Achieving Financial Success: Scott Galloway's Tips

well first of all Scott Galloway uh welcome to the next big idea thanks for having me um well I should say welcome back to the next big idea this is your second time on the show so Scott you are known for your irreverent honesty uh so the topic of money I think is a great one for you because it's a topic that I think we we collectively lie about a lot um and what I've always found so interesting about you as a listener of your podcast reader of your books is your peculiar mix of Cockiness and humility um and this is a book that I think was born out of both your Cockiness and your humility um let's start today with the humility side um what are some of the biggest mistakes you've made in your life and and I don't just mean Financial mistakes but I mean the mistakes that when you look back on them it really causes you pain to think about um we're going to need a bigger boat um I wasn't as kind as I should have been when I was younger uh I was very selfish um I oh God I up so many ways I'm um uh I got divorced when I was young that was devastating I was I had a company most of my feelings have been a feeling of character um I could have been nicer to people I should have forgiven myself more easily I struggle with anger and depression so I think a lot about the past and I can't forgive myself and it's kind of haunted me my whole life just got very uncomfortable in here um I professionally have had a lot of failure um I've had a company go chapter 11 and it took me 10 years to fail slowly we were talking about this before success is the best failing fast was the next best thing I had a company fail slowly over a decade which was just heartbreaking um 2000 I didn't recognize this going to the book 2000 um I never Diversified I'm always like I'm awesome I can pick winners my companies are going to be amazing I was always I'd read these stories about people doubling down and mortgaging everything and buying more stocks so when I had red envelope and I went public I margined the stock and bought more and I didn't realize the power diversification that I should have taken more money off the table and just put some aside and let it grow in boring things like lowcost index funds and I woke up at 42 when my oldest son had the poor judgment to come marching out of my girlfriend and uh the 2008 financial recession had hit and I woke up and I didn't have any money and I thought Jesus Christ I've made so much money I've had such quote unquote curb retail success but I didn't just put I I never was in debt I was never in trouble but if I'd just been smarter and put a little bit of money away in boring things that weren't related to Tech I wouldn't I was in the delivering room and I was so nauseous I couldn't stand and everyone assumed it was because I'm not good with childbirth which is true but it was it was this overwhelming sense of failure as a man that I was supposed to be responsible for this kid now and I failed day one right already like failing this kid and I think these are very healthy what I'll call masculine attributes I take economic responsibility from my family it ends up my partner is very good at money and that's wonderfall but I think a lot about masculinity I think a good place to start as a man is to assume economic responsibility for your household and by the way that sometimes means getting out of the way of your partner who's better at the money thing and being more respons uh being more supportive of him or her but take responsibility I think it's a good place to start I felt that immensely and so not being able to take care of or feeling like I was feeling after all this privilege all this success all this opportunity just just humiliating um yeah so not being a High character person and and I remember Red Envelope I I'm sure a lot of people in this room do I I think I was a customer of red envelope I needed you to buy a lot more apparently but it was didn't it it ipoed and you were on paper worth a lot of money and then what was it was it the 2000 uh uh crash and so you you you pretty much got wiped out and that that's we learn very quickly in those situations don't we yeah some of us um you know I came out of the Gat strong I went I had no money growing up and and it was very important to me um my book is about not about what should be my book is about what is I think America becomes more of itself every day and that is it's a loving generous place if you have money it's a rapacious violent place to be down and so given the inequity of America the opportunities the lack there of whatever you want to call it it's a book about trying to get Economic Security and it's things it's almost like a letter to myself when I was younger like the mistakes I made some of the things I did right some of the things I did wrong but yeah came out of the gate strong started a company called profit I started a strategy for when I was 26 sold it for 30 or 33 million 7 months later so I felt like I had a lot of money that was a lot of money for me at the time boom doing great e-commerce incubator back by Golden JP Morgan back here in 99 mov back to New York changed my life got divorced left Tech started teaching always wanted to teach thought I was going to be you know I was with a lot of money on paper was looking at Jets what do I do the rest of my life I want to be a teacher I want to live in New York came back here 2000 hit broke not broke but starting over again but that was okay I was young build my way back up to 2008 kid comes along Wham again broke and here's a lesson when things happen to you realize that 49% is you but 51% of the market and that that goes for both sides of success and failure when you're really killing it when you get promoted at work when you have an investment go up don't believe your own press be humble realize a lot of your success is not your fault and try and be really humble as a matter fact you are never more prone to a really stupid decision than right after a huge win because you start believing it's you and that you can manage the market it's not the market trumps individual performance on the flip side also recognize that a lot of your failure is not your fault and forgive yourself because the the thing I have been able to do is uh with personal and professional upset or disruption or you know disappointment and everyone has that you know if you're going to love people you're going to have grief in your life if you're going to try and score above your weight class economically personally you're going to have to take a lot of risk you're going to get occasion it's not going to work um but try and forgive yourself and not lose your sense of enthusiasm but 2008 more kind of that was rough I started another business in 2009 I took everything I had and I bought three stocks I'm not suggesting you do this but I bought Netflix Amazon and apple and those are up 40 and 60 fold since then and here's the problem and this is kind of a bridge the people in this room don't have a chance to buy anything cheap because we have used your credit card to bail me out Co was the biggest intergenerational theft in in history plus $7 trillion in the economy 85% of it wasn't spent so it went into the market what did that do it sent it sent real estate and stocks skyrocketing because we decided that a million people dead in America would be bad but what would be tragic is if older people lost money and so the natural disruption and shurn hasn't taken place in the last 15 years so anyone under the age of 40 or 4 hasn't had a chance to buy assets inexpensively so uh anyways I I got lucky as I was coming into really my Prime income earning years in 2009 when everything was cheap I doubled down I started a business called L2 I got really serious about saving I started making a lot of money and I started putting a ton of money into the market everything I gamified it I want to put 100 1,000 5,000 10,000 oh I got a partner that's econom i al on board with me 25,000 a month in the I mean this is a story of privilege but the last 15 years for me have just been I mean the the wins in the sales of asset owners the last 15 years have been just extraordinary and I finally got smart and I started diversifying and buying stocks and unrelated industries that one went down the other would go up and um the rich pay fewer taxes my average tax rate over the last 10 years has been 17% uh if you don't think think we're the poor oh my God think uh 122 does anyone know what 122 is my last company I sold for 158 million first 10 million was taxfree I just made an investment um two um I'm bragging now but I'm desperate for your affirmation and I think rich people should talk I think rich people should talk about money I think this notion that it's uncouth to talk about money is nothing but an effort to keep poor people poor because rich people know how much money are making they know how much their employees are making so it's an asymmetry of information where I know how much everyone is making but you don't which seeds power from you to the wealthy but and and rich people talk to each other about about moneyone all the time right uh in a way that they don't publicly right which is a little bit conspiratorial 100% And U there's something called 12 of two I made an investment I invested $2 and half million dollar in a compy seven years distress credit investment did great first 25 million taxfree does that make any sense meanwhile if you're a student if you have a student loan and you can't afford your payments because for whatever reason life is hard for you that debt is not dischargeable in Bank bankruptcy it's the one of the only forms of debt that's not dischargeable in bankruptcy I make all of my money from capital gains selling assets owning assets so my tax rate is much lower than if you make your money working capital uh mortgage interest rate second biggest tax deduction who owns homes who makes their money from buying s assets people our AG who makes money from work and sweat right and pays rent people your age 40 years ago the average 7-year-old is 72% wealthier than they were 40 years ago the average 25-year-old is 24% less wealthy you're going to transfer a trillion and a half dollars out of your paycheck every week not every week but every year to the wealthiest cohort in the history of the planet seniors I'm not suggesting we do away with Social Security but it should be called Social Security not senior security transfers of money should be based on if you need it not whether you're using a catheter I me it's it's insane how much money young people it used to be 3 to one the amount of money we spent on seniors versus kids that's 1990 2019 it's 8 to1 8 to one and Co was the ultimate inter generational theft anyways I don't know where I was well the the uh if if if more if more young people and and middle-aged people in the in the room read your book hopefully hopefully we will'll shift some of the distribution of wealth here but um one thing I've enjoyed about your podcast is that you're is that you are extremely candid about you have taken upon yourself to try to rectify this this kind of taboo we have collectively about talking about money no thanks so with that in mind how rich are you it's weird I was embar when I was young I was embarrassed about how little money I had like when you grow up in a household that doesn't have any money it's like this ghost follows you and your mom around and says you're not worthy kind of whispering right you're not you guys are up right you get that insecurity and now that I have a lot of money I'm I'm embarrassed by it what I what I'll say is that um I decided I'm a big fan of Daniel Daniel Conan who died about whenever about mon ago and his book thinking slow and fast kind of changed my life or not changed my life changed my approach to a lot of things but he has this seminal study about money and happiness and the myth is that money can't buy happiness what um there's a correlation between money and happiness that's the bad news middle inome people are happier than lower income upper income people are happier than middle income that's the bad news the good news is it starts to Flatline once you get above a few million dollars incremental income doesn't provide you with a lot of happiness I decided that once I hit my number I would either spend it all or give it away above that my number was $100 million I passed out about seven years ago since then I either spend it why because I'm selfish and I love nice things and I'm going to squeeze the out of this lemon called life I do amazing things I think it's a ton of fun I do amazing things with friends and family and I'm an atheist I think at some point I'll look into my kids eyes and our relationship is coming to an end so I take them to World Cup and if there's another nice family I take them with me I just spend a ton of money and I love it and then anything above that I tax myself at 100 to 200% a year I look at how much money I spend every year and I double it and I give it away and that's my I want to call my guil tax but that's me trying to say okay you talk about how little taxes you pay and how much money you have what are you actually doing I don't see any reason why anyone needs more than $100 million I just don't see any reason you're not going to get any happiness from it it's going to provide no utility to you the difference between 100 million and 100 billion I just don't think Elon Musk is any happier than me I don't think Jeff well Jeff basis might be a little bit happier than me but I just so I don't believe in hoarding and I'd like to start a Gestalt in America or a zit guys where you get to your number either spend it spending is important it fuels the economy it's good and it's fun why not I can't stand what rich people know how to spend their money or give it away I'm not my kids are going to be up enough on their own without that kind of money to worry about so anyways I have I have a good amount of money but I'm not a billionaire I don't have any desire to be a billionaire um but I have a lot of money I have more than I'd ever thought and I'm just going to use it to enjoy myself and you know get involved in things I'm very passionate about and why do you think it is that we're so uh we have so much trouble talking about money I mean it does occur that like if I'm at a dinner party in New York it would be more comfortable for me to say to the hosts ask them the question how often do you have sex then it would be to say how much money do you make right I mean that's more it's a more embarrassing question to to ask um and yet there are certain contexts within which people are very candid right uh talking about talking about money among people they consider to be their peers why is it you think we have this discomfort well some of it is for survival right um if um if there is a zombie apocalypse or there's a revolution I'm on the wrong list um so some of it has fly below the radar I'm a Jew we've been told forever that you're supposed to hide your success fly under the radar people know I mean Jewish and successful was a recipe for being a scapegoat for Thea history so I think there's a certain amount and also talking about your wealth feels tacky right right um that you're rubbing it in other people's faces you don't want people to feel bad about themselves also it's just smart because people are going to hold you more accountable and wealthy people don't want to be held accountable I if I have an assistant and I'm not paying my assistant well it's kind of like what the like how could you not pay your people well there are warranted additional expectations on the wealthy so why why create those expectations for yourself keep your keep your number below it the a decent algorithm for happiness is to be rich but Anonymous I mean all this will come crashing down for me I don't know how it's going to come down but it you really screwed this up yeah it's going to come crashing down there's an industrial complex and tearing down people who have some Fame and some money there's too much the algorithms love it the media loves it at some point I'm pretty out there with my personal failings at some point it'll all come crashing down so my advice to people is to be rich but Anonymous but I think young people I think it helps to tell people about money uh help them openly evaluate how they get wealthy how they get Economic Security your failures your successes and also I think everyone who has over a million dollars I think their wealth should be published and their community and the IRS should hold them accountable and I can't tell you the ecosystem of the super wealthy which I'm not a part of who literally don't pay any taxes they moov to by they change their passport they have shell companies and they literally pay zero taxes it is the wealthiest people in the world truly the wealthiest people in the world don't pay any tax and you can't have eventually it's what KL Mark said about capitalism eventually it collapses on itself if the wealthiest and most privileged people don't pay back into the system and the problem is and this happens throughout Society wealthy people aggregate power they weaponize government and they figure out a way why they shouldn't pay taxes so tax code's gone from 400 pages to 4,000 in the last 30 years if you have GPS you want to navigate By Starlight so the more complicated the tax code gets the better it is for wealthy people who can afford tax advisors to help them navigate this complexity so everything I think almost everything we've done in the last 30 years around the tax code has been to reduce the taxes on the wealthy and I think I said this my average tax rate the last 10 years has been 177% that doesn't make any sense yeah Warren Buffett has been great on this he pays less taxes than a secretary so you so your your advice to young people is is you know be intentional about making money so you can provide for your family and um uh and uh well let me lob you with softball um how do you feel about the standard advice to young people follow your passion everybody knows I think it's just the shittiest advice you could get we at NYU we invite two lunch and speakers we invite really inspiring interesting accomplished people and we invite billionaires and we've decided once you have three commas you have insight into life and so we invite billionaires and they always end their their speeches with the same Follow Your Passion Follow Your Passion if somebody tells you to follow your passion it means they're already rich and and the guy telling you to follow your passion made his billions in iron or smelting this is what you'll be passionate about don't mistake your passions for your hobbies find something you're really talented at and commit that's what your 20s is about Workshop stuff fail quit figure out what you're really good I started out in Investment Banking I was terrible at it kind of a blessing I figured it out fast I didn't like them they didn't like me I wasn't good at it wasn't good at it try and find something you think you could be in the top 10% like maybe my Natural Instincts give me some sort of affinity for this subject matter and I'm going to commit to being in the top 10% and then the key is that it's an industry that has a 90 plus% employment rate because there are 180,000 people in Sag aftera sag aftera is the union representing actors they're the most creative talented people in the world these 180,000 people 87% of them don't qualify for health insurance because they don't make $23,000 a year you want to be in fashion the Arts creative start a club for music people or whatever it is a private members Club you want to start a restaurant a club be in sports unless you get signals very early in your life that you're in the 0.1% find something boring develop Mastery make a lot of money at it and be a DJ on weekends and this is what I'm passionate about I am passionate about taking care of my kids I'm passionate about taking care of my my dad now I am passionate about doing whatever the I want I thought I was going to be an athlete when I when I was young I would have liked to but I got disabused at that really fast at UCLA where there were real athletes and I was friends I had a lot of friends who went to the Olympics play professional tennis and they went to the Olympics and I got bronzes I go to the Olympics and watch them and I'd rather be me I'm I have a better life than I think everyone but like the top two or three tennis players in the world I get to go to Wimbledon because I buy my way in I'd rather be Nadal or Federer I'd rather be those guys but I'd rather be me than the number seven or number eight seed so find what will make you passionate about whatever it is is Mastery tax lawyers the best the top cortile of tax lawyers get to fly private and have a larger selection set of mates than they deserve and that makes them passionate about tax law being being really good at something the economic accoutrements of greatness the camaraderie the relevance people finding you really interesting they start laughing at your jokes right people find you really attractive you get really sexy when you get really good at something right all of that will make you passionate about whatever it is and here's the thing there's an inverse correlation between your investment on human capital and your return based on how sexy the industry is you want to be a DJ you better be one of the seven or eight best in the world you want to start a platform a SAS platform that schedules healthare care maintenance workers cing and there's a much greater likelihood you're going to have a great life working 50 hours a week and a lot less disappointment sexier an industry is the harder it is the lower the return on your invested Capital I'm not trying to crush your dreams if you want to be in what I want to call one of the romance Industries just be just have an honest conversation with yourself the employment in those Industries is usually a 90% unemployment so if you don't figure out really fast you're in the top 1% go to an industry where you can make a really good living if you're just in the top half because you get into the top 10% it's going to be champagne and cocaine and uh I'm I'm with you most of the way here but I'm not sure I can I'm not sure I can take follow you all the way into tax law uh my my father was a corporate attorney and uh you know wonderful man and and loved a lot of his work but he said he said that he wouldn't recommend for any of his three sons as children to to become Attorney because he said Rufus I got tired of giving people advice that they didn't take you know so it strikes me the way I look at it is if you think of a Ben diagram of like this is the stuff that I really care about here's the stuff that the rest of the world cares about you you better find stuff you're passionate about that other people give a damn about and want to pay you for and then here is the here's the third circle is um business models that work that can make you real money isn't that AAG what do they call it iagi the Japanese thing something people will pay you for something you're good aty excuse me I'm sorry thank you sir ugly American culture appropriation cancel me now I I I I did it without even realizing it yeah you just did it what am I missing the circles what is four circles what are the four so it's something that you're good at something you enjoy something and then basically you're calling it life and whatever okay that feels right that feels like a nice balance same same same idea but it does seem to me I mean I've been very lucky in my own life I've managed I've managed to find that set of things that I was passionate about but also uh there there was a business model available I mean clearly that's the Holy Grail if you can do stuff that you're that you genuinely love dayto day and also make a significant amount of money I enough to have freedom and and something I really relate with that you say is basically like what do we want on some level we all just want the Dignity of being able to choose what we do with our time the people we're with how we apply our time and that does require money and and and more specifically as you say it requires you have a formula for this what's your number 25 times your your your annual burn if you want to spend $100,000 a year you need 2.5 million I think is your math if you want to spend a million a year you need 25 million can you share that math yeah so what is rich rich is passive income that's greater than your burnt I have a close friend who runs a large group in an investment Bank he makes between three and 7 million a year but it's current income 53% tax rate in us I'm sorry in New York so he takes home saying a g you know giving year 3 to four million hard to feel sorry for him but between his wife his ex-wife his three kids his alimony his home in the Hamptons his Flex check card and his need to have a master of the universe lifestyle to perceive or give out the impression of success he doesn't really save that much and I can tell you he stares at the ceiling he's younger than me he's in his 40s wondering if the music is going to stop a lot of stress my father is 93 and between Social Security and his pension from the Royal Navy he gets uh uh and his um I forget it's he has some bonds he gets $58,000 a year in passive income doesn't work $58,000 a year and he spends 48 my dad is cheap and he's he's Rich he's still saving money so passive income it's greater than your burn so 4% is pretty low maybe even assume 6% that's 15 times you know that you need you need 15 times your annual burn so what people don't realize is being rich is more a function of how much you spend as opposed to how much you make so as you get older a lot of people complain that I give a lot of VI young people are like well what if I'm in my 50s okay look out to 70 no one's going to retire at 65 nor should you mortality rates spikes when you retire you want to live longer keep working now work used to be backbreaking terrible dangerous work it's it's not that way then now that actually keeps people alive so assume you're going to work at least till you're 70 maybe 75 at which point you'll have social security or something else and figure out your lifestyle that you'll need plus you know and start adding up and then figure out what's my number what do I need to get to such that you feel a sense of control and hopefully you find a partner and you can start gamifying it I think it's fun to gamify finance and the example I use is um when I was a UCLA um if I didn't make if I didn't make and save $3,300 every summer I wasn't enrolling The Following fall we didn't have any money my parents weren't helping me um I lived in a fraternity and there was it was a bunch of Rich Jewish kids from the valley and there was like everybody knew the six of us that didn't have any money it was like obvious who everyone knew who the six guys were that didn't have money and we used to live together and we all had jobs we had two jobs and we had a whiteboard and we would gamify spending because we all needed money or we weren't going back to college the next year and the summer of 85 I spent $73 a week including rent I ate top Raman bananas and milk that's all I ate and on Sunday nights we used to take a coupon out of the daily brewing and we'd go to all you can eat salad bar and Malibu chicken at the Sizzler does anyone remember the Sizzler it's hilarious be like you know I don't have a lot of class sizler and we used to walk in the entire crew team would walk in skin and the guy would be like you guys are going to bankrupt me and it would start at 5: and end at 9: and we'd stay for 4 hours and eat for the whole week but the nice thing about being young is you can try and gamify or really young gamify spending because I still had a nice summer friends beer I still had a good time uh so I wish I'd kept investing in that saving muscle I then got very caught up and kind of being fabulous in perception well this this so saving money is apparently something that we in this country are not very good at and and frankly I in my own life have not been very good at it um and it it's astonishing isn't it how like immediately after getting a raise you're spending just Rises just without any effort to that to that level it's it almost feels like a law of physics um and it's it's a lifestyle creep thing I think you say 100% And it's just and and it's but at the same time it's just astonishingly stupid right um to seed control of Our Lives as we do this you have this great line in the book you say each incremental Improvement you make to your lifestyle will make every other aspect of your life seem shabby and in need of a glow up right so like you you upgrade a piece of furniture and you're like well gosh that other piece of furniture now was looking kind of rough around the edges right but we we we all fall prey to this um the most talented people in the world with the kind of most I don't know complex Godlike technology have cons are are in a conspiracy to hit you at the exact right moment to get you to spend more money oh wait you're going to upgrade to economy comfort for just 80 bucks oh fun weekend you deserve to be in business class right now it's only 220 bucks so add that flowless chocolate cake from balazar balerie to your order from jaxy Freda for only another $11 I like flowerless chocolate cake I mean they hit you with these offers that are almost imp the amazing thing about a capital Society is there there so many amazing things you can do with money you should generally assume that you're going to spend all your current income I never really had the discipline to save for my current income so what I did was I did Force savings find out any way you can to have money taken out of your paycheck ideally gets matched by somebody or the government and or acorns round up I know that sounds stupid but just never see it it's really hard some people have the discipline to save their current income most do not most you get it and you're just gone right so find a way to get that money out of your bloodstream before you even see it and get it into something Diversified lowcost index funds I've been around the smartest Financial people in the world I can tell you no one has any idea so invest in lowcost Diversified ETFs and if you're young you got to lean into your advantage the majority of the advantage of the people in this room is that you're going to live another 60 years and also try and fight a flaw on the species and that is because the species hasn't lived longer than 35 for 99% of our time on this planet we don't appreciate how fast time is going to go you can't imagine yourself older than 35 because the majority of the time you didn't live past 35 but here's the thing how old are you young man yeah you yes okay Jesus Christ good for you here's the thing if you save okay one less coffee from Starbucks one less awesome pair of shoes I don't know stream Coachella this year and try to spend three if you can save $300 a month from this point forward in some sort of tax deferred vehicle two things are going to happen when you're my age you're going to have millions of dollars no if you pick five stocks in the S&P and hold them for 10 years no one has ever lost money the S&P has been up 11% a year for the last 15 years 11% sounds like nothing at your age because you're you know probably a baller or whatever you're doing think you're going to be big baller that means money is going up Eightfold every 21 years all right in addition you know at that when you get to that what I'll tell you about that point is and I I'm pretty sure you're going agree with me I was you yesterday yeah yeah you don't realize how anyone here over the age of 40 looks back and goes Jesus Christ that was a blank so if I gave you a box and I said all right this magic box if you can find you're in living in New York you're probably making a good living if I gave you a box right now and said if you put 5,000 bucks in it in a blink it's going to be worth 450 Grand how much would you put in it and we have that box you have that box your advantage is you're probably going to be here for another 80 years and it's going to go really fast and so why wouldn't you lean into your advantage and hope that you sell the next big best seller the company goes public but just in case it doesn't know that when you wake up when you're our age just with a little bit of discipline and ignoring it don't day trade don't do anything in crypto don't don't don't try and pick stocks nobody knows right own assets save for a house but spy lowcost index funds 300 bucks if you had taken all the money this is that famous Tony Robins Tik Tok and spent all the money instead on I've owned every Apple phone my assistant knows to get me the newest Apple phone because I like to Signal my worth as a mate to strangers when you have an Android phone you're kind of saying to the rest of the world you know life hasn't panned out the way I'd hoped but seriously this is and you're not just saying this because you own Apple stock this is saying your kids are more likely to survive than if you have sex with someone who has an Android phone so but if I wasn't such a narcissist if I had taken all the money I on I've spent on iPhones and bought Apple stock this is true Tony Robbins of all people did the math I'd have $3 million in Apple stock I mean the power of compounding at your age is just that's your advantage you probably don't have any access you don't get sweet deals you don't but you have this unbelievable asset called time resist the flaw on the species you people your age are rebellious they want a rebellion they're angry that's healthy you don't believe us you don't believe old people you want to be rebellious especially in male your risk aggressive the Rebellion you want is rebel against social media that wants you to hate your fellow man rebel against that rebel against the industrial food complex that wants to get you addicted to shitty fatty food get you obese and then turn you over to the diabetes industrial complex rebel against that rebel against dating apps that want to tell you you have no worth you have worth you just got to get in front of people and show them your body language and your phermones and your humor and your persistence rebel against every tech company that wants to convince you that you can have a reasonable fact assembly of Life at home on Reddit on Discord and on uPorn that's the Rebellion you know that's that's what you need to fight against as a as a as a young person especially a young man and also fight against the notion that you're going to have a big win and just start saving a little bit of money every month and you're going to be just fine this kid is so upset I called on him right now well just to take the pressure off him a little bit uh you said uh you write time is a weapon the young rarely recognize or know how to use i' I've I I've explained this math to my 16-year-old son and he said dad I don't want to be rich when I'm 45 I want to be rich when I'm 25 you know so there there is this sense and and as you pointed out there is a sense if you're 16 years old that like 45 or 55 or 65 is you know incon aable and yet it happens very quickly the power of of uh of compounding returns is insane and so your advice here is you know pursue a career where you can actually make some money turn Mastery into passion um you know pursue your hobbies if you want to write poetry do it on the weekends um as as you're going save money invest it in the market invest it in ETFs just in ETFs you used to pick stocks you've you you no longer pick stocks I do so I I love this stuff if you want to take 30% of your savings or of your investment investable capital and pick stocks pick stuff you think DOA coin's going up whatever right you think you have some insight into something have at it uh because it's fun you'll learn a lot about the markets but that's only if you're into that stuff and you want a dopa hit the problem is as you get older I only have 15% of my net worth in stocks I found myself checking my stocks 12 times a day and it's bad for my mental health I don't like that I don't like to spend that much uh time on um on my phone I love picking stocks because I think it's fascinating I think it's a way to learn um I can do it I have it's unfair I can call the CE of almost any company going public and one out of three times they'll meet with me and one out of two times there they'll let me invest in their IPO and the IPO Market is rigged heads up it's rigged the the bank will price it too low to get it a pop such that the financial press writes about it and their their best clients at Goldman and JP Morgan and Morgan Stanley get an un natural pop I have privilege because I work my ass off and I know a bunch of CEOs and I have a platform I can call the CEO of a pre-ipo company and ask to invest and most of them say no a lot of them say yes you don't have that privilege you don't have that access you have a different type of asset so everybody I think in terms of investing has an asset do you live in a small remote area and you just know the value of real estate there are you handy and you can fix up homes buying a home on the cheap fixing it up taking advantage of the tax break over 24 months we get a quarter of a million half a million if you're U married and you know how to fix up places and you have the patience and the vision to see something you can fix up that's an unbelievable way to build wealth and by the way you can roll it in 1031 it into another asset tax deferred sit down and think what is my advantage to get Rich what is my advantage and almost everyone has an advantage youth is I have very little money very little contacts no knowledge in the market oh but you're 30 you got 50 years find a little bit of a savings muscle start investing in lowcost ETFs I can't resist investing in stocks I love it I find it interesting but the majority of my money is now in privates because I have access I like getting involved in these companies and I can take more risk than most people but you don't have that Advantage for most people I think you want to invest in lowcost ETFs yeah I think that's I think that's sound advice as you know Scott because we were speaking earlier I you know I'm a Serial entrepreneur I've started three businesses I'm building my fourth sold the first three only really produced a great financial return on one of the three yeah so sold our last business to Disney but took the outcome of that it was seven figures not eight figures and put it all into most of it into to Amazon Apple Google Tesla so you're fine um and and and bought into real estate so that that worked out pretty well I thought I was a genius then I went back and looked at the math and had I invested it in the NASDAQ 100 I would have basically had the same return because the nasac 100 if you look at like QQQ power shares or something has returned you know 20 21% in the last um average year-over year in the last decade um less than that if you go back 15 years or years this is one thing that I was surprised by because you wrote a book called before about you know four of the biggest tech companies in the world that are among the 10 most valuable companies today um I'm surprised that you wouldn't counsel people to prioritize um a NASDAQ 100 ETF over an S&P 500 ETF well it's funny that I get I track everything I I get between 40 and 50 questions a day via email LinkedIn someone writes me a really thoughtful email asking a question and the number one question is for mothers they want advice about their sons young men are failing and really struggling in this country and the people I get the nicest emails from are mothers and it generally goes something like this I have three kids two daughters one son one daughter's in Chicago doing PR the other's at graduate school in Penn and my son is in the basement vaping and playing video games women globally have ascended faster in the last 30 years than any cohort history there double the number of elected positions in Parliament in the last 30 years there's more women seeking uh tertiary educational attainment now than men globally when when you think about certain Nations there women don't go to college the fact that globally there's more women that's extraordinary there's no cohort in America that's Fallen faster than men young men they're really four times as likely to kill themselves three times as likely to be addicted uh s fewer single manown homes we're getting close to two to one female to male call college graduates and that really impacts The Mating Market because we don't like to have an honest conversation around mating and that is women made socioeconomically horizontally and up men horizontally and down and when the pool of horizontal and up keeps shrinking uh women aren't quite frankly just aren't interested in mating with the the pool of young men we're producing in this Society two and three women under the age of 30 have a boyfriend one and three men under the age of 30 have a girlfriend because women are dating older because they can't find economically or emotionally viable Young men so this is like a project for me I relate to these guys but the second most questions or the first most questions I get is issues surrounding young men the number one question I get is it too late to buy Nvidia literally I get that question like five times a day hey I have a question this may seem a little strange but do you think it's too late to buy Nvidia and the honest answer is I don't know but this is the answer I give I don't know but if you buy an P Index Fund 33 cents on the dollar will go to the Magnificent 7 I can make a case for all these companies are going to double my stock pick of the year is alphabet it has access to all of your calendar your videos you know your your email it's going to be able to figure out oh Scott OS is the same person to get his teeth cleaned in New York our AI is going to speak to speak to their I Ai and it's going to look at my calendar see that I'm going I'm name dropping now I got mil bmore on Friday night they know exactly where I like want to stay they'll they'll Google's AI should be able to handle everything for me very soon because they have a proprietary data set to feed into their llm anyways that's Google but in if you invest in the Magnificent 7 in an S&P fund 33 cents on the dollar goes to the Magnificent 7 because they're now worth 33% of the S&P but just in case the other 493 stocks have their time in the sun and the Seven are overvalued you're hedged you should be okay and the wonderful thing about America because of demographics and because of productivity and technology and an unbelievable culture around making money over the medium and long term the S&P is generally up and to the right and so don't convince yourself that you know the answer whether Nvidia is going to go up no you don't none of us do right so just you don't need to find the needle on the hay stack just buy the whole uh hay stack but people are constantly asking me which stock I'm like okay have some fun take a third maybe of your investment capital and convince yourself you know what you're doing fine and if you and occasionally you might have opportunity you might you might see you can you own two food trucks and someone offers you a third food truck because they're retiring there's going to be there are millions of baby boomers retiring with small businesses and young people are not there to take those businesses there's five people exiting the trades uh sector and only two going into them because we've shamed those Industries so there's you might have special access to outsized opportunity for your finite invest investment Capital lean into this make sure you talk to a lot of people though to get their advice you're not doing anything stupid that's another big mistake I made when I was your age I thought masculinity and Leadership was never asking other people for advice because I was so smart what an idiot to not ask people about stuff hey should I borrow money against the one stock I have red envelope to buy more Red Envelope someone might have said what happens if it goes down Scott like what happens to you and your mental health if you're levered up and it goes to zero in 3 weeks what happens to you like if someone had cared if someone you know that wouldn't have been a hard question had I sought uh mentors but anyways stock picking take the majority of your money I mean I literally I work with the brightest people in the world in finance do you realize 100% of all economists they have never been unanimous on anything in this Bloomberg survey in 2022 for the first time they had unan ious agreement among all economists and the thing they all agreed on was that in 2023 we were definitely going into recession did anybody predict that mortgages would go from 2 and a half to 7 and a half% and real estate prices would Skyrocket none of us know I mean we have maybe occasional ideas you know Warren Buffett's been pretty good but but Warren Buffett will admit I you know I really haven't beat the beat the S&P by very very much so fall out of the delusion that you understand the markets better than anybody you might have special Advantage Lean Into Your Advantage stock picking is fun I really enjoy it I think I learn a lot from it I like to think I can teach people about the markets by understanding it but disabuse yourself of the notion you can outperform the market and here's the good news you don't need to outperform the market we live in the most remarkable economy in the world remember the Chinese were going to overtake Us in the last three years they've shed $6 trillion in the stock market we've had seven companies at $4 trillion since the beginning of the year you are in the right place bet on America bet on the S&P if you want to have a world fund to to diversify away from America I get that but boy you don't you don't need to be a hero you don't need to swing for the fence and you used to though do more of this just to keep you honest you you uh don't do that there there was some uh I was amused to discover yesterday that there were some Wise Crackers who created an anti- Galloway index with the tagline bet against the professor they said basically if they bought every stock that you said was going down they produced excellent returns yep right so you had I think I think you've said that you lost $15 million shorting the market last year uh that's not sure I lost 17 million okay okay but you also bought claims on FTX and quadrupled your money in about six months which who would have seen that coming right so so you you know but but it seems like you have you used to do more stock picking you've moved towards the ETF model um which which makes total sense to me when you look at I mean as you say nobody can predict the future but it's you know since 1871 the stock market's returned over 9% annually if you include dividends since 1871 since 1957 when the S&P 500 was introduced it's returned closer to 10% annually but my my my investment thesis is you know NASDAQ 100 since 1985 has had an a return of almost 14% in the last 15 years 16% in the last 10 years 21% the difference between a a 10% annual return and a 20% annual return is massive yeah um and it does seem to me like the big the big tech companies there's a different physics that's happening when you have uh these Network effects this um all these converging Technologies do you not think I mean I I would bet you a a good bottle of red wine that 10 years from now the NASDAQ 100 will trounce the S&P in the in the next 10 years yeah the question is at some point every dog has its day and at some point good companies that aren't in Tech get oversold you can buy really good companies fairly inexpensively because the Magnificent 7 have soaked up all of the capital and there are periods when Tech goes down do you know that in 1999 the company that was the most valuable company in the world was Cisco it was like we don't know what to do everything it's a weird Market infrastructure well-managed Cisco lost 90% of its value between 1999 and 2001 you know who else lost 90% of their value from 99 to 2001 Amazon so these companies Tech when the good times are rolling Tech rolls but take it for me when Tech gets hit whoa it gets hit hard so what what I do is I vasely diversify I don't put more than three or four perc of my net worth in any one thing diversification is your Kevlar and that is you can go to zero you can get hit by a bullet go to zero I've had a lot of Investments go to zero that hurts but I have Kevlar it hurts but it's not fatal because I now make sure that I have Investments spread across everything you don't quite have that luxury when you're young especially if you're an entrepreneur you have to be very concentrated but when I sit on Boards of companies the first thing I Su I suggest to management when they have a fundraising I'm like take some money off the table no we're in it to win this is going to be huge I'm like hope you're wrong take some money off the table and invest in something entirely different than this industry such that if this thing goes down you're still like have your mental health you don't have to go home and tell your husband that we need to sell the house I've had friends go through this I mean that shit's really upsetting right but I don't know if I agree because I'm over invested in Tech but being over invested in Tech has been pretty rough on my mental Health sometimes and the last I mean unfortunately the way to become build a trillion dollar company right now is to find a flaw in the species um young girls trying to figure out their social capital need for affirmation young men's risk aggressiveness gambling and create a technology company that Taps into a flaw and young people's insecurities and vulnerabilities and takes advantage of the fact that our elected representatives are across between the Golden Girls and the fing dead and have absolutely no idea and know EMP how to control these Technologies they have no empathy when speaker Pelosi's first daughter was born Castro had just declared martial law in Cuba and two-thirds of households didn't have a color television but she's supposed to understand the algorithm sending out extreme dieting tips to a 57 95 pound year old 16y old girl she's supposed to understand what a single mother is going through trying to raise a boy who's addict addicted to gambling apps or is jeweling all that I mean how on Earth can these people oh by the way though Social Security gets $135 billion increase in cost of living adjustment I mean you can be you can bet seniors are going to be taken care of so look I I don't I don't know I would go I'm sticking with diversification and if you buy the Spy 33 cents on the dollar are just going to those seven companies that we love that have Godlike technology but Nvidia is trading at 60 times revenues right now if Nvidia went down 80% % it still wouldn't look cheap we if it goes if it doubles we're going to say well of course it doubled and if it goes down 80% you and I would be like well of course we went down 80% we just don't we just don't know but you don't need to know you don't need to know all you need to know is that over the long term the American economy is really outstanding I'm sounding very Buffet likee well my my my last contrarian view Shar is that what I what I'm seeing in recent years is the flight to safety when the market starts to is moving more towards Big Tech it used to be the flight to safety was away from technology now I see the flight to safety moving towards Tech so to me tech tech is both the safest place to be and and the highest return but the um and you start you have an e-commerce incubator right uh no I have a I I have a I have a company that's John borwick has has has the accelerator um but um turning to turning to luck and timing yeah you have a great section in the book about how critical timing is right because the time the changes in Market sectors um and how do you think about we were talking earlier about how you know eight years ago seven or eight years ago was a great time to start a podcast you know five years ago was a pretty good time to start a podcast today it's really hard to start a podcast yeah um and and this is true of so many things um what do you think what do you see as opportunities that are well timed today and how do you think the people listening can get think about timing well it's really hard to time the markets I'm always invested in the markets I always like you talked about I just got to mention the anti- Galloway ETF or index I wrote a blog post saying that oo weor snap Pinterest Tesla uh were all over massively overvalued and some VCS who I don't have a great relationship with the VC Community uh said oh he's wrong and they did an index and because Tesla literally went up 15x like if you if you had gone long the companies I said to short it was way up but what's interesting is four years ago when these stock started crashing they stopped publishing the index and this is the beauty of online is the that makes you look like an goes viral but once look like less like I actually think the anti- Galloway if anyone wants to do the math I think I'm up now cuz snaps come down 90% we work scan away but online people aren't interested in that there's no fun in that they just want to mock you anyways I sound very defensive know I think it I think it was flattering they're paying attention to you yeah I guess um I guess if if you're not if you're not getting pushed back you're not saying anything I guess um I forget the question oh qu question is is when we think about timing if we we think about like we think about like there was a time when early people there was a time when if you got on Twitter early you could build a big audience if you started a podcast seven years ago you could build a big audience now like substack or or or like what are the when you think about or or or should people be um getting into AI or was that window closing how how do you think about timing these waves well okay it's just it's just nearly impossible to time the markets the one thing you could probably do is look at the most popular job of my students second year MB have a tendency to go in things as it's peing so whatever my students are doing don't do um they're very rear view they're they're risk averse and they're very rear view mirror looking in terms of timing like I think AI at a minimum you really want to understand AI so whether you go to work for AI or you invest in it you need to every day be on Firefly or the difference between Claude and GPT and just get good at it AI is not going to take your job someone who understands AI is going to take your job and when you're young and your brain is still pretty plastic or malleable you really want to get good at kind of incorporating this into your everyday workflow like how you use AI I see like my son is bidding on shoe drops and he downloaded this AI thing and I'm like God he's going to be a an economic Warrior um I hope uh can't make his bed but he knows AI um in terms of timing the honest answer is I think there's going to be a huge opportunity and Baby Boom is retiring with small non-romantic businesses and just think the guy who hangs your drapes who has three vans the carpet cleaner I was talking to the guy cleaning my carpets he has two Vans makes about 200 Grand a year he's retiring he makes 200 Grand on a million in assets here he clears 200 Grand and he has no one to sell the business to can nobody wants my business my kids don't want it they think this a shitty work I think there's going to be a lot of small business opportunities I think understanding AI to the other end of the spectrum if I was to bet on a medium if I was to really bet on a medium I mean first off if you want to be a punch above your weight class there's just no getting around it social is how people learn about you you need to find a medium you're good at and commit to being in the top 1% with content or just advertising you do really well and telling stories online and that's difficult for some people it's hard to be very successful without having a a really strong social media presence if I was going to bet on anyone platform I would bet on um Tik Tok I think Tik tok's the most ascended platform in history I think it's a security threat I'm very excited about the ban which will be a divestment and everyone will be fine um but I would go kind of if I was trying to bet all my finite human capital on a platform I would be Tik Tok got to get good at really good at social media recognize the opportunity in non-romantic small businesses I mean I have basic stuff get to a city I mean you you figured this out two-thirds of economic growth over the next 20 years is going to be in 20 cities so You' if you're good here you're going to do much better than if you're great in akan you're just going to do better there's you're bumping off potential opportunities every day here so get to a city you do need to have if you're not in Tech you need to be Tech literate but I think there's going to be a lot of opportunity in the non-tech stuff I think Tech's getting almost a little bit and I don't know I think it's getting a little bit over invested I think there's going to be a lot of people that make a lot of money and really weird analog businesses I I was surprised that you weren't you have a wonderful section of the book where you talk about sort of pros and cons of all the different sectors one can go into whether it's you know Media or Finance or consulting or Academia uh you talk about entrepreneurship which is great for people who are incapable of working for other people which apparently describes the two of us yeah um is it I I was surprised though that you didn't sound more bullish on entrepreneurship I mean it's obviously it's it's we don't want to false advertise building businesses from scratch is really freaking hard um but I've also found it to be deeply gratifying and when I think about when I talk with my kids about opportunities I certainly would like them to go and work for you know some of the companies that that that are the best at what they do for many many years before starting a business but to me entrepreneurship is highly appealing is it is it not to you um so the question I get the most when kids come to my office hours when I say kids I mean my students the question I get the most is they come and say I have an offer from Google or JP Morgan but I really like to start a business and they come to me as an entrepreneur and I say oh my God don't be a idiot go to work for JP Morgan just a emotional toll and the roller coaster if you I mean here's the thing the greatest wealth generator in history I'm just talking about being an economic animal right now the greatest wealth generation uh generator in the history of the planet is the US Corporation and they will invest in you they'll remove that mole they they they pay for your health care they will um they'll let you screw up unless you really screw up they usually don't fire you they will teach you how to re room they will force you to be empath a little empathetic you know they will force you to endure Injustice I mean the only thing I can guarantee about the work world is Injustice someone less talented than you will get promoted faster than you right you will weird things will happen at a corporation you they turn off your email or they have a new policy and you can't even figure out who made the policy you can't you don't even know who to call right but you learn the ability to navigate and have the maturity I started at Morgan Stanley and I'm not doing this as a humble brag I was I did not have the skills to be successful in a big Corporation if a group of five people went into a conference room I was convinced they were talking about me I couldn't stand it when anyone I perceived as being less talented than me got promoted and made more money than me I just couldn't stand I was too insecure to to navigate the politics of a big Corporation get along with people establish allies be thoughtful if you have those skills and you have the certification to gain entry into an American corporation that is absolutely on a risk adjusted basis the way to go my stall made of Morgan Stanley stay of Morgan Stanley for 30 years he became vice chairman we got together we were very transparent we have are in the same place economically he's done very well but he's endured so dramatically less stress now he of course a grass was a Greener he en envies kind of my fame or my he'd like says wow what a life like dude do you know what it was like in 2008 when I was broke like how much money did you have in 2008 I like oh well not a lot I had 10 million back then like I I was I was fig I was trying to figure out what the deductible was for a private room for my girlfriend for child birth I mean I was I'm like you have lived such a more not what I'll call like you haven't had these deep really ugly moments an entrepreneur the highs are very high but the lows are really low and if you don't have the emotional fortitude for that and you have entree into a big Corporation it's a good company at a minimum do what you're talking about I needed the guard rails of a big company I was an IDI if if I knew I didn't have to be up at 8: a.m. to go into Morgan Stanley I would have gotten high every night if I you know if I didn't if I didn't need to put on I wouldn't have showered if I was running my own company at the age of 22 I just wouldn't have done any of these things I never would have learned how to read a room I had great people Morgan Stanley who would call me into a conference room and go don't say that don't be a idiot I needed to hear that I needed that and so it's a great I think corporations are vastly underrated and I think entrepreneurship is vastly romanticized it is really difficult and imagine having a having a business is like conceiving a child it looks smells and feels like you it kind of inherits your DNA and the infant mortality rate is about 80% it is really upsetting when your business dies and it's public failure so look if if you're if you're blessed enough to have a good opportunity and you're emotionally strong and you know you know knock yourself out but on a risk adjusted basis all you hear about in entrepreneur ship are the success stories you know there are just a lot of companies that fail slowly you know you lose your in-laws money you don't want to admit how poorly it's going you think that oh if I just work all weekend and ignore my kids maybe the business will resuscitate the market doesn't care that you're ignoring your kids so I don't know I I have some real scars from entrepreneurship so just go into it with eyes wide open I think the sweet spot is 10 to 50 employees yes because you've already starched out a lot of the risk you're still if you're talented can get a sizable piece of equity but the in mortality has mostly been starched out but you're still in a position to get the key to wealth creation and that is tax deferred Equity so I think the sweet spot for an employee is joining a company say 10 to 100 employees do you agree with that yeah I do I do and it's and it's and it's I in my own life I've just found that it's one of the most deeply gratifying things you can do is to build something with a collection of people you know AG I mean you don't have to be the founder just to be part of that it's it's deeply gratifying let's talk about how much money is enough um you write in the book young people should be motivated by money in order to get to a certain level of Economic Security beyond that it becomes a personal matter more money may make you happier and offer new opportunities but returns can go negative at some point where do you think they go negative well so you're on this stonic treadmill your whole life especially if you didn't have money it's about more and the terrible thing about money is you can always imagine more it's like that scene from Star Wars when Luke says to Han more money than You' ever imagin I don't know I can imagine a lot of money right whatever the number is I can imagine double it and I know someone who has double or 10 times it and I think oh would be nice to be them but what I think idea and these are really good problems but essentially money is the ink in your pen it can write new chapters it can write current chapters and they can burn brighter but it's not your story at some point you have to decide okay where do I get real reward and the majority of people almost all research shows that the real satisfaction the real reward in life comes from deep and meaningful relationships and what I have been good at I think is once I got to a certain level of Economic Security I thought I'm going to spend a lot of money on deepening my relationships I'm going to spend a ton of time doing amazing things with friends and kids I'm going to spend money on give money on things I'm really passionate about and then to give me reward I'm going to use money as a means of of deepening my relationships with people who matter to me and I'm not going to worry about getting more I'm always I love money I I was trying I try and make more but I'm not worried about it and I'm like that's the means money is the means means and I understand if you're you should be focused on it you should be stressed about it you should be thinking about it a lot but the ends are deep in meaningful relationships that is the whole shooting match full stop right not only people who love you but the opportunity to aggregate enough people who will let you love them immensely that's it that's the whole shooting match and what money does is it releases you from the anxiety so you can lean in and focus on those relationships when I was starting my business business I don't know how young your kids are I couldn't F I didn't see my kids really zero to five it took a huge toll on me it cost me my marriage cost me my hair I didn't see my kids a lot and this is going to sound terrible it was worth it because now I can spend a ton of time with my kids now I can give away money now I can be generous now I can you know so it's I think it just comes down to a sober conversation with yourself some people kind of live to work and live to make a lot of money I was that guy it was super important to me I was willing to go all in for 20 or 30 years I did nothing but work maybe you're not that person I'm not saying it's the right way it was my way but have a sober conversation because the conversation I can't stand is my kids my students I do a survey how much money do you be expect to be making by 35 80% of them expect to be in the top 1% 80% expect to be in the top 1% now granted it's self- selecting these are Uber capitalists who are very ambitious and then I said say what's the most important thing to you and they'll say balance and I'm like okay you expect to be making $700,000 a year within seven years the average age of a graduate a Stern is 28 but balance is the most important thing to you so I'm like okay that's going to work as long as you have Rich parents here's what I have found you can work to live if you want to move to a suburb of St Louis work 40 hours a week be a good solid citizen at work but you want to focus on little league and your kids and your relationship and your church and your community I think you can be happy but it's going to have to happen in St Louis and you're not going to be able to do fat fabulous things you're not going to stay at the Almond you're not going to go to Stage Coach and get backstage passes it's just not going to happen and that's fine a lot of people are happy with that there's nothing wrong with that have a sober conversation and this is the key to I think establishing a really good partnership with a spouse people think the number one cause of divorce is infidelity or a lack of shared values it's not as a matter of fact 70% of divorce filings are by women and it us usually follows a financial stress and we don't like to talk about this because we like to bager Vance and pretend women are victims and don't have any agency in anything and that all men are predators right I find neither of those is true but money is why people generally speaking get divorced it raises the blood pressure of the kids when you don't have money it creates it turns small arguments into big arguments so very early on saying what economic weight class do you expect to be in who's responsible for maintaining that economic weight class what is your approach to spending what is my approach to spending and really having a partnership around building a base oh you want to live this way you want to have a we want to be in a country club we want to spend a lot of time with our parents uh you know you're going to work but I'm going to stay whatever it is okay that means we need to move to a lowcost area I had that conversation with my partner we had two babies we were living in New York and I'm like I'm making great money and I feel poor I'm making so much money or what felt like a lot of money to me I think I was making I was sitting on some boards I was teaching I was writing books I think I was making like 6 800 Grand a year I never thought I'd make that much money when I was younger and I couldn't afford to live in New York I'm like I'm sick of struggling and being stressful so we moved to Florida and my partner was on board with that Lord my tax is 133% and then I got very lucky and things started screaming so I got very lucky but have an honest conversation with that your partner about your stress is about money what you expect do the goddamn math how much money do you spend how much do I spend how much do you make how much do we what where do we expect to be in seven or eight years how do we really build a financial life together and what I'll tell you is that building Economic Security with a partner is so rewarding it really is if you get there and you can do nice things together and you built that life together it just makes you really the flip side is it makes you really close we did this we did this we can take care of your parents we can take care of my parents the flip side is if you're not lined up economically and things get stressful you start blaming each other you blame your partner for spending he might blame you for not making enough money and it turns every opportunistic infection in your comp in your relationship into a full-blown you know sickness and we never talk about it we never talk about it it's really important so I think the long way of saying money is and I figured this out kind of in my 40s I wrote a book on happiness because I struggle with it I'm not good at happiness and I wanted to get better at it and all of the research says the same thing it's about deep and meaningful relationships but the problem is without a certain level of Economic Security there's stress injected into every one of those relationships you can't enjoy your kids because you feel like you're failing them you and your partner have a stressful relationship because one of you or both of you feel like you're failing because you're not providing so I think that get getting being really focused economically with a partner and then recognizing once you get to a certain point a sober conversation around where you expect to live what you're spending should be and then really leaning in if you ever get to the point where you have a decent amount of economic success not even you don't have to be a baller but some economic success recognizing the you're going to remember the really the things you're going to just love are like remember when we were walking around Rome with the boys and just how awful they were that you look back on that I just went to Egypt with my kids oh my God could they have been more bored in the pyramids like when can we go home and Tik Tok right I know they are going to treasure that trip the rest of their lives I know they're going to look back when we went to the Sphinx and you know I just think they're going to like love it and that's what I'll remember on my deathbed right I'll look back and go okay I wasn't I was at I was at the Sphinx with my kids and money helps us do that you know that's the key money is the means the ends is it frees up anxiety and gives you the opportunity to strengthen relationships that's the whole shooting match well I I like I like this framing of of uh it's it's at the end of the day happiness equals love right which is the conclusion of the big Harvard longevity study big Grant study at the end of the day you know other people and our relationships with other people is what determines our happiness and the way that money affects that informs when money is is positive or negative example like you know studies that show that uh lottery winners people who win the lottery often end up less happy afterwards well why would that be well they have a collection of of friends in a community and all of a sudden they have all this money and everybody want something from them and they're no longer apart or they move to another neighborhood they lose their Community they lose their people so it seems to me that money can both have the effect of strengthening your relationships with the people you care about but also can potentially over time in some cases have a negative effect like you can look around wake up one day and realize 3ar of the people I interact with work for me and so many of the people I interact with want something from me you know don't you think there might be some inflection point where there's a there's a level of money where it becomes actually harder to have uh you know close relations I would categorize that as a good problem um but I I think that what you're talking about what I think is it's so easy I do a team meeting we do a team meeting and we do the editorial everyone thinks it's me in my kitchen doing all this content like sketch in graphs and doing account prop media is 14 people and it's they're really talented really hardworking really smart people it's scale the stuff we do and the you know the the the the notion that we're like you know doing this uh doing this together is super super rewarding but what you have to do and it's tough for me because I'm I'm a narcissist and I'm have a big ego we do this editorial call and one of the kids will disagree with me and goes that's stupid and I'm like I'm going to fire that I just get so angry I'm like how dare he does he not know that I'm going to be at beta Works doing a B book event um and I get and when I realize is if you're any have any resemblance of success or wealth you have to surround yourself with people who keep it real is it is so easy to surround yourself with people who are so fascinated by you and what you do and oh you're spreading you're spreading homophobic conspiracy theory on your new social media platform you're a genius you don't think people are telling mus that every day oh God you're such a leader we love how Politically Incorrect you are if you don't surround yourself with people who are willing to push back on you and say that was really stupid you shouldn't do that you're going to lose the you're kind of kind of lose the plot so I think it's really important to have surround yourself with people who are willing to say they they the it's weird the president of the board of advisers this incredibly successful person at Bill berele his name's Bill Berkeley at NYU he calls me on a regular basis and when I write something and he'll be like he doesn't even say he doesn't even go hi it's Bill can you talk I just pick up the phone he's like for someone so smart you do really stupid things I'm like hey he bill and I get angry and I think like why am I taking this guy's calls and I realize how important it is because it is really hard to read the B the label from inside of the bottle and what another thing I didn't do as a young man is I didn't have a kitchen cabinet of people on my shoulder who will tell you no it's a bad idea boss right oh wait you're thinking about getting divorced no this is about your not hers right oh you you know you're at war with your sister that's just stupid make up right make up you need you need people who save you from yourself I don't care who you are everyone has a certain amount of bad judgment and you need guard rails you need people in your life who can really push back on you because you get as you get wealthier more successful it's really easy you think Mark Zuckerberg thinks he's a bad person I don't I think he sleeps like a baby at night I don't think he's surrounded himself with people who will say yeah what's the point you're worth $60 billion do and you're depressing teens all over the world like what are you doing I don't think he has a single person in his life that he trusts who he will take that advice from so anyways I do you have those people in your life I sure do I sure do kids are very good at that procreating is a great way to get a lot of honest feedback in my experience by the way my young men in my life my kids have never once asked me for advice yeah yeah never once I know well that's why I tried to get them to come here tonight because they won't they won't listen to this this for me this kind of council but they'll listen to it from you so it's there's a lot of studies on this especially young men they'll take advice their peer group is more important and they'll take advice from their friends fathers but they won't take it from their fathers yeah yeah yeah well Scott I I want to I want to read uh the last couple sentences from your book which are so wonderful and really nails and distills your message for listeners find something you're good at that people will pay you for and go hard really hard at it spend less than you make so you can deploy an army of capital that fights for you and your loved ones while you sleep diversify so you can endure the unknown have a long-term perspective all of this can get you to the profound more quickly and what's the profound it's about being in the company of others thank you Scott Galloway for being in our company this even uh such a lovely conversation

Channel: Next Big Idea Club

Views: 125,401

Keywords: next big idea club, transformative ideas, interviews with writers and thinkers, book authors interviews, ideas that will change your life, next big idea app, nonfiction, next big idea podcast, scott galloway, algebra of wealth, professor scott galloway, scott galloway advice, the algebra of wealth, scott galloway interview, scott galloway life advice, prof g, investing, how to get rich, scott galloway podcast, life lessons, how to make money, financial independence

Id: gKmwUuYcNEQ

Length: 80min 20sec (4820 seconds)

Published: Thu May 02 2024