Brandon: Welcome to the BiggerPockets Podcast again. How you doing man?
Ryan Holiday: I’m doing great. Thanks for having me back.
Brandon: Good. All right, so last year on the show, it was way back, I don’t know, 245. It’s been a while. We talked a little bit about how you owned a ranch outside Austin. You got a vacation rental. I’m wondering, I guess since that point real estate wise, we’ll start there before we get into the book stuff. What are you been up to?
Ryan Holiday: Yeah, I’ve got a couple more vacation rentals. I’ve got two in Florida and then I’ve got a longterm rental in Florida as well. I’ve just sort of been dabbling. I like stuff that kicks off cash mostly. I like stuff that gives me an excuse to go places I want to go.
Brandon: Do you stay in your vacation rentals when you go then?
Ryan Holiday: Yeah, I was just there in Florida for a week with my kids. Checked out the places, did some minor repairs, saw how stuff was going and then know someone checked in right after we left.
Brandon: That’s cool. Let’s talk about this for a minute. The whole vacation rental thing, because this is something a lot of people say. They say, “I want to buy a vacation rental because then I can go and stay vacation [inaudible 00:01:23]. Has that worked out well for you? What has worked out well and what are you like, “Okay, I learned a lot of lessons there.”
Ryan Holiday: When I looked at the math, I was looking mostly on return. What is it kicking off annually and could I get a better return from my cash somewhere else? I’ve done a lot of hard money lending over the last 10 years, and I’ve just started to get more and more skeptical of it. I think in 2009, 2010, there were legitimate people who couldn’t get access to the credit markets on properties that were very likely to continue to appreciate. Now when I start to look at those, I think one, how is this person possibly going to make eight or nine or 10% note work for them? It’s either that they have a totally irrational attachment to the property or they are just hoping against hope that this thing is going to … and so I just started to become … they were steady producers of income for me.
Ryan Holiday: I had a portfolio of different notes that I really liked. As they started to pay off, I just became less and less convinced that that was a safer place for money as it once was. I was also thinking in the notes where it’s actually working, they think they’re getting a good deal. They wouldn’t be borrowing the money if they weren’t capturing the equity and the depreciation and all the benefits of owning the property.
Ryan Holiday: Anyways, so I started to look for properties where I could just do the whole thing myself. I bought one or two in Austin that I like that were low cost. One of them was an apartment and then my wife and I were on vacation in Florida where we’ve got a bunch of times and we were looking at it and we’re like, “These places are actually producing very similar returns to investment properties here in Austin,” and this is even including the cut of a property manager and all of that.
Ryan Holiday: The other reason we started to look at in places other than in Texas is that it’s unless you’re getting a really cheap place, the property taxes here are so high, it’s really hard to make the math work. We were just sort of experimenting, but they happened to be the two … I have three in Florida, two are vacation rentals, one’s a longterm rental. It’s an extra benefit that we can go there on vacation and we like it and we have a good time. We have stuff there, but I definitely would want it to be very cognizant of not rationalizing an investment purchase or rationalizing an investment because I really wanted to hang out at the beach.
Brandon: Yeah, I think a lot of people make that mistake as they will buy a vacation rental that is just not a good deal at all. Like they’re essentially losing money where it’d be so much cheaper just to go and actually pay for a hotel. Just losing money all the time. I love that you said that it’s like not … to make sure you’re not rationalizing it just because you want to play, something like that.
Ryan Holiday: Well, that’s obviously what timeshares are all about. It’s tricking people into thinking that a bad deal is a good deal because they really want to say that they own a place here or there or that, you know what I mean? I wanted to make sure that that’s not what we were doing. I mostly looked at the rate of return and then the fact that we could go there was an extra benefit. Then, if you really do get one that has a return, it almost becomes harder to go on vacation there because you’re looking at the opportunity costs of the week or two that you took it off the rental market. To me that’s a sign that you actually have a good deal.
Brandon: Yeah, that makes a lot of sense actually because I have this extra unit in my house and I can rent it out for three, $400 a night if I really want to like as a vacation rental, but I’ve been having friends and family stay. Now I’m starting to think every time somebody comes and stays like my buddy Elliot is staying right now I’m like, “This cost me $2.” Now all of a sudden it’s like, “I should start renting this thing out more often.” Or it’s, “Maybe I will.” Have you found difficulties at all with the legal side? A lot of areas … it’s kind of area in specific are shutting down Airbnbs and vacation. Have you had that at all?
Ryan Holiday: Yeah, like in Austin it’s tricky. There’s definitely properties that I’ve looked at that I think would make a great investments as a vacation rental. As a longterm rental, the math just doesn’t make sense. You have to pick a place where that’s sort of part of the market and people are openly accepting of it. I do tend to find though that that does limit the appreciation of the house because people are buying these, telling them there’s more calm. Everyone is attracted by the fact that they think they can get an ROI out of this market. It’s a little more crowded.
Brandon: Yeah, that makes a lot of sense.
David: You find as the market gets tougher and tougher, and it’s not like this is the first time that’s happened. This is a cycle that repeats itself all the time. In 2010, there was good deals everywhere. You could just pick a random house on the street. It was a good deal. Then as the market gets better and better, more people get in. Money gets cheaper. Everybody starts to pick up momentum, and that’s where you see people making mistakes. This is the part of the market cycle where you can easily make a mistake. It was tough to make a mistake in 2010, 2011 and what you see is people pushing into vacation rentals because literally that’s the only way you can get an ROI, and you stop thinking about the work that goes into it.
David: When you get a short term rental, you’re not just getting a passive investment, you’re buying a job, you’re probably going to need to hire someone to do a lot of the logistics. It just kind of more like buying a business. Right?
Ryan Holiday: Sure.
David: Then the other thing you said that I thought was incredibly insightful is you can talk yourself into this deal. That the logical part of your brain is saying, “No, don’t do it. This is a bad idea.” You don’t buy an investment because you can say, “Well, I could also go stay there. It’s right next to the beach.” Just go pay the $120 a night to do it yourself if that’s right.
David: I kind of wanted to ask you about that Ryan, because this is one of the areas where you excel is helping people understand why they do what they do. Helping us understand our own nature. Brandon and I see this in real estate investing all the time. People that make really big mistakes and then we look back and analyze it and it is obvious that was a terrible decision, but when they made it, they didn’t feel that way. You’re an investor, and you’ve got this background. Can you share a little bit about why you think people ignore the part of them that saying, “Don’t buy this vacation rental for instance, because you want to stay there?”
Ryan Holiday: Well, I’ll give you an example from my own life. I bought a place in Austin that I bought with a friend, and we thought would be a good investment. It’s clear in retrospect that the math was totally optimistic. We’d done a previous deal together that had gone quite well. As we were looking at this second one, it was like, “Well, of course it will be just as easy as last time.” I think the big mistake on my part is I was thinking about how successful it would be, but I wasn’t thinking about where that success actually fit in my life. What I mean is like, let’s say that it had gone perfectly and it was doing super well as opposed to the complete nightmare that it turned out to be. It turned out that the person didn’t disclose a bunch of permitting issues. It turned out that the there was contractor nightmare after contract nightmare over what was supposed to be some light renovations. You know what I mean.
Ryan Holiday: It’s currently sitting vacant and this Kafka S core story of permitting nonsense. Anyways let’s say none of that had happened. It had gone super well, I would have been making, 1,100 extra dollars per month, which would be wonderful if I was 22 and it was a side hustle. $1,100, I’m very privileged to say would not substantially change my life in any way if my accountant calculated my taxes, this way or that way and $12,000 of income disappeared. It wouldn’t bother me. Here I was thinking about how it would go well and not thinking about whether even if it went well, if it would’ve been a good idea. Do you know what I mean?
Ryan Holiday: I think the worst part about it for me as I sort of do a post mortem is I think about the fact that when I was talking to my wife about it, she was like, “It’s not a good idea. Don’t do it.” I didn’t listen to her, but all I was thinking about was I was thinking, again, I was thinking about the upside just as like a game. Like, “Hey, it would be fun to get this win.” I wasn’t thinking about what the win would cost.
Ryan Holiday: What I should’ve done is something that I actually talk about in my book, The Obstacle Is The Way. The Stoics have this exercise of Praemeditatio Malorum or a negative visualization. I should’ve thought about how badly it could go and whether those potential negative outcomes would outweigh the potential positives of a positive outcome. The truth is had this gone well, it would’ve been a negligible impact. It went poorly and it’s been a very big impact on my life. I think we often know what the right thing is or the wrong thing is, the problem is that we just proceed anyway.
Brandon: Yeah, that’s very true. There’s that book of Mark Mason, I think his name is rated [inaudible 00:11:35], The Subtle Art Of Not Giving an F. That’s part that stood out most in that book to me was he makes this point that a lot of people set a goal based on what they want. He says your goal should not be based on what you want. It’s what pain will you put up with? Because every goal has a pain associated with it. You should approach it. That’s huge. I want to be a billionaire. I don’t, because I will not do the pain needed to become a billionaire. That is not … same with guy do you want this kind of real estate business? Well, what’s the pain associated with it? It’s just asking yourself to look at it from that standpoint. Reminds you of that, the same that Stoicism look at it.
Ryan Holiday: Yeah. No, I saw a BiggerPockets post on Instagram. I emailed you about this a couple months ago where someone was saying that they had 20 rental units, and they were making like a $12,000 a month or so. I forget the specific math, but it was just like when I saw that, I was like, that was my nightmare. That’s like a nightmare. The amount of work that you’re doing for the return that you’re getting, I think it can be very easy just to be thinking about adding dollars to your gross return. What that mostly is is ego because you’re not going, “I need this to pay for chemotherapy for my grandmother.” You’re saying, “I want this so I can feel extra important or extra special or I can buy a speedboat.” You are not thinking about the costs that that has. Often, as Seneca said, these things come at the cost of life. The amount of unhappiness and stress that this failed property has caused me, probably outweighs the gains on several of the properties that I have that are great. Definitely a painful lesson, but a valuable one for me for sure.
Brandon: Yeah. Really good. Can you explain for those who didn’t listen, maybe the last episode we had you on or haven’t read your material. When you hit the word Stoicism, a lot of people instantly get kind of like, “Wait, that sounds like some weird.” We all have like these preconceived notions of what that is. What is Stoicism?
Ryan Holiday: We think Stoicism is the absence of emotion, but in fact it’s this sort of comprehensive philosophy about how to live. It happens that the very first Stoic, the founder of Stoicism, a guy named Zeno was an entrepreneur. He was a dye merchant who would transport cargoes of dye. It was an incredibly speculative and risky business. There is this connection in Stoicism to entrepreneurship. Interestingly enough, I’m working on a book right now about some of the more obscure Stoics and I came across this debate that two of the Stoics were having, and they were actually debating. They’re like, “You’re selling a house and it has a known sanitation issue. What is your obligation to disclose this?” They’re talking about it, not legally. They’re talking about it as two people who are trying to live by the golden rule, but are also engaged in commerce and in business.
Ryan Holiday: They talk about … they’re like, “Okay.” Again, this would be a very real example for someone like Zeno. He’s saying like, “Okay, you’re in a convoy of ships and you’re selling grain and you get into Athens first, but the other ships are just a few days behind you. Because you’re the only one, the price is X, but as soon as they arrive, the price will plummet. Is it ethical to sell at an inflated but temporary price that people are going to regret?” The point is Stoicism is actually this sort of operating system for living that’s supposed to give us tools and strategies for dealing with the stresses of, you put your life savings in a property and then it burns down or you have an investment partner, and it turns out that they promised to do a certain amount of work and they’re not holding up their share. How do you deal with these things that are taxing your attention and your patience and your ethics? That’s what Stoicism is there to help us with.
David: Yeah. That’s cool.
Brandon: I know a lot of people … The Obstacle Is The Way was … a lot of people cite that book is like … a lot of athletes use that book. A lot of entrepreneurs like that book. It’s like crap is going to happen in your life all the time. I’ll almost see, and this is probably a horrible way of explaining it, but the way I see it is like a detachment from being in it. It’s almost like we say, “Don’t work in your business, work on your business.” It’s like don’t work in your life, work on your life. It’s like, let’s step back and see our life for what it is. There’s always tools to kind of help do that. That’s kind of out of the way that I’ve seen it. Like how do you feel on that definition?
Ryan Holiday: Yeah, there’s property I was telling you about. Obviously I would have rather it gone swimmingly or I would rather it have just not gone so poorly, but it is what it is. The question is not how could I make this not have happened because it did happen. The question is, what can I learn from it about myself, about the business? How can I turn this into an educational experience that allows me to move forward? Or what virtues or skills is this situation now calling for from me?
Ryan Holiday: I sort of had to end up taking the situation over. I’ve had to do a lot. I’ve learned a whole bunch of things. I mostly learned I probably won’t do any more investments in Austin because … I learned something about how the sort of the permitting and coding works in the city that makes it just like an ongoing concern that that’s too risky to really mess around with. Let’s say I end up losing $100,000 on this project. Well, that’s an expensive way to learn that lesson, but the other way to see it is maybe it’s saved me from losing $1 million on a future deal. It’s all in how you look at it and how you move forward.
Brandon: Yeah, I actually was just having a conversation with a buddy the other day. We were talking about how like, everyone’s always like you do something stupid. Let’s say you go walk and you step on a nail and you’re like, “Man, why did I not see it?” You get all mad at yourself for not seeing it. I like to try to play this word or this picture get in my head. I was like, “What if I would have not stepped on the nail, walked up to my car and got hit by a bus and just died?” I would assume everything could be a whole lot worse. It’s not as much as the event. It’s how do you think about it?
Ryan Holiday: Yeah, it can be a good exercise to think about how many people would kill to have stepped on a nail but be living in Hawaii doing their dream right now or what did stepping on this nail save you from that was much worse. In some ways, this is all sort of trickery, but the alternative is just being discouraged or being mad. Excuse me. It’s all about how can you sort of take control of your thoughts and direct them in a way that allows you to be stronger and better and more resilient.
Brandon: Yeah. Really good.
David: Well, you said, something that I … dude, I loved what you said. You said that what virtues or skills is this situation calling for from me? That just hit me so hard because as a person who’s an entrepreneur, I’m growing a team of real estate agents and we’re selling houses, there’s always going to be things that go wrong. What I noticed is that people on my team started saying, “Yeah, we didn’t get the result we wanted, and here’s the excuse why that always ended with, well, because it’s hard.” That was what was happening. It was very subtle and I didn’t recognize it and I was just kind of eating it. Like they feed it to me and I’d eat it. I hit this point where I just felt disgusted. Like just food poisoning from hearing, “We didn’t succeed because it’s hard.”
David: So many times that just the thought of it made me want to throw up and I told everyone, “I’m never listening to that again. You will not say that again. We are never going to end the statement with, because it’s hard. We are going to say it is hard, and so therefore this is my plan for what I’m going to do,” and you just summed that up obviously much more eloquent than me because you’re Ryan Holiday and I’m not. That’s how you got to approach life. You see I’m at A and I need to be at B, what do I need to do to get there instead of I can’t get there or someone didn’t give it to me or it’s too hard or whatever. If you take that approach, then there’s very few things that we’re probably not going to accomplish.
Ryan Holiday: Well, look, of course it’s hard. If it wasn’t hard, everyone would be doing it and the market would be so saturated, there’d be no scarcity or gains. I think what we want to do is we want to take the things that happen. Like you have an employee that’s being insubordinate. Okay, what is that calling on you as the boss to do? Is it to be patient? Is it to forgive them? Is it to have the unpleasant conversation of letting somebody go? Is it to have the empathy to understand what’s wrong with them or whatever it is. You’re dealing with a natural disaster. You’re dealing with pipes that keep breaking. What is this situation asking for from you and are you going to be able to deliver it?
Brandon: Yeah. Well, let’s dive into your book. The new book that you’ve got coming out. Stillness is the Key. It’s actually out right now. I’m not just saying this because you’re on here and I read a ton of books, but easily one of my favorite books I’ve read this year … I just devoured this thing. Stillness is the Key. Can you explain what do you mean when you say stillness? If it’s the key, [inaudible 00:21:14] secret to the book right here. What is the-
Ryan Holiday: Everyone I think knows what that word stillness means. You’ve felt it in your life. Whether it was that you were negotiating the deal of your career and everything slowed down and you were totally focused. It was you were writing an article and you were just in this flow state. It was sitting on a porch swing with someone you love. It was when you were locked in conversation with someone that you were connected with. Stillness is this state we get in and it’s spoken about by the Christians and the Buddhists and the Stoics and all the ancient schools. It’s really the key to performance at the end of the day. Like an NFL team in the two minute drill on the fourth quarter. It’s an NBA player with a game on the line and they’re shooting a free throw.
Ryan Holiday: It’s a hedge fund manager trying to make sense of a market that’s whip sighing in different directions. Stillness is the place we get to mentally, spiritually, physically, that allows us to ignore everything that’s going on outside us and focus entirely on what we’re doing and bring all of ourselves to it in a sort of a healthy adjusted profound way. I think we know these moments fleetingly, but the book is really about how you can make them a regular practice in your life and how you can cultivate them more often.
Brandon: Yeah, because as a kid I [inaudible 00:22:53] those things or as a teenager, even though it seemed to happen more often, like naturally. It’s getting to these states where you’re just like in this great moment of like … I can think of a hundred examples when I was a kid where you just like sitting with a friend talking late at night until three in the morning. That whole time is just so pure. As an adult, we can go sometimes weeks or months, it feels like if we don’t intentionally plan those things. Do you have any like tangible … There’s a lot of tips in the book. Do you have anything tangible, like this is a really good idea, try this in your life. Anything that you can give people that’s tangible right now?
Ryan Holiday: Yeah, I’ll give you a couple. I would say one Winston Churchill wrote a fascinating book that I talk about in this book called Painting as a Pastime. He talks about what helped him win the Second World War. What helped him get through the failures of the First World War and manage the incredible workload that he had on him his whole life. Was not white knuckling it with more and more work. It was picking up something like painting. He liked to build buildings out of brick on the back of his property. He had hobbies that allowed him to sort of rest his mind while he being active.
Ryan Holiday: I think it can be so easy whether you’re a real estate investor or a lawyer or an author, to be 100% focused on your work. That’s what we think. We go, “I’m totally locked in. I’m 100% on this. This is all there is.” You’re like, “Screw work life balance.” Well, actually no. Hobbies allow you to step away from what you’re doing. Look, I was talking about that my place in Florida. I was at the beach with my family playing in the sand with my son when I had the idea for what will be my next book series.
Ryan Holiday: I could not have gotten that banging my head against the keyboard trying to force that. You have to have something that channels your energy. That allows you to sort of explore yourself and explore in a sort of free play fashion. I think hobbies are a big one. A habit I have in my own life. That’s a big part of my morning routine is I go for a long walk every morning and I don’t take my phone. My son and I go for this walk and we’re just outside. We’re just fully present. We’re experiencing and the ideas that I have on this walker not only worth a lot of money, but they sort of prepare me for the day ahead. Then that’s a big one.
Ryan Holiday: If I was going to give you one more … I would say having some idea of what enough is for you. This is exactly what I fell into with the deal I was telling you about. If you don’t know what enough is or you don’t know what you need, then the default answer is always more, and more and more and more eventually leads to bankruptcy. Literally or figuratively. If you have no idea what you need to be happy, you will end up chasing things often that come at the expense of that happiness.
Ryan Holiday: There’s an exchange I have in the book between Joseph Heller and Kurt Vonnegut, two of the greatest writers of the 20th century. They’re at this dinner party. They’re in the house of this billionaire. Vonnegut says to Hillary says, “What do you think of the fact that this billionaire probably made more money this year than your book Catch-22 will make in its entire life?” Joseph Heller looks at him and he goes, “Yeah, but I have something this guy can’t have, we’ll never have.” Vonnegut says, “What’s that?” He says, “I have enough.”
Ryan Holiday: The idea of what you need your life to be. What kind of life you’re trying to build. What you want your day to look like is really, really important as you are trying to make decisions about what to or not do or how to live or what to say no to.
David: I think that’s so important for people to hear because like you mentioned earlier, it is so easy to get into the frenetic frantic almost maniacal, “I have to get here and I have to work harder.” That’s the only way to achieve is just to do more. For some people that is actually useful for them. There’s someone who’s never tried that much and kickstart to see what’s really inside you is important. It’s almost like that can be the battery that jump-starts your car, but the alternator needs to kick in and something else has to propel. You don’t want to rely on that forever.
David: I got this Instagram message from a 17 year old kid over the weekend and he said, “David,” he was torn up inside. He’s like, “I want to join the military and I want to go protect our country and I want to learn all the things they’re going to teach me, but I also want a career in real estate and I don’t know what to do. Should I do this like what I see you doing or should I do that?” I said like, “You don’t have to pick between them. You should go do everything you want to do in the military and save up your money and invest in real estate. Real estate is not life, but real estate can fund the life you want. If the life you want is to be in the military that or learn what that is. If you feel this calling in your soul that you need to gain confidence and develop who you are, then that’s what’s important. Let real estate be a means to get you there.”
David: I think what you’re saying is so important because some of us that get good at real estate, it can easily consume our entire lives and it can become our source of identity and what we do to pick ourselves up when we’re down. You never think that it’s a problem because it’s healthy. Real estate is good.
Ryan Holiday: Sure. [inaudible 00:28:16] your work is always going to be more predictable and controllable and in a way a sort of gratifying then the realities of marriage or real life. A real estate investment never tells you what you don’t want to hear or criticizes you or has emotions or whatever it is. You can end up … whenever you get upset, whenever you get stressed, instead of turning to a hobby or turn to a relationship or reminding yourself what’s important in life, you can just throw yourself into work and you end up doing that enough times and you get so trapped in it that it’s very difficult to get out of it.
Brandon: I have this friend, this girl who publicly like and to me sitting like … well, we’ve known each other for a number of years now. Said like, her goal was $30 million net worth. For a decade now. She’s like, “I want $30 million net worth.” She finally achieved it. She got $30 million and I was sitting with her talking to her and she’s like, “I just didn’t feel right.” She got really depressed, really sad, didn’t really know what would come next. She finally said … Next time I talked to her, she said, “I figured it out. I know what I’m going to do now. I just need to get to $100 million.” I was like, “I’m not sure that’s the answer here. Maybe there’s a line.” I’m curious and it’s a question I’ve asked several people on the podcast over the last few years is how do you balance ambition and the joy that comes from pursuit of business, which there’s a lot of joy in [inaudible 00:29:51] we write books, we do all the stuff cause it’s fun. How do you balance that with being content, with being still?
Ryan Holiday: Well, it’s funny because I thought I heard that story about Joseph Heller and I looked at it and it’s like, “Okay, so he had enough,” but what did that mean? Did he stop writing? No, he wrote a bunch of other books. He wrote one that was a number one New York Times best seller. They’re not as memorable as the others, but he definitely didn’t stop. There was a New York Times reporter who said, “You haven’t written a book as good as Catch-22.” He goes, “Who has?” What you think you get from contentment if you actually really do like the process is freedom to enjoy it for its own sake. The problem is being in real estate because you want to make $30 million or being an author because you want to be famous or because you want to see yourself on television or you want the critics to love you because eventually you get those things and you realize that they don’t really mean anything.
Ryan Holiday: A Super Bowl ring’s not going to make you happy and neither will a mansion and neither will a million Instagram followers. That doesn’t mean that you can’t continue to make music or fund deals or write books. It just means you should do it because you actually like doing that thing that you love the process of it. Not because you need the external rewards. Because the reality is the external rewards are not only not as fulfilling as you think they’re going to be, but they’re often much more unpredictable than you think.
Ryan Holiday: If you invested in this apartment complex because you thought it was going to make you a big shot in town, or you thought I was going to double your money, well, okay, what if you get that but it takes 10 years instead of five years? If you really hate it, that sucks, but if you like maintaining the building and sourcing tenants and be in [inaudible 00:32:07] if it’s an art form to you, then it’s going to be a much better experience.
Brandon: Yeah. That’s really good.
David: I think Brandon and I hear a lot of people that come to real estate because they don’t like their job. They’re looking at real estate to be their savior from the job they don’t like, and all they do is trade the job they didn’t like for a new job. They might not like it even more with less certainty and more at risk. They’re still not happy. We try to tell people all the time. [inaudible 00:32:33] going full time isn’t for everyone. That’s a great point that you’re making is that’s so discouraging when you finally hit what you think was your dream and you get it and you’re like, “This is worse than where I was.”
Ryan Holiday: Really asking yourself like, “What is it going to be like if I get what I’m hoping for?” I think is a big part of it. I was just talking to a friend about this, do you actually need to do that thing to be happy? It’s like, what I would say to your friend is like, “What are you going to do with $30 million?” I was talking to a friend of mine who’s a writer who is leaving. He was going to start a company. The purpose of starting a company long roundabout way. Is like, ultimately he wanted to make a bunch of money to continue being an [inaudible 00:33:22]. You know what I mean? He was hoping to make a bunch of money so then you get write … His dream was in 20 years to be writing more books. It’s like you’re giving up what you already have to do an extremely hard thing to have the … You talk to people, you go, “What do you want to make all this money for?” It’s like, “I need freedom.”
Ryan Holiday: It’s like, actually what evidence do you have that you will be more free with $30 million? It may be that what you have to do, who the person you have to become to accomplish that is ultimately a less free person.
David: That’s such a good point. I don’t know anyone in my life better than Brandon Turner who inherently understands that and is very aware of not getting caught up in those snares. He will ask you those questions all the time like, “Why?” He’ll say that just all the time. “This is what I want to do, but why?” Because what we don’t think about is exactly what you’ve said. Ryan. I want to have a six pack. Okay, but why? Who would ever say having a six pack is bad? Do you really want to get up every morning at 4:30 and go for a two hour swim and then eat the … if that’s what it takes your body to have that and then maintain that forever and it’s not going to make a difference in your health.
David: It’s pure ego that you want everyone to see it. Would you actually be happier having that six back and having to structure an entire life around accomplishing that goal. Will the costs that you have to pay to have that actually be worth it? Or would you just be like, “You know what, if I don’t have a six pack, as long as I’m in a happy relationship and I’m healthy, I don’t really need it. My shirts never off anyways. It might be worse for me if I had it because then I’d become prideful and I’d want everyone to notice it. When they don’t see my six pack and they’ll say anything my feelings are hurt, I’m going through life working really hard and not getting anything.” All of a sudden it’s worse that you went after something that looks like it would be a beneficial thing to happen.
Ryan Holiday: My wife and I are looking now at this commercial property that we’re thinking about buying and there’s a business idea we have for it. I think we’re doing a much better job of thinking about, “What does this do for our quality of life?” I think that part of the reason we’re able to make that decision or to even have the privilege of thinking that way is because we’ve made investments and been smart with money. If this fails, those things will continue to pay our bills. I think the benefits of having sort of passive intelligent real estate investments is that they give you freedom to explore things that you otherwise wouldn’t be able to do, but as we’re thinking about this project, my primary concern is not whether the business will work.
Ryan Holiday: I know I can make the business work in some form or another because that’s who I am and that’s the work that I’m willing to do. The question is, will success be a positive or a negative for us? Will having this thing be wonderful, be lucrative, but we’re now chained to this place and we can’t move if we want to move or we can’t go on vacation if we want to go on vacation or I’ve got to rush to this place at 10 tonight because some problem happen. Is that what I want success to look like for me? Or is it potentially going well going to radically simplify our lives or give us sort of a base to develop on. As we’re thinking about it, we’re not just thinking about what are the dollars and cents? We’ve done that intelligently on our other projects. We’re now able to go, “Is this where we want to go directionally in our lives?”
Brandon: I want to circle back to something you mentioned earlier when you were giving some tangible ways people can find more of that stillness in their life. One of those you mentioned is, you mentioned how going for the walk everyday gives you that clarity and those thoughts. I just want to first of all say the same thing is so true for me in that the most stillness I’ve ever had in my life. Like where the best ideas came from, the most calm is when my daughter was born and she would wake up like four in the morning just crying and my wife needed sleep so I’d take her, put her in the car and you can’t listen to music because she’s sleeping so I’d drive for like four hours and just drive around the neighborhood. Some of what we have a BiggerPockets today. What the podcast does today, the books I’ve written came from those times of just driving.
Brandon: Now on the other hand, I did this like Half Ironman recently. I did the whole … it was like seven or eight hours of just pure exhaustion and I found out the day of, I couldn’t listen to music while I was doing, I had no music. I always run with music and I was with bike with music. I even swam with music. When I’m in the car, first thing I do, I turn on music. When I’m at home I turn on my Alexa. There’s music going all the time. I realized that’s probably not a good thing and that taught me … the worst part of that marathon, the triathlon was not the triathlon.
Ryan Holiday: It was the silence?
Brandon: Was the silence. I’m not the only one that’s [inaudible 00:38:21] we just have music and talk radio and TV from the time we wake up to the time we go to bed. Why do [inaudible 00:38:28] do that to ourselves?
Ryan Holiday: I talk about this fascinating guy, Randall Stuntman, who’s a friend of mine. He’s a consultant and advisor, sort of the CEOs of most of the big New York hedge funds and banks. Basically anyone you can think of in finance he’s worked with. He was saying that over the years he’s asked them about what they do to relax. He’s looked at all their hobbies. It was long distance bike riding or fly fishing or listening to classical music. What he found across all their hobbies was an absence of voices. He said that they enjoy something that is an absence of voices. It makes sense. They have 10,000 people working for them, which means somebody is always asking them for something or they’re always listening to something and that they needed the time that was quiet.
Ryan Holiday: Apart from all that to allow them to recuperate and think clearly and gather their thoughts. I tend to listen to music when I run and work out. When I’m with my son, there’s no music. It’s just quiet. Every once in a while, I won’t take headphones with me when I run for precisely the challenge of like, can I mentally do this? It’s basically I think a shortcut for turning off your mind, listening to music and you just don’t want to become too dependent on it, I think.
Ryan Holiday: I talk to people that are like, “Hey, I …” and obviously people are listening to this on a podcast right now. I think podcasts are great but let’s make sure we’re not like cranking it up to 3X speed and just jamming them into our brain and we never have even a minute of silence. You need silence in your life because silence is where we can hear that voice inside of us. It’s often telling us things that we’d otherwise not think of.
David: That’s really good. I’m going through a phase in my life right now where I’m not working nearly as much. The last two weeks I’ve done hardly any work but it feels like I’m working because I’m thinking so much about my own mind and how I think. What I realized is what I do is I focus on the information that comes into the container of my mind and I’m always trying to jam more stuff in there. I love learning. I’m listening to tons of podcasts, reading tons of book and learning, tons of stuff, but I don’t see hardly any impact from any of that information that I put in my head because I have the same filter that looks at at all that doesn’t figure out how to actually apply that or do anything with it. It’s like I keep putting new apps onto my computer but my operating system isn’t very effective for what I want to accomplish.
David: I’m having to actually look at the operating system. That is what I use to look at the information. It’s very tricky. It’s very easy to never even think about the fact you’re using Internet Explorer to surf the Internet. You just look at the web pages and not think about this experience would be different with Google Chrome and it might be more effective. There’s a better way to think and that’s been on my mind constantly. The only way I’ve been able to maintain the focus it takes because it’s so hard to challenge your own perspective and your own way of looking at stuff. It’s like these patterns have been there for 36 years of my life. Is you’ve got to get away from doing, doing, doing all the time. These questions, your time at Ryan are so powerful to trigger that. Why do I even like it? What am I getting out of this? Do I even enjoy this or am I doing it for different reasons? When I found it, it’s so powerful.
David: I’ve been making the same amount of money not working for the last two weeks that I was when I was just maniacally going after it because I’m more effective with the little bits of times that I do work. The relationships, the talks I’m having are so much more impactful on other people that they are providing the referrals that I need for me rather than me thinking I got to go talk to 50 people. If I talked to the right five people, it’s the same thing. I never ever, ever thought that way when I was in what we were doing so I can just a hundred percent support the point you’re making. I know the listeners that are hearing this, they’re probably wondering like, “Yeah, that sounds great, but can I really trust it? Can I take my foot off the gas without the car crashing?” I know, Ryan, you’ve pursued this for a long time. What advice do you have for someone in that position?
Ryan Holiday: Well, look, there’s a reason that people whose time is worth a lot more money than your time or my time do stuff like that. I wrote a book about Peter Teal a couple of years ago and I would’ve thought he’d be the sort of busiest person in the world. That he’d never have time. We would have these three or four hour long conversations. I was invited to a handful of dinners he would have. He’d have these dinners that would sometimes go on for five or six hours. Then I realized, “Wait at this point in his career, he’s not doing anything.” You know what I mean? He’s not scheduling meetings. He doesn’t have to review paperwork. He has paid people that do everything. The only thing that he can’t pay people to do for him is come up with theories about the world.
Ryan Holiday: Come up with ideas for trends he wants to predict or observations he has. Relationships and sitting down and having long thoughtful conversations is the way that he monetizes what … that’s the best form of monetization of his time. What you realize is that the really powerful people are thinking about their time in a way that’s almost an Athema to how we think about it. Bill Gates twice a year takes one week and it just goes out to a cabin in the woods and he just thinks. He just reads books and he thinks. That might seem like an indulgence that only a billionaire could have, but in fact, that’s why he’s a billionaire. It’s the ideas that he has when he steps away from everything that he’s able to come up with big breakthroughs.
Ryan Holiday: You can pay someone to clean your office. You can pay someone to make sales calls for you. You can pay someone to do a lot of things. You can’t pay someone to think long term for you and to generate new ideas for you. That has to come from you and so you have to make sure that you are … Like I said, I had an idea on vacation. I can’t pay someone to go on vacation for me and have an idea for me. That has to be me being in control enough of my own life to make the decisions and to have the experiences that are required for me to have the ideas that ultimately influence and direct my work.
Brandon: Yeah. Really good. Yeah, I think every book idea I’ve ever had, every book came from a vacation. Same thing as you.
Ryan Holiday: You don’t get that by just pushing and pushing and pushing. You get that by stepping away a little bit.
Brandon: Yeah. I read a study recently, I wish I could cite it now because it was shocking. It was basically something like 80% of all whatever decisions that CEO’s made are made not on work hours or something like that. It was like this shocking stat. Because your mind needs time to get out and just process it and the subconscious to work on it. That’s when those ideas come.
Ryan Holiday: Yeah, exactly.
David: For anyone whose loves this line of thinking, Brandon, before you jump in, check out Episode 330 of this podcast where we interviewed Cal Newport. Very similar line of thinking.
Ryan Holiday: Cal is amazing and hugely influential in my work and in my life. You can’t pay someone to do deep work for you. You have to carve out that time and it’s not a luxury, it’s an essential good for your business.
Brandon: Yeah. Speaking of time, so you mentioned in the chapter on routine, you talked about routines. You hear this phrase in there, I underlined it and it said, “All the greats understand is complete freedom is a nightmare.” What do you mean by that? Let’s talk about routine then.
Ryan Holiday: I’ll give you an example. You know what FIRE is, right? The Financial Independence, Retire Early thing?
Ryan Holiday: I was reading an interesting New York Times article about a bunch of the people that had sort of successfully done that. They were talking to this one guy who had retired, I don’t know, like 30 and made a bunch of money and he had done it. The reporter goes, “What’d you do today?” He goes, “Well, I stared at the ceiling fan for a while and I’m making my way through the thousand greatest movies of all time.” It just like, “Oh my God, dude, get a f*cking job.” That’s not what life is. You have to have structure. You have to have purpose. You have to have a project as way. So many people who retire end up being miserable.
Ryan Holiday: Is not that retirement is miserable. It’s that they were so solely on their job that they have no other interests or no other purpose in this planet, but work. For me, routine is a way that sort of create order. To create purpose. To prioritize my work, but also to prioritize things that are not work. Every morning I try to wake up around the same time. I have a routine that I go through in the morning. I have a routine I go through before bed. I make time that requires me to sit down and do creative deep work because I know it’s not just going to happen on its own. That’s not how it works.
Brandon: Yeah, routine … When I was in my younger punk rock days where I wanted to be the next Blink-182. Routine’s the man and fighting it. I was so against it. That’s changed so much, especially maybe with kids. Like we’re in a lot more routine. I have kids, you have kids, but I cherish my routines now. I love that. I have a cup of … I don’t mean like coffee all that much, but I go to Starbucks every single day with my wife and I get a cup of tea. I don’t need caffeine. It’s not even a caffeine thing. I can get now usually. It’s just that routine, that’s what we do together that centers us every morning pretty much we go, or every night before we go to bed, I have a cup of decaf coffee. I don’t even like it that much. It’s just this centering thing that we do.
Ryan Holiday: I think you realize that with kids, you realize if they don’t have a routine, they’re unhappy. If we violate the routine, my son doesn’t sleep well because now his whole world is out of order. It’s the same with dogs. It’s the same with horses. You need a routine. The idea that human beings are not animals that we’re designed to just do whatever we want whenever we want it is just very unrealistic and I think very unnatural. Having a routine just kind of takes the edge off and then it allows that stillness to creep in for you to do the important work that you’re trying to do [crosstalk 00:49:29].
Brandon: If you ever do you ever do a vacation? Sorry, I was to say, if you ever do a vacation at the end of it, you come home, you’re like, “I feel like I need a vacation from a vacation.” What I realized just really right now is no, what I need is routine again because I’m [inaudible 00:49:41] I don’t have a routine. What I’m actually craving or I think I’m craving more freedom or relaxation, what I’m actually craving it’s structure again in my life so that I feel calm. I just never put that together until just now.
Ryan Holiday: I think it’s really hard to switch back and forth. You tell yourself like, “I’m on this diet, but I’m just going to eat whatever I want for the next couple days.” Getting back to it is extremely difficult because your body reverts. We’re always reverting to that unstructured state. It’s something you’ve got to build and then it’s something you’ve got to protect for sure.
David: I think when you’re not in a routine, your brain has to work double time or more to figure out what should I be doing? How do I get safe? What’s going to make me feel …? I need to be in an environment where I feel like I have some control over it, which it takes a lot of horsepower to do that. You don’t have stuff left over for the deep work that you referred to for those moments to get away and to think and to let these ideas come because your subconscious is running around, where am I going to eat? What am I going to have? Where am I going to sleep? Who’s going to be around me? I don’t know this person. What are they going to say?
David: It’s a lot of strain on you. Now on the other end of the spectrum, you can get into trouble being a person of too much routine. Anything that asks you to step outside of that. You’re fearful and you don’t have confidence and so you’re stuck in that boat. Like Brandon, that’s a very good point. There’s a healthy level of routine that you need. You need to be able to let your brain coast so that you can think these thoughts that we’re talking about. You can ask yourself, does this even matter to me? You’re not thinking those thoughts.
David: I was a police officer for 10 years. Technically I still am one. When you are in the middle of a very high risk, high threat type situation, you’re not aware of almost anything. Your brain goes through what we call auditory exclusion. I’ve said guys names that were two feet away from me and they could not hear their own name because there they were so focused on that gun that guy had, or officers all the time are driving a car and they’re going super fast that they can pursuit. They don’t see the car pull out in front of them that they hit. They always say, we call that tunnel vision. You just zoom in on the threat that’s right in front of you.
David: They train us to slow down your breathing, open your perspective, calm yourself down so that you can see what’s behind the guy that you might be shooting at. Is there a kid back there? Is it better that I don’t shoot at this guy that had the gun? I learned that lesson from being in that environment, that those moments are good for growth, but if you try to live at that place, you don’t see anything that’s happening around you. It’s a horrible way to live.
Ryan Holiday: Totally and nothing shows you this more than than having kids because if you think you’re in control of your routine and then you introduce this insane tiny person into your world, you quickly realize just how little control you have over things. For me, it’s become sort of routines plural. This is what I do in this sort of set of circumstances. This is how I try to play it in these set of circumstances. You got to add some flexibility. You can’t go through life really rigid or you break under the stress of it, but if you don’t have any routine or you have unlimited decisions to make throughout the day, you start making really bad decisions.
Ryan Holiday: There’s a reason Steve Jobs wear the same outfit every day. Barack Obama had only a couple of suits that he choose chose from. The idea is I want to limit the amount of unnecessary choices that I make throughout the day.
David: Who was the American idol guy? Was it Simon?
Ryan Holiday: Yeah, Simon Cowell.
David: Wear a black shirt every time.
Ryan Holiday: Yeah.
David: That’s a guy that had to make decisions on, is this a yes or a no constantly.
Ryan Holiday: Sure.
Brandon: [inaudible 00:53:22] I took a page out of their book and I went on Amazon found it. You used to work for American Apparel, right?
Ryan Holiday: Yeah.
Brandon: I found that you can buy American Apparel, t-shirts on Amazon for like $9. Free shipping to your house. Nothing on them. They’re like the most comfortable shirts I’ve ever worn. I went and bought seven shirts that are brown like this and I have five blue ones and I wear them 90% of my day, unless I’m going somewhere, I have to dress up. It’s the blue shirts.
Ryan Holiday: No, I had to wear this shirt because I was at something earlier, but I wear an American Apparel Power Wash tee which is a version of that t-shirt but it’s actually more comfortable, I think you’d like to get better. It’s designed … I don’t work there anymore, but [inaudible 00:54:01] sure pretty hard. It’s chemically treated so it feels like it’s been washed like 40 times. That’s what it [inaudible 00:54:08] is, but I-
David: [crosstalk 00:54:11] element of comfort.
Ryan Holiday: I wear the same shirt every single day. For me, it’s not just reducing the amount of decisions that I make when I decide what to wear in the morning. It’s actually also eliminating the act of shopping from my life. I think about people who are constantly having to go out and look for clothes and how inefficient that is and having the judge whether something that’s fashionable or unfashionable or whatever it is. Find what you like, stick with it. Then if you’re going to experiment or try new things or explore, do that in your business. Do you know what I mean?
Ryan Holiday: Focus that energy on, “Hey, I’m going to drive over to this side of town and see what this is like or I’m going to try this or that, or I’m going to do it this way, this time.” Don’t exhaust yourself hemming and hawing over where you’re going to have lunch. There’s not a great ROI on that decision or really decide whether you’re going to buy this stock or not.
David: That’s why I shaved my head.
Ryan Holiday: There you go.
David: That’s the secret to my success. I shaved my head so I can’t think about it, and brilliance comes out of me for the rest.
Brandon: That’s funny. Tomorrow rise, you’d have a shaved head. Like you’re right. I’ll do that. All right, so last thing I want to get to before we close this thing up or one of the last things, you have a Journal, the daily Stoic, is that what’s called Journal?
Ryan Holiday: The daily Stoic [inaudible 00:55:30] yeah.
Brandon: We want a BiggerPockets as well, like the intention Journal. Journaling has been a huge part of my life. Why is journaling so powerful? Why does it change lives? When I turn on my routine, it’s huge.
Ryan Holiday: Yeah, I wake up in the morning and I sit down and actually work on three Journals. I have one that’s called a One Line a Day Journal and it has spots for five years. This morning when I was looking at it, it was showing me what I did on that day, last year and the year before because I’ve done it for three years. I have just a general blank Journal where I write different thoughts. Then I do the daily Stoic Journal, which sort of gives me something, an intention like you’re saying to sort of go through and think about over the course of the day and then to reflect on my success or failure of it either that evening or the following morning. It’s this process. I think what journaling is about is like putting out there and then seeing how you do. Putting something out there then reflecting on how you did.
Ryan Holiday: It’s this process of sort of putting yourself up for review and examining yourself and looking at yourself from a distance. When you mess up, when you have success, really break it down and think about like, “Why did it work? Why did it not work? What did you learn from it? What did you not learn? What could you do better next time?” It’s this process that ultimately makes you sort of sharper and wiser for what you’ve gone through.
Brandon: Yeah. That’s really good. One thing I found really helpful in journaling, so much I put it in our Journal, but from a business standpoint is there’s so much noise out there of what you could do in real estate for example, right?
Ryan Holiday: Sure.
Brandon: Like to buy around. There’s a thousand things you could do every single day. There’s this like, I did the [inaudible 00:57:14] like one or two things that actually matter generally. I find when I Journal it helps me actually go, “What is that one simple thing I actually have to do?” It’s usually less than a five minute task, almost always, but we don’t identify it. We will go months [inaudible 00:57:29] identifying what that next simple little thing is. Journaling helps me identify this is what has to get done. If I don’t do it, that night when I go to review my Journal, I’m like, “A three minute conversation, why didn’t I do that?” It was the only thing I had to do today to really actually drive things forward.
Ryan Holiday: Well, I have this ring. I don’t know if you can see it, but it’s one of the rings we make for daily Stoic, but it just says Memento Mori on it. Then on the inside it says, “You could live life right now. Let that determine what you do and say and think.” I think journaling helps with that, but it’s also this process of going like, “Okay, if today was my last day on the planet, what do I need to get done?” If this was the last time I was going to do X, Y or Z, how would I do it?
Ryan Holiday: I think journaling helps us put these things in perspective. We want to make sure that we’re not just journaling about, “So-and-so said something mean to me yesterday, or how can I make a little bit more money or why am I not getting the credit that I deserve?” We want to be journaling and thinking about and meditating on the big questions as you were saying, like what actually matters? What’s the main thing here? What’s the important thing? What thing matters in light of the fact that I’m going to die and I could die this afternoon? That’s what you want to be thinking about and I think paradoxically it will help you be better at your job. It will help you be a better investor because you’re going to be focused on what’s actually important, not all the noise and the chaos around you.
Brandon: Yeah, so good. That whole like you could die today the Memento Mori, right?
Ryan Holiday: Yeah.
Brandon: Actually I think I have two of your coins [crosstalk 00:59:08] at my house occasionally and it’s like, “Yeah.” I love that. There’s this phrase in the Christian world, I guess. We’re like, “In light of eternity does this matter?” Does that really matter that you didn’t get that one real estate deal really in the grand scheme of things. Not much actually matters when you look at it from that [inaudible 00:59:28]. I think that’s just a really good reminder we’re going to die. From the moment we’re born, we’re in the process of eventually dying in here so do that powerful stuff, dude. All right, well this has been fantastic. Anything you want to leave us with? Any final thoughts? Obviously tell us what, you can get the book and [inaudible 00:59:45] order it, but anything else?
Ryan Holiday: No, I think leaving people with that thought. Like does this matter in the light of eternity? Does this matter in the light of your mortality? Not just, this is an in consequential thing that I’m not going to give it much attention, but also like, does becoming a billionaire having 30 or a hundred million dollars really matter in the light of eternity where you can’t take it with you when you die. Don’t take on more than you need. Don’t be stressed more than you need to be stressed. Don’t take things more personally. Don’t get your identity wrapped up in success. Focus on what actually matters, which is whatever happens to be in front of you right now.
Ryan Holiday: You can get Stillness is the Key anywhere books are sold. If you want a daily meditation on Stoicism, you can sign up @dailystoic.com. I’m @Ryanholiday on most of social platforms.
Brandon: Perfect. Perfect. Now, real quick question. We usually do end with the famous for at the end. I’ll [inaudible 01:00:40] favorite real estate book, favorite … Do you have couple of favorite books that’s helped you with your real estate and helped you just business in general. Then we’ll [inaudible 01:00:48] those two.
Ryan Holiday: Yeah, I’m looking at my shelf here.
Brandon: [crosstalk 01:00:51] couple behind you.
Ryan Holiday: As far as real estate goes, I don’t think there was one book, but I did just recently read David Brooks’s book, the Second Mountain where his point is that you climb one mountain, you think that success and then you get there and then you realize that that’s actually not the mountain that matters and that there’s a second mountain usually that has to do with community and family and having impact on the world. It has changed how I’ve thought about things a little bit. That it’s not just about accumulating more and making more money, but it’s about deciding what you want your role on this planet to be.
Brandon: All right. What about … David, I’m [inaudible 01:01:32] question because I already started at hobbies. What do you do for fun?
Ryan Holiday: For me, running and swimming are my two big hobbies. Then I have this farm and we love just going around and working on it and slowly improving it.
Brandon: Yeah. That’s cool.
David: I going to still brand this question. I’m going to change it a little bit. In your opinion Ryan, what sets apart successful business people from those who give up, fail or never get started?
Ryan Holiday: That’s a good question. I do think there is a line from Seneca where you saying, he’s like, “Fools have one thing in common. They are all getting ready to begin.” Is like successful people start stuff. They make progress. I think your point is that people always have excuses for why they haven’t started. I hear from kids all the time, they’re like, “I want to drop out of college and do this.” That thing that they want to do is never dependent on dropping out of college. You know what I mean? They’re like, “I want to be an entrepreneur.” It’s like, “Okay, what company are you starting? Start it from your dorm room.” I think successful people by definition, gets started.
David: I love it.
Brandon: It’s fantastic. All right, well, very thankful for you today for coming on again. Stillness is the Key. Pick it up everybody. I highly, highly, highly recommend it. Really good. Like I said, one of the best books I’ve read in a long, long time. Check it out. Ryan, we’ll have you back again someday in the future when you write another book and got some more real estate deals.
Ryan Holiday: All right. You got it.
Brandon: All right thank you!
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