Erick: Hello friends. My name is Erick Cloward and I'm the host of the Stoic Coffee Break podcast. And today I am up in the Northern part of Netherlands and I will be interviewing Darius Foroux, which is coming out with the book, The Stoic Path to Wealth. And there's going to be a lot of things in this conversation.
I'm not sure where it's going to go, but I know at the very least, we'll be talking about how to use Stoicism in investing and how using some of those things can help you become a smarter and better investor. Because Stoicism is very much about learning how to control what you can't, or learning to control what you can, letting go of what you can't and stock market is one of the biggest things in that it falls in the arena of things you can't.
So as always, um, thanks again for listening to this or watching this. If you're watching the video on YouTube and let's get started. So Darius, go ahead and introduce yourself and tell our audience kind of what you do.
Darius: Yeah. So, uh, thanks for having me. It's great to connect with you. Podcast about Stoicism definitely up my alley.
Um, yeah, so I've been writing online since 2015 and from the beginning I started writing about Dealing with my own challenges at the time. I switched careers. I was living in London at the time and uh, trying to climb the corporate ladder and um, Uh, I knew it wasn't for me after a year because I realized, uh, I'm an introvert.
I prefer to control my own time and being surrounded by people all the time isn't something for me. And, um, I started to search for answers to what to do in my career. And, um, I always return to books.
Erick: Just a moment. Okay, I guess you're recording. Go ahead. Sorry.
Darius: Yeah. So, when I'm confused or when I am stuck or overwhelmed or whatever it is, I always turn to books for answers.
So, at that time, I really discovered Stoicism because I was really searching and actually I found it in Tim Ferriss book for our work week. You know for years that has been the top book for folks who want to have a little bit more freedom in their career Try to start an online business, etc so I learned about and I was like, uh, this is Exactly what I need.
So I immediately started reading all of the classics and When I started reading I thought I had I need to write about how I I'm using this. So I started writing and I thought, well, why not just write a book from the beginning? So I wrote a book called when you're in a battles and published it. And I thought, okay, I need to have a blog to talk about the book.
And then. Almost from the beginning, well, I started to get some traction. It took a while before, uh, it really reached more people, but I did get some initial response from people. So I knew I was onto something. So that was really the moment that I started to. Take philosophy and Stoicism really seriously by reading, applying, and also sharing online.
So that's how I really got started with this.
Erick: Okay. Yeah. Kind of similar to my journey in that, uh, I was listening to Tim Ferriss's podcast and he mentioned, uh, William Irvine's book, A Guide to the Good Life, The Art of Stoic Joy. And said, this is a book that changed my life. And when Tim says that, you know, he reads so much.
And there's so many things that he finds helpful. But for him to say, this is something that changed my life, would, you know, really just, that hit me. And I, and the only thing I knew about Stoicism at that time, or Stoic, was the typical English term of, you know, somebody with, who repressed their emotions.
So I was like, well, Stoic joy, that doesn't make any sense. So it intrigued me. And I bought the book and read through it once and got some stuff out of it, but I didn't have a lot of lightbulb moments. And I was like, you know, I should get more out of this. So I went back and got the audio book and listened to it for my second time.
And that's when the fireworks went off. I went, I was like, Oh, this makes so much more sense. Life. It was kind of like life was kind of cloudy and then suddenly it's just like everything clarified. Yeah
Darius: Yeah, you find a system or structure in the chaos I think that's what Stoicism really does for for most people because we've all kind of Seen some of the the techniques Like focusing on what you control and not focusing on outcomes and all of these things These helpful Stoic ideas, but we've never found a way of life or like a lifestyle to put everything together until like, at least, you know, for most folks that I talk to, that's what Stoicism does for them.
It like, it kind of encourages them to start living their life in a certain way instead of just going with the flow.
Erick: Yeah.
Darius: So I think that's, um, that's the, the, the most beautiful thing about this philosophy.
Erick: Yeah, yeah, definitely. For me, what it's done is given me a framework that I can easily rely upon to look at any situation.
That, you know, you immediately step into it and you're like, how can I handle this in a Stoic way? So, when I first moved here, um, well, not when, a few months ago, I got, ended up getting scammed by a guy when I was getting an apartment. And, rather than losing my shit about it, being mad and yelling and screaming, getting mad at the world.
It was like, okay, that was a dumb choice. I, I didn't listen to, I didn't listen to my intuition about that. Um, and you know, I'm just taking the steps I need to go into the police and simple things like that. But I didn't really let it disturb me because I didn't want. I didn't want that to ruin my mood for days on end.
And so for me, that was incredibly helpful. Um, so in your book, you talk a lot about how you apply it to your investing philosophy. I think that's kind of the main thrust of the whole book. Um, obviously you talk about how to manage wealth, but I think that it's very much about how to apply it to investing.
So maybe you can give a kind of walk us through the main points of that and what you think is important. Stoicism adds to an investor's outlook on how they should view the market and deal with them.
Darius: Yeah, I think, uh, just like Stoicism is a way of life, investing is also a way of life. Um, I think that if you start seeing yourself as an investor, I think you'll treat your money in a very different way.
And the problem is that most people never look at themselves As an investor, they just think, you know, I'm so and so I have this in this job and they might put some money in a savings account. But when it comes to investing, they think, well, that's for Wall Street or that's for geniuses or whatever.
Right. And, um, I think that when you start seeing yourself as an investor, you'll start taking it seriously and also realizing that It's actually really dumb to not invest because there's so much wealth being created in the stock market. And it doesn't require us to do anything other than to invest in, in the stock market as a whole, not to become a stock picker, because that's something else.
And we might talk about that, but that's something that I almost never recommend unless you are like complete nuts about investing and it's your passion. Like it has, has been my passion since I was like in my teens when I, uh, watched the movie wall street, which was a cautionary tale. It was, but, uh, for most people did the opposite.
So I wanted to be a Gordon Gekko at that time, but I realized later on that like the most famous phrase of the book of the movie is greed is good.
Erick: Yeah.
Darius: And then later on, especially when I read about Stoicism, I realized that greed is not good and it actually can harm your potential to build wealth.
Because if you go after all of these flashy opportunities or meme stocks or cryptocurrencies or whatever, You get greedy, but you also risk ruining yourself. And that's the thing I feel like Stoicism, uh, can help everyone with because those ism, when you apply it to investing, gives you that framework for, um, making sure that you don't ruin yourself financially, stay focused on the things that you control.
While at the same time profiting from the system or capitalism or the stock market, because like we were just talking a little bit before we started recording and we're talking about how the kind of capitalism works and how some people are kind of harmed by that, or actually a lot of people, to be honest.
And, um, but at the same time, we also can't change the system. That's one of the first things that We kind of learn when we read Stoicism because I think that's one of the things that It's so obvious when you read the Stoics, even though they didn't have capitalism at that time um, you kind of sense that they were also talking about kind of the system as a whole or Society as a whole nature as a whole you can't change anything about nature.
You can't change the rules of society Um, but you can work with it and also not You Get frustrated by it, which is I think the first step To not get worked up by it. Uh, the second step is not to get sucked in by it
Erick: To
Darius: get on the hedonic treadmill. I think that's the most important thing you could do I think even if you do those two things you're already winning in life
Erick: Yeah, I can agree with that
Darius: right and then the third thing I think that you can do for yourself is just to say Well, look the stock market has been going up for the past hundred years or actually like the stock market started in the netherlands In the 1600s, I believe, and since then, it's obviously gotten more professional over the, over the centuries, but it has always gone up.
If you look at it as a whole, that have been many years when it has gone down, but over the long term it has gone up. So for me. As someone who was always interested in investing. I tried that whole wall street thing and picking stocks and trying to see if I could get rich quick. And I realized it's almost impossible because the odds are against you.
And all of the folks that you see online, those are the lucky ones. I don't think 18 year old day trader who made a few million did it because he's so skilled. It was because he was lucky. Yeah, you know and and it happens if you have millions of people trading stocks or cryptocurrencies It's natural that there are a handful of folks who make a lot of money with it simply by pure luck So I realized that's not a game that I want to play And then I thought to myself what is a game that I do want to play?
Well, it's a game that really Is more aligned with Stoic principles of Having patience and not going against your own nature and being calm and, um, making sure that you prioritize the long term over the short term. And as I started on this, on this kind of thinking pattern, and it actually took me a few years to kind of come to the conclusion that, If I want to invest in the stock market as a Stoic, I just need to see it as something habitual and I need to pick the most solid investment vehicle.
And for me, that's the S & P 500 index to invest in an ETF, low cost. Um, and it simply just tracks the market. So no stock picking involved or management fees, et cetera. And I just need to do that habitually every single month. And if I do that and then just let it go I can just see it compound over the years because one thing that we can Bet on is that as long as the economy keeps growing or stays alive You know the the stock market will go up and some folks say yeah What if it completely crashes because you know, like on on youtube or on instagram, you always see these doomsday thinkers, right?
Biggest crash coming and those things and and I always say, you know, if that really happens Your savings account is also not going to save you, you
Erick: know, exactly Yeah, if the end of the world happens and the whole market crashes then yeah Having your money in cash or in the bank isn't gonna do you any good either because then yeah Then the currency becomes what is a value that people will be willing to trade for.
Yeah. And yeah. So agreed. Um, I know that for me, I, you know, I've tried doing some stock picking. I'm not very good at it. Um, and I look back in my, I look back on my Robin Hood stuff and be like, Oh man, you know, I, I don't make very much on that. So when reading your book, I recognize that in myself, I'm not the type who has that passion to go chasing stocks and figuring out all of these things like that.
And so I think that was one of the things that I really got from that book was that don't go against my own nature. My nature is kind of lazy when it comes to investing like that. The best thing to do is probably just buy some index funds like that. Yeah. And just call it good. Yeah. Because every time I've tried, well, not every time, but a lot of times when I've tried to pick things, um, individually they haven't done very well.
Yeah. But I think luck, I've been lucky, like you were saying, but I've been lucky overall, in that I've always made money in my, in my business, In the portfolio, in my own portfolio, I've made more than I've lost. So that for me, at least is good because usually the ones that are risky, I only put in a few hundred dollars and be like, if this, if this happens, it's a great long shot.
Um, so for me, that was one of the things I got from that is, you know, I really should just choose a few index funds and call it good like that. And
Darius: if you think about it, you've made more in your career, I would assume then. With stocks.
Erick: Yeah,
Darius: right. And and I think your own ability to earn a living I think is the most valuable asset Especially in this economy and then and that's a lot of something that a lot of folks underestimate within themselves because I also always had this Scarcity mindset when it came to money where I thought okay every dollar that I earn or euro that I earn I need to hold on to You And I need to put it in my savings account or whatever I might need it.
But then over the years, as I started to develop my skills and improve my writing skills and started to build an audience. And I think the audience equivalent of someone who is, you know, um, has a job or works for themselves is their network. Um, so if you have your skills and experience and you have a network, I think you can trust in your own ability to earn a living and that knowledge can help you to make, create some distance between you and your money.
Because I think that's one of the things that I love about Stoicism, that they never judged. Earning money and I think it I think it's even epic theaters who said something like if you can make money by staying Honest go go for it. Yeah, and I also read a Unread it like a few discussions from some Stoicism enthusiasts who said something like yeah Money and Stoicism doesn't really go together.
I I don't agree with that because Money is just a part of everyday life. So we have to stay practical if we say, yeah, money is evil or whatever. We're kind of harming
Erick: ourselves. Yeah. I think that for me, the way that I look at it, uh, and as I've been working on my book and just really digging into a lot of the virtues is the Stokes talk about the only things that are important.
Per se, or the only things that you have control over are, you know, is yourself, you know, your, your thoughts, your beliefs, your actions, and that's pretty much it, and that everything else is external, and it's neither good nor bad, only if it leads you away from virtue. Yeah. So if you becoming wealthy. It turns you into somebody who's greedy and who isn't, you know, who isn't practicing the four virtues, then yes, then wealth is something that is bad at that point for you.
But if you can become extremely wealthy and it helps make you more virtuous, and in many ways it can, because being very wealthy can become a very big challenge for people. I mean, we see people who get very famous, for example, and we see how fame, you know, it was something that they thought they wanted, but as soon as they got it, they didn't know how to handle it.
And it ruined them and we see, you know, trust fund kids, you know, they who don't have to work for their money Are some of the most miserable people you'll ever see because they didn't have to work for it So it's it's not that money is bad. It's just if they'd lead you away from virtue. Yeah, exactly. You should stay away from
Darius: and what you mentioned about people who are born wealthy, I totally agree with that, but even people who are Acquire some wealth but don't know how to deal with it.
Even when they come from Uh, you know from background without money. I recently read about the former tour de france winner bradley wiggins He uh declared bankruptcy Yeah, and I think he won in 2012 or something I'm not a huge Tour de France fan, but I remember watching it at that time. And, uh, it was always this character, you know, and even at that time they said, yeah, he has kind of a passion for alcohol and right.
So he, after he, uh, I think at some point he had an accident or whatever, but he stopped cycling. And, uh, apparently his lifestyle wasn't, uh, you know, Stoic at all. And, and, and his estimated net worth was, I looked it up. Cause I was curious, like how much did this guy earn? Because in cycling, they don't earn that much, but with sponsorships, et cetera, et cetera.
They can earn a decent living. So he did quite well from what I learned somewhere. Some people estimated his net worth to be like 5 million at some point and others 10 million, but let's say let's pick the low end 5 million or let's even call it two or 3 million. That's enough money to have some freedom and let it compile, make a few investments, even if you don't like stocks, real estate is something that a lot of folks do when they get, you know, acquire some money, then it's quite difficult to go back to where you came from, unless.
You really get on some, some weird stuff where you start spending, just spending without thinking about your future. Right? So when I read that, I was like, yeah, you know, it still happens to a lot of folks who acquire some money and then think, okay, this is it. You know, like I'm going to change my lifestyle and I can keep this lifestyle forever.
I don't think that's the case. You know, like one of the things that I always learn from Stoicism is that never expect that your current earnings or current success will last forever. Um, I, I always keep that in mind with writing. I, when I have a period when I sell a lot of books or I get a lot of traffic or a lot of folks sign up for my courses, I always think that, you know, this is not going to last.
And whether it will or not doesn't matter, but at least that kind of thinking keeps me grounded and makes sure that I don't go out there and recklessly spend my money, you know?
Erick: Yeah, yeah, I think that's something that could be useful for a lot of us. I know for me, I've had to really work on my mindset towards money.
Uh, my father grew up incredibly poor, uh, and ended up being a software developer and made good money, but didn't know how to manage it. Because for him, it was, there was that scarcity mindset, and he never really invested much. He died when I was 24, and unfortunately, I picked up a lot of his bad habits about money.
Because working as a software developer for years, I mean, I was always in the higher income bracket. And if I had known how to invest, because it just seemed so intimidating to me, you know, I could be retired by now. But I didn't understand it, and so I didn't really start investing until Probably about seven, eight years ago.
And then was, you know, I would invest for a while and I wouldn't, and then I'd invest for a while and then I wouldn't. And that's
Darius: what I did for a few years as well. And then I found out that that that's just almost the same thing as not investing. Right.
Erick: Yeah. So I didn't do a very good job with that. And.
And now I, you know, where I am in my life, I have enough money to last me a bit as I change careers into coaching and creating courses and stuff online, which is where the direction I'm headed, but it's, it's tight because I'm just living off of savings right now. And so I have to, you know, make sure that I'm cutting down and keeping my expenses really, really lean.
And so like, I want to buy an e bike. I'm like, Oh, should I, should I not? Should I just, cause I got a crappy bike that I picked up for 185 euros when I moved here, which is, it's, it's a comfortable bike, but it's not anything fancy. It's not anything I can go racing on or anything. So it's like, Hmm. So it's, for me, it's, I would like to get to where I have that more abundant mindset and looking at how do I invest my time and my effort into myself and my business.
So that I get the kind of return I want while keeping my expenses very low right now.
Darius: Yeah, exactly. Yeah. Well, I haven't really upgraded my lifestyle for as long as I can remember. I did buy a new car like a year and a half ago, but I still live in the same apartment. Um, I have about the same level of spending that I have had for the past, uh, I don't know, like six, seven years or something, except inflation where things have been going up, but I haven't, um, gotten myself into situations where I, I am forced to spend more as in having a big house, big mortgage, uh, buying a new car every year or two years or whatever, or, uh, as in Not buying it with cash, having, um, car payments.
And what's, and what's your
Erick: motivation behind that? What's your thinking or what is it that drives you to stay that way?
Darius: Yeah. Well, for me, like it's two things. It's like on a philosophical level is like, I just don't want to be a person who always desires the next thing or the new thing. I want to be content with what I have.
And I always see it as a, as a challenge because I do. Think about those things on an almost day daily basis, especially when I go on social media, right? Like, oh, wow, that's a really nice car. I, I, I can buy it. Why shouldn't I, right? And then I start journaling or start thinking about it. Like, why? What's the point?
I like, I drive from my home to the office and then to the gym. And like, I might go on a road trip once or twice a year with my partner. And that's about it. You know, that's how much I use the car. Exactly. So, so
Erick: basically what you, the way I, I'm kind of paraphrasing here, but it sounds to me like you want freedom.
Darius: Yeah, a hundred percent. Yeah. Yeah, so that's that Exactly on a philosophical level. I want to have emotional freedom where I will never Want to be in that place where I attach my self worth to my, the things that I own. So that's the thing that I, that I'm scared of, I would say, right? That's something that I don't want to be because it's very easy to see that around you or when you go online, et cetera.
So that's the thing. But on a practical level, I, I also want to make sure that I always live below my means. And okay, let's say you start earning more. Does it mean you could also increase your means? You can, in theory, if you, if you are comfortable with that, personally, I feel like I'd like to have a bigger buffer.
And it also partly comes from who's your inspiration, right? Like for me, it's Warren Buffett. I look at him and it's like, he lived in the same house for like 60 years, drives the same car for like six, seven years or whatever it is until He thinks it's like a good deal to, to get a new one compared to maintenance and, you know, et cetera.
So he, he turns those things into a practical decision. And I do think that's true, right? Because, um, when a car is, is a little bit older, you know, you end up paying for parts and repairs and whatever. Uh, so that's also kind of a mental strain. So, I always look at how I, how I can live a peaceful and tranquil life.
And then I try to see how I should make my decisions. You know, when it, whether it's financially. Emotionally, uh, practically, where to live, and et cetera. So I just want to have the least amount of friction, while also at the same time challenging myself. Yeah.
Erick: Yeah, and that's one of the things that's interesting within Stoicism.
And I have people write to me all the time about that. It's like, how do you be content? With your life, but still not just acquiesce not just give up on life, you know, just say well I'm content. So you never achieved anything Because if we look at the Stoics, obviously they achieved a lot and they were very Active, you know in everything that they were doing.
I mean Marcus Aurelius, obviously most powerful man in the world Yeah, Seneca was very prolific writer and statesman and was you know businessmen as well as you know was a merchant Yeah, it was very wealthy actually You know Um, Epictetus, you know, got himself freed as a slave and then became a teacher and then eventually just retired, but enjoyed living a very simple life.
So how do you, or what are the things that you do in your life that help you to be content with what you have while striving for
Darius: more? Yeah. Yeah. I, I always want to prioritize mental growth over anything else. Uh, the feeling that I get from writing a great article. Or even like finishing a very interesting book where I feel like, wow, I've really learned something new.
For example, I, uh, recently, well, I haven't finished it yet, but I'm reading, uh, this book called, uh, Against the Gods by, uh, Richard Bernstein or his last name is Bernstein. It's about risk management the history of risk Don't really recommend it for most people. It's a bit dry uh, but it's uh, it's It's very dense.
There's a lot of knowledge a lot of history um Of the economy of how of math and how people looked at risk, etc There were even certain parts that I skipped where I skipped where I was like, yeah, it's a little bit too much for me but like when I have that kind of intellectual exercise of reading and and thinking journaling Taking notes, um, highlighting that's stuff that really gives me energy.
And I feel like, okay, now I can use this to become a better thinker or a better investor, a better person. So for me, that is really always the most important thing to progress mentally. And on a, you know, on a lifestyle basis, I do think it's, it is a little
Also, because I don't want to live a very stringent life where I'm like, I need to count every penny because then I feel like you go back to that scarcity mindset. Yeah. Right. Um, and, um, I feel like that's very difficult to balance because how do you know, right? When it's time to maybe buy that nice car that you want or go on that luxury vacation or something that you want.
So I feel like that's something that I don't think there's like a universal answer. I feel like that's something Yeah When it's when it's the time and when it feels right, that's how I look at it When I when when I feel good about it, i'll i'll do it, you know, like The example that I gave of buying the car or yeah.
What's another example? Like, yeah, I love tech as well. Like I love my devices. Uh, I don't have the urge to buy a new iPhone every year, but every two years I feel like, okay, you know, I like it. Yeah. I feel good when I have a new device, I love using it and et cetera. So why would I deprive myself just because.
Technically, we could use the same phone these days for four years or something, right, before the battery starts
Erick: kind of acting up. Yeah, I think my, my daughter was on an iPhone 6 up until like two years ago. Yeah, right, so you can do it. Yeah, it's, it's fine. And then, then the battery kept, you know, it kept draining so fast that they had to charge it three times a day.
So I'm like, okay, let's, Let's get you a new one. Yeah. And we got a, we got a plan and they got a, and they just wanted the mini one, the smaller version of it. Yeah. And they're just like, that's perfect for me. That's exactly what I need. What I need. And so they bought like one of the least expensive ones because, and they're very frugal and they manage their money pretty well.
I definitely could teach them better, but yeah, I, I agree. And for me, I have the iPhone 15, but that was because. My, I think I had the iPhone 12 or 13 before, and then I knew I was going to be coming over here and I wanted to, and it was cheaper to buy it in the States. Plus I knew that I was going to be doing video podcasts and stuff like that.
And the camera on the 15 is phenomenal. So I was like, okay, for me, it's worth it to upgrade now.
Darius: Yeah, a hundred percent. And then I feel like in those cases, especially if you love these type of products or someone who loves Right. Yeah. Um, I feel like it doesn't make sense to deprive yourself because also life is too short for that as well.
Erick: It's meant to be enjoyed. Yeah. Exactly. Yeah. So, yeah, but I think that's where the Stoic virtue of moderation comes in. Yeah. How do you balance that of, and I think, I think that's what a lot of people miss is they think, Oh, moderation just means, uh, or temperance. I just don't drink too much or don't eat too much and that's pretty much it, but it's like no It's about managing your desires in a way because desire can be a driver that can be incredibly helpful for us We you know, if you desire to have this car, we'll work for it.
You know, I had a friend of mine the other day We were chatting and he he doesn't have his driver's license yet And he took the test twice and failed it and it's really frustrating. It's like Trying to get motivated. So he's like, I'm gonna buy a Tesla and that's gonna be the thing that will motivate me To do this and get it done.
Yeah, I'm like you sure and he's like, well I'm just gonna lease it and I'll put it in my company and it'll all be fine And I was like, okay If that's what if that's what gets your juices flowing and gets you there and you can afford it Yeah good for you, you know for me i'm i'm doing my best to live without a car And so I don't have one here.
I just have that Like I said that really cheap bike, but I want to get a nice bike That's kind of my yeah my next thing but i'm waiting until I bring in some more money and then that will be my reward
Darius: Yeah, as far as
Erick: like i've earned this. Yeah
Darius: Yeah, that's how I look at it too. You know, it's like In stages and then also being very, um, deliberate about what area that you're comfortable spending.
Um, because I don't feel like it's, it's smart for your character. To be loose in all areas. Yeah. Right. So for example, I don't like to eat out often, you know, just like to eat at home almost every single day. Um, when we do, do go to a restaurant, which is, isn't that often, then yeah, just go to a nice restaurant and don't think to yourself, Oh yeah, you know, we're eating out to try two, three times a week or whatever.
Let's you know, watch out what we order and those things, you know, yeah, so so it affords you that opportunity to splurge a little bit Yeah and and but but still like in a kind of normal way without Going insane like the the restaurants make the most amount of money in alcohol So fortunately, I don't oh, I don't drink at all almost maybe a quarter of a gallon A few times a year, and then I'll drink one glass, uh, but mostly at home, right?
So, because, yeah, it's just not my thing, you know, like going out and pouring a bottle of wine and those things. I just feel like, yeah, what's the point? So, I feel more comfortable with the lifestyle as a whole because I can see that for me it makes sense. There are some areas where I don't want to hold back and there are a lot of areas where I just like, yeah,
Erick: I ignore it.
Yeah, don't even, don't even need to give it any attention. So what would you say in your experience with writing about finance and Stoicism over these last few years? What would you say is the biggest thing or the biggest struggle that most people have with investing properly?
Darius: Yeah, yeah, I think the biggest challenge is what you mentioned.
Most folks are intimidated by the stock market because I do get it as well. Like most folks know it from CNBC or like your local finance channel. We have one in the Netherlands as well, FTLZ, and they're always these folks in suits and they use big words and they talk about all of these financials and this and that, right?
And then you think that's the only way to invest. And most people never find out other ways to invest because I don't think it's really, I don't think there's much incentive for the financial industry to push passive investing in it, in an ETF. Um, because I don't know, somehow the system probably works better if And then you have more people try to
Erick: trade stocks.
Yeah, well you get the volatility in there. Yeah. And that's where people are going to make money. If it's just this nice long even curve, then you'll make money in the long run. Yeah. But for the people who want to, you know, to capture those short term gains, then the up down is much better for them.
Darius: Yeah, exactly.
And there are a lot of folks who, uh, exactly. That's what they love and that's what they try to do and they almost see it as gambling So if they can make some money, they're happy. Um, but yeah like Intimidation factor I feel like is the most important thing More most important reason why most people don't invest but because I do think that everyone realized that they They need to do something with the money that they earn, especially You know When you start saving a little bit and then you have enough savings that you can live off for like six months, whatever that you're comfortable with, most people start to think about, okay, this money is sitting on my bank account, even if it's a few thousand extra, right?
Then, and then you think to yourself, what should I do? And then maybe you're at a birthday party. And someone saying, yeah, you know, I made a lot of money with this cryptocurrency. And then you think, Oh, wow. What if I could turn my 5, 000 into 10? Uh, let me try that. And then you get burned and then you're like, yeah, I'm never going to invest again.
Yeah.
Erick: And I know that in the crypto, uh, the crypto stuff over the last few years, plenty of people have done that. I did some crypto stuff for a number of years. I ended up overall doing very well. But then everything kind of went bonkers for a while and I just kind of got burned out on it. Yeah. And so I haven't done anything with it.
I own a little bit of Ethereum. You know, I think like maybe two or three, two or three Ethereum ETH. And yeah, I'm good with that. Yeah. And a little bit of Bitcoin. And I, unfortunately, I owned a whole Bitcoin and it dropped down to 16. And my average cost was 14, 000. It dropped to 16, 000. And I needed some money to do some repairs on my house so I could get it ready to sell.
So I'm like, fine, I'll sell that. Yeah. So I only made 2, 000 profit on it. Yeah. Within less than a year, it was up to 65, 000.
Darius: Yeah. That's another thing. Uh, a lot of people have when they are picking stocks, they sell too soon.
Erick: Yeah. Well, this one, it had gone up to 60, then it dropped all the way down to 16.
And I was like, you know what? At least I can break even on this because it didn't look like anything. And then suddenly. You know, six months later, it was back up to 65. I was just like, man,
Darius: I, that's the emotional rollercoaster that I feel like you want to get off as a, as a passive investor or someone who was just investing for the longterm, you know, let, let that for the guys or whatever people who were glued to
Erick: their screens.
Yeah. And for me, I was in a place where I, I needed the money. Yeah. So it was like, okay. And I. Otherwise, I would have just held on to it. Let it ride. But I needed the funds, and it was either that or sell some stocks. And that, you know, as soon as you sell your stocks, and you have, you know, the capital gains and everything on that.
Yeah. Um, so I was like, okay, let me just sell this off, and I'll be done with it. Um, and then, yeah, then like I said, I'm like, ah, crap. But, you know, it's Again, looking at it Stoically, it's just like, okay, that was an opportunity, they got away, and there's nothing I can do about it, so I could either let that ruin my mood for days, or I could just be like, well, it happens that way sometimes.
Darius: Yeah, and not thinking to yourself, I need to chase that again. Yes. I need to kind of mimic that, or find the next Bitcoin, or The next hot stock or whatever, you know,
Erick: and
Darius: then you get into this cycle that generally doesn't lead to success.
Erick: Yeah. Very, very true. So do you only invest in just S & P 500?
Darius: Yeah. So that's it. Yeah. I have this, uh, this rule that I created for myself. That I call the 90 10 rule and I do for the capital, all of the money that I'm currently putting aside for investing. Um, I invest all of it in the stock market. Um, 90 percent of that goes to the S & P 500. And then 10 percent I use to pick individual stocks.
And then the, the ratio can sometimes be like 85, 15 or maximum. I feel 80, 20, because otherwise the risk reward rate ratio starts getting a little bit messed up where you have more odds of bigger losses, because if you, especially if you do the 90, 10. Even if your 10 percent doesn't do well, or you lose 10%, if the S & P keeps doing well, you'll still progress
and build wealth. Um, so I think it's a great way to set yourself up for success while also. Potentially earning a little bit more, but I only think that's worth it. If you've built up a little bit of a portfolio, if you're kind of investing or picking stocks with a thousand dollars, I don't think it's worth it because you can earn more.
In your job or if you're paying for a raise If you put all of your time and energy into getting a raise or a better job offer Feel like it's a better use of your time than spending hours a week on trying to pick a few stocks And then you invest a few hundred dollars and then even if you have a hundred percent return You still made a few extra hundred dollars.
Well, congrats. You could have made that With a raise every single month, you know, so that's, that's how I look at it, but that's how I set it up, you know, and then I always, I never want to own more than like in that, you know, 10, 10 to 20 percent area, never want to own more than three to four stocks, because I feel like.
This is what Warren Buffett calls the LeBron James analogy. Like if you have a top player on your team, it doesn't make sense to go with the 18th player. So in a similar way, if you have like 10 stocks, you like just stick to the top ones, you know, and that's how I. Deploy the additional capital. And I'm in general, I don't pick the stocks that are already in the SMP.
I want to pick a couple of stocks that are not in the index. Uh, unless like right now, um, as we're speaking, I started a position at Tesla a while ago because they underperformed the market for the past two years. And it's a cyclical stock where in general, in general, like now when car sales are low and we're in kind of a car business recession, um, stocks kind of usually bottom at some point.
And we never know when, so you need to have a long term. Approach to it, but, um, combined that with the fact that I also love Tesla cars. Uh, my mother owns one, so I've driven them there in her car, uh, several times. And I think like the, the self driving is just unmatched, so I don't, I can't see anyone else doing that plus they have the humanoid robot coming up and a bunch of other things that I'm kind of excited about.
So I was like, yeah, this is, I feel like now is a good, good opportunity for me. I never do any investment advice other than. The S & P because I feel like that's a no brainer, right? Like that's the strategy that Warren Buffett recommends. But when it comes to stock picks, I always feel like that must be like a deeply personal reason or deeply personal pick.
Because if you listen to stock tips and advice from others, I think it's almost impossible to stick with those, especially when they go down because then you get nervous. You're like, okay What's going to happen? I don't know this company Like let me just get rid of it and then see what happens and then before you know, it's going up again
Erick: Yeah, kind of the the peter lynch idea.
Yeah, and that peter lynch was a very big advocate of Know that you know by companies that you use. Yeah, like he invested in walgreens, uh, because You You know, he was driving home one time and he saw they're building Walgreens here and they were building Walgreens here They were building another Walgreens.
He went go home. He's like, honey, do you do you shop at Walgreens? She's like, oh, yeah, I think it's great. Yeah, okay And so he's like if they're growing that fast that you know, they just put one here they put here They're building another one, you know over here. So three on the way home from work Yeah I think that they're growing and it might be worth putting getting into yeah And he also talked about how he invested in legs pantyhose the ones that came in the eggs Yeah And it was because his wife, you know, came home one time and said that And he was like, what's that?
And I was like, they're pantyhose. And he was like, what? And he was in this plastic egg. And he was like, so do you like these? And she was like, yeah, they're great. And what about your friends? Oh, all the girls use them. And so he was like, okay, I'm gonna, I'm gonna invest in that. And so it had that personal touch.
Yeah. If it was something that he used, then he was interested in investing in it, which is one of the reasons why he did so well.
Darius: Yeah, exactly. And, uh, yeah, I, I'm also, uh, Yeah. Man of his books. I love the way that they set those up. Um, and, and kind of the, the underlying principles of why certain stocks go up and down, and he also talks about the cyclical nature of the stock market.
So I feel like it's a great place to start with, you know, investing. And, uh, the one thing that people often misinterpret about Peter Lynch is that. He never really said that you should buy everything that you use, right? Like a lot of folks and I see this online a lot like oh peter lynch said buy what you use or buy what you know Um, that's not really the true.
It's not like oh, I go to mcdonald's. I just should be Blind about the stock and just buy it at any price. Yeah, but it buy it If you are stock picking geek and the valuation makes sense, right? Yes, and that's the thing that people kind of
Erick: yeah Well, he was he
Darius: was
Erick: saying before you to go out and buy some stock that you that you Will never like you never use their product you'd you'd have no interest in it at all Yeah, and I think his point was Buy stocks that you have an interest in that company.
Yeah. Like if you use Walgreens, well then you're interested in Walgreens and so it has that personal connection. Yeah. So you're gonna be willing to pay more attention to it. Use it. Use it as kind of like a, an audition if you will. You know, these are the ones I'm considering because I use them, which means that.
There's a good chance that other people use them. And so it was more of like, if you're using it, there's a good chance other people are too, so that might be one.
Darius: Yeah. And, and the great thing about the S & P 500 is that. It consists of so many companies that we all use, starting at the top with, uh, now NVIDIA, the biggest, uh,
Erick: part of it.
Yeah, I owned a bunch of NVIDIA a while ago and I sold it for a good profit. And then when the AI stuff started picking up again, I went, I need to buy more of that. And I did. And I, I just a few months ago and I think I already tripled what I put into it. Yeah. And it just, cause I was like, you know, I caught that wave just right.
Darius: Yeah. They, they've been on the incredible, like it's never happened like this fast for a company that was already that big. Um, but yeah, like Apple, Amazon, Microsoft, Nike, um, the list goes on all of these great companies one after the other, uh, whether you like their management or philosophy or business or not, there are all of these brands and companies that we use.
Where we get our gas from and, uh, they're, they operate globally. That's another thing that some folks ask is like, okay, if I live in Spain or if I live in Australia or I live in, I don't know, Brazil, does it make sense for me to invest in S & P 500? And I, my answer is yes, because. No matter where you live, almost all countries have access to Apple products and Microsoft, et cetera.
So they're, they're global companies and they are active in your country. So I think it makes sense to bet on the biggest companies and they so happen to be located in the U S but you know, they're, they're active globally. So. I feel like that's just the smartest and quickest way to, to wealth creation.
So this is why I feel like that's the best option. And I, that's also one thing I learned from Stoicism is to not. Be judgmental or not have any personal preferences or not be nationalistic and think, Oh, you know, just because I live in the Netherlands or Germany, I should invest in, you know, the local stock market.
I don't think that should be. Um, a factor, a factor should be okay, where do I have the best opportunity to compound my money? So,
Erick: yeah. Yeah. So, so in a way, your book actually is kind of a very boring stock book, you know, like buy the S & P 500 and then play around on the side with some other things.
Darius: Yeah, it's the advice.
I basically just start out in the beginning. It's like, okay, this is everyone says this is the best technique But the technique doesn't matter because if that was the case everybody would be investing now The most important thing about investing is managing your emotions And that's what the book is about teach folks Techniques and principles for managing their emotions.
Because I think if you're not able to manage, then you either at some point, whether it goes down or up or whatever, or you feel like, Oh, I need that money. Then you get out of it. And as soon as you stop, you, you destroy your chances of becoming, uh, wealthy over the longterm. And when I talk longterm, I generally talk 20, 30 years.
Yeah.
Erick: Yeah. I think that's, that's really important. Is that
We often, you know, we have to just look at it and going up and down all the time. We're like, Oh my God. And freak out about it. Um, I know that when I was heavily involved in crypto a number of years ago, there was definitely a lot of that, a lot of FOMO people going, Oh no, I should have bought this now. Or they hop on it when it's, you know, already at its peak and it's going to crash.
Um, or, you know, it's, they're very emotionally driven. And I know that, I know that I was somewhat that way, but I could also be Pretty good about it, but I never thought about applying Stoicism directly to my investing philosophy But so in your opinion, and again, you're not a stockbroker per se But you think that so for you the S & P 500 it just has enough diversity that that's good enough for you.
Darius: Yeah Yeah, I'm saying yeah, I feel like simplicity is The most important thing for consistency. Uh, if you want to do something for a very long time, it has to be very simple. And you want to take out all of the other options from your mind as a long term investor. And as soon as people start talking about, well, yeah, but you can diversify.
Should you, uh, maybe you should own some real estate. Uh, or some reeds right in Stockholm. I also do own real estate. I have two rental properties, but those basically came on my path. My neighbor wanted to sell his condo a few years ago. I was like, yeah, he said, do you want to buy it? I said, yeah, sure. But I never really went out actively to get in that business.
But, um, if you get opportunities like that, okay, why not? You know, it was great. I feel like the most important thing is just like to go on with your life, to, to do your work, to enjoy your life, be a better human or whatever it is that you is important to you. Uh, and study what you enjoy and, and learn things that you are passionate about and perform or do your hobbies, et cetera.
And then just have very simple strategy that works well. What about gold? You know, or what about. Um, international stocks. Should I have some exposure there? And what about rebalancing? As soon as you start talking about that stuff, you lose like 90%.
Erick: Yeah.
Darius: Uh,
Erick: it gets pretty complicated, you know? And
Darius: even for me, I, I I've been.
Investing since 2007 and I specialized in finance in grad school. And when I think about rebalancing and making it a very active approach, I'm like, yeah, I just don't like, can't be bothered with that stuff. I just don't want to do that. You know, I, I love, I want to just make profit from the S & P. 500 because it just keeps going up because that's where basically capitalism just Gathers, you know in the stock market and then because I love Like following companies and I want to pick some stocks here and there That's what I want to do.
I don't want to be like a portfolio manager. I don't want to hedge My portfolio. I don't want to play around with options and futures and And gold and any other thing, you know, and I said, I said, Oh yeah, maybe you could earn more, you know? Yeah, fine. Great. I don't care other than the fact that I'm already doing okay with the S & P 500.
And that for me is good enough, you know, if even if it does eight or nine percent and it doesn't do the ten percent that it did. You know, on average post World War II, I'll be content with that, you know? So I feel like that's, that's the most important thing for me as a Stoic investor.
Erick: No, that's very true.
And I'm thinking through some of my investments right now, and I think I'm probably going to have to change some of them because I want to be that more active investor, but I'm not, it's, it's not my passion. Um, I remember years ago, I tried to get more passionate about it and it just didn't work out.
It's not ever been my thing. Um, like I fell into tech because I, I found it interesting and I found it. I like, I like creating and building things. And so for me, when I fell into software, it was because, Hey, I'm building something and creating something. Look, I, I do this stuff and then you can click on buttons and things happen.
And it's, it was very cool. So for me, I'm much more driven by creating something than I am driven by, how much money can you make on this thing and making trades. I tried forex for a while one time. Oh, yeah, that was an emotional roller coaster. Oh my gosh And this was long before I found Stoicism Yeah, but I remember I put five hundred dollars into an account and and I I would try trading Uh, I think it was japanese yen and british pound and trying to arbitrage that and I went, you know It was with this group and they were all talking about how great it was and you can do all these things And every time I made a trade, I pretty much just You know, and even, you know, and I would just be like, I could feel that, that stress, um, coming through.
And so I, I finally reached a point where I was just like, you know what, I'm going to close this account, pull all my money out of it because it's not worth the stress. I feel like I'm going to have a heart attack because I'm so worried about this.
Darius: Yeah. Yeah. I can kind of relate to that also, also a little bit.
I had a while when I got into futures trading, uh, S & P 500 futures. And especially when there's not a lot of volatility, when the market is somewhat stable, like it is now, we haven't had like, um, I think even like a 1 percent move in SMP for like months or even this year. And there are not a lot of crazy swings that when you start, that's one of the worst things that can happen to you as a beginner.
If you start in like a period when everyone is making money, then you start thinking you're a genius. And that's when I started with futures trading. Um, I think, uh, I can't remember when, I think, uh, before the trade war, eight years ago, something like that. And then I got back into it again. And, uh, 21 when it was also still stable before the crash.
And then I start thinking, Oh, okay. You know, like this is a great way for me to earn some extra money as short, as a short term trader. And when it, when the market turns against you, your system or framework or whatever that you had and you use before just doesn't work at all. And then you lose everything that you made over six months in like a week or two.
And then that feeling, that's one of the worst things, you know, because it's frustration, anger, everything that you can just. So I, I also had a couple of those types of experiences where I was like, yeah, this is just not worth it. You know, I love picking stocks. I love that, that, that whole game. I just don't want to have too much money on the line.
Plus, I don't want to be attached to it. Where, where it starts to impact my mood and it starts to take me away from my main task in life, which I feel is writing. So that's, uh, yeah, something that I think a lot of people can relate to, you know, especially in the last few years where it's become more mainstream to do any type of trading, whether it's.
Forex or crypto and so many young folks get into it. Because of social media.
Erick: Yeah.
Darius: So they, they fall, everyone falls for the same trap.
Erick: Yeah. And because they get lucky on a few things, they suddenly think they're a genius and then they write it up. And we saw that with the crypto bubble that happened a few years ago, everybody's like, see, it's great.
It's everything. And then when it crashed, yeah, that was, it was pretty bad. And I, I'm, there was one crypto I was invested in was doing pretty well. And it's I got lucky and that I just happened to be watching it one night and noticed that it went from like 60 dollars to Down to 53, down to 38, like in a really short amount of time.
And I was like, this is, this is not good. And so I, I put my trade in and was able to get rid of it. Um, and then I texted my, my daughter had invested some into it. Um, and I was like, you need to sell this now. Yeah. And they were like, okay, and done. And I said, I'm sorry I didn't get to you sooner. I was watching it and I wasn't sure when to get out.
Um, so I got out and I did fine with it, but it eventually went to, I think the last time I had checked on it, it had, it was zero point, and I think it was like 20 zeros, four nine. Yeah. And it had been like 63 at its peak.
Darius: That's nuts. That's the financial ruin that I was. Talking about, I think it happens to a lot of folks.
And when you have an experience like that, when you, when your money really goes to zero, then I think it's very easy to say, you know, like, this is not for me.
Erick: Yeah.
Darius: The right to stay away.
Erick: Very, very true. And I think that, that I can appreciate your investing advice because it does have, it, it, it, it ticks all the boxes.
It's simple to do. It's something that. Has lower volatility. So you may not make as much money as if you were trying to do it, but that lower volatility also helps keep your emotions a little bit more straight. It's diversified. And then if you just do the S & P 500, that's 500 companies you're invested in.
Yeah. So you are, you are creating a large portfolio just by buying one ETF. Exactly. Yeah. And so it, it takes care of all of that for you and you don't have to do the rebalancing and everything like that because it's already done for you.
Darius: Exactly. Yeah. And it covers. All industries that you can think of from actually real estate, um, to energy to tech, which is of course the largest portion.
But I think that's the beauty of the S & P because the S & P rotates based on market cap and the market cap is determined by the economy and or in fact, how well these companies perform in the economy. So You can basically hold that investment strategy for your entire lifetime. Because while for a lot of folks, it's almost unimaginable to think that.
Apple won't be one of the biggest companies in the world in maybe 10 or 15, maybe 20 years, but it's more likely that they are not
Erick: because
Darius: that's just like how history has played out.
Erick: Yeah, the natural life cycle of firms. I got a business degree, marketing degree, but yeah, the natural life cycle of companies.
And it's very challenging for one company to stay at. The top or near the top for too long. You reach a point where you just, there's no more growth.
Darius: Yeah. And the economy just moves to other things that are more up and coming and become all of a sudden more valuable, right? Like we had, you just go back, um, like several decades or during world war two or, and, and a decade after steel companies.
Were the most important companies in, in the economy, right? So they were also the most valuable ones. Um, and then we had a phase of electronics. GE was the largest company and we're actually in that phase now where we're going to, we had Apple. Leading the pack for so long because they made such an impact on the world.
And it was, it is still one of the most important companies, but now we see the shift towards AI. And NVIDIA is starting, is becoming now the biggest company. It just all depends on the economy and what's hot and what's valued, et cetera. Most folks just, you don't want to think about those things, you know?
It's a lot of work to chase those things.
Erick: An I think, I think reading your book has made me rethink about my investing philosophy and I probably need to clean up my portfolio. Yeah. Um, So is there anything, I think we should probably wrap up here. Um, is there anything that you, that we haven't discussed here today that you would like my listeners to understand or to think about, um, as far as, as Stoicism, wealth investment, or just anything else that you think would be important.
Darius: Yeah, I feel like if you've listened to your podcast and you've been, um, practicing Stoicism for a longer time, or let's say for more than a year, or even if it's a few years, it's even better, but if you have a little bit of experience with applying Stoicism in daily life, I feel like it's the perfect product.
Foundation for investing because you already have those basic skill sets of not focusing on outcomes and considering what you control. And when you combine that with, you know, like we were saying, like the simple strategy for investing, then you really, yeah, you will set yourself up for success because you have the mental fortitude.
The only thing you need now is just the financial strategy. And when you put those things together. It's just a matter of time before you build some substantial wealth. And as a Stoic, you kind of have the tools to put that in perspective because you won't get impatient when it doesn't happen within a few years.
Yeah. You remind yourself that I'm in this thing for decades and then you'll become more at ease, keep staying the course. Yeah,
Erick: no, I can definitely agree with that. Like I said, I think for me, looking back, If I had just taken this simple strategy when I started my career in tech, I'd probably be, like I said, I could be easily retired by now.
But I didn't know what to do. And so that's, that for me was why I think it's, it was important reading your book because I was like, ah, this is a very straightforward strategy. And hopefully my listeners will be able to take it on board and, and make some wise decisions about their investments. Yeah, appreciate it.
Yeah. All right. Well, thank you so much for your time. I really appreciate this. Um, it's, it was a, an interesting ride coming up, obviously seeing a whole new part of the Netherlands. But, uh, yeah, I really appreciate having me up here.
Darius: Yeah. Thanks for coming. And, uh, yeah,
Erick: Real pleasure talking to you. So thanks again for joining me on my podcast today.
Again, this is Darius Foroux, his book, Stoic Path to Wealth, comes out, is it out yet? Uh, July 16th. Comes out July 16th. Um, I highly recommend it, it's well written, it's a good read, gives you a little bit of history about investing and how to think about investing. Um, and it gives you the simple strategy that he has, but if you want to become a more of a stock picker type, It can help you develop the mental fortitude to be able to pick stocks without losing your mind And I think that's something we could all handle in our, in our investments in our finance.
So thanks again for listening as always be good to yourself, be good to others. And thanks for listening.
Hey friends. Thanks again for joining me for this podcast with Darius Foroux. I really appreciated his interview. It was enlightening for me to work on my mindset for investing. And I hope that you can get something from that. Again, if you aren't following me on social media, I would appreciate it if you would do so.
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