"Never ask anyone for their opinion, forecast, or recommendation. Just ask them what they have—or don’t have—in their portfolio"

The essence of the quote is pretty straightforward: talk is cheap. Instead of relying on what people say, look at what they actually do. If someone is giving you advice on investments or decisions, don't just listen to their predictions or recommendations. Instead, check what kind of assets they are actually holding or avoiding in their own portfolio. Their actions will tell you much more about their true beliefs and strategies than their words ever could.

Historically, this advice is particularly relevant in the world of finance. There are countless pundits, analysts, and so-called experts who are more than happy to share their theories and forecasts about the market. But not all of them have skin in the game. Many of them make a living out of making predictions, regardless of their accuracy. The quote serves as a reminder to be skeptical of such advice and to seek evidence of real commitment.

Let's put this into a real-life scenario. Imagine you're at a dinner party and your friend starts raving about a hot new tech stock. They go on and on about how it's the next big thing and suggest you invest in it right away. Instead of getting swept up in their enthusiasm, you ask them if they own any shares themselves. If they say no, that should raise a red flag. Why are they so keen on something they haven't invested in themselves? On the other hand, if they do own shares, it adds credibility to their advice. They're putting their money where their mouth is.

So how can you apply this wisdom in your own life? Start by asking the right questions. When someone gives you advice, dig a little deeper. If a financial advisor suggests a particular investment, ask them if they have it in their own portfolio. If a food blogger raves about a specific diet, see if they follow it themselves. This approach helps you separate genuine advice from mere opinions. It’s all about verifying the credibility of the source.

Imagine you're thinking about starting a small business. Your cousin, who has never run a business before, tells you it's a terrible idea and that you should stick to your day job. Meanwhile, a friend who owns a successful café encourages you to go for it and even offers to help you with a business plan. Whose advice should you value more? Your cousin might mean well, but they lack real-world experience. Your friend, on the other hand, has walked the walk. They’ve got actual experience to back up their words.

This approach isn’t just for big decisions either. It applies to small, everyday choices too. Think about the last time someone recommended a movie or a restaurant to you. Did they rave about it but admit they hadn’t actually seen it or eaten there yet? Or did they tell you it was fantastic based on their own experience? You probably trusted the latter more.

In a nutshell, actions speak louder than words. The next time someone offers you their opinion, forecast, or recommendation, remember to check if they practice what they preach. It’s a simple step, but it can save you from making decisions based on empty words. So, next time you’re at that metaphorical coffee shop, remember to ask the barista if they actually drink the coffee they’re serving.