Marcus Aurelius - The Inner Game of Investing

In this episode of The Timeless Investor Show, we explore the life and writings of Marcus Aurelius — Roman emperor, philosopher, and author of Meditations.

What does a 2,000-year-old Stoic emperor have to do with modern investing, entrepreneurship, or leadership? A lot.

We talk about:

• Why emotional discipline matters more than intelligence
• The difference between control and acceptance in business
• How Stoic thought prepares you for market cycles, setbacks, and success
• And why some of the greatest investors in history turn to Meditations as a mental anchor

This episode is for anyone building something big — and trying to stay centered while doing it.

Listen in and think like an emperor.

Act well. Think wisely. Build something timeless.

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Transcript

SPEAKER_00: 0:00

In 165 AD, a deadly plague swept across the Roman Empire. Marcus Aurelius didn't run. He stayed. He ruled. He faced great difficulty and challenge with great personal courage and conviction. And in the end, he died doing his duty. His life and his death were a masterclass in inner discipline, self-command, and timeless strength. That's what we're talking about here today. You're listening to The Timeless Investor Show, where we explore timeless principles for life and investing. I'm your host, Ari Van Gemeren. I'm a real estate investor, fund manager, and a student of history. So why are we talking about Marcus Aurelius? Who is Marcus Aurelius? Stoicism is having its moment in our current culture. There are a lot of influencers and people talking about it. It is a fantastic system. Ryan Holiday talks about it. Tim Ferriss talks about it. They describe it as an operating system for how to run your life, how to live your life. One of the exemplars of Stoic philosophy was the Roman Emperor Marcus Aurelius. Marcus Aurelius was the Roman Emperor from the year 161 to 180 AD. In his life, he faced war, diseases, betrayal, the potential collapse of the Roman Empire, endless wars. combat and difficult situations that he was confronting all over the Roman Empire. And he was the last of the five good emperors that ruled over Rome during this time. Very famous for good reason. He was very well illustrated in Gladiator, which is totally historically inaccurate, but it was a great still portrayal of the man I thought in many ways. What's fascinating about Marcus Aurelius is that he wrote meditations. So those of you that are not acquainted with meditations, meditations was his private diary, his private journal that he kept over the course of his life as a daily practice to check in with himself to better implement the tenets of Stoic philosophy. He wrote these throughout the course of his reign, and they have been passed down to us through meticulous care of the records over time, monks in the Middle Ages re-recording what he wrote, keeping it alive for us today for posterity's sake. And he died during the plague. And so, you know, there are several books of meditations that were written while he was the emperor during this incredibly tumultuous period of history. One of my favorite quotes from it is, you could leave life right now. Let that determine what you do and say and think. Why is this important? On this show, we are in pursuit of timeless principles and that the greats of the past and the greats of today, great investors that we'll talk to, have utilized to build better operating systems and make themselves better investors. Stoic philosophy is very much in vogue right now. But the core tenets of Stoic philosophy are incredibly useful as you think about building your own real estate empire, your own business, your own investing empire, whatever it is you're working on. I'm going to highlight a couple principles that every investor should really needs to take away from stoicism in their own life and as an application to their personal life, to their business life, to their investing life, to your life, to my life, that is so incredibly useful. The first one is control what you can. Or said differently, know what you can control. There are so many things that are out of our control when it comes to investing or entrepreneurship or building or even just our lives. I mean, you could be doing great and then your partner might pick a fight with you. or something could happen to your child, God forbid. There's so many things you cannot control. What you can control, you must control. You cannot control the Fed. You cannot control what the market does about cap rates. You can't control your investors' emotions. Sometimes it's difficult to control our own emotions. But if you look at the world in terms of what is under your control and what is outside of your control, it provides remarkable clarity. So some things a real estate investor should think about. You can control your underwriting. You can control the quality of your underwriting, the conservatism of your underwriting. You can control the reserves you've taken. So I think every investor deals with this and they buy a real estate property. How much do you want to hold in reserves, right? You can control that. Controlling that mitigates a lot of downside risk down the line. Being thinly capitalized is a huge risk. And it's a controllable risk that many of us just do Or we buy something with the last penny we have, but we have no reserves. I mean, that's the number one way. I've said it many times. It's the number one way to go broke in real estate. You have, another quote from Aurelius, you have power over your mind, not outside events. Realize this and you will find great strength. Great was my addition to that. The second principle I want you to think about is to prepare for adversity or in Latin, premeditatio malorum. Visualize what could go wrong Not out of fear, but out of discipline. Be prepared for the downside scenarios. I think oftentimes in investing in entrepreneurship, we are told endlessly to visualize greatness, success, all the best things that can happen. And I totally buy into that. I really believe in that as a philosophy. But also, think about what could go wrong. Mentally fortify yourself. Prepare for what could go wrong. You have to. I have a fantastic business partner who we're going to interview on this show later, who's an incredibly successful investor. And every single deal we do, he challenges me on it. He says, you're not looking at all the bad case scenarios. Go back, do the underwriting again, go through and look at what happens if rents are negative? What happens if cap rates spike? What happens if interest rates spike? And as a deal guy, sometimes I don't want to do that. I want the deal to work. I want to make it work for myself. But Understand what could go wrong. I mean, this is a huge part of Stoic philosophy and it's really important. And the Stoics would practice this in many different ways. Sometimes they would go live on the streets for five days so they understand what it feels like to be without food, to be without common luxury because they wanted to steal their bodies and their minds and prepare themselves for what could go wrong. Third, difficult, master your emotions. Our emotions are our greatest strength and probably our greatest weakness. Our emotions drive us. They make us relentless in pursuing what we want to get after. But they can also handicap us. They can cut our knees out from under us. They can really hurt us in this pursuit. Stoics spend a lot of time understanding their emotions, controlling what they can control about their emotions. There's some great, I mean, I think meditations is a perfect example. Marcus Aurelius wrote in his journal every day for himself And oftentimes the focus of his writing was on his own emotions, on how he was processing a situation. It's interesting and kind of funny to think about, but the emperor of Rome was talking about encountering people on a daily basis that were unpleasant, that were cruel, that were emotional vampires, to use a modern term. The emperor of Rome was thinking about this, right? If he had to deal with this, how much more so do we have to deal with this? I agree. Another great quote from meditations that highlights this point. If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it. Understand that. Understand external things should not have the control they have, but they do. I want to give a quick personal anecdote of the application of this in my own life. Kind of a difficult story, but it's an interesting one. Ultimately worked out well. The very first investment we ever made was in a 23-unit building in Portland, the Richardson Court Apartments. And I haven't told many people this story. I mean, my family knows it, of course. We were scheduled to close on December 24th. My father died on December 20th, okay? He had had cancer. It was sort of expected, but as any of you who have lost anybody to cancer knows, sometimes the end comes rather abruptly. So everything seemed fine a month before, and then at the end, he died. It was difficult. Obviously. My father was my rock. I always felt protected and cared for because I knew my dad was there. It would help me. He was gone. At the same time, the lender failed to perform on this deal. So I have to close on December 24th. My dad has just died and the lender fails to perform. So any of you that have done a real estate deal understand at this point what's going on. You have earnest money in the deal. It's gone if you don't close. You have all your pursuit costs gone if you don't close. It is a financially devastating situation for me on top of having just lost my father and having to drive out to see his body at 2 a.m. in the morning. So how do you solve this situation? And I felt every emotion you can imagine, mostly panic, terror, fear, tremendous stress and anxiety. What have I done to my family? This is such a difficult situation. I had been studying stoic philosophy for years. I didn't do it perfectly, just to be clear. I didn't do this perfectly, but I took assessment of my emotions. I journaled about it. I thought about it. I called the broker. We got the seller on the phone. We structured a short-term seller financing close to close that deal. The lender performed in January 2021. We got it done. We refinanced the seller out. We all worked together. Now, yes, right? The seller could have said, no, I don't want to work with you. But it was that clear-eyed thinking, working with my partners and the team that I had put together, and being able to kind of not approach this from a position of complete panic, but a position of strength and thoughtfulness that enabled me to navigate through the situation and enabled the team to come up with a really creative solution. So stoic philosophy shines best under pressure. And that is about as high pressure situation as I've been in, hopefully we'll ever be in it again. And I've been in many high pressure situations. But these tenants have been life-saving for me, instrumental. So always we're gonna come back to what are the timeless principles to take away here? And we've just highlighted three, I think are incredible timeless principles for any investor of any size, shape or form to keep in mind in their own investing practice. Stoicism, the tenets of stoicism, gives you a real edge in investing. It keeps you from overreacting in down markets. It helps to manage your team, your capital, and yourself. Markets favor clarity. Capital flows to conviction, and real wealth follows those who can endure. Endurance and surviving the downside is the most important thing, and managing your emotions, managing what you can control, and preparing for downside scenarios are instrumental in to being a good investor. I hope you've enjoyed this. This is a brief touch on stoicism, a topic that I am personally very passionate about. I studied philosophy in university. I studied stoicism in philosophy. I do want to say before it was in vogue, but I am so grateful that the philosophy has become much more in vogue. Please share this episode with other serious operators. Join us on the Timeless Investor Newsletter, which you can subscribe to via my sub stack, which is in the show notes. or to our private investor newsletter as well. And I just want you to, I want to leave you with this thought, just where am I letting my emotions override my principles in my investing decisions? Stoicism is ultimately an operating system to manage your emotions. So how are you managing your emotions? Think well, act wisely, build something timeless. Thank you for joining me today.