Jordan Belfort

The closer you've been following your equity investments recently, the jumpier you likely are. A lot of Americans have concluded that the Wall Street game may be rigged.
The whole thing is kind of a scam, but there's still a huge amount of money tied up in it, not just in individual investing, of course, but in pension funds. The whole world is tied up in the American stock market.
So how exactly do you succeed in it as an individual? We thought the man to ask would be the man who's seen both sides of this business, legitimate and less than. Jordan Belfort, the Street with a new book The Wolf of Investing and he joins us now to explain you can make a fortune on Wall Street.
But it takes time. You know I think it's I think listen the mistake that people make is that the average person is that you don't have that much money to start.
Let's just choose a number. Let's say just $10,000, right? It's a random number, right? You say to yourself, if I'm going to really get anywhere as an investor, I need to make a big hit.
I get to turn that into like a million bucks. I've got to find the next Apple computer, the next crazy crypto token, whatever it might be, some wildly successful investment, right? Which leads you to engage in wild speculation, short-term trading, trying to time the market.
And the truth is, is the opposite. You don't need to start with a lot of money to end up with a lot of money by doing the exact opposite, which is holding for the long-term and all the highest quality stocks and relying on long-term compounding and reinvesting dividends and making small contributions along the way but forgetting like you said the noise and people are worried about their equities this is the problem because as soon as you start buying into that like you know what i think the market might be going down or maybe it's going to go up next year you should time that by buying and selling you create taxable events and also human beings by our nature we're kind of crappy stock pickers.
And when you try to pick individual stocks, you tend to lose most of the time. So here's what I'm gonna do.
I'm gonna give you my investment strategy, and I'm gonna be as honest as I can be, and you assess it based on your expertise and tell me if I'm right or wrong. Okay, so I'll get down to my rec room, big screen TV, with my dab pen and my laptop, and I'll turn on Jim Cramer on CNBC.
when he tells me to buy I buy and if he sells says sell I sell. Yeah you're getting financially whipsawed so I think I call- Is that working for me? No it's not gonna work so I kind of buried Cramer in the book I guess I'm not going on CNBC anytime soon for any interviews.
Why would you bury Jim Cramer? This is a guy with an uninterrupted string of correct calls by JP Morgan of this generation, Sam Bankman Freed's FTX. Listen, the best thing was was interrupted string of terrible calls by all listen, he's had a lot of good calls because he's on both sides of the market tells you to buy one thing on Monday and sell it on Wednesday and back and vice versa.
This guy literally is telling you, you actually did a study on this. When they put up his recommendations of what he said on Monday and then on Friday, the exact opposite.
Like one day he's saying the market's going up, next day it's going down, buy this, go from this sector to that sector. That's historically, mathematically, scientifically proven to be the worst possible way to invest your money.
They've gone back a hundred years, the scientific, the academic studies, and the analysts can't pick the right stocks. The hedge fund managers and the mutual fund managers can't beat the S&P 500, which is the overall border market.
And there's a reason for that because all the information is out there. So unless you have inside information, which is illegal, right? And certainly the average person is not going to have that or some other way to beat the mark whether it's a high frequency trade with computers that

are lightning fast so some of the big firms they'll time the market like a millionth of a second better than an average investor they get an edge but for everyone else you can't beat the market you just it doesn't work especially when you deduct all the fees the commissions and also the taxes from short-term trading so let's say let's say a hedge fund returns 15% when you say that's pretty good right but after they take their 2% magic 20% performance bonus right suddenly it's not even beating the S&P 500 and that's not a good year most of the time they don't even beat it without their fees so why would anyone hand money to a hedge fund so Warren Buffett asked this exact question back in 2007 made a big announcement that a million bucks that I don't care what are the hedge fund you want you can't beat the S&P 500 over ten years and at first no one took the bet eventually someone did with what's called a fund the funds yeah yeah different funds right and after year seven they threw in the towel they

couldn't even come close to the s p and that was without all their fees and just so you know the

fees they take so it's 20 typically is a performance bonus right right if the fund makes money off the upside on the upside but if the fund loses money the following year they don't get any of the losses so it's heads they win tails you lose you lose, right? The mutual fund industry is equally bad. So they're engaging in, you know, basically asset gathering.
Because what they do is they try to gather as many assets as possible, money, right? Because they get their management fees. But the returns on the average mutual fund are dismal.
They don't keep up with the S&P 500, which is America's 500 biggest, baddest, most profitable companies. And those 500 companies change.
So the S&P this year is not the same as it was last year. So what happens when you buy that index as the centerpiece of your investments, right, and just hold it, you're always having the 500 top high performing companies in your portfolio.
It's very tax efficient. Now it's boring boring but it compounds at about 11% a year and guess what if you invest $10,000 right and just compounds at 11% a year you put a little extra money in whether you can each month each quarter right over 30 years 40 years it turns into millions of dollars but I'm still caught up on the hedge fund idea.
So Steve Cohen, Ray Dalio, all these guys are billionaires. World's biggest art collections.
So how did they get so rich if it doesn't work? Well, for a time, it was like everyone thought, oh my God, they're so great. The hedge fund sold for many in the 90s and 2000s.
The word was really like this mystique that you had these really high performing hedge funds and there were a few there were there were a few people that actually can beat the market ray dalio is one who's done it consistently he's not taking your money the average in those when they're really not good they don't take an average investor's money they train their own money in a few very very large institutions so those funds are not open to the average investor but then all the other hedge funders kind of suck right they're bathing in the afterglow of the aura of the hedge fund manager we see like on billions right see this like mystical hedge fund well guess what most of these guys suck all right they they're not beating the s they're just not it's mad it's historically proven they don't beat the s&p and they take these massive fees when they do win one year and they always get that two percent magically so watch what happens let's say you're managing a billion dollars so before you even start it's 20 million a year you're getting just in what even starts plus 20 of all the profits and when you take those and how about this i'll go one step further and also when you have a hedge fund you have to show activity because unless you're you can't just buy the S&P and hold it someone will say well why would I give you my money you're not doing anything so they almost have to show activity to justify their existence which makes them engage in short-term trading and people human beings are just terrible market timers they and this is just over it's proven over a hundred plus years of studies that you cannot trade in and out of the stock market buying selling selling buying sector this sector one day so it's just a trap where look at it is it so Wall Street creates massive value they do Wall Street's necessary you can hate Wall Street despise them for what they things they do wrong but Wall Street is necessary they create massive value for the economy they take companies public right they finance the growth of America and it's needed they maintain the debt markets the credit markets that's the useful side of Wall Street where they create massive value then there's the not so useful a dark side of Wall Street where they create bubble after bubble after bubble with instruments of financial mass destruction they create for just gambling purposes where they churn you they have excess commissions and fees and rob the public blind so the question

in the book was you know how does the average person get the maximum exposure to the good side

of wall street which is the great companies they take public and finance that become huge multinational so how do you maximize that but avoid the corruption or the churning and the and the burning and the financial bubbles and so forth, try to play into what I call the Wall Street theme machine complex, which is this advertising monolith where basically they convince you, like people like Kramer, to play the sucker's game. But actively, if you go on CNBC, they're all day long trying to convince people to play the short-term trading game, which is indeed a sucker's game.
So you go into a casino, right? We spoke about about Kerry Packard, right? Gambling, right? So they own casinos, the Packard family, right? So in a casino, you go in there knowing that the odds are against you by what? Five percent, depending on what game you play. So the odds are against you and the house will win over time, right? That's a legit casino.
The odds are against you. But what if you go into a corrupt casino where they have loaded dice and a dealing from the bottom of the deck? That's Wall Street.
So now not only are the odds against you because it's hard to pick winning stocks, but there's people who have information that's more timely than you. They're trading ahead of you.
They are charging excess fees. And also all these publications and new chatting in news with CNBC, Bloomberg isn't as bad, right? Because they cater mostly to professionals, but still trying to convince people that you know, you could somehow figure out when you should buy oil and then sell your meta and then somehow go into a steel stock and then go into overseas.
It's insane. It doesn't work.
And people get financially whipsaw. And I saw it myself, my own family member, very start my book off telling his story what's your brother-in-law yeah my brother-in-law he's a very smart guy and he's I watched his portfolio get decimated through short-term trading and using margin all the things that they was he doing it himself he's trying to do it himself and you know following tips he heard on TV or online and and it's just it is so simple what happened to him well, he's thankfully successfully lost a lot of money and then he learned his lesson and I showed him what to do the right way.
And he now is building a proper portfolio for the long term. So I think the distinction is this.
You can get rich in the stock market, but not overnight. It's just it doesn't work.
You can't do that. And if you try to get rich by engaging in short-term trading or picking like one stock,

you're probably going to end up in the financial poorhouse.

So the solution I put in this book, which is ironic of where I came from, right?

Because I committed fraud 30 years ago, right?

So as you said, I've seen both sides, right?

So the solution in the book is really very simple to build a world-class portfolio and

secure your future.

Because I don't think you can rely on social security these days you'll be enough to pay for your diapers when you're in a

nursing home when you get it right so this is about you know empowering yourself financially and it's about doing less versus more not hiring experts less trading yourself less trade it's about investing as opposed to speculating now there's nothing wrong with with speculating. It's fun Right, and if you want to take 5% of your capital and speculate and buy and sell it, that's great There's nothing wrong with that now you encourage people to do that because it's good You can have fun with that maybe you'll make some money, but that's not how you secure your retirement If you want to secure a great retirement you start off young as possible, right? And it's never too late, by the way.
And it doesn't matter how much money you have. You can start with a little bit of money.
You don't need a lot. But the key is making little, small, regular contributions and not worrying.
Just to an index fund? Is that what you're saying? The main one is an index fund. You want to have an index fund, low cost S&P 500 index fund.
And you want to have it in certain types of accounts that are tax deferred whenever possible and so forth right then you also want to balance that out with some need to have some bonds in there a small amount depending on your age right and on top of that some cash for an emergency and then if you want to speculate you can add that's a 5% for speculation but the key is this don't hire an expert for example we've been conditioned this is the trap right so you're a homeowner right so if your pipes in your house burst you probably do a lot better off calling a plumber to fix your pipes then trying to fix them yourself right right right fair enough right if you have an electric short I suggest you call an electrician versus trying to go put on rubber gloves and not get electrocuted you'll get a bunch better result with the expert in that too if you're sick you see your appendix is about to burst right don't do your own surgery have your wife cut you open go to a doctor that's an expert at doing surgery let him do the surgery fair fair enough right that's true for almost all things in life except Wall Street it's the one exception to the otherwise pretty much steadfast rule about seeking out experts to help you get the best result on wall street they don't get you a better result than doing it yourself they get you a worse result because of all the fees the commissions the performance bonuses and also they can't outguess the market the market is too hard to beat now again there's a few people that can do it. They're not taking your money.
I want to focus on them for a second because undoubtedly they're the touts. They're the people who convince the rest of us that this works because they're so rich.
How did those people get rich? So if you look, a guy like, for example, like a Ray Dalio, he got in very early into the game. Right.
And he's an incredibly brilliant guy. He's a great stock picker.
And whatever his proprietary method is or a Warren Buffett. Right.
You know, these there's a few people out there. And this is one of the great studies was from an economist named Paul Samuelson.
Right. In the 70s.
And this is really what started the shift into index funds. He did a study that went back 100 years, all the way to the earliest days of record keeping, right? He studied every mutual fund out there since the 1920s, all the stock recommendations since the 1890s, right? And he came to the conclusion, he goes, okay, maybe there were a few people who could outperform the S&P, but they remained remarkably well hidden.
He couldn't find any. This is like a top, like he won a Prize the guy for this right so that was really the beginning that was like the shot across the bow now Wall Street did everything they could to suppress this so the first guy to try this was was of Jack Bogle from Vanguard you know Vanguard right so Vanguard's a place I great great place where you could buy the best index funds with virtually no expense so I strongly recommend Vanguard right and there's a few others as well but jack mogul was the first right but when he started vanguard wall street went out on the ultimate smear campaign for like a decade suppressing everything about index funds saying it's the stupidest thing who wants to be average dryfuss which is a huge mutual company said no fees no way like actually in public in the wall street journal full pages like if you don't like that was marketed to the people who were the gatekeepers to investors so yeah they're not because vanguard doesn't pay fees right so if they don't pay you fees don't put your clients in their funds instead put them in our high commission funds will pay you a lot of money so for many many years vanguard languished and was suppressed right it finally got traction after the crash in 87 for the first time also you know the mirage evaporate when everyone lost a lot of money and for the first time Vanguard started to get a fair shake in the market and then slowly but surely they started to grow and grow and then as the internet came about and the high-speed connections and platforms for direct communications with, it suddenly became a mass exodus out of this, you know, sort of high expense mutual funds, right? Which I think that Bogle saved the public probably a few hundred billion by now in fees.
Mutual funds were ripping people's eyeballs out forever. Now they still do crappy.
Their performance is crappy compared to the S&P 500. But for years and years, they're just ripping the public's eyeballs.
That was the most lucrative industry out there. And Wall Street just spent, you know, countless hundreds of millions of advertising campaigns and whatnot, right to make people think this is the way to go.
So you're Merrill Lynch is bullish on those commercials, bullish on America, right? Although you know, a T. Rowe price, and I want to point the thing at any one of them, right? But now they all offer this ultra low cost index options, which historically is outperformed people trying to pick individual stocks forever.
It's just it outperforms people because people are really crappy at picking stocks. And also, you know, there's another part to it as well, right? Just trying to time the market, it plays into all our worst impulses.
So like you said, right now, people are scared, right? And rightfully so. The world seems to be on fire.
And I watch your podcast all the time and it scares me. It's a scary world, right? So you would think that, okay, the U.S.
economy is laden with debt, right? Which is true, right? It's got fundamental problems. China is going to take over the world, right? Well, when I was, i was you know in just getting started was japan taking over the world which turned to be a fallacy and they had their own problems so i don't know whether china is going to take over the would be the biggest economy it's going to surpass the united states i don't know if the stock market is going to go up down sideways around circles for the next five years i mean how do you don't know anyone tells you they know that is lying to you so to sit there and try to watch the

news and trade against like what's happening in the economy and what's

happening in the world is a fool's errand you're not gonna succeed like

that unless you're one of these rare individuals who's full-time as his

unique gift so happens but then again though look at all these massive

companies that have been created in the last 20 years like you know Google meta

Here we go. this unique gift.
So but then again, though, look at all these massive companies that have been created in the last 20 years, like, you know, Google meta, right? This is huge coming that in the video with artificial intelligence. So how do you get exposure to all that? Without having to pick the winners from the losers? The answer is very simple.
You buy them all in one investment, which is the S&P 500. And then you sit back and let time do the heavy lifting for you so you don't have to watch Jim Cramer at all if you watch Jim Cramer for entertainment if you like that kind of bloviating humor good for you right I personally don't like it the worst even worse than that is if you watch Jim Cramer and you happen to opt in like if you have to answer one of the emails on the website they'll start barrageraging you with emails.
I did this as an experiment. I was like, you know, a guy that injects up with the virus to see how sick you get, right? I actually opted into Kramer's, you know, little thing online.
And I started receiving a barrage of like 100 emails about join his special club. He'll alert you to what stocks are going up and down in real time.
I mean, it's like, this insanity. But this is a major network, right? That's, you know, giving investors crappy advice.
Now on the flip side, here's the weird part. They also have good stuff on that network, like this legitimate news.
And that's the problem. So they mix in legitimate news, great reporting, interviews with great CEOs, and you learn about the economy, what's going on in the world.
But they intersperse that with like this market giving advice. And it's not it's nonsense.
You people can't beat the market. And I saw it play out my brother in law, many of my friends back in when the bubble burst in 2008.
And even worse, by the way, in 2000 with a dot com bust, right? So every time the market busts out, all the bullshit gets exposed. Of course, you you know almost some people thought they were expert day traders or expert market timers they were like basking in the globe just an upmarket like I say in the book a rising tide lifts all ships right and a falling tide well it lowers all ships right so you see the truth come out as Warren Buffett says you know until the tide goes out you don't know who's not has no clothes naked, right? So, but you said at the outset that there are people who do succeed in the market because they have inside information.
Right. It feels like there's a lot of that.
There is. Yeah.
How does that work? So I think there's different levels of it, right? There's like the full on criminal stuff like you saw in the movie Wall Street with Gordon Gekko, right, where like people are actually paying people and moles and stuff like that to get you know information that's not public paying off directors having inside links to the company or law firms that are doing deals right? That happens for sure and people do get in trouble from time to time and go to jail right? But Martha Stewart. Right exactly right but she was like kind of you know a fall person.
She sure was like I mean people did a lot worse than Martha Stewartart right i mean why did they put her away you know it's hard to say but she's you know famous and she's a big target and you know it kind of sucks when you're famous in a big target and yeah they want to come get you right especially if some of your views aren't that popular they want to come after you right so but that's sort of the cliched type of insider trading where they're just literally buying and getting moles and that's highly illegal Then there's the softer side of it

Which is where these big hedge funds have these like analytical firms that are getting like research that's inside research

So like for example, they're like I had a friend who was a very big short seller

Right and he actually had people waiting outside of a warehouse counting the number of trucks that were leaving the warehouse and tried to like

You get it to see how they really shipping the amount of goods to do this deep type of research, which sometimes crosses over into inside information. So what is the line? I mean, you're allowed to be informed, you're allowed to be informed, but theoretically, you should not be in possession of information that is non public.
Everyone's supposed to have access to the same information at the same time to make a fair market right and generally speaking it's true for everybody all the average investors but there are certainly people on wall street i mean you'd be naive to think that you know an analyst that has special relationships that's doing the investment banking deal so someone raises you know 500 million dollars for a company you tell me the ceo and the owner of that firm are not like having little conversations little inklings here and there so i'm sure that's happening that's much more difficult to prove so it's a lot of it is buried under like you know guidance and financial reports so they'll issue an analyst report right and you know the analyst report will give sort of plausible deniability for why they think a stock is going up or down right but even then i mean i I think that's difficult to prove, which is why you don't hear a lot of those cases. No, the SEC doesn't seem to bring any.
Well, the SEC, I have a whole history of the SEC in the book. The SEC is a ridiculous organization.
So it was conceived. Listen, the first chairman was Jack Kennedy or Joe Kennedy, the original Wolf of Wall Street.
So like, you know, the bootlegger. Yeah.
From the beginning, it was set up with a two tiered system where the big firms basically were protected. Right.
And you know, when they got in trouble, they did things so egregious that it was undeniably egregious. They pay a small fine and move on.
Right. Which is why Goldman Sachs, for example, right now, Goldman Sachs serves a vital function to the US economy.
And they're also behind every great crime or the biggest crimes that are out there including my movie that was you know the wolf of walter was

financed by these malaysians right the one mdb fund that scandal that was just coincidentally and who was the banker that that paved the way for that goldman sachs out of there i think was in malaysia or singapore office that a banker there that provided the funding and you know got double or triple the normal fees for doing it and that money got siphoned off that's classic Wall Street so on one hand they create massive value on the other hand they rape and pillage the village and it's the average investor and the average person that bears the brunt of that the bailouts and subpar returns so just to follow up on the Wall Street investment firm, I mean, information firms, research. Yeah.
I mean, everyone uses those, correct? Hedge funds are very much using them. So they got in trouble, though, in the past.
In some cases, they pay employees or former employees of companies to talk about what's happening inside the company. Right.
That's very common. Yes.
That's so that's a very lobbyist.

How is that not in center trading?

I've always wondered.

Well, again, it's it's not

if someone gives you an overall

you know, sense of what's going

on, that's like nothing.

It's not out in the public

domain, but it's sort of like an

insider's perspective versus

information on like our sales

going down.

Is there a problem with

manufacturing?

It's not public.

Right.

So that's when it crosses over the line and it's a gray area right but it's very common in hedge funds to use these research firms that go out there and get non-public information and there's a very fine line like a drug trial that there's a drug trial going on like you know how do you know how the drug trials performing well if you're imagine calling up all the people are interviewing people that are in the drug trial and trying to figure out yourself or people are intimately involved with administering the placebo studies or double blind studies, they're all over that stuff. It appears that members of Congress consistently beat the S&P 500 in their personal investments.
Nancy Pelosi. And a lot of others.
And Pelosi especially. She's the famous one.
Yeah. So how does that, is Nancy Pelosi, do you think, a stock picking genius? No, she has to be operating on information that's non-public or is it not- Wouldn't that make her a criminal? Yeah, but, you know, look at Joe Biden right now.
I mean, look what's going on right now. Like, listen- Do you think he's a good stock picker? Joe Biden? No, I think he's great at laundering money, though.
Yeah, apparently. I mean, honestly.
From what I've seen right now, I don't get it. Like just imagine it was Trump who was president.
Yeah. Well, every single day in the front page of New York Times, the Washington Post and every other publication would be like $40,000 check for $20,000 check from his his brother.
Like it'd be game over cries for impeachment. Oh, yeah, it'd be like the world falling down.
He's in China's pocket. But it's like we're living in an alternative universe right now where people in power especially on the on the left right can operate almost with impunity and Pelosi's a perfect example she's not the only one but it's inconceivable that someone could have that higher return the mark when everyone else can't do it so what's the edge the edges she knows let key legislation someone's whispering in her ear, okay, because, you know, they want to be on our good side, right? So it's hard to prove.
But it's just prima facie. So if what you're saying is true, and that is that the most sophisticated people in the world can't beat the S&P average, then any member of Congress, and I think they are on average dumber than than the population, especially the career politicians, for sure.
Yeah. There's no possibility they could do that with that inside information.
No, it's not possible. But again, so how do you go proving that, right? They have the issue of subpoenas.
And listen, I think that in this case, the solution is they shouldn't be allowed to trade these people. Yes.
They should not be allowed to trade. It's insane that they're allowed to.
And, you know, as you said, it's prima facie, right? You know, if it looks like shit, smells like shit, well, guess what? Yeah. It's shit.
Then that's, you know, or it's bullshit in this case, right? So listen, she's done incredibly well in an area where like the most professional investors struggle to even match the index. So somehow she's doing three times as well.
I don't know. Why is no one ever taking that seriously? I mean, this is like a feature of internet memes, but I don't know.
I mean, don't we have an SEC to look into that? I mean, what? SEC is not going to look into that sort of stuff because they don't want to make an enemy because they're funded. Who funds them? You know, they're funded by Congress.
The budget's tied to Congress, right? There's a committee that's the Financial Services Committee, right? So that funds the SEC. But how does it make you feel? I mean, you got in a lot of trouble for fraud, but I deserved it.
So like, I put sort of that. Yeah, I know.
But like, I never one thing. Listen, I admit that after 2008, I got a little bit bitter.
I was like, you know what? These people had bankrupted the world economy. And yeah, and no one went in Germany went to jail.
So I was a little I said, you know what, that's not really fair. But you know, I don't think it's, you know, an empowering way to live to say just because you know, I went to jail, other people should go to I think jail is a terrible place.
Right. And, you know, I did my time and and I made the best that I wrote my first book in jail, right, which is turned to be a great thing.
But, you know, I learned from that. But I don't then wish it on other people.
How did you, I mean, a lot of people go to jail. Few write books.
How did you, how did you do that? It's a great story. So believe it or not, when I go to jail, right? How old are you? I was 41 years old, 42.
It's a terrible time to go to jail, right? I lost everything. Right.
And I got my two kids at the time. Yeah, which was breaking the news to them was the most heartbreaking thing ever.
I mean, like literally it was like too much crying and then you go. I still get emotional about it.
Right. And I had to tell them, like, you know, daddy made mistakes.
And now he's in the hysterical. They were 11 and nine at the time.
Right. um i go to jail and it's not the worst jail in the world not worried about slipping in the shower so it's like a minimum security but jail sucks right who's my bunk mate tommy chong from cheech and chong what was he doing there so he's there for selling not marijuana but bongs bongs it was the most ridiculous thing ever so he's doing a year in a day a year in a day for selling bongs i'm like he's doing a year and a day for bongs i should probably get 3 000 years how long did how long are you serving i'm 22 months yeah right so he's there for a year and a day and you know the first few days you know there's not much to just tell each other stories and i'm telling him stories about my life the insanity and did you know who he was of course yeah they put us together we put us together.
We shared a, we shared a cell. Yeah.
Cause they can be both high profile. So they just put us together.
Right. So they could watch us both at once.
Right. And so in jail, as in normal life, all the famous people know each other basically.
Right. So he's a great, he's a great guy.
And he was, he was writing a book at the time and I'm telling him stories and he's just rolling, laughing hysterically every night. Right.
And the third night he's like, you know, I'm making this shit up, but my wife Googled you and it's like all true. In fact, your assistant knows you from the father from back in the day.
He was a friend of mine. Right.
He's like, this is, you actually psyched the boat. You crashed these cars.
You did all this insane. You made all this money and all these drugs.
He goes, you have to write a book. And I'm like, really? You think my life's exciting? Like, cause when it life? No matter how crazy your life is, it's yours.
You don't have a core right? You think it's just normal? I'm like, he's like, I'm Tommy Chong. I think your life is insane.
He was write a book. So I started trying to write and I was a terrible writer.
Terrible. I couldn't write anything.
I never written before like that. You know, it's like a month.
I'm like, Oh, this is just not working. I go to the prison library and library I stumble upon a book called bonfire the vanities by Tom Wolfe of course I pick up this book and I'm like oh my god I want to write like this so I plowed through the book and then I started with the yellow highlight and I use this book like a textbook and I taught myself to write by modeling Tom Wolfe so it's like I had a model now and i spent about three months just every i mean every metaphor how he used grammar how he described locations how he used conflict and i really started to see my writing dramatically improve so i wrote about a hundred pages when i was in jail and then i ripped them up i didn't think they were good enough i got out of jail with no pages but i had a skill now right so when i got out i was like you know i don't know what to do with my life and i was like maybe i'll just start trying to write again right so i wrote about 12 pages and i'm like wow i think those are really good like i thought they were pretty good i hate my own writing always right it's like when you write you it's very like you always hate what you write right so i'm like i think this is pretty good i sent to a few friends and they're like laughing like oh my god it's the funny i'm like really so I sent it to a book agent I knew very casually just a casual friend right so I call him and say I want to you know write a book you're so great let's get you a ghost writer well I want to write myself he goes can you write I'm like I'll send you the pages I sent 12 pages next day calls me back he goes did you pay Tom wolf to write those pages it was like that close to Tom Wolf's voice my first draft right I like no no I wrote it myself he's like it's really good he goes like write ten more pages so I said alright so I took about a week to write ten more pages I wrote another ten pages I sent in the pages 15 minutes lady calls goes stop everything you're doing you have no idea what's about to happen to your life this book is gonna be a master head master I'm gonna get a movie made about this we're gonna get Leo DiCaprio to play you right I mean right from the start right I was like I thought he was delusional right but it not much going on back then right so I was like screw it so I you hold up and literally I had a little tiny apartment and I spent one year just like doing 18 hours a day writing the book the wolf of Wall Street right about on page 60 he took it down to random house who bought the book I got a nice advance so like at least live right and then when the book was finished about a year later went through seven edits because I overrode it got it from a thousand pages down to 500 pages and then when it was still a manuscript it became a bidding war between Brad Pitt and Leo DiCaprio yeah it wasn't even a book yet I know it's crazy right and you know, Leo brought in Scorsese and I always loved Leo.
So I sold to Leo and Scorsese after a nice bidding war. And so began, you know, the story of the Wolf of Wall Street, what happened with the movie.
And then there was a delay, by the way, for five years because that was 2007. And then the writer strike hit and it got delayed, which ended up being a great thing.
And this is really empowering for all the listeners I'll tell you why because when I when they wrote the script when the script was done by a guy Terry winter who adopted the book He did an incredible job. The first draft in the script was amazing, right? But it ended with me in jail Because I went to jail and got out right and that was the ending of the movie of the script, right? there was this delay then for four years after the writer's strike and During those four years I got very wealthy again going out there and speaking and training entrepreneurs and teaching sales right so finally four years later when Leo call because we're ready to go it came back to my new house I was living in a mansion on the water it's like what the hell happened to you like in four years I was in a tiny apartment now into a very nice house again and like oh I'm do this stuff around the world I showed him my clips from live on stage.
He's like, wait till Marty sees this. He's gonna go crazy.
They rewrote the third act of the movie and made it a comeback story. So that's it.
Yes, I kind of rewrote my life story. When were you happier at the peak of your success? Pre conviction were on the comeback? Comeback.
I was never happy before. Why? Number one, I was a massive drug addiction.
Yeah. Like, I'm literally massive drug addiction.
What were you using? Quaaludes and cocaine. Quaaludes? Quaaludes, yeah.
Is this the 70s? 70s. Well, you know, I...
Where'd you get Quaaludes? I'll tell you how. So when I got really wealthy, you know, they made them illegal in the United States.
Yeah. Right? Go a long time ago.
But, but, in Switzerland and Italy and Spain, we were going country to country and like buying out the pharmacies of all the ludes from overseas and bringing them back into the United States, just not to sell them, just to take them, just eat them all. We weren't dealing.
I'm just consuming massive quantities of these quaaludes. Right.
And I got so wildly and I was taking about 10, 12 a day. Very.
Yeah. And like one of them would knock out a 200 pound Navy SEAL for eight hours.
I would take four and walk around like what was the appeal of that? You know, euphoria, the incredibly euphoric, they get this like the first thing you get this tingle phase and then you get like the slurs and the happy drool phase. Anyway, it's incredibly euphoric.
And then I said, Well, we're getting drool phase. The drool phase is when you drooling as you're talking, but you're like, well, drooling is not a big deal.
Baby's drool. And when you're slurring like baby's slow, right? So he's always a justification.
But then the problem is, is the fourth phase is unconscious. That's great.
That's the best justification for though is is unconsciousness, which is a problem. So what do you do then? Well, a responsible drug act will then take cocaine to make sure you don't go into the course, right? So I started to balance it out.
The yin and the yang. Come on.
Cocaine, which is great. Works great.
The problem is cocaine makes you anxious. So I needed Xanax to get rid of the anxiety.
Right? So I take Xanax to call the anxiety, but I still need something to kick me over the edge with sleeping. So took some ambient to sleep and then some walking for the pain I had and before I knew it I was taking 22 drugs at the same time I was like a human petri dish right and I was just incredibly high all the time running I know I'm very lucky I know I don't you know I always wonder why I didn't have any permanent damage yeah right I think most of them was not a big drinker I think alcohol is like that wild card alcohol and quail is a kill you yeah it's a wild card it's like gasoline on the fire so I was very fortunate I got sober in 97 how went to rehab I went to rehab I got so much withdrawal like from Quailins not bad it wasn't that bad you know for me it wasn't so much withdrawal was the problem it was more like just I needed like an adult time out I needed I was so done with it like I think you know people can get sober in rehab people can get sober in the rooms of Alcoholics Anonymous right you can get sober anywhere but you have to be ready to get sober yeah if you're not ready right you could be in the world's greatest rehab and you'll just relapse you'll run it you'll climb over the wall as soon as you got you'll use again course I was done I I like my life was so out of control I had my kids were starting to get older now they're four and five years old so I was like I gotta end this so I know I was very happy to stop using drugs right so that was in 97 I had a problem in 2009 where I had some terrible run of like five surgeries in this shoulder and five soldiers in this shoulder.
I had really bad back, the whole thing. So I was taking Vicodin from the doctor.
From the doctor, right? And then I got off of that and went on something called Suboxone. Oh, of course.
Which is a disaster in its own right. But I could function.
And then I find an Ibogaine. You know, Ibogaine? Yeah.
And I got completely that. How did that work? Well, you know, I was on this low dose of Suboxone for like 10 years and it didn't affect me, but it's like, it's just not who wants.
Why did they do that? Because the pharmaceutical companies make a fortune with it. So they get everyone addicted to opioids.
Can you explain? Yeah. What that suboxone? Yeah.
So it's a box, a box. So what happens is with the opioid crisis right everyone's taking oxycontin and percodone and uh perc percocet and vicodin and all these right and they're giving them out like they're candy all over the place right so there's this massive opioid crisis right when they realized that especially oxycontin and fentanyl was so addictive and people were like dying they said we have to have a solution so they put people on something called suboxone suboxone is what they call a partial opioid agonist meaning right it binds to similar receptors but it doesn't really get you high and it you can't really it's very hard to overdose it's like the modern methadone exactly it's exactly what it is right so it's much more long acting and you could be on it and no one knows you're on it but in your mouth maybe a little bit drier and so so forth.
You're a little bit tired there at night. But generally speaking, if you're really careful, then, you know, you can live on that.
And it's not the worst thing in the world. Does it affect your cognitive ability? Not at a very low dose.
But the problem is most people don't stay at a low dose. They go up and they go up because they get a little bit of a high from it.
So they abuse Suboxone and it's like a life sentence. And it's like you're not good for your liver.
You your liver you're taking an opioid right yeah so I was on that for a long time at a very low dose and fine saying you know what I'm just I want to be up I don't want anything in my system so I went and did Ibogaine in Mexico in Cancun which everyone you know heard Ibogaine Ibogaine is a naturally occurring plant right Africa hallucinogen it's a very powerful hallucinogen but for some reason it binds to the same opioid receptors as as as morphine right and you know Vicodin right and it resets them so it's this weird thing it resets you it brings you back to pre addiction so when you're done with this 12-hour nasty scare me trip is scary what happens is not fun I'm like I'm see you do it I did I did it in a, in Cancun called beyond, which is a group. I mean, I'd recommend this place to anybody.
It was amazing. And they really did an amazing job.
Very safe. Very old doctors, supervise.
You always hooked up to a heart machine because it can be taught on your heart. Right.
And, um, and they really like support you emotionally. Right.
And when I did this to play, but what happened? So you take it. I did a guy tripped the scariest, the scariest ugliest like terrible trip but like i was so i was petrified before i started by like you hear all these horror stories about ibogaine right where like you're seeing your you know dead people talking to you and your father is talking to you from back you know my father's passed away right so uh you see all these visions and stuff and you hear a lot of noises and like bugs it's terrible um and was it as bad as you thought it was pretty pretty bad.
I was petrified. I'll admit it.
The whole time? The first six hours is brutal. The second six hours is like, get me out of this room.
I'm like, you're like diaper boy. You want to do a primal scream, right? But what I did feel...
No, no. It is scary as shit.
I'm telling you, it is not fun at all. Right.
But I did feel it like burning out my wrist. I can feel it.
My brain working. Like I knew it.
Like I knew as it was happening, like I'm done with it. Like I'm not going to need this stuff anymore.
Right. So anyway, so after it was over and I recovered like that, you know, 12 hours, I got out.
I never did another, you know, any morphine or any narcotics ever again. That was it.
It was done. Amazing.
Yeah. It resets your receptors.
Did it affect you in any other ways? Um, you know, some people I think have more, more of a spiritual journey. Um, cause it's great for PTSD as well, like for veterans, right? So right now they're trying to fund studies for veterans is very helpful with PTSD, right? I didn't think it made that many changes in me.
I was in a pretty good place when I went in there. I just literally had a physical addiction that if I didn't take this stupid drug, I'd get uncomfortable and I didn't want to have that.
Like I'm traveling all the time, right? So for me, I didn't feel like I made any profound changes other than that for the first 45 days, I had to learn to be completely sober again. So even no physical, uh, withdrawals, I had some post-acute, like mental, I just didn't feel great.
But then after like 45 days and suddenly all the clouds lifted and I, you know, felt terrific again. So it was an amazing gift that I gave myself and I would, I would strongly recommend this to anybody who's suffering from, you know, opioid addiction right now.
It's certainly a better solution than Suboxone. And and, you know, for me, it was it was life changing.

So it's great. And so you've never been tempted to go back to anything ever again? No, never.
No. But I mean, the thing was, I wasn't using Suboxone to get high.
It was just a maintenance thing because I got addicted to these damn painkillers after my surgeries, right Right, so I was using it at a dose. It wasn't like I was trying to get high So I guess if someone was like reluctantly put on suboxone because they were like a drug act And it was you know, they just the hatch was a life was so out of control I guess they'd have to probably work through some therapy as well afterwards But you know, I think that it's really helpful for that too In other words, some people that go through Ibogaine when they they emerge they're like they get this new perspective on their life and why would I ever want to use opioids again it's like disgusting and terrible so but it is incredibly powerful like me is not no joke it is no joke by the time to try ketamine you know like it's a great thing for that use ketamine that to expand your brain I've tried other hallucinogens.
I've tried mushrooms, right? You know, Ibogaine is in a class of itself It's like not like no one ever abused Ibogaine You know, you know, I get up the I'm gonna let's have a fun trip on Ibogaine. It's like no, it's like, you know It's like let's go to the crazy house and and like, you know, hold on for dear life for 12 hours And and then all your addictions are gone and it really what it works.
It actually works is wild. Yeah.
Do you keep in touch with anyone you were on Wall Street with? I do, yeah. I still keep in touch with some people.
From time to time, I speak to Danny, the Jonah Hill character, other people that my, mostly people that were my good friends before, I still speak to. But a lot of people were like, we employed about 4,000 people at Stratton over the years,'m more like five or six thousand people and a lot of them you know they come and go I brought into him from time to time but you know my new life is very different so for the last you know since 2009 right I've been out there coaching and you know mentoring entrepreneurs and on how to build businesses and how to do sales and increase their you know marketing capabilities right And I never talked about Wall Street, never.
Like I never wrote a book and that was really my core competency, right? And what really made me do is honestly, it was my brother-in-law when I kind of just saw him like just getting whipsawed, I'm like, you know what? Like there's two sides to, I think, to retiring and being wealthy or at least comfortable. One is you want to make money when you're in your working years, right? right so that's we all have to do that and you want to make as much money as you can hopefully doing something you like that's part of the equation right the next part is what do you do with the money that you can save from from all the hard work how do you put that money to work in a in a very safe responsible way that's going to outpace inflation significantly that's going to compound compound and allow you, when you're ready to retire, have an amazing life.
I believe that people deserve that. So I look at this book as it's a gift.
If you read this book, really, it's such a, it's like a blueprint and it's really simple. It's like not that complicated, but you know, I knew that if I wrote the book in a dry way, people would not read it.
So I wrote in a very funny and more story, so it would be really engaging. But as you go through that, you get this, what I consider to be a turnkey formula for a portfolio.
So like- Steve Adubato, Can I ask a dumb question? The S&P 500 is 500 stocks. But they're not all in the same tier at all.
They mean, they're thriving emerging companies, churning out a lot of profit, and then there are a lot of older industrial companies that aren't. So why wouldn't you just make your own S&P 15 or 10 or 50? Why would you- Which ones though? And how do you know which ones are going to win and which ones are going to lose? So here's the thing, right? Human beings and even analysts, I mean, even experts, just that's terrible at picking the winning stocks.
It's too hard. So you're just imagine everybody is trying to do the same thing.
What's the next winner? What's the big winner, right? So all the money is chasing after this pool of shares, right? So the question is, you know, any given moment, you know, the way, you know, economics would say is that the market is fairly priced in this moment based on all the available information that's out there. Yeah.
This is what every single individual stock is worth, right? Now, over time, right? When you buy the S&P, now remember the S&P 500 is the 500 biggest, most profitable companies in the US. They're in 10 different sectors, but the S&P, the index committee, every quarter will meet and say, okay, based on the US economy, is the weighting of each sector correct? Do we have enough information stocks? Do we have enough in industrials? How about healthcare, right? So if you go back like 30 years, industrials are one of the biggest sectors out there.
But then we exported our manufacturing base to China, right? And suddenly the financials become really big and also especially computers and information and healthcare. So the biggest ones are now healthcare and computers information technology.
Those are your biggest sectors. So what happens is the S&P will reweight itself every quarter to match the US economy and any of the companies that are either underperforming, right right or becoming less relevant to their sector will be replaced by companies that are doing better and are more relevant so you have at any given moment the 500 best companies all done for you for free by the s p index committee who's selling that information making money in a different way they don't make the money you can't invest in the s p index because it's an index index you need a fund right that so there's a very big difference when the S&P first came out you could only watch it there was no way to invest in it it was like a benchmark how am I doing compared to the S&P you couldn't buy it you'd have to go out by each of the 500 stocks which is a cost prohibitive and not you know you could just time prohibitive as well right so when the first S&P 500 index fund came along it allowed people for the first ever to buy all 500 companies in one trade right which is incredibly tax efficient

and time efficient now what else happens once a company goes into the s p all the institutions have to buy it so there's almost a self-fulfilling prophecy or part of it as well right? So if you have information, like inside information, you're one of those rare people that can somehow, like one of 10 million people or 100, that can somehow figure out which stocks are going up and are going to beat the S&P, God bless you. Right? But my chance to everyone listening is that's not you, right? You're not going to be able to beat the S&P.
You don't think that's me? Even with my jim cramers strategy you don't think it's me so much so much talent as a speaker and you know god would not give one man so much talent and so much insight right right so anyway so so i really it's been proven like i'm not just saying this it's like it's been proven by every study when you read the book i go through every study in a very funny way and then when you like the last chapter is called meet the fuckers instead of meet the fuckers I called meet the fuckers so we're the fuckers all the fuckers are the Jim Cramers of the world these are all the fuckers who are out there and he's just one of all the online that Charlton's on tick-tock these five stocks about the moon I mean come on like this stuff is littered all over the internet try to bait people into making stupid investment decisions that are self-feating. It's the seminar guy who tells you to buy the magical trading system that's going to beat the market.
You could turn $50 into $5,000 in three months in your bathroom from home with my album. Well, that's so great.
How come you're not using it yourself? Why are you fricking walking? It's so ridiculous, but this is what people fall for it, right? They do it all the time. And they end up getting destroyed.
And you know what? It when it really hits them when they're 55 60 years exactly and they don't have the money they should have if you follow the advice in this book which is an arguably the best advice i mean war buff would give you this advice seriously it's an arguably great advice and that is to play the long-term investing game relying on compounding meaning you start off with a small not as much as you can right right, and then add to it a little bit each month, whenever you can, as much as you can. And then also reinvest your dividends.
So when you get quarterly dividends, because the S&P pays a dividend, reinvest those as well. And just forget it.
Don't worry about what's going on in the world. Like you say, the US economy is going to go to shit.
Okay, maybe it will, maybe it won't, who knows. But here's the deal.
No matter how shitty the US economy gets, you still gonna have really big companies out there that are raping and pillaging making a fortune out there like even the S&P 500 half the business is overseas. Yeah, they're multinationals, right? So you're getting overseas exposure as well.
And you know, listen, I'm also as much as America is broken, I still believe in the

American system of capitalism.

I've traveled the whole world.

I've never seen a country where

they had this like the drive and

the ingenuity that we have. The

US is a special place. Okay,

what's wrong with it? I agree.

Special place and also compared

to what the best bad option out

there, right? So I really believe

and then also there's a couple

other investments you want to

make to balance out risk, right?

You want to have a what's called a

bond fund in there. But again,

none of this is about trying to pick which bonds are going to pay more than others. You can't do that.
You're trading against bond professionals that are going to rip your eyeballs out every time you're trying to beat the market. So you want to be engaging in these index, let's go passive investing.
Yes. Not active, passive investing.
It's exactly It's exactly the opposite of what I told people to do when I was in my 20s. So if I could sum up your advice, it would be ignore the experts and be passive, not active.
100%. Ignore the experts, especially Jim Cramer, by the way.
I call him a carnival barking ass clown. Okay? But I mean, that's totally fair.
But it's totally fair. And everyone used to, like when I was doing my legal vetting and they got the, like, no vetting they got that girl from there at least once a day I watched Jim Cramer on Sam Bankman freed so just to make myself feel good that's a that's another story it's inside the whole crypto world right with Sam backman freed so he got you know I knew that was gonna happen I think I was asked by anybody you but what's gonna happen with Sam back and said this guy said, this guy's gonna go to jail for, I don't think he deserves life in jail.

No, I agree.

But he's probably gonna get 20 years.

Very few people deserve life in prison.

Right, you know?

But he's in for a world of pain.

The people who started the Iraq war do,

but other than that, no, I agree.

Jordan Belfort, thank you so much.

My pleasure.

Great to see you.

Thanks.

Thank you.