1 Big Idea to Think About

  • To find true happiness and satisfaction in life you must put things in proper perspective. Identify what are assets and liabilities, and then invest in the assets and remove the liabilities.

1 Way You Can Apply This

  • Create a T-Account and list your assets and liabilities in your life or business. Try to capture the intangible assets and liabilities. Evaluate what you learn from this exercise and invest in the assets and minimize the liabilities.

1 Question to Ask

  • How many deaths and rebirths have I been through in my life? What part of me died and why?

Key Moments From the Show 

  • What is success? (1:44)
  • Appreciating the texture of life (6:06)
  • Accurate accounting in our businesses and our lives (13:31)
  • Defining assets and liabilities. Is this creating value for me? (17:54)
  • How to set up a P/L for your life or business (20:00)
  • “The only two things I believe in are kindness and math.” (26:10)
  • Allowing any deaths and rebirths throughout our lives (31:31)

Links and Resources You’ll Love from the Episode

Greg McKeown: 

So this is one of the reasons I wanted to double click on Jeong with you. And then you have to correct me if I’m wrong here, but my understanding is that the Blue House in Korea is named after this. It’s Jeong Wa Dae or something like that. I’m not saying. I’m sure I’m saying it incorrectly, symbolically, trying to capture that sentiment of, you know, come here. When you come to the Blue House, you are. This is the presidential house that you will. You know, that there’s a sense of communication and connection and harmony and so on. 

And as it happens, when I went to business school, the son of the president of Korea at the time was one of my classmates and one of my friends. And so we organized a trip to Korea, and it was a. It was just a spectacular learning experience to be able to spend, I think, about ten days with a packed schedule, but going from just, you know, fascinating meeting to meeting, which crescendoed with a meeting with the president at Blue House.

But there was a very, very unusual feeling in the place, in the land, the garden that had been created by one of the presidents and so on, and just a feeling there that was much more, you know, and I didn’t know at that time that. That its translation was, you know, Blue House translation had had a connection to this Jeong principle. But I wanted to go there. Is there more that you can tell us about that connection?


James Rhee: 

You know, I’ll sort of spoil a little bit of the book because I think it’s the coda to the book, and this is the best way I can explain it. And it was actually to a room full of Koreans. You have to picture a room full of Koreans, and my Korean is not great. And it was my way of also saying goodbye to my parents. But I was sitting in a room 70 years after my parents went to high school in that very neighborhood of Seoul, and I explained this. I said, what are the odds of their son being here 70 years later, saying goodbye to them?

They passed away in America, like, feeling like he needed to say goodbye. This is where they went to high school. And so this moment we’re sharing. And then the only way I could communicate it was through song. I asked for a guitar. I had some photos, and I sang, and the whole room understood exactly what a red helicopter was after that. Just two minutes. 90 minutes I lectured, like, private equity CEO MITstyle, and they were like, not sure what you’re about. The red helicopter. I just handed in my manuscript.

So two minutes, I just sang, and they all understood. They just like, wow, your parents were here, and now they’re here. And it’s this loop. It’s a very bittersweet feeling, that same chess feeling, you know, that it’s. It goes further, right? That there’s a repeating of history. There’s a real understanding of just these wrinkles in time, and it forces longitudinal thinking, which is very different than what’s happening in reality in our world, but particularly in Korea. So Korea is really right now, a laboratory for a lot of where the world. The conundrums we’re all going to face.

What is success? A society that has the highest bandwidth, fastest bandwidth, highly educated, 7th largest economy, Korean miracle. Is that success? Or is it success also that highest suicide rate, highest rates of alcoholism? The government is now subsidizing childbirths because women are opting out. They’re like, we don’t want to have babies. Not sustainable. Where young people are now immigrating, just like my parents did.

My parents immigrated because they lived through a war. This generation of Koreans is immigrating because they’re calling it hell Chosun, which is like hell Korea because they don’t feel like they can live, and it’s suffocating to them living in that country right now. And so it is a real metaphor for. And I’ve been watching that country for a long time, saying Korea is going to play a very interesting role in terms of the fulcrum of where the world wants to go. And that’s why they’re having such joy and profit exporting their storylines, because Squid Game, you know, or Parasite, Koreans right now, they’re sort of teasing the world and saying, we know what misery and suffering is. That’s fun.

And then the other things you’re watching, which is like the K dramas, this really saccharine beauty. That’s like an exaggerated chunk. Yes, right? And it’s like, oh, it’s so cute. It’s this.


Greg McKeown: 

It’s a hunger. It’s trying to speak to a hunger. Anna and I watched that entire show. It’s all in subtitles. So, one of the. And the show moves quite slowly. I think every episode is like an hour long. It’s not like a 20-minute quick-bite show. And because it’s all subtitles, it forced maybe me more than Anna, but it forced both of us just not to be on our phones, to not do anything else, to not try and multitask.

You had to be there. And that was. That was. It was quite special because of that. Even though, I mean, at one level, someone could watch that show now and think, oh, it’s just a bit of a soap opera. A bit of a what? You know, you could watch that in quite a shallow way, but it wasn’t shallow for us. There was something. There was something. And what you’re saying is right; maybe it is a slightly saccharine version of Chung, but there’s still something.

There’s still a hunger that that is speaking to.


James Rhee: 

Yes. One of the things when your book came out that I really, really loved, and I tried to convey this in my book, when you distill things down into, quote, simplicity and to sort of like, really getting, seeing things clearly and having concision, it’s not. The conclusion is not that life is then simple. It actually oxymoronically means you can actually appreciate the texture and the more like it’s.

And I think what we’re doing is people who are trying to, quote, live a simple life. Now, ideologically, they’re taking it to the wrong conclusion, saying, “I just want my schedule on an app. Zeros and ones. I want a perfect life. I don’t want to feel any pain. I don’t want to feel any text. I don’t want any torment. I just want to watch Crash Landing on YouTube all the time. And life’s going to be like this,” and it’s just not.


Greg McKeown: 

No, no pain. No, no pain, no strain. Just a comfortable life. What a comfortable life. It’s not. It really can’t be achieved. You know, like, the comfortable life, I think, it’s not an attainable place. That doesn’t mean you can’t find a sweet spot. But that sweet spot’s more like adventure than it is comfort and freedom from all obligation, and responsibility. It’s like, no, that’s not a choice that’s available to us.

When Clayton Christensen was a young man, he went on a mission for the Church of Jesus Christ of Latter-Day Saints, and he served in Korea pretty close to right after the Korean War. So, he made this observation. And I think that that context is important because it’s a bit of a. In one sense, it’s an outrageous thing to say, but what he said was the people at that time were terribly poor but terribly happy. When he went back as a, you know, business thinker, he said, well, the people became terribly rich but terribly unhappy.

And that’s not nothing, because. Although, of course, he is talking about his experience in Korea, as we are observing, this is really the story of the economic growth that has been an economic miracle all over the world, wherever it’s been implemented, wherever a certain form of capitalism has been implemented, you see this economic miracle taking place. And I don’t want to suggest that it’s nothing, because it is so significant, the opportunity it brings and the health and so on, but it’s not the whole answer.

I mean, I’m really in this right now because Anna and I, with a son, we just got back from Vietnam, like, two days ago, and I’d never been before, and that is a country of such dualities. I mean, I haven’t really been able to connect all the dots yet about the experience. But here you have a communist country, but it has enormous economic freedom. Well, no, excuse me. It has had greater economic freedom over the last 30-plus years than it had before, and that has made enormous differences. So it’s a fast growing economy now. And one of the days, we took a tour, I mean, it was a serious hike, actually, through the rice fields, and our tour guide was just the loveliest young woman, Mei.

But it was, it, it was so surreal. In all the villages, you know, you’ve got very limited resources, but they had community. I mean, the Jeong was visible. It was everywhere. It was connected. All of the. They had a place and a connection, and they knew where it all fit together. And yet, then we’d just come back from, you know, the local city supper, and I don’t know, you know, I asked lots of questions. What do you want? What’s your dream? Where would you like to, you know, what would you want from your life? And I don’t have the answer, but I don’t think either extreme is the answer.

I don’t know. Help us make sense of it.


James Rhee: 

Yeah. And that’s what, like, the whole thing in my forties, what I saw, like, it’s. I saw it. We grew up more similarly to. We had a lot of social capital. My family, we had very little financial capital. And then they sent me off to sort of, quote, master financial capital, and then I didn’t want the other social, like, I just. Since when is capital just financial capital? I don’t understand that. And since when is accounting accountable?


Greg McKeown: 

Can you talk more about the accounting? I love your emphasis of words, and you’ve referenced that here. Can you talk more about that, what that means to you, and that language?


James Rhee: 

Yeah. So, like, accounting is a system of comparison that we quote and measure success for companies, and as company norms and work norms are now dominating all of our language like, we work at home. I mean, it’s, there’s, there is no home anymore. And so this, I just am sort.


Greg McKeown: 

Work life balance is an odd. Is an odd phrase in a boundary less technological environment. Totally. I don’t even know what it means, but carry on. Yes.


James Rhee: 

And it’s a violation of privacy. Like, that’s the other thing that’s also happening just all over the place where we’ve given up our. We basically traded our privacy for free social media. We’ve done that without agency, by the way. None of us really knew that was happening at the time.


Greg McKeown: 

But then it’s a bad trade-off.


James Rhee: 

Terrible. Right? And so we’re also trading our children’s health for our free. For free social media. There’s a lot of things we’re trading. And so all of these things that are happening that we know are happening, that a reflection of our society, of how we’re treating older people, the state of our senior living industry, the lack of readiness to deal with Alzheimer’s properly, the demise of our entire public education system, all of these very clear. We know that they’re public failures, that they’re civics wise, just kind of undercutting the foundations of our society.

But we don’t have a way to measure it because in accounting. So whether it’s corporate accounting or now, these days, I think a lot of neoclassical economists, they forget that Charles Dickens was an economist, that it was a social science, like that Adam Smith was truly like a polymath, right? I mean, he communicated his findings through, like, prose. And so we are just relying on these measurements, and I sort of really shred, you know, GDP, like, even though the founder cosmic said, do not use this as well being, and we do anyway. And so it’s me kind of generally eviscerating the way that we’re measuring success and how willing we are to turn a blind eye on clear things that are. We know that they’re, quote, expenses, and liabilities, but because accounting doesn’t make us really own up to it, we don’t.

So we become an income statement society where we see a one dimensional tracking of growth. But the balance sheet, ours individually and as a society, it never lies. Your balance sheet follows you. I always talk to, like entrepreneurs and founders like this when they brag about all their accomplishments and or their value system. I always say, let me see your balance sheet because your balance sheet will show me exactly how you’ve actually lived your life.


Greg McKeown: 

And just break that out for us because you have in mind something more precise when you say, show me your balance sheet. How do you evaluate that with people?


James Rhee: 

Well, I start with in the book. It’s a simple lemonade stand. I’m trying to teach what a “T account” is. A “T account.” You’d be surprised. I do this at MIT, exec ed, and a lot of C-suite people who run multibillion-dollar companies, they don’t know how to put their assets and liabilities on a T account.


Greg McKeown: 

I’m sure that’s true. I mean, I’ve got to say it’s true. But there are many foundational ideas that are just assumed knowledge. And people can move up in organizations over many years and never have to get a precise understanding the simplest ideas.


James Rhee: 

Yeah. And so it’s hard to scale without that being correct in any aspect. Right. That’s the whole fractal conversation later in the book. And, like, it just these very basic things, they have to be right. And we’re not teaching them, by the way, people. It’s not fair to excoriate people for not knowing certain things. We don’t teach it to them. I think, in some ways, some people benefit from people not having true agency. Right. Like, it’s easier to take candy away from people who don’t understand the value of the piece of candy.


Greg McKeown: 



James Rhee: 

And so, like, I think it, like, they’re not going to too much depth, but it’s like, what’s an asset? What’s a liability, fundamentally? Like, that’s one of the questions I’m asking in the book. Define an asset. An asset. Something that creates value. For whom? Well, for the shareholders in a company. Okay. For the workers. No, for the shareholders. How about in your life? Is this asset what creates value for you?

And a lot of people go through life trying to accumulate assets that are easy to value, which are tangible assets. They see it in pictures and say, I want it, and they’re not understanding that. Is it creating value for you, or is it an impression of you? And then they’re giving up all these other assets. We joked about privacy, but time getting back to freedom, it’s like having freedom. I think that the real thing that I’ve learned in my life, that what I want people to have, the tools for an agency, is to have that freedom. What you’re saying about your freedom to spend time with your kids, freedom to read.

But freedom is not like toxic freedom, or it’s not nihilist freedom or go live in a bunker somewhere freedom. Freedom, paradoxically, means you have to have really good relationships to share that freedom with people that time with. And so that’s in the accounting world. You don’t value intangible assets as accurately because it’s hard to measure. There’s a decision; let’s just not measure it. And that’s what I’m ridiculing, saying yes. Okay, well, there are many different ways we can take a. You don’t have to change all the rules of accounting, but you can run your life or your organization and come up with your own synthetic measurements, human wellness, and put it on your, quote, balance sheet, and then when you report formally to the SEC, take it out. But the way you drive behavior, if you’re using accounting to drive behavior, no wonder why your people are miserable. No wonder why you’re miserable.

It’s a choice. And so I’m asking people to make a tough choice and measure things accurately.


Greg McKeown: 

Coach us through how you would actually have that conversation beyond what you’ve already just set up. If you were either in an MIT classroom, with, in an exec ed course, or with an entrepreneur, a founder, one on one, beyond what you’ve just said, like someone listening to this that wants to implement a better scorecard in their lives, how tangibly would they do that?


James Rhee: 

Let’s do one with the company first since people like some of your listeners may be working in a company or running a P and L. Pretend you have two identical lemonade stands. They look the same. Same numbers reported gap; everything’s the same. But lemonade stand number two has employee turnover of, say, 50% every year. And lemonade stand one has zero. Per gap, you would not expense the future turnover expenses in your income statement. It wouldn’t be even on your balance sheet. But you can very accurately measure within plus or -10% the future cost of the turnover that it’s going to cost you in recruiting costs, hiring costs, legal systems costs, loss of productivity costs, and loss of internal knowledge costs. There are all sorts of metrics out there. So, you can take the print value of all the future costs of that turnover and come up with a single quantified figure. And then you put that onto your balance sheet as a future liability, as a liability.

And when you recognize it on a balance sheet, you have to expense it. Then, it hits your income statement. And so the next year, if you do a better job so that there’s less turnover, that liability on your balance sheet decreases, which is then recognized as non cash income. And so it’s hitting your quote EPS. The way you’re measuring success internally, it’s forcing better behavior. And then when you report it out to your investors, clearly, you take out that non cash, you take it out, but it will create better behavior, and it will result in higher earnings. And so that’s a very tangible example of what’s not measured by accounting, and then we dont measure it and never hits your earnings.


Greg McKeown: 

Well, and coming back to the, I mean, my first job was washing cars when I was ten years old. And to this day, you know, I’ve worked with hundreds, without any exaggeration, hundreds of organizations since then. And no matter how complex of a situation I’m trying to understand, I go back to the, I literally go back to the car washing experience to just go back to what the real dynamics of the business are because those dynamics don’t inherently change through scale. It’s still the same dynamics. It’s just much, much more complex. But I love this with the lemonade stand because of its simplicity, because it shows that understanding that in traditional accounting, both of those lemonade stands look the same. They’re not the same, but they look the same. And it shows what a folly it is that those would look the same. 

And, of course, as we transition out to doing the same, though, for an individual, the same idea that somebody can look the same on, maybe even on a resume, even in net worth, but they can be completely different levels of health, even their future net worth can be very different based upon the intangibles of today. Please.


James Rhee: 

Yeah. Financially, I talked about income rich, balance sheet poor. I think a lot of people live their life like this, that they spend every dollar that they make. They save very little. And, you know, I’m a minimalist. I don’t. It drives my wife nuts sometimes. I think when I’m wearing, like, 30 year old shirts and, like, I just, I just, I don’t have a lot of appreciation for a lot of tangible things. Like, I had a midlife crisis in my forties where I announced to my wife, I said, “I’m gonna get a red sports car.” 

And she said to me, “Okay, that doesn’t sound like you”.

And I said, “I’m getting one.”

So I went out and I went. Took my youngest kid, my daughter, and I tested all of these sports cars. I said, oh, the back seat’s too small. I can’t fit the soccer goals in the trunk. I came back with a red hybrid soccer mom SUV. Okay? So that’s how I was going through my trauma.


Greg McKeown: 

I love that story.


James Rhee: 

So I don’t. I don’t. Like, I know for me, like, my balance sheet is, like, I have very few tangible assets, and. And then, like, investments, I make a big distinction between an asset and investments. A special type of asset that keeps growing, and it creates leverage, the whole freedom. You need leverage, right? So it’s having that type of leverage in your life where you’re actually creating time.

So it’s working for you, the money’s working for you, and you have time to not think about this. And, you know, that’s how I live my life. And so when I ask people about their time, oftentimes I ask to look at their balance sheet; what are you supporting? Why do you own these things? Is that an asset? And in the book, I give an example of, like, a fancy car. For me, if I had joy from a car, okay? Like, I just don’t. That’s just who I am. And I don’t want to be told that I should have a fancy car because I don’t want one. And so it would be. If I bought one, it would be a liability.


Greg McKeown: 



James Rhee: 

Not an asset. And because I’m giving up cash and I have to now give up my time to replenish the cash. And so the whole book is about, like, flipping things back and forth. Like assets become liabilities. Liabilities become assets. It depends on the point in time. Like, things always flip flop. And the only two things that don’t flip flop, for me, it sounds, like, embarrassingly simplistic, but it’s.

That’s why I called it. Like, I was like, the only thing, two things I believe in are kindness and math. Like, those two things are always. You know, I was teaching a class at MIT about three years ago, and one of the students said, “Come on. But is sometimes it’s kindness. Come on.” 

Like something like this. And I said, “Is there ever a time where, in ideal, you should not be kind, you may choose not to be, or you may have peer pressure because you don’t think it’s cool or whatever it is, but should you be?”

And he said, “You should always be kind, like you should.” 

And math is that, too. And so anyway, those are the only two things after 53 years, like, I don’t have anything more profound to offer. And I think a lot of my. The way I live my life when I’m writing about, I always say to people, I was like, you know, I’m basically just, in a modern way, retelling some really classic things. I’m not sort of raising my hand on a lot of originality of a lot of these ideas. I was like, you know, there have been a lot of very, very wise people who have written a lot of these things. And I think maybe the only originality is sort of the way of connecting some of the principles, but these are truths that they’ve existed for a long time. And so, how do you adopt them to a society that we’re living in right now that feels more like a casino right now? It’s very hard to sort of keep those bearings living in a casino.


Greg McKeown: 

This is a marvelous conversation. I thoroughly enjoy this perspective that you have written about. I cannot think of any downside and many upsides. So it’s an asymmetric bet for everybody listening to this to be able to buy this book, to read it, to be able to be able to work in a more disciplined way to make choices that actually create a wiser, more intuitive life, more full of Jeong. I mean, this is the game of life, the real game of life.

And the death test, of course, is used by so many people, but it doesn’t get old for me because, in death, it’s so obvious what the game really is. All of the nonsense of Vanity Fair is plain. It’s laid bare. It’s the people around your deathbed. It’s the deathbed test. Who’s going to be there? Who cares enough to be there? Who would you actually want to be there in that intimacy? 

I had Eric Newton on the podcast a few episodes ago. His wife died of cancer. He wrote so clearly and beautifully about the experience. That’s why I had him come on. But one of the things he said to me in that interview was that ever-deepening relationships with those few people that matter most is the only thing in life. He says, “If there’s a purpose, it’s that.” 

And these are the different words from a different experience. But as far as I can see, to the same end and intention of what you’re writing, share with us a final word.


James Rhee: 

Yeah, I’ll sort of riff off of that point. I mean, you know, having read the book, that there’s a lot of sadness in this book, too. And it’s not a coincidence that the section of the book it’s really a piece of music. The book is actually written as a piece of music. It’s a serenade or anthem in e flat major, like so the third act of the book, Joy, comes only after that very difficult bridge with my father dying.

And so, yeah, like death. Those seven years that I was spending running that company, unexpectedly, a lot of things died. My dad died. My mom died. But the other thing that is also in the book that died were certain parts of my former identity. That private equity guy, he died in August 2013, then sort of really died when my dad died, that moment when he died. But with death and with sadness, there’s joy. It’s rebirth. That’s the dragonfly metaphor with the helicopter.

We die and live, and we die and rebirth all the time. And so there’s a lot of people in the world right now who are. They’re stuck, but they’re afraid of dying. And so I think I would leave it at this is to not have the courage. I think this is what kindness actually does. It gives you courage to have parts of you die before you die, die, right? And that’s if you, for those of you who like it more in finance and accounting terms, that’s why I write about that T account is to take those things that are, quote, liabilities or false assets and have them die.

Not just physical assets, but parts of you or relationships that are no longer serving you and that are cluttering your time. They’re cluttering your mindshare and, yeah, sadly, yeah, my dad and mom dying, I’m still not really over it. And it sort of took me a long time to write this book because I just needed to. It’s for them. It’s for them. And it’s for the women at Ashley Stewart who were the most unlikely friends but some of the most devoted friends. They really reminded me and taught me how beautiful a life my dad and mom lived.

And I want to live that sort of life, a beautiful life. That’s what I’m trying to do. And help others see that, too. And part of that is money, too. Like, it’s not like, be a monk. Go. Like, that’s what life, money, joy is like. It’s to not compartmentalize the fact that money is part of the equation. And so when I ask people to visualize this picture, the money being the rear prop of the helicopter, it’s not the top prop.

Like, joy is the top prop, but you need to offset the torque of the joy you need to live. And so there are too many people who are living their life with money as the top prop, and Joy is the counterforce. I don’t think the helicopter flies very well that way.


Greg McKeown: 

It’s a beautiful way to end. It’s poignant, it’s important, it’s powerful. It’s James Rhee. Thank you for being on the podcast.


James Rhee: 

Yeah, thank you, Greg. I really, really enjoyed it.