“You spend the first 20 years of being rich accumulating all of this stuff. And then you’ll spend the next 20 years trying to get out of one thing after another to simplify your life.” — Peter Mallouk
Peter Mallouk (@PeterMallouk) is the President of Creative Planning, one of the largest independent wealth management firms in America.
Creative Planning provides wealth management services to clients, manages over $36 billion for clients in all 50 states and abroad, and has been featured as the number one independent wealth management firm in America by Barron’s (2017).
Peter is featured in Worth magazine’s Power 100, featuring the most powerful men and women in global finance, the only financial planner on the list (2017 and 2018). Creative Planning was featured in Forbes in 2016 as the number one RIA for growth over the last 10 years.
Peter is the co-author (with Tony Robbins) of Unshakeable: Your Financial Freedom Playbook.
Please enjoy!
Listen to the episode on Apple Podcasts, Spotify, Stitcher, Overcast, or on your favorite podcast platform.
You can find the transcript of this episode here. Transcripts of all episodes can be found here.
Would you like to hear my interview with investor Howard Marks? — Listen here to learn more about understanding market cycles for making better decisions, the three stages of a bull market, and how Howard cultivates clearer thinking. (Stream below or right-click here to download.):
QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.
Scroll below for links and show notes…
SELECTED LINKS FROM THE EPISODE
- Connect with Peter Mallouk:
Website | Twitter | Facebook | LinkedIn
- Connect with Creative Planning:
Website | Twitter | Facebook | LinkedIn
- Unshakeable: Your Financial Freedom Playbook by Tony Robbins and Peter Mallouk
- Money Master the Game: 7 Simple Steps to Financial Freedom by Tony Robbins
- The Legendary Tony Robbins Palms My Entire Face, Instagram
- Gold Price History from 30 BC to Today by Kimberly Amadeo, The Balance
- The Federal Reserve Was Created 100 Years Ago. This Is How It Happened. by Neil Irwin, The Washington Post
- The Prophets of Cryptocurrency Survey the Boom and Bust by Nick Paumgarten, The New Yorker
- Walmart Embraces IBM’s Blockchain Tech by Timothy Green, The Motley Fool
- Blockchain, Explained, Investopedia
- The BlackBerry-to-iPhone Switch: Converts Speak by Al Sacco, CIO
- A Quick Guide to Asset Allocation: Stocks vs. Bonds vs. Cash, The Motley Fool
- Money Management vs. Wealth Management: What Do You Need? by Randall J. Richard, Richard Brothers Financial Advisors
- What Are the Traditional and Alternative Asset Classes? by Carrie Smith, Investor Junkie
- The Gay Men Who Have Lived for Years With Someone Waiting on Their Death by Jack Lowery, The Atlantic
- Real Estate Investing: A Guide, Investopedia
- Seth Klarman: Why You Need to Get Used to Holding Cash by Rupert Hargreaves, Guru Focus
- The 10 Worst Corporate Accounting Scandals of All Time
- The Origin of “The Market Can Remain Irrational Longer Than You Can Remain Solvent” by Garson O’Toole, Quote Investigator
- The 5 Mistakes Every Investor Makes and How to Avoid Them: Getting Investing Right by Peter Mallouk
- Common Sense on Mutual Funds by John Bogle
- The Intelligent Investor: A Book of Practical Counsel by Benjamin Graham
- 16 Years Ago Today, Napster Changed Music as We Knew It by Tom Barnes, Mic
- Peter Mallouk Wants a Few Good Advisors, with No Assets by Jane Wollman Rusoff, ThinkAdvisor
- Awareness: The Perils and Opportunities of Reality by Anthony de Mello
- How Full is Your Bucket? by Tom Rath and Donald O. Clifton
- The Prophet by Kahlil Gibran
- Choosing A Financial Advisor: Suitability Vs. Fiduciary Standards, Investopedia
- MyAdvisor
- Find a Local Advisor Near You, Independent Advisor Learning Center
SHOW NOTES
- What are Peter’s thoughts on investing in gold? [06:33]
- How does he feel about Bitcoin and cryptocurrency in general? [11:42]
- An overview of how the stock market works for long-term and short-term investors, and why Peter is good at what he does. [14:59]
- Money managers versus wealth managers and the debate between active and passive management. [23:15]
- Peter shares his insights into alternative asset classes. [28:51]
- What is Peter’s perspective on real estate investment, and why do a lot of people see it as a “safer” option than other investments? [34:46]
- How does Peter feel about investing in art and collectibles? [40:10]
- When illiquidity is a feature rather than a bug that protects against behavioral mistakes. [42:31]
- How do you know when the market is worth waiting out, or if the end really is nigh? Perhaps the real question to ask: is your money worrying you more than it’s worth? [48:19]
- Something even Peter hasn’t seen in 20 years of investing with over 30,000 clients. [58:09]
- When is the risk of being out of the market greater than the risk of being in? [59:59]
- The protective benefits of diversification. [1:02:13]
- Why Peter advises aspiring investors not to expect more from the market than what their day job is giving them. [1:04:07]
- What does underdiversifying look like, and is it possible to overdiversify? [1:05:41]
- “Markets can remain irrational a lot longer than you and I can remain solvent.” [1:08:43]
- How an investor’s style might differ depending on whether they’re using their personal or professional finances, and how much time they or their client can reasonably expect to be alive. [1:11:28]
- Required and recommended reading for active and aspiring investors. [1:13:58]
- What Peter considers his most worthwhile investment of time, money, and energy — and the hard but valuable lesson it taught him about supply and demand. [1:16:21]
- What Peter sees as the biggest — and most common — mistake wealthy people make, and what he does to help them course correct. [1:20:02]
- Books Peter has most gifted. [1:27:05]
- Caution: In the United States, financial advisors aren’t always required by law to have your best interests at heart. Peter explains how you can know for sure. [1:29:20]
- How do Peter and Creative Planning make money? [1:33:40]
- What advice would Peter, now 48, give to his 30-year-old self? [1:34:43]
- How does Peter help clients discover what to hone in on? [1:36:05]
- What would Peter’s billboard say? [1:38:39]
- The deceptively problematic characteristic of “busyness.” [1:40:09]
- Closing thoughts. [1:41:29]
Comment Rules: Remember what Fonzie was like? Cool. That's how we're gonna be — cool. Critical is fine, but if you're rude, we'll delete your stuff. Please do not put your URL in the comment text and please use your PERSONAL name or initials and not your business name, as the latter comes off like spam. Have fun and thanks for adding to the conversation! (Thanks to Brian Oberkirch for the inspiration.)
Always love listening to your podcasts and these are no different. At some point in my life, I would like to become an investor and these are great tips, thank you Tim.
Good episode as usual Tim, thanks! My favorite quote is "Education alleviates uncertainty."
Tim, I'm an entrepreneur who made a little bit of money selling my last company. I've had some of the same concerns you have about putting all of my money in the market, especially with the upcoming uncertainty people are predicting. Have you heard of the Permanent Portfolio? It has similar returns to a 60/40 stock/bond portfolio, but is far less volatile (it dropped only about 2% in 2008). It's extremely unconventional, but I've found the arguments in my research to be very compelling, and am shifting my portfolio toward the strategy. I'd love to have a follow-up investment episode where you interview one of the people with deep experience with this portfolio, as a counterpoint to much of the traditional advice espoused in this episode. [Moderator: additional text and link removed.] But the devil is in the details with this portfolio. The assets are chosen for very specific reasons and it helps to understand the arguments why. Too many people argue against it with only a superficial knowledge of the asset allocation. The book I recommend reading to learn the "why" behind it is The Permanent Portfolio by Craig Rowland and J. M. Lawson: [Moderator: Amazon link removed.]. Of note is that Craig is a serial entrepreneur who made much of his money growing and selling two network security startups. So he comes from a risk adverse / hacker mindset. He didn't invent the portfolio; he just implemented it for several years successfully and blogged about it, and then was approached by a publisher to write about it. If you wind up exploring it, feel free to contact me, and I'll send you more of my notes and analyses. Trevor
Thanks for the interview. The part about investing in gold made me think: it'd be fun to have an episode on what the super rich are doing to prepare for end times.
Dear Tim Ferriss My name is Rebekah Bestol. My husband and I listened to the Four-hour Work Week years ago and it did change our view point. Since then I've listened or read hundreds of hours of information or interviews by or about you. I feel like I've learned a lot. I'd like to say thank you. Thank you for sharing so much of the research that you've done. It has helped us and we appreciate it. I've seen through the years that you are searching like we were. We were searching for the truth. You seem like you've tried close to everything. Higher education, achievement, money, fame, success, friends, porn, romantic relationships, supplements, drugs, dancing, sports, food, tea, wine, yoga, stoicism, meditation, body building, researching, learning languages, and more. But it seems to me that you haven't found true happiness or peace. I was very sad to hear that you suffered from depression at times and I feel like I'd like to tell you what helped us. As we've discovered money doesn't guarantee happiness. I basically retired in my 30s. But money didn't make us happy. The true 'life instruction manual' is the one everyone knows about but doesn't really read or understand. I think you'll be surprised to learn how logical the bible is. Jehovah God created Adam and Eve. He made them perfect, put them in a beautiful paradise, and told them to fill the earth and subdue it. (Genesis 1:28) That was Jehovah's purpose for the earth and humans. His purpose didn't change. He still wants us to be perfect and live forever on a paradise earth. (Revelation 21:4, Psalms 83:18) However, Satan convinced Adam and Eve that Jehovah didn't have their best interests at heart and got them to rebel. (Genesis 3:1-6) So then the question arose: Who could rule the world better? Jehovah? Their creator who loved them? Or Satan? The one who convinced them to kill themselves? Jehovah could have killed everyone off and started over. But he didn't. He loves people. He wants us all to live, to be happy, peaceful and humble. Jehovah is allowing Satan to control the world for now. (1 John 5:19, Jeremiah 10:23) But he made a way out for all of us. (Genesis 3:15) He sent his son, Jesus, a perfect man, to earth. He ransomed, or exchanged his perfect life for the perfect life Adam had given up. This opened up an opportunity for all of us to have a close personal relationship with Jehovah. Jesus taught: We need to love Jehovah with our whole hearts, and love our neighbors as ourselves. He showed that the identifying marks of true Christians would be: 1. Proclaim Jehovah's name and news about his kingdom to the entire earth. (Mathew 24:14, Matthew 9:35, Matthew 28:19,20, Mark 13:10, Revelation 14:6) 2. They would have love among themselves. (John 13: 35) [Moderator: proselytizing content removed.] I think that you can see there's a bigger picture going on in the world today. You can see that there is wickedness and that there should be more to this life. (2Timothy 3:1-5) The bible tells us its not good enough to be a "good man" we have to do Jehovah's will. If we pray to Jehovah using his name and read the bible, he will let himself be found. (Zephaniah 2:3, Acts 17:27, Isaiah 55:6) [Moderator: proselytizing content removed.] I hope you find peace and happiness like we have. Thanks again, Rebekah Bestol
G'day Tim, Quickly I wanted say that I bought your book Tools of Titans and Scientific American at the airport a month ago. As soon as I started reading your book, these awesome ideas started popping into my head. And then when I read Scientific American – I had a massive brain wave….feels like serendipity. Early days mate, but one idea has me so excited, I feel like a 7 year old on Christmas day! Oh, and I also bought the 4-hour body – and spent a week on slow carbs….maaaaate, I've lost a 1kg in a week without any real effort (and am learning to love beans!). Thanks, Dan V
FANTASTIC podcast. Magically timely for me! I admire Tim's mindset or "mindstance" of navigating from a master investor to a beginner's startpoint, and anywhere in between.. You show up at the frontlines…. THANK YOU!
Hi Tim, As far as diversification with non-correlated investment vehicles go, I would love to hear your take on trend following (Dunn Capital is who I invest with, but I am just a regular guy, not an investment representative). When you look at the historical returns, it is impressive (but sucks right now), the rational methodical approach, and the expected and calculated volatility (to along term investor, volatility is not necessarily risk) provides the financial equivalent to a cold shower, to scratch a Stoic itch. For Info, look at Michael Covel or John W. Henry (the guy who bought the Red Sox) or Dunn Capital. Thank you for all you have done to improve my knowledge and resilience in the past two years.
Yes, this moves humanity forward! I am creating an art performance about optimal human performance and leadership for a sustainable and abundant world. In it we present how leaders navigate forward. Literally how they walk and how their unique qualities are present in every step they take. Tim, I would like to present you and what you do. I'm in San Francisco 21 JAN – 2 FEB. [Moderator: full name and contact info removed.]
It remain a strange thing. This relationship between volatility and price for Gold. It doesn't behave like anything else. Maybe because it shines? 😉
Can't tell you how much I appreciated this Podcast with Peter Malllouk. I've been in the financial business since 95 and a CFP since 2010. Very refreshing and insightful advice. Gold, Bitcoin, Alt's, Cash Flowing Investments, Emotions, Savings, Living Your Life, to ways folks blow up their own plans. He was spot on. I have seen and experienced all of those things! Thanks Tim!
Another really great podcast. A couple things that have helped me over the years is invest in what you know and are interested in. I have done very very well with Art and vintage racing motorcycles. Both are my passion and I have made millions in both. The other thing that was not touched on enough is fraud in the private equity world. I made some substantial Real Estate investments in what was basically an organized crime ring. I was luck that investor Carl Icahn had also invested and he used his legal and political muscle to get 40% of our money back. Overall really solid advise.
I wanted to reach out (according to your contact ROE's) and say that you have really figured out how to get the best value out of human life! It is impressive how much knowledge you have packed into your books. If you ever have a chance, it would be a HUGE opportunity to have a phone call with Tim Ferriss!
Tim, you'd love to interview Simon Black [Moderator: Twitter handle and domain name removed.]. I know it would be so interesting to me and your audience. He's right in your wheelhouse – international entrepreneur (e.g., operating large farm in Chile, among other businesses), value investor (finding and investing in underpriced companies), traveler, speaker; he shares tax strategies and recommendations on getting a 2nd passport (Argentina is one of best options); and, he actually understands gold. Please please please.
Tim, thoroughly enjoyed this episode. I'm very much a novice when it comes to investing but I'm compelled to want to continue to try and learn and absorb as much as I can. Most of us with employer-provided retirement plans are so vested in the markets, whether we like it or not, I feel like I have to push myself to grasp as much as I can about investing. I loved Peter's philosophy about enjoying money, being as important as saving and investing it. His comment about all the typical advice of avoiding Starbucks to save a few bucks as being a bit trite was spot on. Great discussion here as always Tim.
Dear Tim, i want to thank you from the bottom of my hearth for alk the great interview you release. I learn so much from them. They really enrich my life. You have a great fan in Italy !!
I enjoyed this podcast very much Tim, even though I disagree with the investment philosophy that Peter has. Like you, I've been holding a majority of my net worth in cash. The financial experiment of QE by the Fed for the past several years gives me little faith that the markets will provide "normal returns" in the coming years. I refuse to be a sheep and blindly invest in index funds when it seems logical that the markets could have a very significant drop due to the high amount of global debt and also that Ray Dalio is predicting a recession in 2020. For now, I'm sitting on the sidelines until there is blood in the streets. If you would like a recommendation for a person who does believe in market timing, I recommend doing a podcast with John Mauldin (Mauldin Economics – Dallas,TX) Thank you for the great content you keep putting out there! -Dirk Massie
Tim. That was a great talk with Peter Mallouk. Among the points which I found most interesting were the discussion of what Peter did earlier in his career (Used CD Shop) and what he took away from that experience. We learn from all of our experiences; even when others look back and see failure. I was also moved by Peter's advice about living each day and not waiting for retirement to start acting on your 'bucket list'. Life is too short and while striving to accomplish more it's important to live each day. Thank you Tim. Brian
For a novice in the world of (especially) Tech Investing, this podcast has provided me with practical tips to get started. Thank you Mr Ferriss and Mr Mallouk. Mr Ferriss, may I be so bold to request a Podcast with Elon Musk?
Finally got around to listening to this one and quickly listened to it twice. I found the whole episode to be clear, concise, and perhaps the best primer for anyone who is thinking about investing. When i talk about investing, my wife tends to glaze over. I already sent her the link. I look forward to future conversations like this one.
I shared this with many, and one-clicked on Awareness. Thank you Peter and Tim!
Hey Tim! One of the latest podcasts had a mention of mambo sauce from DC…. I cannot for the life of me remember which one or which company the guy recommended! HELP! Do you recall, I want to order some! Thanks! -V
AWESOME podcast and Perfectly timed for me!. I salute you Tim's approach of going from a master investor to a beginner's starting position.