0:00

Hello and welcome to Secret Leaders. Today

0:02

we've got something a little special. I

0:05

recently had the opportunity to speak

0:07

with Professor Scott Galloway for a

0:09

live interview here in London in

0:12

an audience full of entrepreneurs. Scott

0:14

Galloway is a founder, author and

0:16

professor of marketing at NYU Stern.

0:19

We touched on a lot of topics in

0:22

this conversation, from remote work to the

0:24

purpose of even having money. But most

0:26

of all, we spoke about

0:28

the ideas in his new book, The

0:30

Algebra of Wealth. With some

0:32

of the funniest personal stories,

0:34

Scott explains the four components

0:36

in the equation for building

0:38

wealth. These are focus,

0:41

stoicism, time and

0:44

diversification. Scott outlines

0:47

specific strategies he recommends, from

0:49

developing a savings muscle and

0:51

harnessing the power of compound

0:53

interest, to diversifying your

0:55

investments and building a network

0:57

of supportive friends and allies.

1:00

But it's important to note, this isn't

1:03

about getting rich in the next couple of

1:05

years. This is not some

1:07

crypto get rich quick scheme vibe.

1:10

The point of his book, and what you'll hear

1:12

in this talk, is to give

1:14

you the advice so that in about

1:16

30 years people ask you, why is

1:18

your life so much easier? Because as

1:20

Scott puts it, money should make your

1:22

life easier. But it's up

1:24

to us to define what easier really

1:26

means, and to pursue a vision of

1:29

wealth that encompasses all aspects of

1:31

a well-lived life. So

1:34

if you're ready to not just

1:36

build a successful business, but to

1:39

create lasting multi-dimensional wealth, this

1:41

episode is for you. All right, let's get

1:43

on to it. Here's Scott Galloway. I hope you enjoy.

1:46

Thank you. Big

1:48

thank you to Professor Scott Galloway for joining us

1:50

today. A

1:58

big thank you to Techspace, who are hosting

2:00

us I asked them to you know how should I describe

2:02

them and as big fans of your work They said tell

2:04

him it's like we work, but profitable Which

2:09

is always better, you know astute so the

2:11

lateral business model behind this one and not

2:13

so much pawns, so Please

2:16

take a seat. I think it's very important to

2:18

say that this is investment advice See

2:25

there's a kind of jokes you can make in England in

2:27

America You'd be like let's not start with that you scrub

2:29

that straight off Okay,

2:31

so Scott in entrepreneurship often

2:33

you follow your passion or

2:36

you follow your purpose You'd

2:39

probably say that's bullshit either one of them. What

2:41

do you think about that? What's your entrepreneurs really be doing

2:43

sure? So first off thanks. It

2:46

feels really like I'm on trial in

2:49

the future Well, the ruse is up

2:52

guys you might as well just own up

2:57

I'm about to be banned to the seventh moon of

2:59

Romulath I've

3:01

generally found that anyone who tells you to follow

3:03

your passion is already rich and that

3:08

Your job as a young

3:10

person is to find your talent and that's

3:12

not easy But if

3:14

you find something you're good at and you

3:16

can commit to the requisite ten thousand hours

3:19

of investment and persevering through

3:21

really difficult things and Enduring

3:23

the only guaranteed attribute of the workplace, which

3:25

is a series of injustices if

3:27

you're willing to potentially Make

3:30

the commitment based on some really core talent that

3:32

you take to something and it's not obvious what

3:35

that is It wasn't obvious for me That

3:38

the mastery of something Will

3:41

make you passionate about whatever it is

3:44

So find your talent and then this is the

3:46

kind of the second key component find your talent

3:48

in something that has a 90 plus percent

3:51

employment rate And

3:54

by the way, that's 98 percent of

3:56

industries If

3:58

You want to be an actor? There are model

4:01

an athlete in the arts, open

4:03

a restaurant, a nightclub, Just

4:05

recognize that. Unless.

4:08

You're getting flash and Green lives the you're in

4:10

the top one percent from a very early age.

4:12

Recognize. That. All. Your friends

4:14

who go into non vanity non romantic industries

4:17

were less talented than you are going to

4:19

have a nicer life. Despite. The

4:21

much less talented and now. If.

4:23

You're in the top ten percent of tax

4:26

lawyers. You. Get to fly

4:28

private and have a largest let's instead

4:30

of mates and you deserve su. Su

4:33

if you're the top ten

4:35

percent of basketball players. You

4:38

get cut from Jv basketball in high school.

4:41

So you'd rather be good

4:43

in a non vanity industry

4:45

than amazing. In.

4:47

A vanity industry. And. I'm

4:49

not here to pressure James. You want to be an

4:52

actor? You. Know you want a. Huge.

4:54

You want to coach Arsenal someday? Fine,

4:56

but if you aren't figuring out really

4:58

fast and a point one percent. Find.

5:01

Something less romantic. There are one and

5:03

eighty thousand actors. And sag after

5:05

that's the union in the Us. For. The

5:08

most talented people. In. Media.

5:11

These. Are the best. The best is not easy to

5:13

get indian. And others hundred

5:15

and eighty thousand. Eighty seven percent

5:17

and qualify for health insurance because they did may

5:19

twenty three thousand dollars last year. And.

5:23

The millionaire am and what I would suggest

5:25

isn't what I can promise you is that.

5:27

Anything. That you can become

5:29

a ninja like master at. The

5:33

accoutrements it out. Mastering. Economics

5:36

Relevance Camaraderie. Proceeds.

5:40

All. Of those things will make you passionate

5:42

about whatever it is. I

5:44

am. Renovating. A house and

5:47

are gonna know this guy this Iraqi. Immigrant

5:50

and his The Soapstone Guy. And.

5:53

Marla and all Central London. and

5:55

he just loves the zane and marveling can talk

5:57

about marble forever and he goes to the core

6:00

and he cuts marble and

6:02

I've gotten to know him pretty well and I figured

6:04

out with back in the hand math this guy, he's

6:06

making about a million and a half bucks a year

6:08

installing soapstone. And

6:11

I just can tell he's really passionate about

6:13

what he does. And

6:15

just in terms of kind of bringing it down to personal,

6:17

I thought it was going to be a quarterback of the Jets

6:19

when I was 17. I have

6:21

a good plane of vision, I have a fantastic arm

6:25

and I thought that's it, I'm going to be a

6:27

professional football player. And then I

6:29

got to UCLA and I found out what real quarterbacks

6:31

looked like and I wasn't one of them. Then

6:33

I thought I was going to be a pediatrician and

6:36

I took organic chemistry and I found out the science

6:38

is not for me. And

6:40

then I thought I was going to be an investment banker, I

6:42

got a job at Morgan Stanley and I spent two years there

6:44

figuring out I'm not very good at investment banking. And

6:47

then I found something called business intelligence and analytics

6:49

where you just kind of marinate and data, tell

6:52

stories. My life or

6:54

my professional life has basically been answering

6:56

the hardest questions of the 55

6:58

year old white guy who runs a big company. That's

7:00

what I do. These very powerful people

7:03

in the 90s and naughts, I

7:05

would come to me with their most difficult questions and

7:07

I could marinate and data and

7:09

then come back to them with answers. I had never in a

7:12

million years thought I would do that. And

7:14

it didn't really have a lot of appeal to me initially,

7:17

but I was really good at it. And

7:19

what I've become super passionate about is taking

7:22

care of my kids. I

7:25

absolutely love putting my dad

7:27

in an ICE assisted living

7:29

facility. I'm going to Cannes Lions

7:31

in a couple weeks and I'm going to stay at the

7:33

Hotel de Capre. And I realize I'm sounding

7:36

very materialistic, but in a

7:38

capitalist world, Britain

7:40

and the US become more like themselves every day and

7:42

that is their loving, generous places if you have money

7:45

and the rapacious, violent places if you don't. So

7:47

I'm not talking about what should be, I'm

7:49

talking about what is. And

7:53

I'd rather be nay-doll

7:55

or Federer than me. If

7:57

I could switch with them, I would. But

7:59

I'd rather be... me than the number seven or number eight

8:01

best tennis player in the world. Because

8:04

I get to go to Wimbledon, I can buy my way in. And

8:06

I'm not as nervous, and I have

8:08

an amazing time. So

8:11

I'd rather be the number one or

8:13

number two, I'd rather be Serena Williams. But

8:17

for the thousands of people that devote

8:19

their lives to professional tennis, and are

8:22

lucky if they make $10,000 a year, and end

8:24

up starting their lives at 28 or 30, starting pretty

8:28

much at zero. And that was, all of my roommates

8:30

were world class athletes at UCLA. I lived in athlete

8:32

housing, and a lot of them went to

8:34

the Olympics, and they were calling me at 28 to try and

8:36

start their careers. So

8:40

find your talent, and find something you think,

8:42

I could be in the top 1%. And

8:45

even if you're in the top 10%

8:47

of an industry that's a non-romance industry,

8:51

you're going to do really well. And

8:53

in a capitalist society, anything that affords

8:55

you the opportunity to have real economic

8:58

vitality makes you passionate about

9:00

that thing. And they're

9:03

almost sort of self-excluding, because people say, well

9:05

Scott, you're telling us to engage in drudgery.

9:08

You can't be great at anything you hate. You

9:11

just can't. So by virtue of the fact,

9:13

you think, I could be great at this. Tax

9:16

lawyers like the law. They find it fascinating. They're

9:18

good at math. They find the intersection between

9:20

tax and the law, and their

9:22

ability to communicate with clients, and their

9:25

ability to write well, while also having

9:27

analytical skills. They like that. They

9:29

enjoy that. So

9:31

follow your talent. And

9:33

I worry that young people sometimes mistake

9:35

hobbies for passion. Just

9:38

make a shit ton of money, money through Friday, and then be a

9:40

DJ on the weekends. Back

9:43

to you. Which

9:46

actually is exactly what the CEO of Golden

9:48

Facts does. DJ's

9:50

on the weekends. It's worth that well for him, right?

9:54

You wrote a book on wealth. I guess

9:56

does the world need another book on wealth? And

9:58

what's your hot take on it? on like waste of

10:00

the white space. So this

10:03

book, it's not as soon as you

10:05

earn and cut up your credit cards, just pay cash

10:07

for stuff. This isn't about someone who's in debt

10:09

and needs credit counseling. The inspiration

10:11

for the book was, I love that

10:13

study that says, as

10:15

parents we like to think we engineer our kids. And

10:18

what you find out is, they mostly come to you. You're

10:20

a shepherd, you get to decide where they graze, you can

10:22

point them in the right direction, you get to choose what

10:24

to eat, but the sheep comes to you. And

10:27

we also like to think that, oh I can shape

10:29

my kids outcomes. And what you realize, all the studies

10:31

say, it's their peer group that is

10:33

the most important thing. It's more important than their school, it's

10:35

more important than their parents, the kids they hang out with.

10:38

And there's a lot of studies that show, if you take the four people

10:41

you spend the most time with, from the age of 18 to 30, and

10:44

then you average, you'll become the

10:46

same body mass index. You

10:48

support the same teams, same politics, you end up

10:50

living in the same region. I mean, you become

10:52

almost like many muse of each other. Where

10:55

there's greater variance, is all five of those

10:57

people can make the same amount of money,

11:00

and one will end up economically secure.

11:04

Making no more money than the rest. And

11:07

so the book is, what are the behaviors and

11:09

strategies of that one person, that

11:11

ends up much more economically secure, despite not making

11:14

a lot more money than his or her

11:16

peer group. We've all heard the stories about athletes,

11:19

and lottery winners that make tens of millions of dollars and

11:21

end up bankrupt. Fortunately,

11:23

there's stories of millions of

11:26

civil servants, teachers, people who work

11:28

in government, who because they were

11:30

offered and had discipline and character,

11:32

the ability to have tax advantage,

11:34

matched savings programs, that never make

11:36

more than $100,000 a year in their life, and get to my age and

11:41

they're multi-millionaires. And it's

11:43

not only savings vehicles and certain types of

11:45

investing, it involves a certain type of character,

11:47

and a certain behavior set. So

11:50

the book is, what are the character

11:52

traits, and the strategies and the asset

11:54

classes, that that one person,

11:56

who never made more money than the other

11:58

four of his or her closest. It.

12:00

Would. End Up ended up in a

12:02

much better financial position. And.

12:05

Actually with the book is about I'm assuming in this

12:07

book. That. You have to have your act

12:09

together. For. You know how to make

12:11

some money, but you've got the skills.

12:14

To. Make a decent living. But.

12:16

You want to be one of those people the wake

12:18

up and when you're in your fifties, when you're my

12:20

as and people go. How come

12:22

see. Is. Is much better off

12:24

than the rest of us. How. Can

12:26

they just have a lot more money than

12:28

the rest of us and are able to

12:30

have a much more stress free live. In

12:34

their fifties and sixties, it's neither at risk.

12:36

Quick, quick scream. I.

12:38

Think I absolutely think I know how to get

12:41

your rest. As. A good news bad news

12:43

is the answer. Slowly. As

12:45

read the book and I'm not. It's not easy.

12:47

It takes real discipline. And. The book

12:49

as a lot of her last addict or something

12:51

of us more about life and really it's about

12:53

money and I'm also try to be very transparent

12:56

about my shortcomings. In the

12:58

ways many ways I screwed up financially. A

13:00

lot of those lack of character. In

13:02

just personal failings, the really haunted

13:04

me financially. But. To try

13:07

and identify those. I owe same

13:09

about the wealth as a whole person project and

13:11

I'll come back to that. But.

13:13

This is this has meant to say

13:15

how what are the behaviors I can

13:17

adopt early. The. Make Me that

13:19

person. That. Everyone wonders how did

13:21

they get so much money? That's.

13:24

That's the mystery woman you want to be. Announcers

13:28

honesty is obviously. As

13:31

right, I'm a guy. so you have

13:33

an actual formula. Yeah, what is Algebra

13:35

of Us. So. The first, his

13:37

focus. And this find your talent. And

13:40

doubled down on it. I hate side

13:42

hustles. Aside also is fine if

13:44

you know your main hustles not where you're going

13:46

to do and you want to explore something else.

13:49

But. I think it be much better off

13:51

if you took the incremental time you're investing in

13:53

a side hustle imported into your main hustle. Cause

13:55

the difference between being good and been great. Is

13:58

three to five actually mounting Some you can. Like. And

14:01

often times as is ten or twenty percent more

14:03

effort. I. Somebody save the and

14:05

morning fan. We'll say the lads, it's

14:07

successes in the last ten percent. proofing

14:09

the document one more time, right?

14:11

One one piece of inside the managed

14:14

to get in. Oh. Let's let's stay

14:16

up a little bit later. Let's get this chart Perfect.

14:19

So. Find. A

14:22

focus as soon as possible and

14:24

it's hard. I. Think your twenties

14:27

about work, shopping and failing see above

14:29

Pediatrician Investment Banker Affleck. I took me

14:31

for swings to the plate and wasn't

14:33

really until I was twenty seven I

14:35

started a strategy for my second, Your

14:38

Business School. That

14:40

ultimately and or can install but I do is

14:42

focus. Find. Something you think you can be

14:44

great at and go all in on it. And. By

14:46

the way, when I say focus, I mean work your ass

14:48

off. And. I'm

14:51

not suggesting it's the right way, but it's my

14:53

way. And. That is if you expect

14:55

to be in the top ten percent of income

14:57

earners, much less a top one percent. You

15:00

should never uttered the words balance.

15:04

I think it's just insane. When I will,

15:06

my kids and I see my kids, my

15:08

students. as of Saturday five hundred students. I

15:10

do a survey at the end of the

15:13

course. Where. They expect to be

15:15

economically brands. There's some self selection hear the

15:17

average salary out of him. I started to

15:19

hundred and twelve thousand as the average. To

15:23

So that means anyone who goes in a non

15:25

profit making eighty thousand or someone going to work

15:27

for three hundred fifty for private equity firm in

15:29

these kids to twenty seven, twenty eight at an

15:31

amazing income. So they're pretty ambitious and their well

15:33

really was certified. The. Two thirds of

15:35

I'm expect by the time they're thirty five

15:37

to be in the top one percent of

15:40

income earning Americans, which is seven hundred and

15:42

fifty thousand a year. And then I'll ask

15:44

them what are the key attributes of a

15:46

successful career and inevitably, About

15:48

half of them. Say.

15:51

Balance. Time.

15:54

Are. You high. and

15:57

less you're born rich if you

16:00

You want to be wealthy, or maybe if you're Kanye.

16:02

Like if you're a genius, okay fine. Assume you're

16:04

not Kanye. Right?

16:06

What I have found, with every person

16:08

I've met who wasn't born rich, who

16:10

is now wealthy, they've

16:12

spent 20 to 30 years doing

16:15

pretty much nothing but working. It's

16:18

not aspirational, this is not a Hallmark commercial. I'm

16:20

not suggesting it's the right way. I

16:23

don't remember my kids as babies. Because

16:27

I wasn't there. I

16:30

lost my hair. My

16:33

first marriage was a function of me

16:35

working nonstop. It took

16:37

a huge toll on me emotionally, mentally. And

16:40

it was worth it. Or

16:47

it was worth it for me. Because I knew

16:49

at a very young age that I wanted economic

16:51

security. It was just super important. I wasn't here

16:53

to be a good person. I

16:55

had no purpose other than economic security. I didn't

16:58

give a flying fuck about dolphin friendly tuna. I

17:01

didn't understand any of the social justice shit. Didn't

17:03

make any sense to me. And

17:06

more power to you if you do. And I'd

17:08

like to think I've become a little bit more

17:10

aware as I've gotten older. When I was young,

17:12

I'm like, I'm gonna get wealthy or die trying.

17:16

And for me, this has to

17:19

be a safe space. Because

17:21

my agreement is I'll be just entirely

17:24

transparent. The total motivation

17:26

for getting economic security was women. First

17:30

and foremost, I wanted to take care of my mom. My

17:32

mom got very sick and it was devastating not to be

17:34

able to take care of her. The second

17:36

was, on a much

17:38

more less noble basis, I

17:40

noticed at a very young age that

17:43

certain guys had a broader selection set of

17:45

women. And I'm

17:47

like, why does this guy of average character and

17:50

average looks seem to

17:52

always attract really cool, attractive

17:54

high character women? I'm like, does it have something

17:56

to do with his parents' house in Aspen and

17:59

Palm Springs? I

18:01

just figured out early. I wanted to take care of

18:03

my mom, and I wanted to be

18:05

more attracted to women. And I know how, I

18:07

hear that and I want to shower. But

18:11

it was very motivating for me. And

18:13

also I wanted to have cool friends and

18:15

do cool things, but that was very motivating

18:17

for me. And pretty much, I

18:20

got my shit together when my mom got sick. But

18:23

pretty much for the next 20 years, I

18:26

don't really remember much but working. And

18:30

that doesn't mean it's the right

18:32

way. But have a sober conversation

18:34

with yourself around your expectations and

18:37

the trade-offs required. If you

18:39

want to move to a low-cost neighborhood and coach Little League and

18:41

work 30 to 40 hours a week, a

18:44

lot of people work to live. They don't

18:46

live to work. More power to you. I think you can

18:48

be happy doing that. But you're not

18:50

going to be able to live in central London. You're

18:53

not going to be able to send your kids to

18:56

a private school. You're not going to be able

18:58

to vacation in Stad. I mean, just

19:00

resign yourself to the fact that you're

19:02

going to have to substantially lower your

19:04

expectations and also find a partner who

19:06

is in alignment with you around those

19:08

things. Anyways, focus,

19:12

work hard, and I'm assuming

19:14

you want economic security. This book is really

19:16

for people who think, I

19:18

really do want to have the trappings.

19:21

When I say economic security, I mean making more

19:23

than your average bear, so to speak. And

19:26

then that's the first thing. If you don't

19:28

make money, it's very hard to have economic security, right?

19:30

Got to make real money. The

19:33

next thing is really our multipliers of each other.

19:36

And it's the product of stoicism, time,

19:39

and diversification. Stoicism. It's

19:41

kind of the wrong word. It's really discipline. And

19:44

that is trying to acknowledge or recognize that

19:46

no one's thinking about your shit as much

19:48

as you are. And

19:51

that buying a bottle of Grey Goose late night at

19:53

a club isn't that impressive to other people. And

19:56

that blowing your first year bonus of Morgan Stanley on

19:58

a BMW. All right, was

20:01

that smart? How

20:04

many people, I don't

20:06

care much about cars, I don't know much

20:08

about driving, how many people were really that

20:11

impressed by me at 23

20:13

having a BMW? Is that really where

20:15

you're gonna find reward? Do

20:17

you have discipline? Can you take yourself, can

20:20

you put aside those emotions and

20:22

think, wow, okay, I mean, this

20:24

goes on to time. If

20:27

I had taken that $30,000 and put

20:29

it in SPY, it

20:33

would now be worth about 2.9 million, right? Do

20:37

you have that ability to take yourself,

20:40

separate yourself from your emotions, your need

20:42

to signal, your need to feel attractive,

20:45

your need to indulge and have

20:47

a dope ahead? Can you disassociate from these

20:50

emotions that are there for a real powerful

20:52

reason? All of these emotions are baked

20:55

or linked to anthropology, but

20:58

am I able to separate myself and look at

21:00

these things and go, and you know, I'm

21:02

gonna be the person that just buys a Hyundai,

21:06

and I think I have the discipline to figure

21:08

out the math and I'm gonna separate myself from

21:10

some of the trappings of concern around what other

21:13

people think. I can control that. There's

21:15

certain things I can't control, I can't control the market,

21:17

but what is in my control is my spending. That

21:20

is absolutely in my control. And

21:23

you wanna develop a savings muscle. I'm not suggesting that,

21:26

I'm worried that my oldest, he

21:29

won't spend any money. I

21:31

took him to this cool sneakers store

21:33

this weekend, and I wanted to buy

21:35

him a cool pair of Nike. He's like, no, it's too

21:38

much money. I'm like, I'll pay for it. No, no, he

21:40

just can't do it. And he dresses

21:42

like shit and it drives me crazy. And

21:45

he won't spend any money. He won't spend

21:47

it, he won't spend a, he

21:49

won't spend any money. And I'm worried

21:51

he's not gonna, he's gonna lose out on some

21:53

amazing things you can do in your 20s with

21:56

money. I'm not suggesting you don't go

21:58

to Taylor Swift or whatever. whatever it is young

22:00

people do nowadays, or occasionally

22:04

spend a little bit of money on a credit card to stay at a

22:06

nice place when you're in Thailand or whatever it is. You're

22:08

only in your 20s and wants by all means have some fun.

22:11

But at a minimum, at a minimum, you

22:13

wanna develop a savings muscle. I'm

22:15

going to put 100, 200, $300 a month away no matter what. I'm

22:20

gonna round up to the nearest dollar on acorns.

22:23

I'm going to find out what matching schemes

22:26

there are at my employer or at my government,

22:29

and I'm gonna have it taken out of my

22:31

check. I'm gonna opt into all this shit so

22:33

I never see it such that it never comes

22:35

through my hands because 99% of

22:37

people plus will spend every dollar that comes

22:39

through their hands. I

22:41

have trouble, I spend all my current income. The

22:44

way I've gotten wealthy is for savings for me

22:46

was equity in the companies I started, or

22:49

when I signed up for investment plans it was pulled out of my

22:51

check. You should assume that every dollar

22:53

that you have access to you will spend. That's

22:56

a safe assumption. So create

22:58

a series of four savings when you're young.

23:03

Time is just such

23:06

a powerful concept. There's a lot of young people here,

23:08

I just came from a talk where everyone was about

23:11

20 years younger. Everyone has

23:13

an advantage. What is

23:15

strategy? Strategy is answering one

23:17

question. What can you do that's really hard? What

23:20

are your assets? What are your strengths, your competences,

23:22

and then what's happening in the marketplace? And strategy

23:24

is a set of decisions that attempts to cut

23:26

a swath down the middle of those two things.

23:29

If you're in your 20s or even your 30s, you

23:32

have one asset, time. And

23:37

it sounds basic, but you don't really believe

23:39

it. For the 300,000 years

23:41

our species has been on this planet, very

23:44

few people live past 35. So

23:47

your brain does not believe you're gonna be here

23:49

past 35. And

23:51

if you're 28, you're probably gonna be

23:53

here another 70 years. But

23:57

you really can't process that. But

24:00

once you start to actually believe it, you should believe

24:02

the second thing and talk to anyone over the age

24:04

of 45 and they'll tell you the following. It

24:08

is staggering how

24:10

fast it goes. It literally,

24:12

you think, I don't wanna

24:14

say that kind of, oh my God, I can't even imagine that.

24:17

30 years, 40 years? Between

24:19

now and then, I'm gonna be a baller, I'm gonna win the

24:21

lottery, I'm gonna sell a book, or my

24:23

company's gonna go public. I can't imagine that I

24:25

might just be me doing the

24:27

same thing in 40 years. I'm

24:30

telling you, I was in this audience watching

24:33

some self-important jerk talk about

24:36

as well yesterday, it was

24:38

yesterday. Speak

24:40

to anybody here over the age of 40 and

24:42

they're gonna go, you're, no one ever says, wow,

24:44

life has gone really slowly. Said

24:47

no one ever. It's

24:49

gonna go really fast, so the question I put forward is,

24:51

if you can figure out a way to

24:53

find 1,000 bucks, enter

24:56

into some sort of scheme where it never goes through your

24:58

hands, and I have this magic box, and

25:00

if you put that 1,000 bucks in a

25:02

magic box at 11% a year, which the market has

25:04

done since 2008, in

25:07

30 years, you're gonna have $34,000. So

25:11

if I give you a magic box and said, if you can figure out

25:13

a way to put 1,000 bucks in here, and it's gonna be 34 like

25:15

that, and it does feel

25:17

like that when you get older, how

25:19

much would you put in? So

25:21

recognize the flaw in the species is we

25:23

have no ability to calibrate time, and

25:26

it's gonna go a lot faster than you think. It's the

25:28

whole thing about compound interest. I

25:30

bet some of you are new parents. Any new parents

25:32

here? So

25:35

when I was a new parent in New York in 2008, I

25:38

was looking at these really Tony

25:40

schools downtown. Grace Church,

25:42

first Presbyterian, because

25:45

I'm a narcissist, right? I

25:47

was doing it more for me than them. I don't think any

25:49

four-year-old knows where they are during the day. And,

25:52

but I wanted to signal, oh, my kids

25:54

are at Grace Church, because I'm a baller,

25:56

and I wanted to meet other rich narcissists,

25:59

right? I'm just being

26:01

very transparent here. $62,000

26:03

a year. Plus,

26:05

in the interview, they ask you if you're philanthropic, which is

26:07

Latin for how much money you're going to give us, on

26:10

top of your 62 grand. Now,

26:12

why do you want your kids to go to private school so

26:16

they have a greater likelihood of success? Well, what

26:18

do you mean? What does

26:20

that give them? Well, it's a

26:23

competitive economy. We want to give them

26:25

any benefit possible, such

26:27

that they can maybe someday have a house, have

26:30

kids, not have the economic anxiety

26:32

that maybe me and their

26:35

mom had. You want that for your kids.

26:38

Well, OK. If you were to send

26:40

them to a public school, and by the way, there's a lot

26:42

of research showing the best school you can send your kids to

26:44

is a school that's closest to where you live. And

26:46

you take the time they saved commuting and

26:49

invested in sleep and studying and time with their

26:51

friends. But assume you're wrong

26:53

and you screwed up sending them to a

26:55

public school. If you took that

26:57

$62,000 and just invested it in

27:01

a low cost index fund, and the market

27:03

just, you didn't even look at it, but

27:05

you were really disciplined. All right, it's tuition

27:07

time, but instead of Grace Church, I'm

27:10

putting the 62 grand into SPY for those 14 years. Assume

27:14

you screwed up and assume they're not as successful,

27:16

that they really would have benefited from the contacts

27:18

and the networking and the Ivy League school they

27:20

would have got into. You screwed up by sending

27:23

them to a public school. You

27:26

can ease your and their pain with

27:28

the $5.4 million you can give them at 35. Five

27:35

and a half million dollars will solve a

27:37

lot of problems. So

27:40

does it really make sense? And

27:43

here's the thing at those schools, I know

27:45

this firsthand, there's a lot of people

27:47

that doesn't care, if you have the money and it really

27:49

doesn't matter, fine, send them to the, on a risk adjusted

27:51

basis, the best school, regardless of what it costs. But

27:54

I think about half or two thirds of us that

27:56

send our kids to private school, it's a

27:58

real tax on us. It creates

28:00

real anxiety in our lives. Oh my God, we

28:02

gotta pay this tuition? Jesus Christ. And then once

28:04

the kids in school, you can't pull them out

28:06

of the school. It creates

28:09

real anxiety in the household. And

28:12

what I'm suggesting is people just don't

28:14

understand the power of time and compound

28:16

interest. Okay. So

28:19

we have stoicism, then we have time, and

28:22

then the last component is

28:24

diversification. And this is really where I screwed

28:26

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28:33

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28:35

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29:46

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leaders. That's personio.com/secret

30:31

leaders. There's a link in

30:33

the show notes. I

30:35

got it. I've always made a lot of

30:38

money. I am remarkably talented. I'm

30:40

in the top 1% easily, easily.

30:45

Now being in the top 1% of America means you're in

30:47

the top 0.001% of the world. A

30:51

lot of my success is not my fault. The

30:53

smartest thing I ever did was being born a

30:55

white heterosexual male in 60s

30:57

California. I came of age of free education

31:00

that was accessible and my professional

31:02

life kicked off during the internet. And

31:04

I recognize that. I finally recognize that as I've gotten

31:06

older. But beyond that,

31:08

right, what are the market dynamics?

31:10

I came busting

31:12

out of business school, made a shit ton of money. And

31:17

99, I'm worth 20 or by the way,

31:19

I talk in real numbers. I think people,

31:21

this British and Latin American notion

31:23

that you shouldn't talk about money, that's

31:26

the rich trying to keep you poor. You

31:30

talk about anything else you want to be good at. Why

31:33

wouldn't you talk about money? Because

31:35

I know what every employee at my firm

31:37

makes. So I tell them, no, you don't

31:40

talk about your salary. Because the

31:42

asymmetry of information benefits me. Because

31:44

if Bob figures out Lisa's making 30% more,

31:46

you might say, why the fuck is she making 30% more than me? Talk

31:50

to your friends about their investments. Talk to

31:52

them about their houses. Talk to them

31:54

about interest rates. Talk to them about how much money they're

31:57

making and how much money you're making. at

32:00

something, you need to talk about it a lot. So

32:02

I'm very transparent with money. And by the way, I

32:04

don't want to talk about my wins. I lost

32:07

$15 million last year shorting the market. I hate it

32:09

when rich people just talk about their wins all the

32:11

time. Where

32:14

was I? Diversification. Well,

32:16

you're about to sell real numbers. What's that? You're

32:19

about to sell real numbers. So 99, I'm worth 20 or

32:21

$30 million in stock in

32:24

the companies I've started. I've always been an entrepreneur. I'm

32:26

looking at jets. I'm flown down

32:29

to an airport in the middle of Texas to look

32:31

at a Bombardier or a Gulf Stream, right? That

32:35

was probably, I was self-aware

32:37

enough even then to go, this

32:40

is me sticking my chin out

32:42

to God, looking at jets at

32:44

the age of 31. This

32:47

is, something's wrong with the universe right now.

32:49

I remember thinking that. And I was right.

32:52

And in 2000, the dot bomb implosion came and

32:54

I went from being worth 20 or 30 million

32:56

to zero. But

32:58

that was fine. I was single, I didn't have kids, I didn't care.

33:01

That was like a bad month for me, but then I was fine. But

33:05

I had several opportunities along the way

33:07

to sell two or three million in

33:09

stock, diversify a bit and put

33:11

it in strange boring shit, Japanese bonds or

33:13

whatever it might've been. And I

33:16

would have had a lot of money to

33:18

fall back on, but I didn't do it. And

33:20

then what's worse, I did the exact same thing

33:22

again. I had a

33:24

company called Red Envelope, which was an e-commerce company when public

33:27

in 2002. And I got

33:29

into a war with the board and the venture capitalists.

33:31

So I went and I borrowed $3 million against

33:34

the 10 million in stock I had to buy

33:36

more red envelope stocks so I could kick those

33:38

motherfuckers off my board. And

33:40

it felt really good when I did. And

33:43

then when the company, because of the

33:45

great financial recession and because of the

33:47

longshoreman strike, a union

33:49

went on strike at the port of Long

33:51

Beach and all of our merchandise got stuck

33:53

seven miles offshore. And then there

33:55

was a software glitch at our distribution

33:57

center in Ohio. And we sent 30. 30,000

34:01

gifts to the wrong addresses over the

34:03

holidays, which is really bad for business.

34:05

And within three weeks, I went from

34:08

owning 14

34:11

million in stock to chapter 11,

34:14

and the stock was worth zero, and I

34:16

still owed the three million to the people who had

34:18

lent me the money, and

34:23

my oldest son had the poor judgment to

34:25

come marching out of my girlfriend. And

34:29

I was broke. And

34:31

I would say one of the

34:33

lowest moments I've ever had was

34:35

in the maternity ward at Langone,

34:37

NYU Langone, and I

34:39

was so incredibly nauseous.

34:41

I could barely stay

34:43

conscious, and the people taking

34:46

care of my girlfriend, they had to say

34:48

to me, just so you know, if you

34:50

go down, we're not focused on you. We

34:52

got shit over here. They

34:54

had to say that to me, because they could see how bad

34:56

I was doing. And they

34:59

naturally probably thought it was the situation,

35:01

it was the mechanics

35:03

of delivery. That wasn't it

35:05

at all. It

35:08

was a recognition that the first thought I had

35:10

when my son was brought into this world that

35:12

I had failed as a father. That

35:15

was so humiliating, and

35:17

I never had that sensation. I

35:19

think men, and I think this is a very

35:22

healthy thing, I think men feel an especially strong

35:24

onus economically, around

35:27

their obligation to economically provide. By the way, I

35:29

think that's healthy. I think men should

35:31

take economic responsibility for their household, which sometimes means

35:33

getting out of the way and being more supportive

35:35

of your partner, who happens to be better at

35:37

that money thing than you. But

35:39

I think it's a good place to start. I

35:42

do. And by the way, I think most women

35:44

deep down think it's a good place for you to start

35:46

too. And I know that sounds

35:48

sexist, and every piece of research backs it up.

35:51

And I had failed. I had

35:53

failed myself, and I had failed my son.

35:55

And if I had just taken some, if

35:59

I had just not doubled. down. If I just borrowed

36:01

the money against the stock and put it in

36:03

bonds and then told the bank, sorry,

36:05

I don't have the stock to pay, I

36:08

just would have been in such a better

36:10

place if I just diversified a little, a

36:12

little, and I still had

36:15

learned it. And it caused me such

36:17

unbelievable mental anguish.

36:20

And now, and I got

36:22

lucky again, I got very lucky. I started another

36:24

company, unbelievable bull market, 2008

36:26

to 2000 to now. We've never seen a market

36:29

like this, never

36:31

seen a

36:34

market like this. I bought Netflix at 12 bucks a

36:36

share. It's at 610, right? Which by the way

36:38

is an intergenerational theft.

36:40

We'll come back to that. But

36:45

now I don't have more. I know exactly how

36:47

much I'm worth. I don't have

36:49

more than three and a half percent in any

36:51

one thing. Almost

36:54

anything can happen almost. And

36:56

I own Deutsche bonds. I

36:58

own an Eric, a piece of an aircraft

37:01

maintenance facility in El Salvador.

37:05

I am not going back. I'm running out of time. Diversification

37:08

is your Kevlar. The

37:10

one investment I was most excited about that I

37:12

thought if I had to pick a 10 X,

37:15

it was this company that's doing tech

37:18

space, preventive health care. We sign up big companies

37:20

and the employees pay three bucks.

37:22

The company pays three bucks for employees.

37:24

They can go on AI driven on

37:26

your phone. Here's my rash. This is

37:28

the rash prescription on its way. I just love

37:31

this company. Tier one VC lucky

37:34

to get into the deal. Baller

37:36

CEO bankrupt last week, zero. And

37:41

here's the thing. It was a bad hour for me, but it

37:44

wasn't a bad day or a bad week because I have

37:46

Kevlar. It's called diversification. I can take a

37:48

bullet to the chest now in any one

37:50

investment and it hurts, but

37:52

I'm fine. I get hit down and

37:54

I get back up. Diversification

37:57

is so incredibly

37:59

powerful. for

38:01

your own mental well-being and

38:03

also risk-free adjusted returns. And

38:05

Daniel Kahneman, who's a role model of mine, who died a

38:07

couple months ago, showed that

38:10

the happiness you would get from being

38:12

smart enough to pick Nvidia two years ago and going

38:15

all in on Nvidia, I wasn't

38:17

that smart, the happiness you're going

38:19

to get from outsized returns is

38:22

a fraction of the misery

38:24

you're going to experience from

38:27

outsized losses from a lack of

38:29

diversification. So just for your

38:31

own mental health, as soon as

38:33

you can, you want to

38:35

start diversifying. Now, some of you won't have that

38:37

option. A lot of you are going to have

38:40

to be very concentrated to buy your first house.

38:42

You have to borrow money, you have to go

38:44

all in on a house. Fine. Some of you

38:46

entrepreneurs, unfortunately, sometimes have no choice, but

38:48

to be very, very concentrated in an asset.

38:51

You don't have the choice. What

38:53

I'm saying is, is the moment you have the

38:55

choice, you're doing a

38:57

financing and you might be able to sell some of

38:59

your stock in a secondary, right?

39:02

You have some additional capital, you

39:05

take out a second, right? Well, let's

39:07

maybe invest it in a different asset,

39:09

whatever it might be. As soon as

39:11

you can, once you have assets, start

39:13

diversifying, because the markets are

39:15

cyclical and you want to

39:17

have, there's nothing like sleeping fairly

39:21

well in a down market. It

39:23

feels really good to be like, yeah, my

39:25

net worth is down 10%, 20% fine. Being

39:29

down 120% of your net worth and I've been there, makes

39:34

for really ugly sleep patterns. Diversification

39:37

is vastly underrated. Focus

39:40

times the product of stoicism slash

39:42

discipline, a recognition of time and

39:44

how fast it will go and

39:47

compound interest, and then

39:50

diversification. That's essentially, if

39:53

you really understand and try and apply those

39:55

things, I think things will work out.

39:57

And then the context of the

39:59

atmosphere. around all of it is

40:02

that wealth is what I call a whole

40:04

person project. What

40:06

do I mean by that? There's a myth that

40:09

wealthy people are bad people. And

40:12

unfortunately that notion is cemented

40:14

by some billionaires in

40:16

their 30s, mostly in the tech industry, who are just

40:18

not very good citizens. They're just

40:20

not, they're strikingly

40:23

non-impressive, low character people.

40:26

And it's cemented this notion that rich people

40:28

are all like Monte Burns from the Simpsons,

40:30

lighting cigars with $100 bills and

40:32

getting the power plant and living alone and just

40:35

weird, not nice people. The

40:37

truth is the majority of wealthy

40:39

people are high character people. Because

40:43

if you want to be really wealthy, you

40:45

need to create and collect

40:48

a series of allies along the way. Google

40:51

just did a study, the hiring manager said when we

40:53

have a product management position that we advertise, we get

40:55

200 CVs within 24 hours,

40:57

we pick 20 people to come in.

41:00

80% of the time the person we pick has

41:03

an internal champion that's their friend. People

41:07

with the most friends have the most professional

41:09

opportunity. You want to be put in

41:11

a room of opportunities when you're not physically

41:13

there. I know Lisa's looking for a

41:15

job and I just heard this woman's hiring. I'm

41:18

going to go talk to her and I'm going to tell her I have someone great

41:20

for her. Oh, Bob's

41:22

starting a business. Business sounds

41:24

stupid, but we love Bob. Let's put some money

41:26

in. We love Bob. We

41:29

love Bob. Generally

41:33

speaking, wealthy people are

41:35

really good people. They try

41:37

to be generous. You need to start

41:40

making investments in other people and

41:42

racking and stacking allies.

41:44

The flip side to that, and

41:47

I've experienced this, is the fastest way to

41:49

snatch financial victory,

41:53

financial insecurity from the jaws of

41:55

financial security is divorce.

42:00

50% of my net worth overnight. 50%

42:03

went to my ex. And

42:05

10% more because now we're supporting two houses. And

42:09

I can guarantee you that

42:11

if you ever get divorced, it'll

42:13

be exactly the wrong time to

42:15

sell a house. Whenever

42:19

you're a forced seller, it's just naturally

42:21

the world says, oh, it's

42:23

the worst time in the world to sell these stocks,

42:26

these assets that you need to split. In

42:29

addition, nothing, nothing

42:32

perverts success like

42:34

professional divorce. Show me

42:36

a smaller or medium sized firm that's actually going really

42:38

well and it starts coming apart at the seams. It's

42:41

the partners stop appreciating each

42:43

other and start being mean or not

42:45

generous with each other and there's professional

42:47

divorce. So if you don't

42:50

bring a certain amount of generosity and forgiveness

42:52

and character and love to your

42:55

personal and professional relationships, you're

42:57

never gonna be that wealthy. Rich

43:01

people tend to have much higher rates

43:03

or lower rates of divorce. Really

43:06

rich people tend to be people that get

43:08

along even with their ex-business partners. They're

43:11

generous. Because if you

43:14

keep a scorecard, and this was one of

43:16

my biggest flaws in terms of character growing

43:18

up, I always had a

43:20

scorecard. Am I getting enough from this girlfriend that

43:22

I think she's getting from me? Am I getting

43:24

enough from this friendship, this business relationship, this investment?

43:28

Am I making money? And what

43:30

you realize is that you will instinctively

43:32

inflate your contribution and diminish theirs. And

43:35

at some point you're just gonna be upset and angry

43:37

and it's gonna digress from there. And

43:40

I finally figured out, at least for me, the approach to

43:42

life is what kind of son do I wanna be? Not

43:45

how did my dad treat me? Was

43:47

he around or not? What kind of son do I wanna be?

43:50

What kind of board member do I want? What kind of investor do

43:52

I wanna be? What kind of spouse do I wanna be? What

43:54

kind of business partner do I wanna be?

43:56

What is my goal? And then that's what I put

43:58

my behavior to. I've put the

44:01

scorecard away and I'm just

44:03

much happier and I'm a much better partner

44:05

on a lot of dimensions because

44:08

you will not calibrate the scorecard

44:10

correctly and it

44:12

leads to divorce, professional and personal.

44:15

Wealth is a whole person project.

44:19

One thing you just said on building

44:22

wealth is about being high character,

44:24

about building wealth, being

44:26

someone who someone wants to be friends with in

44:29

the first place. A

44:31

lot of that stuff professionally happens in

44:33

rooms. So 2020 happens,

44:37

the whole world went remote. That's

44:39

a big cultural shift for generally how

44:41

people were running businesses. There were a

44:44

bunch of remote companies sure, but predominantly

44:46

people were office based. And

44:48

then since then you've had to sort of phase back

44:50

like, are we hybrid? Are we remote? I mean, certainly

44:52

in my company Heights, you've gone through exactly this, like

44:54

fully remote currently struggling with hybrid. It's a

44:56

fucking mess. And a lot of people feel

44:58

this. What's your view on what the

45:00

right culture if you were building a company today, how

45:04

would you build it culture wise? And

45:06

how do you think that works sort of generationally

45:09

looking forward? So with AI, all of the things

45:11

over the next 10 years, how do you

45:13

build a great company culture? So

45:15

I have a small company called Procte Media that

45:17

does my pods, my books, my

45:20

TV stuff. It's small,

45:22

it's about 10 to 12 million a year, but

45:24

I'm the only shareholder. And

45:27

the average age is probably 35 because

45:29

me and my partner are old. But the

45:31

mean or the median is probably 25 or 26. It's

45:34

a bunch of over educated, super ambitious, wonderful young

45:36

people, 12 of the 14 are in their

45:39

twenties. I think remote

45:41

work is a disaster for young people.

45:44

Now who's it great for? I

45:47

think there should be a new classification of worker called

45:49

the care worker. You have young kids, you

45:51

have aging parents, you're struggling with

45:53

your own mental health, or maybe you just don't make enough

45:55

money to live close to the office, which is a lot

45:57

of people. You should be classified.

46:00

as a remote worker and I believe the company

46:02

has an onus to provide the resources and

46:05

take additional time to try and evaluate you despite

46:07

the fact you're not going to be able to

46:09

maintain the same level of relationships as people. If

46:13

you are before you collect dogs and

46:15

kids, oh my god get into

46:17

the office. There

46:19

are three people or more who are

46:21

eligible for every promotion and the

46:24

decider will make their decision their pick based on

46:26

who they have the best relationship with and relationships

46:28

are a function of proximity or 38% more

46:31

likely to get a promotion when you're

46:33

in the office four plus days a week. In

46:36

addition and this is especially true

46:38

of young men, you

46:40

need the socialization in the guardrails

46:42

of the workplace. If

46:44

I didn't have to be in Morgan Stanley,

46:46

515 Figueroa by 8

46:49

a.m. If I wasn't there by

46:51

9 a.m. it was a paid day off. Things have

46:53

changed a lot. If I got in at

46:55

905 it was counted as a paid day off and

46:58

I got 20 of those a year so I was always there by

47:00

9 usually by 8. If I

47:02

didn't have those guardrails a

47:05

22 year old Scott Galloway would have smoked

47:07

pot every night. I love

47:09

pot, oh my god. I

47:11

don't think I would have showered that off. I

47:14

wouldn't have I used to

47:16

get pulled out of conference rooms by

47:19

my VP Betsy Jacobson and she's like

47:21

come here we go another room and she'd be like don't

47:24

say that. That

47:27

was stupid. Don't say that

47:29

again. What? She

47:31

literally said what the fuck were

47:33

you thinking? I'd sit

47:35

there I think. I'm much out of you I'm getting high.

47:38

But it was really

47:41

I needed that. I

47:43

needed socialization. By

47:45

the way I met a former

47:47

co-founder of my business. I

47:51

dated people at work and

47:53

it was consensual and wonderful. One

47:56

out of three relationships began at work.

48:00

want to talk about this, if you don't

48:02

know the difference between expressing

48:04

interest and asking someone for

48:06

coffee and harassing somebody, you

48:08

have much bigger problems. I've

48:12

had eight marriages at the companies I've started

48:14

and I think it's wonderful. Where

48:16

are young people supposed to meet? Online?

48:20

That's a disaster. Online dating?

48:24

Get into the office. Get

48:27

into the office. Meet mentors.

48:29

Meet friends. Meet co-founders. The

48:32

office is a feature, not a bug. And

48:35

I realize your lifestyle, it's a strain

48:37

on your lifestyle, it pays

48:40

huge dividends because as you

48:42

get older, remote work is

48:44

almost necessary. One of the

48:47

criticisms I'm had of the book is, okay, this

48:50

is advice for people in their 20s and 30s. What about their 50s?

48:52

So I got on the phone with a bunch of them on my

48:54

podcast and they outlined the situation and

48:57

I talked about getting to your burn,

48:59

your passive income needs to be your burn.

49:01

These couple was 48. They

49:04

want to get, they want to retire at 60 and da-da-da. They're

49:06

only gonna have, we did the math, they're only gonna have

49:08

$78,000, they need $120,000. They live

49:10

in San Jose. I'm like, why

49:13

are you in San Jose? I'm like, well, our

49:16

mother-in-law is here. Our in-laws are here. And I said, I'm like,

49:18

do you need to be near your in-laws? And

49:21

they all look at each other and one's looking at the other, right?

49:24

Their kids have all moved away. And I'm

49:26

like, where else have you been that you really like? Well,

49:29

we just had it, we just, we spend our, we

49:32

spend a month a year in Costa

49:34

Rica. I'm like, why wouldn't you move to Costa Rica? You

49:37

can cut your burn substantially. You're gonna be really happy

49:39

that it's got great health care, great food. So

49:42

remote work is an enormous unlock

49:44

for caregivers and for people looking

49:46

to arb down their spend. But

49:48

for young people, oh my gosh,

49:50

you want to get into the office. In terms of the culture, one

49:53

thing I'm trying to do is just on the phone with my

49:55

team now. We

49:59

don't have an office. So I

50:01

started Prop G in like 2019. I'm

50:03

a narcissist, so I got this gigantic space in

50:05

Soho because I want my friends to think I'm

50:07

a baller and it's big and beautiful, and

50:10

it costs $80,000 a month. And

50:14

yeah, rookie move, right? I keep making them.

50:16

I keep making them. And

50:18

then COVID came along and I

50:20

had this epidemiologist on my podcast

50:23

and I called him and I said, how bad is this?

50:25

And he said, Scott, it's worse than anyone thinks. I remember

50:27

them saying that. I'm like, I

50:29

didn't believe any of the thing about the, I was like,

50:31

oh no, I'm not worried about this. He's like, oh no,

50:33

it's worse than anyone thinks. So

50:36

I called LVMH who I was subleasing from and

50:38

I said, I want to give it back. And

50:41

they said, well, you're gonna lose a year of deposit. I

50:43

wrote them a check. I forego a

50:45

million dollars and I got out of the lease. Four

50:48

years later was the smartest thing I've ever done. Now the

50:50

problem is, how did these kids

50:52

get together and how do you develop a form of a culture?

50:55

One, I tell them they can have a co-working

50:57

space whenever they want. And what's interesting is the

50:59

youngest people who supposedly love remote work, they

51:02

immediately get co-working space, immediately. I like

51:04

that, no deposit, no security deposit. It's

51:06

not that expensive. I

51:08

think it's 18 or 22 grand a month. It's not a lot of money. And

51:11

I say to them, okay, anytime any four

51:13

of you are together, and you can only do

51:16

this with a small firm. It's not realistic. Anytime

51:18

any four of you are together, you have my

51:20

credit card. I don't

51:22

care if it's at a Broadway show, in Tulum,

51:25

or in three weeks they're going to St. Farts. They

51:27

just told me. And

51:31

they like each other and they get along.

51:34

And it's selfish of me because the number

51:36

one source of retention in

51:38

companies, people think it's compensation. Well,

51:41

that's actually number three. Number two is if they

51:44

think they're learning and they're getting some sort of

51:46

psychic compensation, the number one predictor of retention, does

51:48

anyone know what it is? If

51:51

you have a friend at work. So

51:54

I'm like, it's my job to

51:56

make them friends. So

51:59

they all interview. interview each other. We don't hire anyone unless

52:01

everyone says, yeah, I'd like to hang out with this

52:03

person. They like them. And you can only do that

52:05

in a small company. That doesn't scale well. And

52:08

they do the most amazing shit together.

52:11

They have a ton of fun together because it's on

52:13

me. They make really good money, but they can't

52:15

afford to go to St. Bart's. In

52:18

the last three years, they've gone to LA, last

52:20

three years, last 18 months,

52:22

LA, St. Bart's, this

52:25

June, Tulum, CAN. Oh,

52:27

we're coming with you to CAN. There's

52:29

three of us who want to come. All we need is

52:31

a fourth and we'll see you in CAN. And

52:36

I'm sincere about this. They have my cards

52:39

as long as they're together. And I think

52:41

it's working. I think they generally like each

52:43

other and they love the firm. Now, granted,

52:45

my firm's a little bit different. I'm rounding

52:47

third. I get a crazy amount of money

52:49

to do talks and books and stuff

52:52

like that. So I can afford this sort of thing. But

52:54

we have never lost a person voluntarily.

52:56

No one has ever voluntarily left the

52:58

firm. So, and

53:01

I think that's kind of the key. I'm

53:03

getting into a little bit for HR, but generally

53:05

what you find, and this is not a Hallmark moment.

53:07

We have a small company. 10%

53:10

of your employees add 120% of the value

53:12

and the rest are negative 20%. And

53:16

you need to identify those 10% and

53:19

nail them to the floor. Right?

53:23

Ignore how old they are. Ignore their background.

53:25

Ignore what they look like. And it's not

53:27

easy because we all have stereotypes. And

53:30

if this 23 year old former

53:32

diver from Yale who just seems smarter

53:34

than anyone here and works around the

53:36

clock, oh, hi, I'm going to give

53:38

you 10% of the company. This is my plan. I'm going to

53:41

build this company for seven years. I'm going to sell it for

53:43

a hundred to 200 million with dilution. That means you're going to

53:45

get seven to 10 million. Are you in? Okay.

53:50

Find those two or three people or

53:53

those 10 people, the 10% who

53:55

drive the 120% so

53:58

they can minimize the negative 20. of everyone else

54:00

you need to scale. And

54:02

by the way, oh, but everyone has a role. Okay, fine.

54:07

There is a small number of people at

54:09

firms that drive the majority of the value

54:12

and you wanna massively overcompensate those people.

54:14

You wanna look them in the eye

54:16

and go, I'm focused on me, but

54:20

if me does well, you're gonna do well.

54:23

And this is how I can guarantee that. And you

54:25

are gonna do better than your parents did 20

54:28

years younger than them. I'm

54:31

very Darwinian about it. I wanna have a nice work

54:33

environment. I want them to learn. My assumption is the

54:35

majority of people go to work for economic security for

54:37

them and their families. And what I

54:39

tell them is I'm gonna get you to economic

54:41

security faster than anywhere. And that

54:43

might not be the right way. It's my way. And

54:47

I'm very much focused on those individuals.

54:49

Retention is job

54:52

number one, finding good people, ringing

54:54

the register, but I do think in a

54:57

small company that has a good product, everything

54:59

is about retention. Finding that, identifying

55:01

those people early and just knowing they're not going

55:03

anywhere because they could never do better than what

55:05

they're doing here. I

55:08

mean, that is a fucking ball of move as well. It's

55:10

like, you know, the card, not

55:13

everyone can do that. But I think if you

55:15

put yourself in a position because of wealth, because

55:17

of following all these techniques, I guess

55:19

one of the things you were trying to minimize in

55:21

your age, if you don't mind my mentioning. Sure, I'm 49. I'm

55:25

fuck, I'd say 59. God, I would have really threw

55:27

that up. I'm turning 60 in. Yeah.

55:30

Five months. Because I'm sure one of the things you optimize

55:32

for is, yeah, sorry about that. But I'm sure one of

55:34

the things you optimize for is you're

55:36

chilling out there. Like not having to deal

55:38

with like the employee churn, et

55:40

cetera, et cetera. So therefore there's like a big

55:43

tax that you're mentally paying every time

55:45

you have to sort that out, which money can solve for

55:47

you, right? And that's a really nice

55:49

way, a nice model and framework to use for

55:52

money. It's like, is it making your life easier?

55:54

That is the, you're tapping into the, that's

55:56

the correct question. Because this is what money gets

55:59

you. And

56:01

that is money

56:03

is a means, it's not the end. I

56:07

got to my number, everyone, you have

56:09

your number, what you really like now. What was your

56:11

number? Well, it was a million dollars when I was

56:14

your age, then it became 10, then it became 100.

56:17

Because I had different things in my mind, well, I like to have

56:20

a nice home. Well, how much do

56:22

I need for a nice home? Well, only a million bucks, well, no, that's

56:24

10 million. Well, I'd

56:26

really like two homes. Well, I'd really like a

56:28

Gulf Stream. You want a nice divorce? I kept

56:30

going up and up. And that's

56:32

the problem with money, is it's quantified

56:34

by a number, and you can always imagine

56:36

more. And what

56:38

you have to realize, and it takes some discipline,

56:40

and this is a high class problem, is

56:43

to realize it's thinking your pen, and that is

56:45

it'll write different chapters, it can make certain chapters

56:47

burn brighter, but it's not your story. All

56:51

studies show that the key to happiness, one,

56:54

let me be clear, money can buy happiness. The

56:56

bullshit money can't, that's bullshit, and I can't

56:58

buy happiness. Middle income people are happier than

57:01

poor people, high income people are happier than

57:03

middle income. That's the bad news. The good

57:05

news is it's diminishing returns. Once

57:07

you get to a certain point of wealth, once

57:09

you get above, say, a million bucks a year, which is a

57:11

lot of money, but once you get above that, going to two

57:13

or three million, very little marginal

57:15

return. So you have to

57:17

figure out what's my number. And if you're fortunate

57:19

enough to get there, if you're fortunate enough to

57:21

get there, what I think the

57:24

ends is, the whole point of economic

57:26

security, is such that

57:28

you can have an absence of anxiety, so

57:31

you can focus on relationships, and

57:34

then you transfer that money you have into

57:37

time and attention to your

57:39

relationships. I

57:42

can't imagine a bigger failure, and

57:44

I was this way. I was

57:46

more concerned with what other people thought of me than

57:49

the people who I was living with thought of me. I

57:53

wanted fame, I wanted relevance, I wanted success, I

57:56

wanted to be in my 30s, but the people really

57:59

close to me. They

58:01

like me, but they don't love me as much

58:03

as strangers. I mean, okay, I

58:05

need to recalibrate my life. Having

58:09

money is, I hit

58:11

my number, I still think about

58:13

money a lot, but I'm not going to hoard wealth. I've

58:15

decided above my number now I'm going to spend it all

58:18

or give it all away. I don't

58:20

believe in billionaires. More power

58:22

to them, I don't think we should take their money away. I

58:24

don't think they're any happier than me. I

58:26

just don't. So

58:28

what money is now is I have an absence

58:31

of economic stress. I still have it kind of

58:33

deep down, but I know I just need to

58:35

be rational and it disappears because I grew up

58:37

without no money, so it's still there for me.

58:41

But I do amazing things with

58:43

my wife and kids. I

58:45

give money to things I love. I

58:48

help friends out. I'm doing a ton of virtue signaling

58:50

now. And I don't give money away.

58:52

I don't give money away because I'm a good person.

58:55

It makes me feel really fucking masculine. It

58:57

makes me feel like a baller. I

59:00

love it. And I don't give money away. And honestly,

59:02

I show up and I cut ribbons. And

59:06

it makes me feel really good about myself. And

59:08

I think that's okay. It makes me feel strong like

59:10

both. I think that's

59:12

okay. But once you

59:15

get to a point of some economic security,

59:17

the whole point is you can then double

59:19

down on what every study shows is the

59:21

key to happiness, and that

59:23

is deep and meaningful relationships. I'm

59:26

catching up. I'm spending a ton of time with

59:28

my boys. I'm taking

59:30

the dogs and my son to Estelle Manor,

59:32

whatever the fuck it's called, and I'm setting

59:35

up shooting and all these stupid things and

59:37

Padel. He's

59:40

doing a cooking class. And I'm doing a cooking. He's 13.

59:43

I have no... And it's amazing. It's

59:45

amazing. And I couldn't do

59:47

these things. Money's an incredible

59:50

lubricant for a lot of things. But

59:52

if you don't use it when you have

59:54

it to cement and really go deep on

59:56

relationships, What is the point?

1:00:00

The. Biggest tragedy and I thought about

1:00:02

this a lot. Is. The

1:00:04

end up as. The. N

1:00:06

Y u langan President Circle floor

1:00:08

as you give langan throwing up.

1:00:11

The. Ten years ago if you give a quarter million

1:00:13

dollars and when you and gown you got a secret number.

1:00:16

And. Then and a half and see how the secret number

1:00:18

and the like are you have covered. Were sending the

1:00:20

world's greatest pulmonologist over to your house and five minutes.

1:00:22

It's is dirty secret. Recipe:

1:00:24

What much better healthcare Most people know that

1:00:27

are they going on access and then I

1:00:29

have this floor where you go to give

1:00:31

birth and.it feels like a forcing. It.

1:00:33

Lewis was like a forces. Beautiful.

1:00:35

Doesn't try to hospital. And. I thought

1:00:38

this is my biggest fear. I.

1:00:40

Get there and I'm dying and I'm

1:00:42

surrounded by strangers. right? All

1:00:45

these people to don't know me or super impressed and pretend

1:00:47

to like me but the people are supposed to let me

1:00:49

Don't show up. That is failing.

1:00:52

That. Is failure. And.

1:00:54

It sounds remote, but if you are so

1:00:56

obsessed and provide the commitment to make money,

1:00:58

it is easy to get on a treadmill.

1:01:01

We start ignoring the really important

1:01:03

relationships near like to start sacrificing

1:01:06

and never bust out of that

1:01:08

cycle. And you end up

1:01:10

in your forties in your fifties with a city

1:01:12

relationship with your spouse. You're not spending as much

1:01:14

time trying to your parents as you would like

1:01:17

to. Or. You don't reciprocate them.

1:01:19

You know the manic concerned they showed

1:01:21

for you. Your friends are sort of

1:01:23

professional. Friends are not real friends. I

1:01:25

mean their friends. But once you know,

1:01:27

wander in a position of economic relevance,

1:01:29

they're not. They're not really like love

1:01:31

you. All. That.

1:01:34

That. Is failure that snatching defeats in

1:01:36

the jaws of victory. So. I

1:01:38

purposely have decided. I'm. Going

1:01:40

to spend it all. I. Don't want

1:01:42

my kids to inherit a lot of money. They'll be fine.

1:01:45

And all my money goes

1:01:47

towards cement in relationships. I'm

1:01:49

a yes everything. Any friend calls me

1:01:51

and says. Hey, we're going

1:01:53

to Stagecoach! What? Stagecoach.

1:01:56

What's. the new could shallots country music

1:01:59

i hate sensing I'm in. My

1:02:03

right is I can always say no. I have

1:02:05

the right to always back out, but I'm a

1:02:07

yes to anything with friends or people I care

1:02:09

about. My kid asked me to do anything. I'm

1:02:11

a yes. I have the right to back out.

1:02:13

But it sounds this is what this qualifies

1:02:16

as a good problem, but keep in

1:02:18

mind money is just it's just

1:02:20

the means. The ends are deep

1:02:22

and meaningful relationships. Most

1:02:28

entrepreneurs obviously have a

1:02:30

certain type of way they build wealth. Right.

1:02:33

So you've talked a lot about the

1:02:35

strategies that normal logical people

1:02:37

who aren't fucking idiots and go all in

1:02:39

on companies would do. But for

1:02:41

a lot of us it's like decent famine, right? You either

1:02:43

did make a lot of money or you didn't or whatever.

1:02:45

So in those circumstances there can

1:02:48

be a number and a moment. I guess

1:02:50

I'm wondering do you actually have a number?

1:02:52

I did, yeah. No, but do you have

1:02:54

like a like advice like in 2024? Yeah.

1:02:57

And just swap dollars for pounds or whatever.

1:02:59

Yeah. Like how much does someone need to

1:03:01

make on an exit to be financially free

1:03:03

for the rest of their life and can

1:03:05

you break down your maths? Well

1:03:07

it's just situational. You might decide

1:03:10

my goal is to live in the British

1:03:12

countryside and have a modest home and

1:03:14

live well and be able to take vacations

1:03:16

and I have one kid and my husband

1:03:18

works. So you just do the math. Assume

1:03:20

you're gonna make between seven and I'll call

1:03:23

it nine percent a year. The definition

1:03:25

of rich is the following. Passive income that's greater than

1:03:27

your burn and I'll give you two examples.

1:03:29

I have a close friend who runs the M&A group

1:03:31

at a large iconic investment bank. He makes between four

1:03:33

and 14 million a year

1:03:36

depending on the market. Between

1:03:39

his ex-wife, his alimony,

1:03:41

his child support, his

1:03:44

three current kids, his

1:03:46

master of the universe lifestyle, his 54% tax rate,

1:03:50

his flex jet guard and all the trappings

1:03:52

to signal that he's a

1:03:54

baller and also a feeling that

1:03:57

he should be a baller given how hard he's working

1:03:59

and advising the CEOs. because it's going to be in the world, I

1:04:01

don't think he saves a lot of money. He's four.

1:04:04

And I can tell you that he, I

1:04:06

know this firsthand, he is really stressed about

1:04:09

what happens if the music stops. Really

1:04:12

stressed, that is not rich. My

1:04:14

father, who's turning 94 in three months, between

1:04:19

his Royal Navy pension, he was a frogman

1:04:21

jumping into the North Atlantic with the Royal

1:04:23

Navy at the age of 17. Can

1:04:25

you imagine that? And he gets a pension for doing

1:04:27

that. And Social Security

1:04:30

has lived in America for 60 years. And

1:04:33

he owns 11 washing

1:04:35

and drying machines at trailer parks where he

1:04:37

goes every day to collect the quarters. He

1:04:41

makes $52,000 a year in passive income. And

1:04:45

he spends 48, and he's happy. His

1:04:48

passive income is greater than his burn, he's

1:04:50

rich. My dad is so

1:04:53

painfully cheap, he's that guy every Friday, he has big

1:04:55

treatise, he goes out for Mexican food with his health

1:04:57

aid. And he

1:04:59

orders a frozen margarita, and he drinks half of it,

1:05:01

and he gets the rest to go. He takes home

1:05:03

half of a frozen margarita, and

1:05:08

puts it in the freezer, and there's all

1:05:10

these weird gelatinous margaritas from that. Anyways,

1:05:12

he's that guy. He's

1:05:16

rich. Working

1:05:18

is totally optional for him. So your number is just a

1:05:20

function of where you think your burn needs to be. And

1:05:22

some people don't need a lot of money, some people need

1:05:24

a lot of it. But

1:05:27

think about realistically, what would my burn need to

1:05:29

be at a certain age? What are my sources

1:05:31

of income? And assume a certain return on your

1:05:33

nest egg based on traditional

1:05:35

returns, and just do the math.

1:05:38

And then if the math isn't there, well then you need

1:05:40

to adjust down what your burn's gonna be. And there's all

1:05:42

sorts of ways to do that. The lifestyle arbitrage, moving to

1:05:44

a different neighborhood, whatever it might be. Or

1:05:47

you might have to work longer, or you might need

1:05:49

to get more serious about savings right now. No, saving

1:05:51

$800 a month isn't enough. You

1:05:54

need to figure out a way to save $1,100 a month. You

1:05:57

can do the math. The advantage you have in your 40s and 50s.

1:06:00

is the landing lights are on. You're

1:06:02

not going to retire at 65. Assume you're going to make money until you're

1:06:04

70. The landing lights

1:06:06

are on. You can start doing the math. What

1:06:09

does this cost us? And then

1:06:11

the other thing that people don't talk about is it's so

1:06:13

important you have alignment with your partner. What's

1:06:17

the number one cause of divorce? By the way,

1:06:19

70% of divorce filings are filed by women. 70%

1:06:24

by women. And what's the number

1:06:26

one source or cause

1:06:28

for why they file for divorce? I'm guessing it's

1:06:31

not friends again. Money. It's

1:06:37

usually when the male has

1:06:39

had a financial breakdown, a bankruptcy, lost

1:06:42

his business, or some sort of mental breakdown. And

1:06:45

you hear that and you're like, oh wait, I thought all women were

1:06:48

just wonderful people and all men were predators. There

1:06:51

is still a standard expectation

1:06:54

in relationships that once

1:06:56

a male is no longer a provider, he

1:06:58

becomes much less attractive to his mate. Men

1:07:01

are three times as likely to take ED drugs when

1:07:03

their wife starts making more money than that. The

1:07:07

likelihood of divorce doubles the

1:07:09

moment the female in

1:07:11

the relationship starts making more money. Isn't it uncomfortable

1:07:14

to hear this shit? And

1:07:16

here's the thing. Here's the thing. As

1:07:19

long as you have alignment, you're fine. My

1:07:21

wife worked at Goldman Sachs and it was a huge

1:07:23

source of relief for me because I was

1:07:25

starting a business and we had alignment. She

1:07:27

was going to work her ass off because I wasn't making

1:07:29

any money. And then when the kids

1:07:31

got to a certain age, I was going to

1:07:33

take over financially. We had alignment. We

1:07:36

have a similar approach to spending. We

1:07:38

have alignment. You want to

1:07:40

talk about divorce? It's just so frustrating.

1:07:43

It's when one person has a different expectation

1:07:45

around the economic weight class you should be

1:07:47

in, a different expectation around

1:07:49

who's responsible for putting you and keeping

1:07:51

you in that economic weight class. And

1:07:54

what can break up a marriage really fast is a

1:07:56

different approach to spending. Do

1:07:59

you know how many really other... arguments around

1:08:01

misalignment around spending. So

1:08:03

young people, what do you

1:08:06

need to be successful in a marriage? One,

1:08:08

I think sex and affection. It

1:08:10

says you're singular. Young people

1:08:12

figure that out. That's very important to them. The

1:08:15

second is values. Religion. Where are

1:08:17

we going to live? What's our approach

1:08:19

to kids? Child rearing, all that stuff. Young people

1:08:21

don't talk a lot about that. And

1:08:23

then the third thing, and the number one

1:08:25

cause of divorce in Merilagita, and young people

1:08:28

never talk about it with the romantic partner

1:08:30

because it feels sort of uncomfortable and very

1:08:32

unsexy, is money. Where

1:08:34

do we expect to live? Where do you expect to live? How much

1:08:36

is it going to cost us to live there? Who's

1:08:39

responsible for making that money? What

1:08:42

is your, I mean these conversations are

1:08:44

really hard, but alignment with a partner,

1:08:46

and I'm not saying you have to start out,

1:08:48

but one of the most wonderful things about, it's

1:08:50

great being wealthy, but I actually think the most

1:08:52

rewarding thing was getting wealthy and

1:08:54

building it with a partner. That was just

1:08:56

so nice to like, it's

1:08:58

like raising kids, and the kid works out.

1:09:01

To build something with a partner is

1:09:05

hugely rewarding. Hugely rewarding, right?

1:09:08

Anyways, alignment, and

1:09:10

it's not too late. Sit down with your partner. I

1:09:12

find especially men don't want to talk about

1:09:14

money with their spouses. They

1:09:17

go leave it to me. And by

1:09:19

the way, a lot of times I think spouses, men

1:09:21

and women, where you really come off the tracks, is

1:09:24

unwelcome surprises. You

1:09:28

need to tell your spouse when you've lost a lot of

1:09:30

money in the market. You

1:09:32

know, you need to tell, you need

1:09:34

to have real transparency. I sit down

1:09:36

with my partner once every three

1:09:38

months and go through everything. This is

1:09:40

where we lost money, this is where we made money, right?

1:09:43

I'm much more risk aggressive. If we're up to

1:09:45

her, we'd be bearing cougarands in the yard. She's

1:09:48

much more risk, and the combination works

1:09:50

really well. But something we

1:09:53

don't talk about with young people in terms of

1:09:55

mating is how important it is to get alignment

1:09:57

around money. You don't have to

1:09:59

be exactly the same but at least be honest

1:10:01

with each other. Final

1:10:04

one for me then we'll do some quick Q&A. Yep.

1:10:07

So, obviously, not

1:10:09

shy of a hot take. Very

1:10:12

informed with data and spanning lots of

1:10:14

different categories and stuff. You've got a

1:10:16

platform, you've got opinions, is

1:10:19

there anything off limits? Is there stuff that

1:10:21

you're like without your, you know, SVP

1:10:23

taking to another room and saying what the fuck are

1:10:25

you doing? Are there things

1:10:27

that you're just like, look, I should not get

1:10:29

involved in this? Like this is not a prof

1:10:32

G thing or are there like, is your view

1:10:34

that sort of anything's on the table if you've

1:10:36

got informed opinions? Well, in

1:10:38

office hours when people call in, a lot of

1:10:40

times people call in who I think are struggling

1:10:42

with their mental health or

1:10:45

with something medical and I try to be more

1:10:47

responsible and say I'm just not qualified to comment

1:10:49

here and I'm going to try

1:10:51

and get you some resources but I don't have a

1:10:53

degree in clinical psychology. I'm not a psychiatrist. I'm not

1:10:55

a medical doctor. I'm trying to be more measured. Here's

1:10:59

the problem. There's this Dunning Krueger effect where if

1:11:01

you're really good at one thing, you immediately assume

1:11:03

you're an expert in anything and

1:11:05

it's just not true. I should not be

1:11:07

talking to people about, you know,

1:11:10

health treatment. I should not be trying to

1:11:12

diagnose depression. I can recognize depression in

1:11:14

other people if I'm going through

1:11:16

that. I suffer with depression and anger and

1:11:19

I can say this is what I'm struggling with

1:11:21

and it sounds like you might be struggling with

1:11:23

it. Here's some resources called but I try not

1:11:26

to prescribe or tell people what

1:11:28

to do around health related issues because I know I

1:11:30

don't have any domain expertise there. I talk about my

1:11:32

kids a lot. I don't talk

1:11:34

about my partner a lot because she's threatened me

1:11:36

with violence if I say anything about it. She wants that

1:11:40

part of our life separate. And your kids haven't threatened

1:11:42

that yet. It's funny, my

1:11:44

kids are now just figuring out what I

1:11:46

do. They're constantly like my friend's

1:11:48

dad says you're great. What do you do again?

1:11:51

They just have no idea what I do. No

1:11:53

idea. I like that. I'd say I do

1:11:56

have one one last one actually. Very important

1:11:58

because you talk about it. a lot about

1:12:00

your kids and you talk about your parents. And

1:12:04

you mentioned earlier this generational

1:12:06

idea of wealth, this

1:12:08

sort of like bank robbery. What are

1:12:10

you referring to? What is this great robbery

1:12:12

that's taken place in generational wealth?

1:12:14

Super easy. My generation has fucked

1:12:16

yours. The

1:12:19

greatest intergenerational theft has

1:12:22

occurred over the last 40 years.

1:12:25

The average 70-year-old is 72% wealthier than they

1:12:27

were 40 years ago. The average person under the

1:12:29

age of 40 is 24% less wealthy. And

1:12:32

we use words like network effects

1:12:34

or globalization. It's been

1:12:36

a purposeful transfer. What are

1:12:39

the two largest tax deductions? I know this is true in

1:12:41

the US and I'm sure in the UK. Mortgage interest rate

1:12:43

and capital gains. Who owns homes

1:12:47

and who owns stocks? People my age. Who

1:12:49

rents and makes their money from current income?

1:12:51

People your age. Every year in the

1:12:53

United States we transfer $1.4 million

1:12:56

from young people to old people, the wealthiest

1:12:58

generation in the history of the planet, old

1:13:01

Americans, called Social Security. Shouldn't

1:13:03

old people who've had an unprecedented

1:13:06

level of prosperity be responsible for giving

1:13:08

young people money? Makes no sense to

1:13:10

me. Oh, a virus

1:13:13

kills a million people. That would be bad. But what

1:13:15

would be tragic is if I lost money. So

1:13:18

we put $6 trillion into the economy, 80% of

1:13:21

it wasn't spent. It wasn't spent

1:13:23

on medicine or food. It was put

1:13:25

in people's savings accounts. So what do

1:13:27

they do? They invest in stocks and

1:13:29

bonds, which sent assets skyrocketing. So my

1:13:32

assets went, because I already own a

1:13:34

home in stocks. But if

1:13:36

you're looking for a house or you're

1:13:38

just coming into your prime income earning years and want to

1:13:40

buy stocks, how do you get your shot?

1:13:43

The reason I got wealthy is because in

1:13:45

2008 we let the economy crash. We bailed

1:13:47

out the banks, but we didn't bail out

1:13:49

the economy. And I was

1:13:51

just coming into my prime income earning years, starting to

1:13:53

make real money, even though my life had gone to

1:13:55

shit. I was still making a lot of money and

1:13:58

I took all my money and I bought. Apple, Amazon,

1:14:00

and Netflix for six, eight, and

1:14:02

12 bucks a share. And

1:14:05

now they're at 160, 180, and $600. But

1:14:09

we decided we're not going to let

1:14:11

assets crash this last time. Disruption

1:14:14

and market cycles are key to

1:14:17

the... There's this

1:14:19

myth that's been fomented that you

1:14:21

have bought, and it's

1:14:23

a lie. And that is strong markets

1:14:26

and high asset prices are good for

1:14:28

everybody. There are two parts to your

1:14:30

life. There's the investing part, where

1:14:33

you're trying to make more money than you're spending so

1:14:35

you can save and invest. How many of you are

1:14:37

in the investing part of your life? Then

1:14:41

there is, I'm spending more than I'm saving because

1:14:43

I'm a little bit older. I'm

1:14:46

in the harvesting part of my life. How many of

1:14:48

you are in the harvesting part? Okay.

1:14:52

If you're in the investing part, you

1:14:54

want asset prices to crash. Some

1:14:58

markets aren't good for you. You

1:15:01

want prices as low as possible. How on earth

1:15:03

are you ever going to afford a home in

1:15:05

London? How are you... What,

1:15:08

you're going to buy Nvidia at 800 bucks a share and hope it goes

1:15:10

to 8,000? So

1:15:13

when we bailed out the baby boomer

1:15:15

owner of a restaurant in New York,

1:15:17

all we were doing was robbing opportunity

1:15:19

from the 26-year-old graduate of a culinary

1:15:21

academy that wanted her shot. So

1:15:25

the entire market is rigged to

1:15:28

take money from a younger generation

1:15:30

to an older generation. My

1:15:33

tax rate the last 10 years has been 17%. What's

1:15:36

your tax rate? The

1:15:39

rich is 25 Americans, paid

1:15:41

an average tax rate of 16%. Corporations

1:15:44

are paying the lowest tax rate since 1939

1:15:47

in America. It used to be

1:15:49

3.5% of GDP corporate taxes. Now it's 1%. But

1:15:52

if you're a super earner, you

1:15:55

make more than say 100 or 150,000 pounds. You

1:15:58

and your husband or you and your wife. up to a

1:16:00

million or a million and a half, but you earn it, it's

1:16:03

not from ownership, it's from, your taxes

1:16:05

have never been higher. There is a

1:16:07

myth that the rich don't pay taxes. Actually

1:16:09

the rich pay almost all the taxes. The

1:16:11

nuance though is it's the super earners, the

1:16:14

workhorses. Dad's a chiropractor,

1:16:16

he's got a little chiropractic clinic, he makes

1:16:18

two, 300,000 pounds a year, he's doing great.

1:16:22

Mom is a baller partner

1:16:24

in a law firm making six, 800,000 pounds a year. They

1:16:28

make a million pounds a year. Their

1:16:31

tax rate is probably 50%. But

1:16:35

if you own assets, your tax

1:16:37

rate plummets. So it's the

1:16:39

super rich and corporations that

1:16:42

are not paying their fair share, but

1:16:44

the super earners, the people with good

1:16:47

jobs, who earn a lot of money,

1:16:49

are paying enormous tax

1:16:51

rates. And

1:16:53

this is nothing but a transfer of wealth from the

1:16:55

young to the old. Almost

1:16:57

every economic policy we have is

1:16:59

a transfer of wealth from your

1:17:02

generation to mine. COVID was the

1:17:04

ultimate generational theft, but

1:17:06

all of the biggest tax policies are

1:17:09

generated, and it makes sense. Look

1:17:11

who's running for president of the United States. Look how old they are.

1:17:15

The former speaker of the house, Nancy Pelosi, when

1:17:17

she had her first child, Castro

1:17:21

had just declared martial law in Cuba, and

1:17:23

two thirds of households didn't have a color

1:17:25

television, so she's supposed to understand the challenges

1:17:28

facing a 17-year-old girl who's five nine, 95

1:17:30

pounds, getting extreme dieting tips

1:17:32

and notifications from meta. She's

1:17:34

supposed to understand that. These

1:17:37

elected officials, Mitch McConnell at 82, are

1:17:39

supposed to understand the challenges of a

1:17:42

23-year-old male with no economic or romantic

1:17:44

prospects who keeps getting notifications on his

1:17:46

gaming app from Kevin Hart and

1:17:48

Charles Barkley that he should bet on the Chelsea game.

1:17:52

They really understand the threats and

1:17:54

challenges facing young people. The

1:17:56

average age of an American is 38. The

1:17:58

average age of our elected representative... of the 62. And

1:18:02

they keep voting, seniors keep electing other seniors

1:18:04

who keep voting themselves more money. You

1:18:08

wanna talk about really screwing young Americans?

1:18:10

I apologize, all my data's about America.

1:18:13

Student debt, it's the only debt in America

1:18:15

that's not dischargeable by bankruptcy. Shouldn't it be

1:18:17

the most dischargeable debt? If

1:18:19

a young person screws up and trusts me and pays $72,000 a

1:18:21

year to come to NYU and

1:18:24

they end up with $150,000 in debt and

1:18:26

they're one of the people that's not cut out for college, oh no, you

1:18:28

own your debt for the rest of your life. University

1:18:30

doesn't have to pay back, it's backed by the government. Every

1:18:34

major fiscal policy across, in my

1:18:36

opinion, not exception, not Northern Europe,

1:18:38

but Western Europe and America is

1:18:41

nothing but a thinly veiled con job to

1:18:43

get me more money from you. It

1:18:47

is, all the protests on campus

1:18:49

in the US, I was just on Pierce Morgan, they

1:18:51

got nothing to do with the Middle East. None of

1:18:53

these people have any fucking idea what's going on there.

1:18:55

They couldn't name anyone in the

1:18:57

PLA or any of the leaders of Hamas.

1:18:59

They don't even know what countries border Gaza.

1:19:04

It's not about the Middle East, it's about

1:19:06

America. They're enraged. And

1:19:09

any cut to the system turns

1:19:11

into an opportunistic infection because they're

1:19:13

enraged. They're angry. And I don't

1:19:16

blame them. I'd be pissed off.

1:19:18

Any opportunity to be really pissed off, I

1:19:20

would take if I was a

1:19:22

young person in the UK or

1:19:24

America right now. There's prosperity

1:19:26

everywhere, everywhere. When

1:19:29

I was 25, inflation adjusted basis, average salary 85,000, 20

1:19:31

years ago was 65. Now

1:19:34

it's 55 for 25 year olds. But

1:19:38

meanwhile, housing has gone up fourfold and education's

1:19:40

gone up twofold. What the actual

1:19:42

fuck? But the economy

1:19:44

is boomed and the stock market's touching all

1:19:47

time high. And I

1:19:49

get 210 notifications a day, the

1:19:51

majority of which are people vomiting

1:19:54

their wealth on me. And

1:19:57

what do you know? What do you know? generation

1:20:00

in Britain and the US is the

1:20:02

most anxious, depressed, obese, and addicted in

1:20:04

history. I

1:20:07

mean, I say that I

1:20:09

literally can't figure out what

1:20:12

is this all for, right? Innovation,

1:20:15

AI, GDP growth, IPOs.

1:20:18

If our kids are

1:20:20

obese, depressed,

1:20:23

and addicted, what is

1:20:25

any of this about? It's

1:20:28

like, I can't, I

1:20:31

think about this, I'm like, have we lost our

1:20:33

fucking minds? Your

1:20:35

kids? Most of you

1:20:37

have kids, can you imagine, I think about,

1:20:39

if I didn't have money and I was

1:20:41

sending my kids into this world of prosperity,

1:20:43

they're going to be so fucking

1:20:45

depressed? It's criminal,

1:20:48

it's literally criminal. This

1:20:51

is the jet lag speaking on the motion. On

1:20:56

a, sorry about that. Let's

1:20:58

talk about something brighter. Well maybe

1:21:00

it's brighter, maybe it's not, but what is your advice

1:21:02

to entrepreneurs then in the room and listening who might

1:21:04

actually be able to make change? We all believe that

1:21:06

we can make change, right? That's the whole fucking point

1:21:08

of entrepreneurship in the last place. What

1:21:11

can we do? What can we do to

1:21:13

actually create a better world? Because all of those

1:21:15

things that you have listed there are insidious,

1:21:18

but you know, Protestantism

1:21:20

is living in reality, right? That is

1:21:23

something that you are as a philosophy

1:21:25

that you practice. How

1:21:27

do we live in reality and also create a

1:21:29

better world? What is your advice for us to

1:21:31

actually make change? Well it sounds very

1:21:33

tried but vote. Get

1:21:37

more politically engaged. Young people don't vote for some

1:21:39

reason. I

1:21:41

think a lot of the onus comes down

1:21:43

to my generation just being less

1:21:46

selfish. I think we have to have economic

1:21:49

programs to transfer money back to young people.

1:21:52

This is, we can, we screwed all

1:21:54

this up, we can unscrew it. There's

1:21:57

nothing I'm talking about that can't be fixed. Tax

1:22:00

policies that favor the young instead of the old,

1:22:03

child tax credit, national

1:22:05

service that helps young people meet

1:22:07

other people, potential mentors, friends. I

1:22:10

think there's a child tax credit, universal

1:22:13

child care, just basics that help young

1:22:15

adults out. I

1:22:18

think there's a ton of things we can do.

1:22:20

Young people, I think young people are pretty socially

1:22:22

minded. I

1:22:26

think you have an onus to be economically viable. Take

1:22:29

the temperature down, get off of

1:22:31

social media. It's total empty

1:22:34

calories. It'll just make you depressed and angry.

1:22:36

I mean, use it for your own companies

1:22:39

to get your word out. But I got off of Twitter a

1:22:41

year ago, and it's probably the most accretive thing I've ever done

1:22:43

for my mental health. But

1:22:45

I do think the onus is on

1:22:48

my generation. We're the ones in

1:22:50

power. You're more

1:22:52

powerful than most people your age because you're young

1:22:54

and you have digital platforms. But

1:22:57

the real

1:22:59

power is in corporations and

1:23:01

people my generation. So

1:23:04

I think we have an onus to change things. I'd

1:23:07

like to think people are waking

1:23:09

up to it. But young people, just

1:23:11

be successful and vote. Take

1:23:14

the temperature down. Don't do what I did. Don't feel

1:23:16

like you have to get back in someone's face if

1:23:18

they say something mean about you on social media. That's

1:23:21

just stupid. You know what the best

1:23:23

revenge is? I struggle with anger. I get really angry

1:23:25

at people. I hold grudges. And one of my mentors

1:23:27

said something so powerful to me about 15 years ago

1:23:29

that changed my life. He said,

1:23:31

you really think I was at a war with my

1:23:33

board. And he's like, you really want to serve

1:23:36

this guy a cold lunch? I'm like, yeah, I got it.

1:23:40

He's like, if you really want revenge,

1:23:42

he's like, just live an amazing life.

1:23:45

Just live an amazing life. He's like, love

1:23:48

as many people as you can. Have as many people

1:23:50

love you. Make a shit ton of money. Spend it

1:23:52

on fun things. And everyone that

1:23:54

you hate is just literally going to,

1:23:56

don't even think about them. Don't

1:23:59

even, and it's going to drown. Drive them crazy when they see

1:24:01

what a nice life you're having. And

1:24:03

that kind of changed my life. I'm like,

1:24:05

what am I doing being angry at people?

1:24:08

I've never, I've been in business 35 years. I've

1:24:11

never sued anyone or been sued. Someone

1:24:13

treats me poorly, I just don't work with them again. But

1:24:17

it's all started with what can you do?

1:24:19

Take the temperature down and social, never respond

1:24:21

to a slight. The world's going to

1:24:23

be fine. If it's a little bit out of

1:24:25

balance, if someone gets the best of you, and

1:24:27

vote, get very politically active. Scott,

1:24:31

it's been amazing. Thank you so much. Thank you. We're

1:24:35

going for a couple of Q&A. We're

1:24:37

going for a couple of Q&A. Okay,

1:24:42

so we do

1:24:44

have pizzas and beers upstairs, so I won't keep

1:24:46

everyone from them for too long, but we'll take

1:24:48

time for three questions. Okay? So

1:24:50

first hand up. And

1:24:54

there you have it. Masterclass in building

1:24:56

wealth from one of the most interesting

1:24:58

minds in business today, Scott Galloway. There

1:25:01

were so many powerful takeaways from this

1:25:03

conversation. Here's what stood out to me. The

1:25:07

importance of developing a savings muscle

1:25:09

and making wealth building automatic. The

1:25:12

incredible power of compound interest over

1:25:15

time. The

1:25:17

necessity of diversifying your investments,

1:25:20

skills and relationships. And

1:25:23

perhaps most importantly, the idea that true

1:25:25

wealth is about so much more than

1:25:27

just money. It's about

1:25:29

crafting a life of purpose, fulfillment

1:25:32

and generosity. If

1:25:34

you enjoyed this conversation as much as I did, please

1:25:36

take a moment to share it with someone you think

1:25:38

would love it. Also, I highly

1:25:40

recommend you check out the full version of

1:25:42

the interview on our YouTube channel to

1:25:44

search the Secret Leaders podcast and it

1:25:46

should pop right up. In

1:25:49

the video, you're going to see a bonus

1:25:51

Q&A session where Scott answered many questions from

1:25:53

our live audience of AD Founders that were

1:25:55

split between some earlier on

1:25:57

their journey learning how to save it and

1:25:59

a large group of people. exited founders curious

1:26:01

for insights about how to spend and invest

1:26:04

their wealth. And as always a huge

1:26:06

thank you for listening and sharing this show. We couldn't do

1:26:08

it without you and it genuinely means so much to us.

1:26:17

Here at Mindset Wind we want to give

1:26:19

you the tools to become better at

1:26:21

what you do. Taking inspiration and

1:26:23

wisdom from our guests we will

1:26:25

hear stories, strategies, tips and tricks.

1:26:28

Told by leading names in sport and

1:26:30

beyond. Who know what it takes to get

1:26:32

to the very top. There will

1:26:34

be two episodes each week packed with

1:26:36

amazing stories and practical takeaways for us

1:26:39

all to follow. Search for Mindset

1:26:41

Wind on YouTube and on your favorite

1:26:43

podcast app.