← The Peter Attia Drive

#125 - John Arnold: The most prolific philanthropist you may not have heard of

Aug 24, 2020 2h 28m 22 insights
<p>John Arnold is widely regarded as the greatest natural gas trader of all time, but in his late 30's he walked away from it all and turned full-time philanthropist. He and his wife have committed to strategically give away most of their vast fortune in their lifetime and are already doing so at a staggering pace of nearly a half billion dollars a year. In this episode, John explains his quest to address the most challenging social programs plaguing the country, including criminal justice, health care policy, and K-12 education. John also shares self-identified attributes that contributed to his success in natural gas trading and how those same traits have translated to his philanthropic aspirations.</p> <p>We discuss:</p> <ul type="disc"> <li>John's background, upbringing, and early entrepreneurial tendencies [3:50];</li> <li>John's time and rise at Enron [16:45];</li> <li>Characteristics<s> </s>that made John an exceptional natural gas trader and how they translate to his philanthropic work [27:30];</li> <li>The collapse of Enron [35:00];</li> <li>The success of John's hedge fund, and his early interest in philanthropy [40:30];</li> <li>The infamous 2006 trade that brought down Amaranth Advisors [55:45];</li> <li>John's analytical prowess and emphasis on fundamentals [1:02:15];</li> <li>The decision to become a full-time philanthropist and the founding of Arnold Ventures [1:09:00];</li> <li>Education—John's quest to fundamentally change K-12 education [1:18:45];</li> <li>Strategic philanthropy—preventing problems by attacking root causes and creating structural change [1:24:30];</li> <li>The criminal justice system—structural changes needed to address mass incarceration, policing practices, and recidivism [1:31:45];</li> <li>Re-imagining prisons to reduce recidivism [1:49:00];</li> <li>US health care policy—John's focus on drug prices, and the severe consequences of not making system changes [1:56:15];</li> <li>Climate change—the bipartisan role of John's foundation [2:13:45];</li> <li>Advice for young adults interested in philanthropy [2:17:45]; and</li> <li>More</li> </ul> <p>Learn more: <a href="https://peterattiamd.com/">https://peterattiamd.com/</a><br /> <br /> Show notes page for this episode: <a href="https://peterattiamd.com/JohnArnold">https://peterattiamd.com/JohnArnold</a><br /> <br /> Subscribe to receive exclusive subscriber-only content: <a href="https://peterattiamd.com/subscribe/">https://peterattiamd.com/subscribe/</a><br /> <br /> Sign up to receive Peter's email newsletter: <a href="https://peterattiamd.com/newsletter/">https://peterattiamd.com/newsletter/</a><br /> <br /> Connect with Peter on <a href="http://Facebook.com/PeterAttiaMD"><u>Faceboo</u></a><u>k</u> | <a href="http://Twitter.com/PeterAttiaMD"><u>Twitter</u></a> | <a href="http://Instagram.com/PeterAttiaMD"><u>Instagram</u></a>.</p>
Actionable Insights

1. Cultivate Emotional Detachment

In high-stakes environments, develop emotional detachment from outcomes to maintain 100% focus on executing the process, preventing emotions like fear and greed from swaying decisions.

2. Develop Balanced Confidence

Possess enough ‘arrogance’ to challenge market consensus or the status quo, but temper it with humility to acknowledge potential error and adapt your views, avoiding career-destroying overconfidence.

3. Adopt ‘Theory and Test’

Formulate hypotheses for complex problems, commit to them, but continuously test assumptions with available evidence and remain open to being wrong, rather than rigidly adhering to initial theories.

4. Embrace Long-Term Change

Understand that systemic change often appears slow and invisible for extended periods, requiring sustained effort and belief that a breakthrough moment will eventually occur.

5. Focus on Systemic Philanthropy

Direct philanthropic efforts towards improving the incentives and rules of a system rather than merely funding individual programs, especially if those programs already have clear evidence of success and government funding.

6. Maintain Narrow Business Focus

Concentrate on a narrow and deep area of expertise to achieve excellence and competitive advantage, avoiding the temptation to spread resources too thin across diverse fields.

7. Anticipate Political Windows

Start early with evidence-based research and clear solutions to problems, communicating them to policymakers and the public, so you are prepared when political will for change emerges.

8. Leverage Philanthropy for Public ROI

Fund experimental programs with strong long-term ROI in public sectors (like criminal justice) where short-term budget constraints prevent government investment, and rigorously evaluate their effectiveness to provide evidence for future public funding.

9. Thoroughly Study Problems

When approaching complex problems, dedicate significant time (e.g., a year) to thoroughly understand systemic inefficiencies and identify specific areas where your resources can have the most effective leverage.

10. Align Strategy with Investment

Manage your business or investments primarily for your own returns and risk tolerance, which creates a clear and honest proposition for other stakeholders or investors.

11. Recognize Career Transition Signals

Pay attention when your focus shifts significantly from your primary career to other interests, as a decline in 100% dedication can signal it’s time to transition to a new professional path.

12. Build Confidence for Career Shifts

Before making a major career transition, take sufficient time (e.g., 24 months) to build confidence that you can find satisfaction and purpose in a new endeavor, mitigating the risk of returning to an unfulfilling past.

13. Actively Manage Stress & Health

Prioritize health and actively manage stress (e.g., exercise, moderate drinking) to counteract the negative lifestyle habits often associated with high-pressure careers and prevent long-term health detriments.

14. Reflect on Work’s Social Value

Regularly evaluate the social value and broader impact of your professional work to ensure it aligns with your personal values and long-term aspirations.

15. Start Philanthropic Exploration Early

Begin exploring philanthropic interests and researching organizations that align with your values early in your career, even with modest means.

16. Tailor Giving to Resources

Adapt your giving strategy based on your resources: smaller donors can focus on direct charity, while larger donors or foundations should prioritize strategic philanthropy requiring extensive research and expertise for systemic change.

17. Consider a ‘Further Pledge’

Commit to donating a significant portion of your income above a comfortable living wage to charity, recognizing the greater good it can achieve for society.

18. Define and Support Community

Once your family’s needs are secure, actively define your community (friends, city, shared experiences) and use your time and money to support and improve it, as local knowledge can lead to more informed gifts.

19. Encourage Independent Development

For children with inherited wealth, encourage them to pursue independent life experiences and career paths in early adulthood to foster genuine personal development and avoid being solely defined by their wealth.

20. View Collectibles as Assets

When acquiring collectibles, consider them as potential assets rather than just sentimental items, which can open up business or investment opportunities.

21. Find Efficient Business Methods

Seek out and implement efficient ways to conduct business that align with your lifestyle and time constraints, rather than adhering to traditional, time-consuming methods.

22. Accelerate Education/Career Stages

Be maniacally focused on achieving your next career stage, even if it means accelerating your education or current tasks to enter your desired field more quickly.