How to Avoid Bankruptcy

Question: What do you tell the average American to avoid catastrophe in this crisis?

Michael Lewis:    I like that the Prime Minister of Iceland said when they figured out they were bankrupt, because they turned themselves from a country into a hedge fund.  He basically stood up and said, “Now, we all need to go fishing again.  We need to stop banking and go fishing.” 

I think that one of the threads that runs through the last 30 years of American financial history is the increased financial obsession of ordinary people, the increased sense that they should devote some meaningful part of their existence to whipping and driving their savings on E-Trade to make money instead of doing whatever they do productively to make a living. 

And symptoms of these are things like the show, Mad Money.  There are cable channels that are symptoms of these.  Symptoms of these are the way the markets move around. 

And I think that, just to back away from this, what behavior leads to happiness?  This isn't behavior that leads to happiness.  Essentially, it’s a ‘going to Vegas’ mentality just spreading into ordinary life. 

And so, my first piece of advice would be, when you think of your savings, don’t think of trying to turn a little money into a lot of money in the markets.  Think of just trying to prevent a lot of money from becoming a little money.  Just think of preservation. 

And secondly, when you think of making money, think of what you do for a living, not the financial markets.  They’re all these signals coming in to you that tell you that’s not how you should think of it.  Your broker, the television set, everything, the smart guy down the street who got rich because he made the smart trade.  But it’s not a healthy way to think about capital. 

And then, I guess I would say, never feel stupid asking a simple question, that the markets conspire to make you feel stupid asking what is actually the smart question.  Be withering in your investigation of any investment opportunity.  If you don’t understand what the person who’s trying to get your money is telling you, look him in the eye and say, “Could you explain that to me again in English.”  And if you don’t understand it, say, “Maybe, I’m just stupid but it doesn’t make any sense still.”  If it doesn’t make sense, it probably doesn’t make sense, and the complexity is not intelligence. 

So, I think those are kind of big things people can take into their loss.

Recorded Nov 11, 2008.

Michael Lewis on how Mad Money fueled the Vegas mentality.

LinkedIn meets Tinder in this mindful networking app

Swipe right to make the connections that could change your career.

Getty Images
Swipe right. Match. Meet over coffee or set up a call.

No, we aren't talking about Tinder. Introducing Shapr, a free app that helps people with synergistic professional goals and skill sets easily meet and collaborate.

Keep reading Show less

Douglas Rushkoff – It’s not the technology’s fault

It's up to us humans to re-humanize our world. An economy that prioritizes growth and profits over humanity has led to digital platforms that "strip the topsoil" of human behavior, whole industries, and the planet, giving less and less back. And only we can save us.

Think Again Podcasts
  • It's an all-hands-on-deck moment in the arc of civilization.
  • Everyone has a choice: Do you want to try to earn enough money to insulate yourself from the world you're creating— or do you want to make the world a place you don't have to insulate yourself from?
Keep reading Show less

Physicists puzzled by strange numbers that could explain reality

Eight-dimensional octonions may hold the clues to solve fundamental mysteries.

Surprising Science
  • Physicists discover complex numbers called octonions that work in 8 dimensions.
  • The numbers have been found linked to fundamental forces of reality.
  • Understanding octonions can lead to a new model of physics.
Keep reading Show less

Why 'upgrading' humanity is a transhumanist myth

Upload your mind? Here's a reality check on the Singularity.

  • Though computer engineers claim to know what human consciousness is, many neuroscientists say that we're nowhere close to understanding what it is, or its source.
  • Scientists are currently trying to upload human minds to silicon chips, or re-create consciousness with algorithms, but this may be hubristic because we still know so little about what it means to be human.
  • Is transhumanism a journey forward or an escape from reality?
Keep reading Show less