Everything is Investing

Episode 002: Life as a Portfolio: A Framework for Better Returns

Synopsis

In this episode, Jared moves from the "what" of Vested to the "how" of the Everything Is Investing (EII) framework. He argues that portfolio management is not a niche skill for Wall Street, but a universal operating system for navigating human life. Jared breaks down the three "investing macros"—Time, Energy, and Money—and explains why we must view our lives as a collection of accounts where there is no such thing as a neutral action. Whether you are managing your health, your marriage, or your retirement fund, you are making deposits or withdrawals every minute of the day. This episode concludes with a practical "Mindshare Audit" to help you stop being surprised by your results and start taking command of your trajectory.

Sequential Outline

I. Establishing the Framework: The Pilot’s Dashboard

(0:41) Foundational Operating System: EII is the core framework for everything Jared teaches. Before diving into specific real-world case studies, it is essential to understand the underlying "operating system."
(2:03) The Pilot Analogy: A pilot doesn’t hop into a jet and fly at 600 mph immediately. They first spend months learning the systems, the gauges, the dials, and the controls.
(2:42) High Stakes: While money feels like high stakes, the responsibility for your own life and the well-being of those you care for is even higher. Understanding the system allows you to apply principles effectively rather than acting on impulse.
(3:17) Accessibility: This framework works regardless of where you start—whether you are currently "below zero" or in the top 1%. It is a "white belt to black belt" progression.

II. Redefining the Portfolio Manager

(3:47) Everyone is a Resource Allocator: Portfolio management is not limited to those managing multi-million dollar funds. We are all resource allocators choosing from a "menu" of investment options many times every day.
(4:20) Life Accounts: Every aspect of life—relationships, health, career, faith—should be viewed as an account that can be managed, budgeted, trimmed, or reallocated.
(4:40) The Literal Definition of EII: Every allocation of your limited resources (Time, Energy, and Money) is a literal investment that produces a return.
(5:02) The Myth of Neutral: Every action is either a deposit or a withdrawal. There is no neutral gear; your accounts are either growing or shrinking based on where you direct your resources.

III. The Three Investing Macronutrients

(5:38) 5% About Stocks: For most people, the stock market represents 5% or less of the "investing game." Even for professional investors, the vast majority of life-investing happens outside of public markets.
(6:03) The Macros: Time, Energy, and Money:
- Money is just one macronutrient. Time and Energy are often far more critical to the highest-stakes accounts like family and health.
- Even with money, most of your "investing" isn't in stocks; it's the daily decision of where to direct cash flow to solve problems or create value.
(7:35) Universal Application: The same tools Jared uses for professional portfolios (tracking, benchmarking, rebalancing) are the tools he uses for his spiritual life and fitness.

IV. Mapping the Accounts of the Life Portfolio

(8:51) Examples of Key Accounts:
- Health & Fitness: A portfolio of physical movement and nutritional inputs.
- Marriage: Shared interests, trust, and service built primarily through time and energy.
- Friendships: A portfolio of people you invest in and who invest in you.
- Career: A portfolio of accumulated experiences, projects, and education.
- Parenting: Often a "one-sided" investment focused on launching a healthy, upstanding human into the world.
- Spiritual Life: A portfolio of prayer, service, learning, and practices.
(12:31) Happiness as a Return: Fulfillment is the cumulative return of how well you are investing in the accounts that align with your purpose.

V. The Rule of Returns: Trajectory and Responsibility

(13:15) The Caveat of Exceptions: Jared acknowledges outliers—cancer (citing his mother’s healthy lifestyle but short life), failed businesses, or external tragedies. Not every bad outcome is a "bad investment."
(14:06) The Rule vs. The Exception: While exceptions exist, in the vast majority of cases, outcomes are the direct or indirect result of investment decisions.
(14:42) You Get What You Pay For: If you consistently deposit into a "mediocre marriage" or "unhealthy body" account, the resulting state of those accounts is not a surprise—it is a result.
(18:46) "Why Are You Surprised?": A core Vested question. Looking at your current account balances typically reveals exactly where your resources have (or haven't) been flowing.

VI. Reframing Failure & The Danger of "Average"

(19:42) Failure as Poor Returns: Reframing failure as "poor investing" makes it solvable. Investing is a skill that can be learned; it is only a permanent failure if you reject the opportunity to learn.
(20:37) Average is Terrible: In modern society, being "average" in health, marriage, or finances is actually a borderline disaster. Average is not a target to shoot for, but a point to move past.
(21:37) Investment Failure: Below-average outcomes are rarely moral failures; they are usually failures of resource allocation.

VII. Long-Termism and the Power of Compounding

(25:52) Investing vs. Gambling: Investing is a long-term strategy focused on ownership. Gambling is a short-term hunt for immediate gratification.
(26:44) Compounding: This is one of the most powerful forces in existence, but it only lives in the long term.
(27:56) The Buffett Model: Warren Buffett’s fame isn't just his returns; it's his eight decades of consistency. He didn't hit $1 billion until age 60. Most people quit long before the compounding truly takes off.
(30:13) Staying Invested: The only way to make meaningful progress in what matters is through long-term consistency and focus.

VIII. Top 1% Results and the Role of Mindset

(31:13) The Cost of Meaning: High-impact outcomes require high-impact costs. You cannot run a marathon on talent alone; you run it because you "deposited" 5,000 miles of training.
(32:30) Putting in the Reps: Hard work doesn't get "lighter," but you become more capable of doing it without fatigue.
(33:36) The Expectation Gap: You cannot expect Top 1% returns (in health, wealth, or relationships) while providing Bottom 50% inputs.
(34:21) Mindset Determines Trajectory: Your mindset (Wealthy/Abundant vs. Poor/Scarcity) sets your investing ceiling. You can be a "wealthy person" without money yet if your trajectory is correct. Conversely, someone with money and a "poor mindset" will eventually lose it.

IX. Practical Tool: The Mindshare Audit

(37:55) Behavioral Truths: Tracking tools (time logs, budgets) don't lie. They reveal what you actually care about.
(38:04) The Drift Test: Pay attention to where your mind settles when on "autopilot" (showering, driving, riding). Your mind settles on your highest priorities.
(39:35) The Three Categories of Drift:
1. Over-Allocation: Addiction, waste, or vice. (Things you spend too many resources on).
2. Under-Allocation: Regret, guilt, and "stuckness." (Things you know you should invest in but aren't).
3. Proper Allocation: Passion, purpose, and calling. (Areas of high impact and positive returns).
(41:40) Diagnostic Value: If your mind drifts to categories 1 or 2, you have a trajectory problem. If it settles on category 3, you are realizing the returns of a purposeful life.

X. Closing: Purpose vs. On Purpose

(44:12) The Key Question: "For what purpose?" If you can't answer that, you can't invest "on purpose."
(45:10) Next Episode: A deeper dive into the "Investing Macros": Time, Energy, and Money.

Jared’s Current Mindshare Audit (Top 3):

Housebuilding
Podcasting
Money

Notable Quotes

"Investing is the default. Not investing is not an option."

"Trajectory is more important than your current state."

"Discipline, patience, and effective effort, when done together, are rarely defeated over time."

"Why are you surprised? Look at the investments being made, and you shouldn't be surprised at the balance."

"There is no neutral. Every action is a deposit or a withdrawal. Every account is either growing or shrinking, and we should grow the ones that we want to grow and shrink the ones that we want to shrink."

"Inputs predict outcomes. You grow what you invest in. You get what you pay for. Our trajectory—the direction that we're going—predicts our destination."

"You can be a wealthy person and just not have money yet because you haven't given it enough time. It's putting effective resources through an effective system that results in returns.

"What is revealed by tracking where your time, money, and effort goes does not lie. Those tools reveal what you really care about and where your investment resources are actually flowing."

"Top 1% outcomes come from top 1% inputs. Top 1% days come from top 1% hours put in. You don't get exceptional outcomes without exceptional inputs."

"If you expect top-tier performance with bottom-tier investments, well, get used to disappointment."

002 Everything Is Investing Full Transcript

(0:15) Good day, investors. Welcome back. I'm Jared Bowers. Today, we get to dive deeper into the core philosophy that drives everything that I teach and what I do best to practice myself. And that is "Everything is Investing" as a concept, as a framework, as a philosophy. In the first number of episodes together, we are going to focus on laying out that philosophy, that framework of what is "Everything is Investing." We might and probably will take some side routes that have some fun digressions along the way because we have a lot of interesting and exciting directions that we can and will go from here. But it's important that we lay out the framework that makes up this approach and this philosophy across all areas that we invest in in life, or at least the ones that seem to be pretty important.

(1:27) The importance of establishing this and understanding this framework, this philosophy, is hard to overstate. Understanding the foundational concepts and the tools that we have to use is a critical step in learning and acquiring almost any skill. And that's why before we get into more topic-based episodes, before we really start to dive into examples, apply things directly to the real world, to our lives, talk about case studies, learn from both good and bad examples when it comes to investing, I want to make sure that we are starting from the same foundation of understanding.

(2:03) Because to use an analogy of pilots flying airplanes: when a pilot trains, they don't start out by hopping into a jet and blasting off at 600 miles an hour. They start by learning the systems, the dashboard, the gauges, the dials, the controls, the operating system. And once we understand a system, we're better able to apply the principles in practice. And yeah, I suppose I am likening investing to having the responsibility for passengers in the sky and their lives, but in fairness, that certainly isn't the case with everything that we invest in or even most things.

(2:42) But that comparison does come down to investing. Investing is lower stakes when it comes to something like money. But those pilots that have responsibility for people's lives invested their way there. If you have responsibility for the wellbeing of other people in some capacity, you have invested your way there. And you have a precious resource that you need to care for. And regardless of what direction you're coming from or the outcome that you're trying to achieve, investing and investing well plays a critical role in everything that we do. If we set the stage well, if we get this, I think the podcasts are going to click from here. They're going to make sense.

(3:30) No matter where you're starting from—whether you're starting from below zero or whether you're already in the top decile or even the top 1% of life, white belt to black belt, so to speak—this framework applies. And as we add tools and strategies and learn how to apply this framework of "Everything is Investing," I'm confident that it will result in good things and in better returns. So with that frame in mind, let's dive in.

(3:46) So, "Everything is Investing." What does it mean? It means that we are all portfolio managers. We are resource allocators. We are choosing. We're picking from a menu of investment options that are available to us every day, many, many times every day in all that we do. There's this idea that portfolio managers are only people like me who direct resources and make investment decisions on behalf of other people or have a big portfolio of their own to invest. And that is a very narrow definition of portfolio management because it's not the case.

(4:20) When you look across life, we should look at every aspect of our lives as accounts, portfolios of resources, of people, of opportunities, challenges that can and should be managed, directed, reallocated, budgeted, bought, sold, trimmed. That makes all of us portfolio managers. "Everything is Investing" means this: Every allocation of your limited resources—your time, your energy, and your money—is an investment that produces a return. And those returns can be good or bad, positive or negative. And that's not just metaphorical, it is literal.

(5:02) And I think it's also important to note that there is no neutral. Every action is a deposit or a withdrawal. Every account is either growing or shrinking, and we should grow the ones that we want to grow, and we should shrink the ones that we want to shrink. And we should avoid making deposits into the accounts that should not have deposits. And this concept, this truth that life is a portfolio of accounts is clearly much bigger than just money. Because most people hear investing and they think stocks and bonds. They think of the stock market, financial statements, company reports, buying and selling at the push of a button. And that's true, those things do apply, but only partly.

(5:43) I'd say maybe that's 5% of the game, maybe less depending on your life. Even in my life, the financial markets don't make up that big of a percentage—bigger than most, maybe, probably. But in terms of how I invest across many other areas, that goes well beyond stocks and bonds. Money, first of all, is just one of the Investing Macros, time and energy being the other two. And those other two are often more important when it comes to the most important areas that we invest in. Yes, money tends to be involved with most aspects of life—there's really no getting around that.

(6:17) But even when it comes to money, which we all deal with every day, think about how much of your money decisions, your mindshare related to money, involve the stock market? Unless you're somebody like me. And again, even if you are someone like me, the answer is probably not a lot. It likely should be for the average person: very little. You might check your account balance on an average day. You might notice what's happening in your portfolio of stocks and bonds. But the majority of your money, the vast majority of your money-related tasks and investments do not involve stocks and bonds.

(6:54) By choosing where you direct your money, for instance, what you buy at the store, whether you spend money at all, how you use your money during the day to try to solve problems, get what you want, make things easier—that is where most of our time and effort with money is focused. And that is true, even in my case, and I work with the stock market as my greatest tool. But don't worry, we're going to talk plenty about the markets, about financial investing as we go forward. In the very near future, we're going to dive much deeper into what I refer to as the Investing Macros: Time, Energy, and Money.

(7:35) Portfolio management is a universal operating system for life because we are all managing portfolios and we can all learn to do it well. Whether we see ourselves as portfolio managers or not is a different thing, but we should. We all practice investing on a spectrum from bad to great in every area of our life, whether we refer to it or think of it as managing portfolios or not. And the same tools and the same strategies that I use to manage multi-million dollar portfolios are the tools that I use to manage my health, my relationships, my career, my spiritual practices, and my habits.

(8:25) This brings us to an important concept to understand, which is that not investing is not an option. Or, said not as a double negative: Investing is the default. It is what we do. We are investors. And therefore, we should be portfolio managers who are managing with intention, with purpose, using useful tools and strategies because we are allocating resources every minute of the day. Every domain of life is its own account that you can make deposits into or withdrawals from.

(8:57) Let's talk at least briefly about some of those accounts at a high level. Let's talk about your bodily health, our fitness. That is a portfolio of inputs that you make and outputs that you require. It is a portfolio of movement and time that is allocated to them. It's a portfolio of ingredients that you put together to make up the food that you eat to fuel your body. Let's consider relationships as accounts. Specifically, let's talk about marriage. That is a portfolio of shared interest, time spent together, service to each other, conversations, mutual trust built over time, mostly through the investment of energy and time.

(9:41) Continuing on the relationship front, I think that friendships are very similar. They work the same way. And our friendships are a portfolio of people that we invest in and who invest in you. Our careers are portfolios of experience, projects, responsibilities, goals that we're working toward, many of which we were able to achieve because of the portfolio of work that we had put together in the past. Parenting is another big portfolio, definitely a portfolio of accounts that require significant investment. And as I think that through, parenting may be probably one of the most one-sided investments that exists. Or is it? Funny to unpack on that. Maybe another time.

(10:31) Those of us who are parents understand the level of investment that is required there and the return that we are trying to get: healthy, upstanding, well-rounded humans that we can launch into the world. And of course, our finances. That one's almost too easy to talk about as a portfolio of accounts, not necessarily easy to manage, but easy to make an example of. We already think about portfolios as money, but the portfolio of our finances makes up so much more than just the holdings in our investment accounts. It's how we spend our money, where we direct it, where it comes from, and how we feel about it.

(11:13) And to get a little bit higher level on the account and portfolio side, how about our spiritual lives? That is a portfolio of the prayers that we say, the people and organizations that we serve, the witness that we live, the learning that we do, the books that we read, the practices that we pursue. All of those things tie into so many different accounts of our lives. And the point of all those examples is to illustrate that life is made up of a whole lot of accounts, which together make up our life's portfolio. And we are all investing in those accounts, whether we realize it or not, whether we intend to or not.

(11:53) We are, or at least should be, investing to try to get more of the outcomes that we want and fewer of the outcomes that we don't want. And what do people want in life? Generally, if not specifically, I think people want more happiness, more fulfillment, right? In what they do and the things that they're pursuing, they want to get more out of life. And oh boy, I realize that this might have backed me into trying to answer the question of how to live a happy and fulfilling life much sooner than might be ideal, but I'm going to make a go at it.

(12:26) I believe that the happiness that you experience and the fulfillment that you achieve are the cumulative returns and the direction of the returns of your investing across the accounts of life that are most meaningful to you. Essentially, to try to boil it down more succinctly: how well you are investing in and toward your purpose. At least that is the best definition that I can come up with right now. Every outcome in our lives is influenced and directly impacted by the cumulative account balances of the deposits and withdrawals that we make.

(13:08) Now, as a caveat, I feel like I have to acknowledge whenever I talk about this, that of course, not every outcome is perfectly derived from or the direct result of our inputs and our investments. Outliers and edge cases and exceptions absolutely do exist because everyone that has had a difficult marriage did not specifically invest their way to it. Everyone who has challenging money outcomes, even bankruptcies or failed businesses—they did not necessarily invest their way into that. Every person who has a debilitating disease did not invest their way into it. I understand this. I acknowledge this.

(13:47) My own mother passed away of cancer that she did not invest toward, as evidenced by the vice-free lifestyle that she lived for her 53 short years. So I am not saying, and please don't hear me say, that every bad outcome is directly your fault. But—this is very important—in most cases, it is. Not every case. That's the caveat. But in most cases, most did invest their way into those bad outcomes, those bad situations that they are now experiencing. And this is actually great news, and we'll get into this more in a bit, but it goes both ways.

(14:27) Most of the good and great outcomes in life are also the direct result, or at least heavily influenced by, our investment decisions. There are exceptions in every case, with both good and bad outcomes, but the exceptions do not disprove the overall rule. And that overall rule is that we generally get the outcomes that we invest toward. And I believe that it is more strongly than just generally. Frequently, specifically, we get the outcomes that we invest toward in most areas of life. And that is a very important thing to state clearly early on.

(15:04) Because on one side, it can sound like what I talk about is just a straightforward prescription: If you do this, then you get that. That hard and fast, simplified, directly correlative relationship in every case does not exist in the real world. It probably exists in some areas, and more strongly in some areas than others. Again, there are exceptions, but there is a reason that they're called exceptions. Just because there are outlier cases does not disprove that we get the outcomes that we invest toward. We should be concerned with what we have more control and influence over: how we are directing our investment resources.

(15:52) And the fact that most of those outcomes are the direct result of—or at the very least, the strongly influential indirect result of—the investments that we make is good news. Just like those negative examples: trouble in relationships, money, or health, mostly invested toward by the people that get those outcomes, the reverse is also true. The positive outcomes that we get in life are more often directly impacted and in many cases directly determined by the deposits and the withdrawals that we make and the cumulative account balances that we achieve.

(16:40) The healthy and disease-free body that someone has in old age was invested toward in most cases. The marriage that is stronger and even better than it has ever been after decades was invested toward in the vast majority of those cases. The multi-million dollar portfolio that allows a couple to live comfortably into their golden years was absolutely invested toward. I have many clients who've worked very normal jobs and now have millions of dollars that I manage for them and that they live on because they invested early and consistently. Deposits equal growth. Withdrawals equal atrophy.

(18:00) It is true very broadly, often specifically, despite the exceptions. If you consistently make deposits in the "have a mediocre marriage" account, guess what you are probably going to get? If you consistently make deposits into the "be unhealthy in 10 years" account based on what you consume, do not act shocked when that account matures. Just like you can be confident in the outcome if you make deposits into the "be strong and fit into middle age and beyond" account. Why are you surprised? And that is a key question to ask.

(18:51) A question that I often ask myself and those that I work with and those that I teach: Why are you surprised? It is going to come up frequently as we move forward. Look at the investments that are being made and aren't being made, and you should not be surprised at the balance of those accounts. Now, I'd like to talk more about why this philosophy matters and how it might apply to your life. I believe that even a great philosophy and quality information isn't all that useful unless it can be and then is applied.

(19:38) So my intent is to relate it and to apply it to real life. Most cover that most people's problems and failures come from poor investing, and most people's successes and solutions come from effective investing. Most people aren't failing in their problem areas because they're stupid or unlucky; mostly, they're failing because they're investing poorly. And if we can reframe failure as "poor returns," that seems like it's something that we can do something about as investors, right? Since investing well is a system and a set of tools that can be learned, someone is only a "failure" if they are presented with the opportunity to learn and then they reject it.

(20:32) We've talked about the statistics: Being average in most areas of life is actually pretty bad. Probably borderline terrible. You do not want to be average in your health. You do not want average money or average money outcomes. I don't think we want to be average in our relationships or our fitness. The average or below average outcomes that we get are not a moral failure or a lack of opportunity in the vast majority of cases. They are an investment failure. Poor allocation of resources, directing those resources toward accounts that they shouldn't be going into, and not making deposits into accounts that should be getting them.

(21:52) The reverse is also true. The above average outcomes are the result of investing well—investing with intention and discipline and consistency. Inputs predict outcomes. You grow what you invest in. You get what you pay for. And our trajectory—the direction that we're going—predicts our destination. Outcomes are not a surprise. We should be able to forecast the good and bad outcomes based on the trajectory that we're on. The meals that you eat and the workouts you put in predict the state of your body 20 years from now. The investments you make in your relationships through quality time predict the state of those relationships decades into the future.

(23:13) Having the tools is going to give us what we need to be able to identify those areas and determine how we can better allocate our resources, being eyes wide open about what we are investing toward. All day long, we are investing. It's not just with the things that we do on purpose. It's easy to see a workout as an investment. But scrolling Instagram and TikTok isn't thought of that way, but they are just like a workout is. It's just one happens to have good results and the other generally has poor results.

(24:14) The healthy home-cooked meal and the fast-food takeout are both investments of time and energy and money in different ratios for different outcomes and for different reasons and purposes. One of those investments is going to get you better returns than the other, especially in the long term. Sometimes the fast-food meal will be the better return because saving time is the most important thing to accomplish with that meal. But if that investment is the one that's made every time, the compounding effects will result in poor outcomes elsewhere.

(25:04) If we can understand and look at everything that we do as investments, that frame is powerful and will result in behavior change for the better. This applies whether you're starting out at rock bottom or whether you are already in the top 1% of something. Understanding that Long-Termism, a long-term focus, is the only way to make meaningful progress at anything that really matters. Everything meaningful in life requires long-term consistency and focus. It is a bedrock concept of investing, of portfolio management. Discipline, patience, and effective effort, when done together, are rarely defeated over time.

(26:21) If you think that investing is focused on short-term, you are mistaken. That's usually a version of gambling. Investing is long-term. Gambling is short-term. And many people do use—maybe even most people in the financial markets do use—the markets as a gambling tool. But that is not how that powerful tool is best applied. This also applies in life. Long-term is the only place where compounding lives. And compounding is one of the most powerful forces that exists. It applies to every area of life that is worth investing in. Those small deposits are necessary in our pursuit of building large accounts.

(27:35) But the issue is almost everything in the modern world trains us and points us toward short-termism, immediate gratification. And we are going to try to shift that focus and mindset away from short-termism, which has a very strong gravitational pull. Almost everyone is familiar with Warren Buffett. I consider myself a student of Warren Buffett, so he will come up with some regularity. He's famous because of two things: He achieved substantially above-market returns for decades upon decades. It's not just the exceptional returns; it's the decades themselves.

(28:51) Warren Buffett started investing when he was a kid. He did not achieve his first billion dollars until he was around 60 years old. That took 50 years of investing. Most people that start investing as young adults and then retire in their late 50s or 60s—they don't even get to that 50-year mark as an investor. Buffett could have stopped at that point and lived a very comfortable life. But that was 35 years ago. If he had stopped around 60, we would probably not have ever heard his name.

(29:32) One of the biggest reasons why he is one of the wealthiest people in the world is because he's been doing it for over eight decades. That, combined with his excellent returns, resulted in his massive fortune. It was the great returns coupled with a very, very long, consistent period of time that he had been doing the same thing. He remained invested that entire time because having a long-term focus that we actually follow is the only way to make meaningful progress.

(30:17) Another way this applies to real life is that we all have the same three investment macros: Time, Energy, and Money. Every problem in our life and every success in our life at its core is due to an allocation of these resources. Learning how to invest these resources better is going to result in good things. The philosophy of "Everything is Investing" also explains why hard things are hard and why that is just fine—actually, why that's a good thing. Meaningful outcomes always have a meaningful cost.

(31:27) People often want meaningful outcomes that they have not intentionally invested meaningful resources toward for a meaningful amount of time. We often do not invest because it's hard. Sometimes it involves giving up something that we want for something else. To use a fitness analogy: You don't run a 26-mile race just because you're talented. You run it because you deposited 5,000 miles beforehand. That is the effort that is put in for the outcomes that we want.

(32:11) Most wealthy people don't just have nice cars and houses because life handed it to them. Most went without those things for a very long period of time because they were investing in getting to where they're at right now. They put in the reps. They did hard things. They sacrificed. And the great thing about putting in reps and doing hard things is that you don't just make progress because of it—you are more capable of putting in those reps because you adapt to it and you learn. The miles don't get shorter, but they do get capable of doing them.

(33:03) Another reason that this applies is because most people do want top 1% results. Very rarely do I talk to people who do not want top-tier returns. But most people are trying to achieve those while putting in bottom 50% inputs. Top 1% outcomes come from top 1% inputs. Top 1% days come from top 1% hours. Top 1% years come from top 1% weeks and months invested. If you expect top-tier performance with bottom-tier investments, get used to disappointment.

(34:11) Our mindset sets our trajectory possibly more strongly than anything else. Mindset determines our investing ceiling. We'll dive deeper into scarcity versus abundance, ownership versus victimhood, the renter versus owner mentality. Wealth is not decided simply by how much money we have; it is strongly influenced by the mindset that we have, because that will determine whether you are poor or wealthy in the future, regardless of where you're at right now.

(35:19) You may already be a wealthy person; you just don't have money yet because you haven't given it enough time. Maybe you're young or just now getting on the right track, but because you have the right mindset, you will eventually be wealthy. And the reverse is also true—if someone has a poor mindset, they will very likely eventually be poor. Trajectory is more important than your current state.

(36:13) To close things out, step one to applying this framework is simply to identify your accounts. Ask yourself: what are the key portfolios in my life? Health, relationships, finances, career, education. Then ask yourself: Which ones actually matter to me, as evidenced by my investment in them, and which ones am I "pretending" matter, as evidenced by my not actually investing in them? Step two: Track your current cash flows, your actual behavior. What deposits are you making? What withdrawals are you making?

(37:19) Track your time, track your money flows, and try to identify where your energy is going. Time logs and budgets reveal what you really care about and where your resources are actually flowing. And where we'll spend a little bit more time today is what I call a Mindshare Audit. A mindshare audit is an exercise where I want you to ask yourself: where does my mind drift to when I don't have something else specifically at hand to hold my attention?

(38:13) Everyone's familiar with "shower thoughts." Sometimes we get our best ideas in the shower or bath because we don't have an active task holding our attention. We're on autopilot. We let our mind drift. Another place that this happens often for me is when I'm driving, or on the bike. For you, it may be something else. But ultimately: where does your mind drift to? Because what your mind settles on to think about, to plan, to look forward to, or to worry about typically represents one of three things.

(39:39) First, it may represent the things that you spend too many resources on that you shouldn't—over-allocation, over-investing. Number two: It may represent a thing that you spend too few resources on, something that you should be investing in—an under-allocation of resources. Or number three: It may represent an area where you are investing well, an area of high purpose and high impact—proper allocation of resources. Identify those top three things and hold them in mind.

(40:23) Ask yourself: are those things you wrote down primarily over-allocated, under-allocated, or properly allocated for good returns? If they fall into that first category, they are probably generating the wrong kinds of returns. If they fall into the second category, you know you should be investing but you aren't, and you are missing out on returns that could be had. And if they fall into that third category, you are very likely getting good returns. That indicates your trajectory.

(41:45) In most cases—and this is certainly true with me—there are improvements that can be made. If your mind primarily drifts to things that you are over-allocating to, the associated words are addiction, compulsion, vice, waste. There's a reallocation of resources that needs to happen. If you're thinking about that second category, things you are spending too few resources on, the associated words are regret, guilt, unfulfilled, lost, stuck. Oftentimes, those are errors of omission rather than errors of commission.

(43:15) Finally, that third category: areas of purpose, of impact, where you are actually making progress. Some recipe of appropriate allocation has been found. The associated words are passion, purpose, calling, love, fulfillment, pursuit. That is the category that we want to mostly live in. It is purposeful investment into those things that we care about that results in the returns that we want. Purpose is the operative word here: if you can't answer the question "for what purpose," how are you going to invest on purpose?

(44:35) As we build our investor toolkit and we become more effective portfolio managers, we are going to get better at diverting resources away from things that shouldn't have them and investing those resources into the things that should get them—things that are going to check the box of purpose and positive returns. In our next episode, we're going to do a deeper dive into our Investing Macros: Time, Energy, and Money. I am excited to be doing this. Thank you for investing in yourself and in those around you. I will talk to you next time.

(45:39) And if you're curious, my Mindshare audit top three are currently housebuilding, podcasting, and money.

(45:51) [End of Transcript]