Scott Galloway: We’re Raising The Most Unhappy Generation In History! Hard Work Doesn't Build Wealth

Let's be honest, it's the boring [ __ ] that makes you rich. And the most unbelievable way for generating wealth and long-term economic security is And then once you do that, you can become a super tax evader. That sounded awful. Scott Galloway, one of the world's leading voices in business and finance, is back. His mission is to help millions of people build incredible wealth and live a life of economic security. If you're trying to build wealth, you want to lean into your advantages. Your advantages in your 20s are flexibility and time. So, take risks, find your talent, not your passion, that has a 90-plus percent employment rate, or become an owner, not an earner, and develop an army of capital that goes out and kills for you at night, and then invest it. What if you're not young? Focus on the things you can control. One thing that is within your control is spending. But 98% of us will spend everything we get our hands on. It is very hard to have the discipline to take money that is within your grasp and invest it. And we don't appreciate the power of investing and compound interest. My team brought a bucket of sand to illuminate the power of compounding interest. This is investing 1,000 a month over the course of 12 months starting at the age of 25. If you left it and kept investing at that rate, by the age of 65, it would look like this. And the young man who says, "I have 500 pounds. I'm going to wait till I have a million before I start investing." The way you get a million pounds is by investing that 500. And this notion that it's too late for me, I'm in my 40s, I'm going to ignore finances, uh [ __ ] So, what is the set of steps? Let me make it easy. First thing, Congratulations, Diary of a CEO gang. We've made some progress. 63% of you that listen to this podcast regularly don't subscribe, which is down from 69%. Our goal is 50%. So, if you've ever liked any of the videos we've posted, if you like this channel, can you do me a quick favor and hit the subscribe button? It helps this channel more than you know, and the bigger the channel gets, as you've seen, the bigger the guests get. Thank you, and enjoy this episode. Scott, you've written a book on wealth, money, finance. Why? And why does it Why does it matter? Uh this is kind of a memo to my 25-year-old self. I've been rich three times. And the first two times I lost it. And I didn't grow up with a lot of money. It's been very important to me. I think America, and mostly in Europe, but especially America, America becomes more like itself every day. And that is it's a generous, loving place if you have money. It's a rapacious, violent place if you don't. I think economic security is really important, and I think there's a series of habits and character traits that uh can help you get to economic security. You know that study that you become the average of your five closest friends, same body mass index, same politics, same sports team, same neighborhood. Uh what they don't talk about is that amongst those five people, even if they're all making about the same amount of money, one will end up much more economically well off than the other four. And I'm trying to understand the behaviors of that one person who becomes economically secure by the time they're my age without making a lot more money than their colleagues. Do you think we're taught about money? Where did Where did it those people, that one in five, where did Where did they learn about money? Yeah, that's a really interesting question. I think So, the honest answer is I don't know. What I would say uh sociologically is that rich people talk about money. And it's considered taboo for employees in middle class and lower class and women to talk about money. Like you're told not to talk about your salary at work. Asymmetry of information will always benefit the person that has symmetry, that knows information. The boss of a company knows what everyone's making, but he tells his or her employees not to discuss their salary because Lisa might find out that Bob is making 30% more for doing the same work. So, there's a bit of a zeitgeist that tells people not to talk about money, that it's like talking about porn or that it's vulgar. And I think you need to start talking about money and maintain a certain level of financial literacy from a very early age because Roger Federer talks about tennis. If you want to be good at anything, most people want to be good at money. And to be good at something, you need to understand it, and to understand it, you need to talk about it. So, I'm very transparent with how much money I make, what I do with it. But talk to your friends about mortgage rates. Talk to your friends about how much money they make, what they're doing with it, where they lost money. And people aren't transparent about it, especially I think about men, we're supposed to be just like accidentally wealthy. And to ever talk about our financial problems is to admit that we're not ballers or that we're not masculine. And so, I encourage people from a young age to start talking about money and understand it and be transparent about it. Where did you learn about money? Cuz I think about my own life, and I think there's key moments of quite frankly luck. Yeah, what I was exposed to information because I was invited into a room, physically, literally into a room, or I was, through no decision of my own, someone came into my life. Yeah. Um or in my case, maybe one of the biggest blessings I ever had is when I went off, dropped out of university, and pursued entrepreneurship, my brother decided to go be an investment banker for 11 years in London. Yep. And then when I had my first exit, he messaged me one day and said, "Hey, I'll manage your money, and I'll quit my job, and come work with you full-time." And that's my older brother. So, like life gave me the greatest gift anyone could ever have been given. It That That That rings so true. So, I think of three things as you said that. The first is the smartest thing I ever did was being born a white, heterosexual male in California in the '60s. Because it gave me an unfair advantage. It gave me access to free education, the University of California, and access, 76% admissions rate when I applied to UCLA. The admissions rate this year is 9%. I came up a professional age in the '90s when the internet was coming online. So, I sort of had these winds at my back. And also, I just to be blunt, everyone that was raising capital looked, smelled, and felt like me. They were all white, heterosexual males. And I didn't even realize at the time what privilege or unfair advantage I had. So, the first is just just sheer luck. The second is environmental. I grew I was raised by a single, immigrant mother who lived and died as a secretary. And people who don't grow up with money People who grow up with money just can't really, truly empathize with what it's like to grow up without money. I felt as if there was this ghost following me and my mom around, constantly whispering in our ear, "You're not worthy. Your mom [ __ ] up, which means you aren't worthy." And so, I very early decided that I was that economic security was really important to me. I want to be clear, you can't make a decision to be wealthy. A lot of it is luck. But I was going to be very committed. My goal in life from zero to 45 wasn't to be a good person. It wasn't to save the whales. It wasn't to to have strong relationships. It was to get economic security. So, I started connecting the dots around money pretty early. And then, along the lines of what you were talking about, um my mom had a boyfriend, and um and people don't talk about this. You know how in certain dramas they reference a second family, where a guy has an entirely other family despite the fact he's married? My mom and I were that second family. Her boyfriend for 7 years was a wonderful man named Terry. Really nice to me, spent every other weekend with us, super generous to me. Uh he was also married with another family. So, we were that second family. But he was a good man, and he was a He was actually a good role model for me. And one weekend, I was asking him, "What is a stock?" And I was 13, and he said, "Here's $200." He gave me two crisp $100 bills and said, "Walk down to one of those stock brokerages, those fancy stock brokerages in Westwood Village, and buy some stock. And if you don't buy it by Monday afternoon or by the time I'm back next weekend, I'm taking my money back." So, at 13, I marched down to Merrill Lynch, Pierce, Fenner & Smith. Was in the lobby, was ignored, I got intimidated, I walked across the street to Dean Witter Reynolds, another brokerage. And this young guy named Sy Searer came walking out and said, "Hi, I'm Sy Searer." And he gave me my first lesson in the markets, and I bought 14 shares of Columbia Pictures. At 13, he gave you a lesson in the markets? Yeah, at 13. And every day, every weekday for the next 3 years from Emerson Junior High payphone booth, I'd put two dimes in and call Sy, and he would say, "Close Encounters of the Third Kind is a hit." Which means that Columbia uh Studios is going to make a lot of money, so people are buying more stock. And then I'd go into his office. I didn't I didn't have a ton of friends. And so, I would just swing by Dean Witter, and he would always give me a lesson in the markets. Had those two men not shown such generosity to you with their time and with that $200 bill, have you ever played out in your mind where you might be? I think we all do that. Like Sliding Doors, that movie. You know, things are It's like life is such a series of you know, I I promised myself I was going to approach this strange woman at the Raleigh Hotel in the middle of the day who was sitting by the pool. Was sitting there with another woman and another guy, and without the benefit of alcohol, it's not easy to open, you know, a conversation with a strange woman. And I walked out to get my car, and I said, "I promised myself I was going to speak to her." I was very drawn to her, a beautiful woman. So, I went back in, and I just rolled right up, and I said, "Hi, I'm Scott. Where are you guys from?" And this was at the Raleigh Hotel. Long story short, 18 months later, our first son's middle name is Raleigh, right? And what I tell people is that unless you're willing to take an uncomfortable risk, nothing wonderful is ever going to happen to you. I mean, a really uncomfortable risk. What you're doing here is an uncomfortable risk. It's public failure if it doesn't work. This podcast platform you're starting, you know, this Most people aren't willing to take these risks. And a lot of this not to get existential, a lot of this comes down to a huge unlock for me has been atheism. I think I have a very solid grasp of the finite nature of life. You're a young man, you're going to be my age in an instant. And the thing you're going to recognize is that okay, in 30 or 40 years everyone whose opinion you are worried about is going to be dead. And I have found that has been an enormous unlock for me, knowing that I'm going to at some point sooner than I'd like look into my kids' eyes and know our relationship is coming to an end. So, I'm comfortable expressing my emotions or more comfortable. I'm comfortable taking uncomfortable risks, knowing that if I call someone and ask them to invest, if I approach a strange woman in a bar and introduce myself, if I call an employee who I would never think would consider working for me, I'm not afraid of rejection because I realize everyone I'm worried about being shamed by is going to be dead soon and so am I. And so, why wouldn't you live out life why wouldn't you live out loud? Why wouldn't you squeeze so much juice from this, you know, lemon called life? It's really been an enormous unlock for me cuz the reality, Steve, is that most people are not willing to take uncomfortable risks that might result in public shaming. It's embarrassing to get rejected by a potential to express interest in someone and be sort of rejected. It's embarrassing to try and raise money and be rejected. It's embarrassing to start a business and not have it work. The majority of people aren't willing to take those uncomfortable risks. And the reason why you get outsized return as an entrepreneur, the reason why you get outsized returns when you're willing to approach strangers and ask for mentorship, friendship, express romantic interest, is because you are willing to endure rejection. The most overcompensated people in any organization are the sales people. In terms of how hard and how smart they are how hard they work and how smart they are relative to their compensation, hands down the most overcompensated people that everyone resents are the sales people. Because they are willing to get out a big spoon and eat [ __ ] "Do not call me again." Okay, so what you're saying is I should follow up in a couple of weeks, right? That type of rejection, that type of risk, that type of public failure, 99% of people are not willing to endure. I ran for sophomore, junior, and senior class president in high school. I lost all three times. And based on my track record, I decided I should run for student body president where I went out went on to, wait for it, lose. And it never really got in the way of my confidence. You know, and that's the key. If you want and unfortunately young men are told, you know, don't try hard or they feel like a loss of agency or especially romantically they're told be careful in terms of expressing romantic interest. And if you don't know the difference between expressing interest and asking someone out for coffee and harassing them, you've got bigger problems. But I think a lot of young men I feel like their agency's been taken away, they feel like the game is rigged so they're not trying. And quite frankly, they're spending much too too much time on a screen or in their homes so they're not putting themselves in a position to have something wonderful happen to them. And on a very basic level, I'm almost entirely sure that I can guarantee you that nothing really wonderful, I mean really wonderful, is going to happen to you inside your home on a screen. Your success is a function of your ability to endure rejection and increasingly how much time you spend outside of your house off a screen. What if you're not young? Because what you described there, that all of that was me at 18. I had just dropped out of university after going to only one of the lectures. And I had these four credit cards which had about, I think combined about a thousand pounds on them. I'd maxed them all out. My parents weren't speaking to me. I'm three hour three hours away from home roughly up in Manchester. More than that, six hour round trip in Manchester. And I'm 18, I've got no kids, no mortgage, no nothing. And I'm in this room that I can't afford to pay for. So, in I was so clearly at the bottom with nothing to lose that every roll of the dice was a potential win. So, I was rolling out my luck. But you kept rolling them. Over and over and over and over again. Yeah. But but I I wonder sometimes cuz there's probably going to be someone listening that's, you know, 47, three kids, mortgage, Yeah. comfortable job, just about cutting it every month, one holiday a year, experiencing the same dissatisfaction with their life, but they can't roll like I could when I was 18. Look, the reality is when you have kids, everything changes. I think that probably the darkest moment for me, maybe personally or professionally other than losing my mom, was the moment that was supposed to be the happiest. That was when my first son was born. And you think that when this child when you you know, this child's introduced to the world it's going to be bright lights and angels singing. For me, if I felt humiliation and shame and fear because I had made a lot of money, but I had gone all in and this is a lesson from the book The Power of Diversification. I'd gone all in on this one company, Red Envelope, which went public in 2002 as an e-commerce company I started. And I thought and had been taught by the venture capital community that if you throw yourself at something and you're talented and I thought I'm a baller, I'm really good at what I do, you got to go all in and I kept investing every spare dollar I had and threw myself at this thing. And then a strike at the port, a software glitch, and a credit crisis in 2008, our stock went from seven bucks to chapter 11 in like three weeks. And I ended up not being worth 10 or 12 million, but being worth worth negative two million cuz I was one of those idiots that borrowed against their stock to buy more stock. Ah. And then my child has the poor judgment, my oldest, to come marching out of my girlfriend. And the first thing I felt was failure on a massive level. Like my first emotion when my son was born was I have failed to live up to my core responsibility as a man and that is to take care of my child. And it was just it was just a really ugly emotion and that's a lesson in the book and that is the moment you aggregate anything resembling some sort of decent amount of capital, you want to look at it and you want to diversify like crazy. Because if I just taken a little bit of money off the table and invested in index funds or in real estate or bonds, I would have been so much better off. But everyone's told you can have it all, you can you you know, you can be successful if you just go all in, never give up. Well, actually the market will trump individual performance every time. And last week, my the investment I was most excited about, this healthcare tech startup, great CEO, tier one investors, elbowed my way into the deal. I put five million bucks in. I found out last Friday it's a zero. It just didn't work. Zero shutting down. But here's the thing, I never invest more than 3% of my net worth now in any one thing. So, while it hurts, I have Kevlar in the form of diversification. So, I took a bullet to the chest, knocked me off my feet, I get up. I was bummed out for an hour. That was it. Because I never go all in on something. And people are taught, especially young people, especially men who are more risk aggressive, go all in on something because the people who are the wealthiest people in the world kind of went all in on something. And what they don't tell you is the moment they have capital, they start diversifying like crazy. So, you want to diversify. You don't need to find the needle in the haystack. You can buy the whole haystack. And especially unfortunately in the American economy, not as much in the UK economy, it continues to be up and to the right. And the S&P and the NASDAQ are sort of self-filtering mechanisms because they kick out companies that aren't great and they bring in new ones. They kick out Kodak and they bring in Salesforce. If I had learned that diversification when I was a younger man, I would have saved myself not only would I be have saved myself a lot of economic harm, I would have saved myself a lot of mental anguish. So, diversification, and that's one of the key components of the my algebra of wealth, diversification, people don't recognize how powerful it is cuz it sounds boring and you have people like Bill Ackman saying, "It's not concentration, it's conviction." You know, and then they beat on their chest. Like check out my [ __ ] No, diversify and get rich slowly. Because here's the thing, life goes so goddamn fast. "Wow, life has gone slowly." Said no one ever. Now, back to your person who's 40, 45, they're going to live another 40 years. They're probably going to work another 30. You want to lean into your advantages. Your advantages in your 20s are flexibility. You want to workshop careers, find some find your talent, not your passion. Start saving a little bit of money. A little bit of money when you're young is a lot when you're older. Try and develop that savings muscle. A hundred bucks a month, a thousand bucks a month. Oh my god, 2500 bucks a month. If you can do that in your 20s, you're going to be fine when you're my age. Even if you don't go double platinum or sell a book or be a baller in business, you're fine. Your plan B is all set. That's your advantage when you're in your 20s is time. When you get to your 40s, your advantage is the following. One, hopefully you're in a relationship with a partner you can align with around financial uh objectives. Your approach to spending, your approach to earning. You can see the runway. All right, I'm going to retire in 30 years. I need 15 to 25 times my my nut to be in the bank to retire. I spend about a hundred twenty thousand dollars a year. That 20 times that, I would need 2.4 million on my Now, work backwards. How much would I need to save over the next 30 years to get to 2.4 million assuming 8% a year. The landing lights are on. You can start to plan your life. I'm not going to get there. I can't save this much. I got kids in college. Okay. When your kids go to college, can you take that burn down to 80 grand by moving to Mexico City or Costa Rica or to St. Louis? But you have the advantage of knowing your path. Ideally, you have a career where you can make some money and start saving a little bit. Ideally, you have a partner where you can get alignment around working together to get that financial security. But most people in their 40s are under the impression their life is over. I mean, they're probably going to live to be over a hundred. And so, okay. So, you don't have 80 years, you only have 60 years left. But, you still probably got another 30 years working and making money, and you kind of know what you need, right? Uh so, I think there's advantages at every age. But, this notion that it's too late for me, I'm in my 40s, I'm going to ignore finances, uh [ __ ] You just need to have an adult conversation with yourself. Do you think it makes sense then to go kind of risk on when you're young and then go diversified once you're older? Cuz you just want to highlight there for people that are, you know, like I was when I was 18, to kind of go all in and to make those big bets when you have nothing to lose. The minute you have something to lose, whether that's your mortgage, you know, you've got children to take care of, or now you've got wealth, to then go risk off. Is that the kind of approach you'd suggest to life? I I think generally speaking, you can't be as risk aggressive when you have kids. Um when you're younger, look, if you screw up here, you you're you're you're likable enough that you can probably find couches to live on for 2 years if you needed to. If you like just got in over your skis, yeah, you could find a way to dance When you're young, you can dance between the raindrops. I lived in New York, I had two two roommates. When I started my business, my girlfriend paid our rent and I because I didn't I didn't have kids or dogs, there's just a certain level of responsibility and things you got to take care of as you get older. When you get a little bit older, don't go all in on anything. If you're going to start a business, use other people's capital. Ring fence it. Don't get seduced into The worst thing that can happen in your 30s and 40s is you start a business and you start failing slowly. You just don't know. The worst type of business is one that gives you just enough green signals that you keep investing more time and more money. Like Red Envelope, people that's what people know me for. That's the worst thing that can happen to somebody cuz it failed slowly. It failed over 11 years. I started an e-commerce incubator in New York backed by Goldman Sachs, Maveron, um JP Morgan. It was out of business in 8 months cuz of the dot-com meltdown. That's a blessing. The best thing that can happen is success. The second best thing is fast failure. The worst thing that can happen to you is slow failure. You can't have slow failure in your 30s and 40s. So, you want to make sure that if you go in on something, you ring fence it. I'm leaving my job. I'm going to try and start my own business. I'm going to spend 2 years doing it. A certain amount of capital, no more than maybe 10, 20% of my capital because hitting a wall and failing at 50 is is much more devastating than hitting a wall or failing at 25 or 30. You can get up again. You're fine. You can press the restart button a bunch of times. So, you want to take advantage of that in your 20s and 30s and workshop a bunch of things. I'm not saying hop around. I'm not saying, "Oh, I don't love this. It's not my passion." No, that probably means it's just work. But, if you're not making progress, if you're not making money, if you're not getting roles in films, if you're not If everything's just really hard, really hard, you're in a position at that age to say, "You know what? I'm going to leave Milan and move to Munich, or I'm going to Dubai." You have flexibility when you're young. You have geographic flexibility. Lean into your advantage. It's a heck of a lot easier right now to make money in Dubai than it is in Caracas, right? You'd rather be good in a great economy than outstanding in a mediocre economy. You have geographic flexibility. Lean into your advantages, your flexibility, your ability to recover, your ability to workshop. What would you do if one of your sons said to you How many sons have you got now? I got two. You got two sons. That I know of. That you know of. One of your sons comes to you and says, "Dad, I would like to be a I've read your book, um all of your books, and I I think they're great. But, Dad, I would love to be a professional actor." Yeah. And then your other son came to you and said, "I want to be a musician." I don't want to crush anybody's dreams. Uh I go for it. I'll be supportive. Um but this industry, let's just look at the economics. Musician and acting has a 99% unemployment rate. So, you got to be in the 1%. And I want you to set up benchmarks for determining what it means to be in the top 1%. Right? 80 uh The most talented actors in the world are in a union called SAG-AFTRA. And by the way, it's not easy to get your union card. You got to be in a Broadway play. You got to be recognized. That's a big moment. It's like getting your PGA golf tour card, right? You get your SAG-AFTRA card. It means you're one of the 180,000 most talented creatives in the world. Last year, 83% of them didn't have health insurance cuz they didn't make more than $23,000. So, you not only need to be in the top 17% just to have health insurance, you probably need to be in the top 10%. Realistically, the top 1%. I know a lot of working actors. If I said, "This is the guy from this show," you'd be like, "Oh my god, that guy's amazing." He's not making a lot of money. I mean, everybody talks about Tom Cruise. The majority of working actors, you would say, "Oh, I know that woman. I know that man. They're great." They make an okay living. If they had achieved that level of excellence in almost any other industry, they'd be they'd own a house and a second house in Ibiza. So, if you want to be an athlete, an actor, a model, an artist, open a restaurant, open an eye club, have a jewelry line, be a fashion designer, I don't want to crush anyone's dreams. But, let's have a sober conversation that if you aren't getting bright green lights that you're in the top 1% really quickly, and we put some guardrails on it. We're going to do this for 2 years, 3 years. Can't pay your rent in 2 or 3 years? Dad's going to stop paying your rent at some point, or maybe I'll continue to pay your rent, but I need you to start workshopping another career because here's the thing. People off Young people oftentimes mistake their hobbies for their passions. And what I would suggest is and what I can guarantee you is being successful at anything, passion comes from mastery. Mastery comes from being a ninja at something. I'm renovating a house, and there's this guy installing our soapstone who's the soapstone guy. He's an Iraqi immigrant, dropped out of high school. He knows everything about soapstone. He can talk to you about the vein in the soapstone and which quarries and he makes I've been very open with him. I've talked about my book. He made 1.3 million pounds last year. He's the soapstone guy. I can't imagine when he was a kid, he and I bonded over football. I would bet, I don't know this, I would bet he dreamt of being a football star and playing for Iraq in the World Cup at some point. I doubt at the age of 17 he thought, "My I'm hoping in 15 years I'm installing soapstone in renovations for American douchebags in Marylebone." I can't imagine that was his dream, right? But, here's the thing. He has an amazing life. He takes care of his kids. He takes care of his parents. He gets to take amazing vacations with his wife, which makes him passionate about soapstone. So, yeah. Go be a fashion designer. But, let's be honest. If you're not making enough money to pay your rent within 2 years, and you're not making enough money to say form a family in 5 years, we're going to workshop something else. This requires such a mindset shift in the current world because obviously the slot machine, the casino, the Las Vegas of validation is Instagram and TikTok. And if I announce on Instagram that I'm a tax lawyer for the next 10 years, It's not a great Instagram play. It's not going to increase my chances of getting laid either. But, if I say that I am, I don't know. If I say that I'm part of Chelsea Football Club, I'm in the, you know, the junior academy, Yeah. or if I say that I'm starting a business, I'm probably going to get laid more in the next 10 years. Well, the only pushback I would get is that you have to be one of the 10 best soccer players in the world that year to play for Chelsea. That is really hard. That is really That means you're the best player in Senegal, and then you go I mean, you just have to be godlike talented. The best 10% of tax lawyers, that's tens of thousands of them, fly private and get laid more than you think because they fly private and they can afford they can find someone and give them a wonderful life. So, I mean, look, in a capitalist I'm not saying this is how the world should be. I'm saying this is how the world is. Economic security provides you with all sorts of opportunities for experiences, for relationships, for romantic opportunities. And it is sexy to be great at anything and get economic security from anything. And I can't tell you, I love taking care of my kids cuz at one point I was worried about my ability to take care of my kids and not worry about it. And this is where happiness comes from. It's great to be in a prestige industry and be a baller. I get reward from some of the fame I have right now. I'm sure you get reward from it. But, the thing that is really rewarding as you get older is I can lean into my relationships with my sons, and I don't have that economic fear I had the first time my son came marching out of my girlfriend. That is so rewarding. I can take care of my dad. I don't have to worry about it. My My dad's 90, going to be 94 in a few weeks, and he lives in a really nice home, and he has a full-time kind of health aid. And it's about a quarter of a million dollars a year to take care of my dad. And if you look at Okay, that's post-tax. There's no tax credit for it. So, it's about $400,000 in pre-tax income. My sister, who does really well, but not as well as me, we have a great partnership. She handles it logistically, I handle the money. And being able to do that and not have it be a source of stress in my life, and know that my dad is taken care of well, okay. I I I'd be great to be a football player. Trust me, when you get to my age, that feels really good. That feels really nice. And the the the the means to the ends, the means money is a means. It's really important. It's hard to be happy in a capitalist society with economic stress. The standing blood the resting blood pressure of kids in low-income homes is higher than kids in middle and upper middle because they sense the anxiety from mom and dad. I remember you know, losing my jacket when I was in the eighth grade and it was going to be just a horrible day cuz I had to go home and tell my mom jacket's cost 33 bucks. All in my head, very upsetting. The ability to take care of your kids, your parents, do wonderful things. Money affords you so many wonderful things. The getting to a certain level of economic security is the means, but the ends, the reason you get to economic securities is so you can free up and be free of anxiety and have some additional time so you can focus on the ends. And the ends is deep and meaningful relationships. I spend the majority of my money on travel and experiences with my family and friends. I spend a [ __ ] ton of money and I absolutely love it. There's no reason to hoard money. Once I hit my number, I hit my number 7 years ago and I start thinking, I could be a billionaire. What was your number? Uh my number was 100 million. Mhm. Uh by the way, my number when I got out of college was a million. And then by my 30s, I thought, well, if I had 10 million, I'm done. And then things got so expensive and my greed lands kept going and my number was 100 million. Why have a number? Why did Why do people listening need to create a number? What's the value of having that sort of line in the sand? Well, you need a goal and you need to be thoughtful about how much money you're going to need. So, if you figure out I'm going to need a I'm going to need 80,000 pounds a year to live The definition of rich is having a ton of [ __ ] and impress your friends. The definition of wealth is knowing that the passive income that you would get from growth from your stocks or dividends or incomes or rental income is greater than your burn. So, you work you work out of out of uh option or you work because you want to, not cuz you need to. That's the definition of wealth. So, having a number is just backward integrating into, okay, um I want to have at least 3 million dollars a a year to live the life I want to live. All right, assuming a 4% return, that means I need 75 million dollars. So, I round it up to 100 million. Right? I got exceptionally lucky to get there. By the way, see above, in 2008, I was broke. I was broke at the age of 42-43. That did not feel good. I got very lucky, started a company, bull market the last 16 years, right place, right time, exceptionally lucky. But you should be able you should have a number. You should say, this is the amount of money I need. And once I get to this number, enjoy it and start giving it away. We we really need to cuz I'm thinking about the lens that I kind of think about this conversation through is like different stages in my own journey and the advice that I would have wanted from you at different steps in my journey. And I I just flashed back to working in those call centers where I was making just about enough money to Well, to be fair, if I'm being completely honest, I did have disposable income, but when I was poor, I was reckless with my money. Mhm. So, I would get the 500 pound disposable income on payday, leave the call center, go and buy a 400 pound TV, Yeah. flat screen TV, and put it in a room where the TV was as big as the wall of my room. All right. And I'm trying to I'm really trying to zoom in on that person who is so far away from nine figures. Yeah. And they're like, okay, Scott, I want to be Scott Galloway. So, what is the set of steps or the mindset, the fishing rod I need in my mind to become Scott Galloway nine figures? Well, the first is the first is some of it is luck. A lot Again, a lot of my success is If I'd been born in Europe, I don't think I'd have that number. Europe's not as forgiving of entrepreneurs who have failed. I've had a lot of failure. If I lived in China, I think there's a decent chance I'd be in jail. So, the smart Again, the smartest thing I've ever done was being born in California. So, you're saying to move? Does that matter? What's that? Should I move city? Oh, if you're young, the first thing you want to do is to get to one of 20 super cities. If you're I'm just talking about someone who wants to be an economic animal, right? You might Who doesn't? Okay, but some people might say, Scott, it's your way, it's not the right way. I want to teach, coach football in my little village outside in the Amalfi Coast. I can make 55,000 euros working running a small bakery and have a really nice life. I didn't think they would have clicked. More power to you. That's not the majority of the people I hang out with. Majority of the young people I hear from realize that capitalism, the wealth equals relevance and love in a capitalist society, and they want to be economically very secure. The easiest thing, the best piece of advice, is one, get credentialed. We live in a LinkedIn economy. What you did, your success is especially impressive because on average, people who get a college degree earn 50 to 100% more over the course of their life. There's an entire set of industries that are off-limits to people that don't have credentialing. I worked to work for Morgan Stanley. We not only didn't hire people without college degrees, we didn't hire people that didn't go to one of eight universities when I applied. Eight. You had to Not only go to college, you had to go to one of eight colleges to get a job at Morgan Stanley at that time. So, if you can get credentialing, the second thing, not everyone's cut out for college, I get that. The second thing is get to a super city. Two-thirds of all economic growth over the next 30 years is going to take place in one of 20 cities. So, if you're in that small town in Italy, you want to get to Milan as quickly as possible. And then, if you can, you want to get to London as quickly as possible or Munich or a bigger city. And then, quite frankly, if you have total geographic agility and flexibility, ignoring the ridiculous INS of the US, you want to get to New York or San Francisco. Because to be good in San Francisco is much better than being a amazing in Stuttgart. The amount of economic Here's the thing. I'm I'm a mediocre I'm a mediocre surfer. I've even actually even given it up. But when I was young and I used to go to Hawaii and the waves were perfect, I started believing I was a good surfer. Or I go to Aspen after fresh coat of snow and I'm like, I'm a decent skier. No, you're not. The snow and the waves are [ __ ] amazing. Anyone could be a good skier in this [ __ ] Get to where the waves and the snow are amazing. And that's generally speaking in cities. And when you're young, you can be in a city cuz you can live in a 400 square foot apartment. You can be out of the house all day. You can dance between the raindrops and make money. But when you are in a city, you know how when you play tennis, if you play with someone much better than you, it elevates your game? When you're in a city, you're playing against Serena Williams every day. Everyone is smart. Everyone is well-dressed. Everyone is working hard. Everyone is taking chances. And you are surrounded by people who are very successful and you are going to bump off professional and personal opportunity every day. Do it while you're young cuz when you start collecting dogs and kids, as I did in my 30s, I could no longer afford to stay in New York. So, I had to move to Delray Beach in Florida. When I say have to, we had a wonderful life down there. There's not a fraction of the opportunities in Delray Beach for someone in their 20s and 30s. Now, I already had professional momentum, but Sunday to Thursday night, I was commuting to New York cuz that's where the action was. So, one, credentialing, but two, absolutely get to one of 20 super cities. When you say 20 super cities, I'm I'm thinking now we're having this conversation in a world where AI seems to be the biggest topic of conversation. It seems to be ripping up many industries. But it I also reflect on that and go, where is the AI opportunity going to be? If that is the biggest wave coming into shore in terms of opportunity, um should I be playing my sort of geographical um decision-making based on artificial intelligence? Cuz everyone's raving about how big of an opportunity that is. And technology generally over the next 10 years seems like it's really going to eat up a lot of uh industry. Yeah, I don't I don't know if it'd be possible to determine geography based on AI. What I would say is, okay, you know, every literally uh a third of my class, NYU, they get on a plane for San Francisco the day they graduate. There's just within a 7-mile radius of San Francisco International Airport, there's been more wealth created, I think, in the last 6 months than than Germany's created in the last decade. Nvidia's worth more than the entire UK stock market. Nvidia's They make the They're basically They make the brains for artificial intelligence. They make a GPU, which is essentially a microchip that powers all of AI right now. And no one can buy them fast enough. Now, they have 30,000 people. I would bet 10 or 15,000 of them are worth at least 10 million dollars now. Because because the 30,000 employees got stock options. And when a company goes from from 300 billion to 3 trillion, it means everyone is getting rich. That doesn't happen that often in Dortmund. It doesn't happen that often. It doesn't happen. I'm being kind. Right? You grow up in Ingolstadt, you either go to work for Audi. Nothing wrong with that, make a good living. But if you're young and you think, I really want to get in front of the biggest waves, you want to go to one of several cities. You want to have the winds at your back. So, if you're young, what do you have? You have agility geographically. But going back, you initially asked me, what's the algorithm? What are the steps? And I tried to The book's called The Algebra of Wealth. I tried to distill it down to a a small number of uh uh features. The first is focus. Go all in on something. Once you find you workshop your 20s, once you find something you're really good at, that you could be in the top 1% at, and here's the key part, as we referenced before, that has a 90-plus percent employment rate. And 90% of industries have that. But if you can be in the top 10% of an industry that has a 90 plus percent employment rate, you're going to make really good money. First thing, focus. Try not to have side hustles. If you have a side hustle, it means your main hustle isn't working. You side hustle to workshop new main hustles, but once you find something you're really good at, go all in on it. Can I pause that just as we keep going cuz I want to just provide counter arguments just in case the certain people are objecting in their minds. I think about me the southwest of England as I grew up and I was in Plymouth working at a McDonald's. I worked there for two days. Mhm. But I worked in retail and shops and stuff. What I had at that moment, I in hindsight, was a void of information. So, I can only work at like a clothing store and a McDonald's because I didn't have any other information. And if a kid hasn't gone to university or someone that seems to just haven't hasn't got the information and they've stumbled across across this podcast, but they're working in, I don't know, like a equivalent of a Wendy's or a Burger King, for example, and they just like how do I get out of this Burger King, Scott? I'm a cashier at Burger King. Yeah, look, I I don't I I I want to be clear. I think there is a certain downside to the notion that we live in a meritocracy and it creates a lot of rage and shame in my young people and that is the notion that in America, especially, anyone can be anything. Well, not really, boss, cuz the problem with thinking we live in a meritocracy is that if you don't make it, you [ __ ] up, it's your fault. Yeah. And there's dignity in every work. What I would say to someone working in a Burger King or in fast food that wants something bigger, work really I was on the board of Panera Bread, which is a fast food chain or quick service. They call it QSR. They don't like the term fast Someone who is hard working and showed up at work every day on time and worked with their colleagues and acted like they owned the place, probably within 2 years could be managing the place and making 60 or 80 grand a year. Now, I'm not suggesting you go all in on food, but there's always dignity in work, there's always opportunity for people who work hard and act like owners and are good people and try and look out for other people and are good managers. That might just be for you a means to an end where you're work shopping other stuff to say, how do I get to to school? How do I get to training? How do I find a better job? How do I save for a 1-year apprenticeship program to become an electrician? How do I start meeting people? You got to pay your bills. There's dignity in all work. I coach a lot of young men and the first thing I say is, you got to start making some money and they're like, I'm not going to work at CVS or a McDonald's. I'm like, yeah, you are. Cuz you need a taste for flesh. The best way to make a lot of money is to start making a little bit of money. But have a plan. I want to be the assistant manager of this McDonald's. I want to save enough money so I can go back to school. I want to save enough money so I can move to Dubai or move to London and get a job there that might be higher paying. Is there anything about the CVS or the Burger King or the whatever that I should be looking at to check that it has room for me to grow there? Is there anything that you know, if we're starting by making a little bit of money, is there any good place to make a little bit of money versus a bad place to make a little bit of money? Well, growth sort of solves all problems. So, if you're working at a Chipotle, Doug McMillon is the CEO of Walmart, started uh loading trucks. He worked in the loading docks, but he was also working for the retailer that grew faster than any retailer in history. So, is your company growing? Uh first thing, growth kind of solves all problems, right? If you were mediocre at Google, you did a lot better than if you were great at General Motors the last 20 years because one was growing, one wasn't. So, is it growing? Two is more situational. Do I have someone who's emotionally invested in my success here? Is the manager of the store like me and saying, keep doing this, I'm going to get you an assistant manager job at the store down the street? Am I learning? Right? Am I getting skills that challenge me? Is this a little bit hard? That's okay. Is it stressful? That's okay, too. You don't want stress, go be a security guard in a parking lot. No stress, no upside. The market is really good at trading off. The more stressful and intense and like, God, I can't keep up here, that probably means you're learning, that probably means you're going to make more money. So, am I learning? Do I have senior level sponsorship? Am I at a company that's growing? Am I in a city where there's economic vitality? Do I have flow? Flow of interesting people, flow of interesting friends that I might start another business with, flow of potential One in three relationships begin at work and every HR's hairs on fire HR managers' hair is on fire right now. One in three relationships begin at work. We don't talk about that. A third of all relationships begin at work and 99% of them are consensual, right? Young people have to find a place to to find other mates, if you will. But there's a seri- and then more importantly, I think than all of this, is assembling a kitchen cabinet of people that will you can be really honest with. I'm working at Burger King. I think I'm doing pretty well there. They want to make me Managers at In-N-Out Burger make about $110,000 a year in in the US and they're even given a chance to participate in profit sharing. And I'm not suggesting being in fast food the rest of your life, but have a plan. And then you got to have a kitchen cabinet. Put together a group of three, four people who know you, who you trust you and you can be totally transparent. This is how much money I'm making. These are my opportunities. These are This is what I'm good at, what I'm not good at. What do you think I should do? And who are those people in terms of are they people that are ahead of you in in the race of life or are they First off, don't approach someone and say, I find you I want you to be my mentor, right? Cuz that's a high bar and a lot of people are really busy. It's like, hey, I'm I think you're really impressive. A neighbor, someone who's made It doesn't have to be a baller, but someone who's living a virtuous life who seems smart and nice to you. Can I get some advice from you? Can I Would you mind? I just have questions. Can we do a call? Can we have a coffee? There are a lot of people out there who want to help younger people and take it as a compliment. Can I get your advice? Ask them for advice. Don't make big decisions without talking to other people. It is really hard to read the label from inside of the bottle. Really hard. Right? Check in with people. Save Save yourself from yourself. So, that kitchen cabinet. And if you're like if you're a young woman working at a Burger King and you hopefully you meet some people and say, hey, can I just get some advice from you? And by the way, it might be someone else working at Burger King and you're like, this person has their act together. This person just has their act together. She's smart. We all know those people. We meet them and we work with them and like, you know, this person just kind of switched on. They just seem to have better judgment around certain issues. So, what I would say is have a plan, don't be afraid to make changes, put together a kitchen cabinet, realize there's dignity in all work and any company, even something you see as lowbrow like fast food, those organizations need talented people to go up the ranks and make money because the turnover is enormous. So, I think there's opportunity and dignity in any work. You said something really interesting which I I don't think I've ever had anybody talk about before, which is you said don't ask someone to be your mentor and I frank- I get asked to be someone's mentor several times a week cuz I'm sure you do. Yeah. And I've never given people advice on why that isn't the right right approach, but you said there that you don't think that's the right approach. So, I wanted to just pause and ask you why. Well, you don't go up to a strange person and say, do you want to have sex? You go up and say, do you want to have do you want to have a conversation? Do you want to have another drink? Do you want to grab coffee? Do you want to go to the movies? Can I ask you a question? Can I get some advice from you? You ease into the relationship. You got to say, ask someone to be your mentor is just very intimidating. The person has to go, do I want to meet with this person every month for the next 5 years and then break up with them if it, you know, if I'm not enjoying this relationship. So, you don't need to say, will you be my mentor? That sounds like a lot. Just, can I get your advice on something? I really I I'm facing some issues in my life, some questions. I'd love to just get your advice. Can we grab coffee or can we do a 5 or 10-minute call? If someone emails me and says, I'm thinking I get a lot. I'm thinking about starting a business. I'm thinking about going to business school. Can I get some time? I try to say yes and I say, I can do I can do a 15-minute Zoom call with you. If someone asked me to be their mentor, there's just no way. I don't I don't have time to You know, I I can barely mentor me right now. I I The I just don't have time to commit to being someone's mentor, but if someone emails me and says, I need advice around this specific issue. And then what happens? You hear that they're you know, raised by a single mother like me. They're a good person. They're struggling. Their sister's got an eating disorder and they're struggling with it and they're trying to they're thinking about starting a business and you're like, oh, no, no, don't do that right now. You've got a good job. Like, you just make some you just help them with some common sense decisions. Common sense. And then what happens? You become emotionally invested in their success. And then they email you a month later and you're like, what's going on? And you want to do another call. You know, ease into it. So, anyways, I think it's much easier to just ask someone for help and for advice. And I think there's a lot of people out there. You doesn't have to be a baller like Steven Bartlett. There's a lot of smart people out there that can give you good advice. Cuz I think this is really important. I I don't think I've As I said, I don't think I've had anyone talk about this, but you get a lot of messages. Have you been able to figure out exactly why some of them perk your interest so much so that you'd give them 15 minutes on a Zoom call? Is there Is there a sort of a psychological formula that gets to you? Well, the first Okay, first off, brevity. When I get like a long, you know, a novel, I'm just not going to get through it. Uh obviously, and this is hard to control, but they reference someone you know, or they write they they make a connection. We're both graduates of Berkeley, or I met you I came up to you and said hi to you at Can, or we have a mutual friend, or I too was raised by a single they make some sort of personal connection, and they make the ask very crisply. I'm writing cuz I'd love some advice around this. I'm writing cuz I'd like an introduction. I'm writing cuz I'm applying for your position for managing editor for Property Media. Just like get to the point, what's the ask? And try to make some sort of personal connection. And the other thing I would say, although I hate you know, I don't want to encourage people to do this, be persistent. Cuz a lot of times I get an email and I think, "Ah, he's a good kid. I should really set up a call or something." And then I go on to the next 85 emails I have, and I don't even remember getting that email. So, I would say don't be afraid to hit again and just say, "Hey, just putting the top of your inbox. Know you're busy. If I can grab 10 minutes of your time, I'd be really appreciative." And also, don't get discouraged if they don't get back to you. That's okay. It's not a reflection on you. Go on to the next. Just don't write it off. That's okay. Don't worry about it. Don't worry about it. I have a I have a bubbling thesis on this that um if you just taught kids, you know, your kids, my future kids, how to ask for things in life, the impact that that would have on their long-term trajectory is unbelievably profound. Because I think if I think back through my life, when I was 18 years old stealing those pizzas in Manchester, or every step along the way, some of my big pivotal moments in my trajectory was sending an email. Yeah. And yeah, pretty like yeah, pretty much all of them started with sending an email. But we don't teach people how to send an email. And you're you're on the receiving end of thousands of emails every month or whatever, so you can see bad and good from a bird's-eye view. And the things you've just said there I completely agree with. The the size of the the message, um being specific in the ask as you said, um playing to ego in some way, letting them know that you've read something you've done or you're interested in them or you know someone, all those things has a such a big such a big impact. I think if you think about your life and you go, "Okay, I'm going to live for a I'm going to live 100 years, and I'm probably going to ask for things 10,000 times. If I can increase my success rate of those asks by 10% because I'm just more thoughtful in how I ask for things, my life could end up in a completely different place." Mhm. Kind of like what you said about you only need a couple wins to really be successful in life. You only need if you send 10 10 emails, you only need like one person to say yes, I'll invest. And and be willing to endure the rejection of the nine. I had a kid that this young kid come up to me. I was just in Can. Uh I'm a big fan, can I take a picture with you selfie? Yeah. Boom. 10 seconds to take a selfie. Sent me an email yesterday with a picture of the selfie and said, "We met, we didn't have a chance to say hi. I'm struggling with I'm and he was quite vulnerable. He told me about some of the stuff he's going through and said, "I'm struggling. And uh would you mind doing a 10 or 15-minute call with me?" And he includes a picture of me and him. How the [ __ ] am I going to say no to that, right? Anyway, there's you know, there's all sorts of tricks and trades, but the willingness to take that risk, the willingness to reach out to strangers, that's the key to success. That's I mean, it's the reason I have kids. It's the reason I'm wealthy. Um nothing wonderful is going to happen to you without uh uh taking an uncomfortable risk. So, I think about this with my boys. I used to force them or ask them to speak to a stranger every time we were outside of the house. My oldest one has no problem. My youngest one doesn't like it. "Really hard. Okay, we sit outside the door for 10 minutes. Just go ask him what breed their dog is over there. Just go over there. Just ask him about their dog." Cuz he I think a good strategy, especially if you're young men who for some reason seem to be sequestering and becoming much more isolated, whenever you're in a line, talk to the person in front of you and behind you. Just talk to them. Just get used to opening. Just get used to eye contact. Just get used to being friendly and having a conversation. Cuz I think people are spending so much time indoors and behind screens, they're loosening the ability to establish professional and personal connection. So, I think a certain cognitive behavior or or training around how to be friendly and how to endure rejection. One of the most revealing things I've I've noticed about you as a person is what you just said about that kid that emailed you yesterday. Mhm. Because as you said I could see the emotion in your face. Yeah, look, what do you want as a species? You want to feel certain things, right? You want to feel you know, the most rewarding things are sensations and feelings. And I get really moved by these kids sometimes. You know, you relate to them. I relate to young men who are struggling cuz I was one of them. And so this stuff really sometimes it you know, you What you want in life is a a group of people who are emotionally invested in your success. And then as you get older, the most rewarding thing is to let other people let you be emotionally invested in their success, right? I want my boys to love me, but what is the most rewarding thing is that they let me love them. That's the most rewarding thing, right? They're these vessels that I get to pour this like affection into. That's the most rewarding thing as you get older. So yeah, I think about this stuff a lot and I get Why did he move you? Well, just the picture and I I don't want to divulge, but he's struggling. He's really going through some issues uh uh with addiction and self-harm and depression. And and also, by the way, is obviously a very talented kid, is very smart, is working in you know, has a high-profile job, and is struggling with addiction and self-harm. I mean, and and you think, "Jesus, this [ __ ] is real, right? This is really really tough for this kid." And uh you just realize I think so many young people we're raising My colleague at NYU wrote this book that's This is the book we wish we'd written. Uh the Anxious Generation, Jonathan Haidt. Oh, yeah. It's literally the most inf He's now the most influential scholar probably globally. And the takeaway is we're raising, despite our prosperity in the US, we're raising the most anxious, depressed, obese, and addicted generation in history. And you can just sense it. There's so many young people out there that are really struggling, that aren't happy, that don't have the opportunities that my generation had. And then 200 time 210 times a day, they're reminded that they're not doing well as someone else vomits their faux success and experiences all over them. That Oh wait, I didn't make I didn't I didn't make a million dollars in Nvidia and I'm not partying in Saint-Tropez, I'm a failure. Right? And their their opportunities for professional and romantic success are going down. People aren't dating. One out of three men under the age of 30 has a girlfriend. Yeah, I mean, there's just so many you can just tell young people are really really struggling. And I think about that a lot and uh you know, it moves me because a few fortunate decisions, a few random emails, you know, things could have been much different for me. And I I so I really I do relate to these especially to young men. I relate to the struggles they're facing. You you talked about making decisions in the algebra of wealth. Um and I get asked this a lot. Um kids come up to me at the end of a talk that I do or some other event and will ask me about decisions, like jump off points in their life. As you zoom out on life, is there anything that I can know about how to be a great decision-maker over the context of 50 years of life? Is there anything about how to make a decision? Greatness is in the agency of others. You're you're not this the business you build is not going to get beyond a certain point unless you have the ability to attract and retain really talented people. Great decisions are in the agency of others. We have some weird notion of leadership. I used to think leadership, when I was a younger man, was quickly assessing the situation, deciding what we should do, and then advocating for my course of action. That was leadership. And it was more important to be to be right than effective, or to get people to agree with my decision than to make the right decision. What you want is you want to get to the correct decision that has the best outcome for everybody, and be open to change and evolving. And the way you do that, I don't make a big decision now without speaking to at least three people. So, you want to make better decisions? Then slow the process down. There's slow and fast thinking, and get the benefit of other people and expertise. Is there any decision that I should make slow versus fast? Is there a framework for how to know what you need Sometimes I think I find in business that the cost is the time I waste trying to make the decision. And then sometimes in business the cost is the outcome of the decision. Well, yeah, there's been books written about this, but basically every day there's thousands or hundreds of decisions you have to make instantly. Like, do I go on the red light? Do I not go? Do I you know, there's a ton of things you have to do, saying thank you, pardon me, whatever. There's a ton of decisions you have to make every day. So, we get into a framework of sometimes where we don't slow down and have the luxury of making a good decision. The other thing is that I've tried to do is I try to screen out unimportant decisions. And this is a luxury, but as I've gotten a little bit of money, I don't make decisions around anything I mean, this sounds weird. I don't order when I'm in a restaurant, I don't order. I basically ask the waiter to order for me. I have a uniform at work. I don't pick out my own clothes. I have a group of people who manage you know, I'm saying, "You're in charge of all decisions here." I try to focus only on the decisions I can bring a lot of value to, so I can spend a lot of time being really thoughtful about them. Um but generally speaking, for a young person that's not in the position of outsourcing a lot of decision-making, what I would say is get a kit Again, it goes back to the notion of a kitchen cabinet. Get a group of people who will you might end up at the same place, but they'll say, "Have you thought about this?" Or, "Why wouldn't you just do Why wouldn't you just have you know, do X, Y, or Z?" Or, I think you know, or have the leadership skills and know you well enough to go, "You know, Stephen, I think you're making a mistake here." When I was 26, I started a company called Prophet Brand Strategy, a strategy firm. Six years later, when I was 33, I was offered 55 million for it. Um from Sapient Nitro and another firm called Scient. 55 million. I owned 60, 70% of the company. So, I would have been done. But, I was under the No, this is the internet. It's going to be huge. We're going to be worth a billion. I If I just had a board, if I just called a couple people, they would I know they would have said, "What the [ __ ] you thinking?" I was doing 3 million a year in consulting, and this firm offered me 55 million dollars. If I had just talked to someone, they've kind of gone, "Let me get the Okay, so Scott, you've been offered 18 times revenues for a small strategy services company?" Also, around relationships, right? When I talk to some of my friends or younger men I know who are really upset with their spouse, I'm like, "Be clear. Yeah, this is an issue, but you're not bringing a lot of generosity and forgiveness to the relationship. And if you don't bring those things, your marriage to this person or anyone else is not going to survive." I didn't figure this out till I was older. But, you will always naturally inflate your own contribution to the relationship and some and and diminish theirs. And the relationship is never going to be in perfect harmony or balance. So, in those periods of deficit, you've got to bring forgiveness, you've got to bring patience, otherwise no long-term relationship is going to survive. And also, be pretty clear, if you split up right now, just know you're going to lose 70% of your net worth, maybe 60, but plan on 70. You split everything. And then the cost of lawyers. And I can guarantee you, if you have to sell a house, that'll be the exact wrong moment to sell it. It's just karma. Just karma. So, just keep in mind there's a lot of good reasons to stay together in a marriage and try and figure it out. Is marriage good for wealth? Oh, yeah. Really? Because I don't want to lose 50, 70% of my money or whatever. Well, you'll have that guy on who's on TikTok all over the place saying it's a failed technology. The majority of really wealthy people uh have long-term relationships and are in a monogamous relationship. They're married because the team is a fantastic way to build wealth. But, if if this starts to accrue and you know, 50 whatever 50 whatever percent of people are getting divorces, doesn't that mean that if I'm building wealth, there's a 50 odd percent chance that I'm going to lose half of it if I'm married or more? Well, first off, if you have wealth going in, get a pre-nup. Yeah. But, what I would say is um And first off, that number is a bit misleading because marriage is becoming a luxury item. To a uh It used to be 95% of wealthy people got married and 85% of middle class and poor people got married. It's dropped to less than half among poor people. The bottom line is no one wants to mate with poor men. And uh wealthy people attract a lot of mates. And generally speaking, really wealthy people I mean, there's all this you know, there's all these It's fun to do TikToks about Jeff Bezos on a on a yacht with his new girlfriend and everything. But, the majority of wealthy people are actually uh uh stay married. And the team is really powerful. You know, you we're both working together, we're both making a lot of money. That is really powerful and sharing one set of expenses. You're going to focus on the logistics of our life or our family, and my wife's the professional baller, right? The team The team is powerful. So, this notion that you shouldn't get married or I'm not I'm not suggesting marriage is for anybody or stay stay married no matter what. I'm not suggesting that at all. But, there's just no getting around it. The team is much more powerful than the individual. And if you if you break down the numbers of people who are wealthy, they generally speaking invest a lot in their relationships. Wealth is a whole person project. There's a myth that rich people are bad people. The Elizabeth Warren, Bernie Sanders, they billionaires crawled over other people to get there. It's just not true. What you generally find among wealthy people, especially people who've made their own money, is that the re One of the reasons they're wealthy is they've collected allies along the way. And just as compounding is so powerful with small investments when you're young, bringing some generosity to people when they need help, being a good friend, occasionally checking in, how are you doing, helping people find jobs when they lose a job, being kind, those little investments you make as a young person really add up. And you're going to find this. I have all these great friendships now with people who I was never great friends with. But, because we made small investments in each other over 20 or 30 years, just checked in, how you doing, congrats, how you're doing this, congrats on your wedding. Maybe not even close friends. You wake up in your 50s and you have millions of dollars in terms of a relationship. You feel close to these people. You feel like a real nice sense of comity with them. You really And And this is very true of wealthy people. You want to be put in a room of opportunity even when you're not there. So, Google did a study when they put out a job opening for a product manager, they'll get 200 resumes within a few hours. They invite the 20 best in. 80% of the time, the offer that's made is made to somebody who has a evangelist, advocate friend in the company. So, this is who you need to be. You need to be that person who's like, "Oh, there's a job opening here? I have this woman who would be great." And then connects them. You need to be in a room You want to be a successful professionally, be successful personally. Go out, make friends, be kind, invest in them, help them when there's no obvious reason to help them. And those investments pay off. And generally speaking, and this is a not a popular narrative, the majority of very wealthy people I have met, and I've met a lot of them, are kind. They're generous. Very civic-minded. Very good mates. So, this trope of you know, of Monty Burns lighting cigars with a hundred dollar bills and owning the the nuclear power plant and pouring, you know, radioactive waste into the river, that's a cartoon. The majority of self-made people who are really wealthy are good, kind people because you have to have allies along the way to be really successful. Can anyone start a company in your view? Can anyone become a successful entrepreneur? Oh, no. You There's There's certain attributes that most people don't have. What are these traits? First and foremost, you have to be really risk-aggressive and have that willingness to fail. You're willing to take huge risks. I speak to people all the time who say, "Well, I'm going to go get a job at Google or JP Morgan for a few years, and then I'll have the credibility to start a business." I'm like, "You're not an entrepreneur." Most entrepreneurs 70% of entrepreneurs are immigrants that don't have access to corporate Britain or corporate America. By the way, if you have access to Google, all these kids come to my office hours. When I say kids, I mean students. And they want to ask They don't want to talk about brand strategy. They want to talk about careers. They say, "I have an offer from JP Morgan or Google, but I'm thinking about starting my own business, and I know you've started a lot of business." And they think I'm going to say, "Go for it." I'm like, "Don't be a [ __ ] idiot. Go to work for Google." On a risk-adjusted basis, the most unbelievable platform for generating wealth and opportunity and long-term economic security is the American corporation. These are unbelievable platforms to get rich with some certainty, slowly and sometimes quickly, in the tech community. If you have access to those platforms, unless you hate it and are terrible at it, you should go that way. The majority of entrepreneurs are immigrants. And why Why is that? Cuz they didn't have any choice. They didn't have access to corporate America. They had to open a dry cleaner. They had to start a soapstone company. Entrepreneurship, you have to be risk-aggressive, willing to take risks. Two, to be really successful at it, you have to be um a great salesperson. You have to be willing to convince people to invest, buy your products. You have to be willing, most importantly, to sell people on your vision and believe that you're a good person and that if you're successful, they are going to be successful. What's the best way to train that muscle? If I'm young. Gosh, I don't know. For me, it was um Look, I I think the core competence you would want any kid your kid to inherit, if I could give my kids any skill, I remember in the Tony's preschools and I'm sorry, high schools, they had Mandarin. I'm like, "Oh, that was just stupid." Or computer science. I believe that replacing history and civics class with computer science, you get Mark Zuckerberg. You get these mendacious [ __ ] who are billionaires but don't care about the health of the commonwealth. The greatest skill you can develop or that you would want your kids to have that will stand the test of time is storytelling. The ability to craft a narrative and then convince people, get people engaged in your narrative and think, "Oh, your company makes sense." You're not going to come in and say, "I'm starting a software company." You're going to say, "This is the technology. This is the marketplace. This is why society needs this. These are our unique skill set." And you can craft it into a story that is compelling. Right? It's the key It's the key to scoring above your weight class romantically, right? Communicating a plan, communicating kindness, communicating empathy, communicating um humor. Right? Any industry, Jeff Bezos' 1997 shareholder letter, you read that letter, you just want to buy stock. I don't care how overvalued it is. When you listen to Jensen Huang talk about the future of AI and biology and healthcare, you're like, well, maybe I should buy it even though it's trading at 110 times earnings. If you want to be a great CEO, you got to be a great So, I don't care if you're Maya Angelou, Rishi Sunak, or, you know, Jensen Huang, the core competence of any really successful person or the core competence that's going to get you real influence and economic security is storytelling. So, it's so interesting because um I completely agree with everything you've said about how at the very heart of wealth creation as an entrepreneur, but it but more generally in life, whether you want to be a president, a prime minister, or a philanthropist, is this idea to craft narrative, but um the average how does the average person develop that skill when they don't they're not a lecturer, they don't have students that they can speak in front of, they don't have a podcast necessarily that people are going to listen to? But if we both agree that it's such an integral skill, the transformative life skill, Oh, there's a million ways. The first thing I assign my students, my kids in the classes, pick a medium. It can be Instagram. It can be X. It can be threads. It can be Pinterest, LinkedIn, public presentations, speaking, radio, podcasting. Identify what it would mean to be in the top 1%. You can go online, what are the top 1% of followers on Instagram? How many followers do you need to be in the top 1% on Instagram? By the end of this semester, you need to be a top 1% storyteller on a medium. I'm really good at this. You're really good at podcasting. I'm really good in front of a large crowd. I'm not very good on the phone. I'm pretty terrible one-on-one. I come across as aloof yet insecure at the same time, which isn't easy to do. So, I know the medium I'm not good on the phone. I'm I become a proficient writer. I I aspire to be a great writer. I'm good now, someday I'll be great. But I know my mediums and I practice storytelling every day. I'm either writing, I'm either speaking, I'm either podcasting. If you're young, oh my god, the mediums. Are you good on TikTok? Get a smartphone, get uh, you know, iMovie, start editing, and every day make small iterations and changes and commit to being a great storyteller. And the wonderful things about these mediums and the economy and these technologies is you can be a great storyteller anywhere, from any background, and from any location. I'm not suggesting that you that everybody has the same opportunities, but the opportunities, the reason why Hollywood is struggling, the reason why the writers for striking for 4 months only got a 5% increase in pay, is that there are 1.7 billion people on TikTok and 850 million of them are creators, which is a fancy term for storyteller. And assume 1% of them are outstanding storytellers. All of a sudden, 8 and 1/2 million new storytellers have come into the medium market. And the half a million in LA who think their work is so [ __ ] precious and are trying to figure out why their industry is in decline, I'm like, you're competing against 8 and 1/2 million new storytellers that aren't asking for pet bereavement leave or for a trailer with catered food. The ability to tell, craft a narrative, find your medium, and then say, I'm going to be in the top 1%. What is the algebra to storytelling? If there had to be one if you I know you've not had time to think about I've thought about that. I think of it as one, you just have to be a compelling I mean, it sounds terrible, but like I have a handsome voice. I was I have a face for podcasting. I've had five TV shows, they've all been canceled within like 4 weeks. Podcasting is my medium, television is television is not. You've done really well on podcasting and video, right? That says something. I would say that more than anything, it's tapping into people's emotions. Like, how do you make someone feel something? I mean, you want to be smart, you want to say interesting things, but how do you really connect with someone and make them feel something? The wide space I'm trying to occupy is I'm trying to be a white heterosexual male in his 50s who's open about his emotions. That's a wide space. Guys my age don't talk about their failures, they don't talk about the way they feel about their kids, they don't talk about, you know, how devastated they were when their mother died. That shit's just not talked about among men of my demographic. That's the wide space I'm occupying. So, you need to say, okay, what am I going to make people feel that other people aren't spending a lot of time evoking, getting people to understand those emotions. It's uh I think the specific crowds out the general, you want to focus on a niche. Own something. All right, I'm going to be in the top 1% of this medium and I'm going to develop domain expertise. I'm going to be the person that understands Ethiopian cuisine. And I'm going to bring romance and make people feel something and I'm going to connect it to family and I'm going to connect it to African culture and I'm going to connect it to maternal love and whatever it is, but think about it, what emotions do you want people to feel? And then every day, it's just hand-to-hand combat. Every day, you know, before we were off mic, you said we were both kind of in the last 2 years, both of our careers have sort of hit a tipping point. I feel like I've worked my ass off for 35 years and all of a sudden I'm an overnight success. And you said, what was the one thing? And I can't point to any one thing. It was a series of little things. It's kind of the Mr. Beast secret sauce. It's iteration. Every day they test things, they make things just a tiny bit better. So, commit to excellence. You put out a podcast, you put out a medium post, you put out a PowerPoint presentation level about AI, whatever it is, try and find a mechanism for feedback and commit to just being a little bit better the next time you do it. I'm going to let you in on a little secret. What is in the Diary of a CEO cup? This cup that sits in front of me when I interview these people, sometimes for 3 hours, and sometimes three people a day, and the answer is this, PerfectTed. I invested in the company on Dragon's Den, and since then, they've gone from an idea to the fastest-growing energy drink in the UK. It is a matcha energy drink, and it is absolutely delicious. But that's not why I choose to drink it on this podcast. The reason I choose to drink it is because it gives me what I call all-day energy. I don't get the same crashes that I used to get with other energy drinks. If you're in the middle of a conversation, or you're in the middle of a talk on stage, or in the boardroom, the last thing you want to do is have a crash. You don't want jitters, and you need focus, and that is why they now sponsor this podcast. Not only is it delicious, but it gives me a significant competitive advantage. If you haven't tried it, go down to a Tesco, go to a Waitrose, or go online and use the code diary10 at checkout, and you'll get 10% off. And when you do try it, let me know how you get on. I'm very keen to understand how you invest your money. So, say I'm that I'm working at McDonald's like Burger King or whatever. And I say these places not to sort of diminish the the value of the work because I worked 4 5 years of my life in places like call centers and the McDonald's, etc. But just as that's the jump-off point for many people, I get up to managerial position, I have a little bit of disposable income now. Mhm. Should I be going all in on crypto, or my friend has this company, he said it's going to work, should I be betting my money there? Over the a long-term time horizon, where have you invested your money and made the most returns? And where should I? Well, just do as I say, not as I do. I was when all in on things. And when you go all in on something, if it hits the ground or blows up, you're kind of done, and you don't have any capital, and you can end up I ended up broke at at In '99, I was looking at jets. By 2000, after the dot-bomb implosion, I was broke. Crawled my way back, was wealthy again by 2007, all in on tech. By the end of 2008, I was broke again. And what I've learned since then is I've crawled my way back, gotten very lucky, markets have boomed, but now I diversify like crazy. What does diversify mean? You're never more than a certain amount of your net worth in any one thing, and you try and make sure those things aren't correlated to each other. It's harder when you're young cuz you may have to go all in on a house. You may have to put every penny you have to buy your first home. When you start a business when you're young, you don't have the luxury diversifying. You have to I bet you kind of went all in on this business at some point. But as soon as you have the opportunity to diversify, I'm about to put money in an aircraft maintenance company in El Salvador. I love it. It's totally different than anything I do. That way if my world goes to [ __ ] again in tech, I have someone making money fixing planes in El Salvador. I do a bunch of just different weird businesses that aren't related because over time, because of demographics and technology, productivity does grow up in our economy and the markets go up. The best advice I can give any young person in terms of the actual investment is a low-cost ETF. You don't want to fees to eat up, you don't want to day trade. 80 to 95% of people who day trade lose money. You want to be in a low-cost, diversified, um ETF. What's an ETF? Exchange-traded fund. So, they basically say, okay, we're going to create a synthetic of the entire market and all healthcare stocks. So, like I can I can invest in a tech ETF or a solar ETF or That's right. or a I don't know, AI ETF. Let me make it easy. Go to Vanguard, and I'm I don't have a relationship with Vanguard. SPY, that's the index that tracks the S&P 500. Mhm. And so, people The email I get most is from young men looking for guidance and mothers looking for guidance for their for their sons. The second most frequent email is the following, is it too late to invest in Nvidia? And the honest answer is I don't know. I can imagine a scenario where it gets cut by 80%. I can imagine a scenario where it triples. So, this is what you do. You invest in SPY. Because about 20% on the dollar will go into the Magnificent Seven because they're about 20% of the market cap of the S&P. SPY is again a basket of different stocks. It's It's a index fund that mimics the S&P. So, there 500 companies in the S&P. Nvidia is probably 3 or 5% of the total value of the S&P. So, 5 cents on your dollar goes into Nvidia. Mhm. Right? About 20%. Is that right? 24 25% is the Magnificent Seven, the tech companies we talk about. 25 cents on your dollar will go to them. So, assume those companies double. Great, you participate. But, assume the other 493 companies finally get their time in the sun and those companies go down a half, you're still fine. You're still fine. Again, you don't need to find the needle in the haystack and stop believing in a very American way that you can figure it out. I know the brightest people in finance. And what the the my net conclusion is that none of them have any [ __ ] idea. Some have a little bit more of an idea. But, if you look at the entire alternative investments industry, hedge funds, private equity funds, mutual funds, anyone on CNBC, if you took all of their returns in aggregate, they're less than the S&P by the amount of their fees. It's one of the greatest grifts in the modern economy is believing that some guy who looks old and unhappy and has suspenders and went to Harvard knows more about the markets than you. All you need to know is diversification, right? SPY, start saving young, and then the next best piece of advice is if you can if you can force savings. 98% of us will spend everything we get our hands on. It is very hard to have the discipline to take money that is within your grasp and invest it. Force savings plan. Find out at work if they have profit sharing or IRAs or Roth's, whatever the the I forget what it's called here where if you put some money aside, the government matches it. Pensions? Well, not only pensions, but there's something here I forget what it's called. If you save 5,000 pounds through your work, the government I think will match it uh put in a thousand pounds. There's all sorts of saving schemes at work. Acorns, the apps that round up to the nearest dollar and then immediately shoot it into SPY. Try as hard as you can to put yourself in a position where you invest despite your best efforts not to. Cuz the majority of us will get that money and go buy a flat screen TV. And when you're saying investing, I think because it can sometimes sound complicated from someone that's so far away from it. There's apps on our phones now where we can in a couple of minutes invest in the exact thing you've just said. From we can make a an account in a couple of minutes. They'll probably ask for our passport, take a photo of our passport. There's so many different apps where you can go in and invest in the S&P 500. You don't need to call someone or know someone. And you can invest What's the minimum you can invest? 50 dollar. Go to public.com. You I mean, start with a basic a basic low-cost ETF or index fund. S SPY, if you want to get take a little bit more risk and you want to be in tech, there's all sorts of ETFs and index funds around tech. Uh you're going to every young person, especially young man, is under the impression they're smarter than they are and that they can beat the market. So, okay, take 30% of your money, have some fun, buy Starbucks, Nvidia, Unilever, Novo Nordisk, whatever you think you have insight into so you can learn a life lesson that over the long term you don't know what you're doing, and just put it in an index fund. Cuz the marvelous thing about the human race is we become more productive and the Western economies, generally speaking, over the medium and long term are up into the right. And again, and I'll go back to my algorithm or equation. Focus. Find something you could be good at, maybe great, that has a 90 plus percent employment rate. Stoicism, we haven't talked about that. Realize there's some things you can't control. Focus on the things you can control. One thing that is within your control is spending. Try and find a partner, try and gamify spending. I spent $78 a week my summer between my junior and senior year including rent because I needed $3,300 to go back to school. I partnered with five other guys in my fraternity and we gamified who could spend the least amount of money. Find a partner who's aligned with you around spending and saving. Right? Realize no one's as impressed or thinking about your [ __ ] as much as you are. Right? Try Try and find reward from exercise, from relationships, not from signaling wealth with kind of stupid [ __ ] Right? I call that stoicism. It's really more about discipline. Develop a savings muscle, one and appreciation for time and how fast it's going to go. I was stupid. I remember my best friend Lee Lotus picking me up to go to the beach when I was in college and he was scrambling to find $2,000 to put into something called an IRA Roth where his company, a bank he was working for, he was just out of college. If he found $2,000, they would match it with another 2,000. I thought I said to him these exact words. If 2,000 bucks means anything to me when I'm older, shoot me. I have made so much more much more money than Lee Lotus and he is a multi-millionaire now. So am I, but I've endured a lot more risk and a lot more ups and downs cuz he was that lame guy scraping together $2,000 when he was 23. I went out and spent my first bonus check at Morgan Stanley. I got $28,000 my first year out of college Morgan Stanley. $28,000 check, I go out and I buy a $35,000 BMW, swung swim goggles from the rearview mirror thinking that would impress people. I don't know what I was doing. I figured out if I had bought a Hyundai for 9,000 bucks, which you could get in 1987 or whatever it is, and invested the other 20 in SPY, never looked at it again, I would have enough money now to buy 11 Ferraris including that new electric Ferrari that for some reason appeals to me, which makes no sense, an electric Ferrari. Anyways, you're going to love this. I tell the people that work for me that I drive up in a Ferrari and I say, "If you work really hard, someday someday I'll have two Ferraris." Anyways, uh I don't have a Ferrari by the way. Uh I My other joke about a Ferrari is Ferrari's like having a long consistent erection. I don't have a Ferrari. Anyways, anyways, but where were we going? Realize people aren't as impressed with your [ __ ] as you are. Recognize the power of time. And then the thing where I really screwed up, Stephen, diversification. Take some money off the table. Invest in I'm hearing from employees at Nvidia, we talked about this, diversify. You get It's such a bulletproof Kevlar for your mental health. You get risk-free return. Nobody knows. Anything can happen. Amazon 1999, again, lost 90% of its value. Do you know the kind of mental anguish when you go into a stock like Amazon and you lose 90% of your of your investments? So, if you want to have some fun, ring-fence it to 30% of your of your savings, pick some stuff, and it'll be a good life lesson for you. You may get lucky, more power to you. Over time you're going to realize nothing beats over the long term Warren Buffett. What are the third wealthiest man in the world? I'm giving you the same answer he gives. If someone has 10,000 bucks how do I invest? And he's like, "Low-cost index funds." It's a two-minute conversation. Put it in the S&P 500. Low-cost index funds. I know it's it's the boring [ __ ] that makes you rich. Yeah. It's also I I I advise a lot of CEOs. It's the boring incremental stuff that moves shareholder value. Mhm. No, it's so true. So, one of the things that stopped me when I was young from doing exactly what you just said is I didn't think that the $500 I had or the 500 pounds that I had was enough to get started. So, I said to myself in my head I thought, "Okay, when I get a million I'll become an investor." And I think a lot of people actually listen to these kind of conversations and go, "Okay, once I've Once I've got 5,000 pounds disposable income a month, then I'll do what Scott said." But, there's no point in doing it with a small amount of money. I wanted to use this little bucket of sand here as an analogy for this because um my team brought a bucket of sand to illuminate the power of compounding interest when you invest in these S&P 500 companies. And this glass represents investing 1,000 a month in the S&P 500 over the course of 12 months starting at the age of 25. Right. But, if you left it and kept investing at that rate, by the age of 65 it would look like this. You have Zuma Beach. Oh my god. Thank god that's you. It would look like that. And this is really what you're saying when you're talking about ETFs. Well, you asked that question about the young man who says I'm going to wait till I get I have 500 pounds. I'm going to wait till I have a million before I start investing. The way you get a million pounds is by investing that 500. We don't believe we're going to get old. We don't recognize how fast time is going to go. We don't appreciate the power of compound interest. Don't focus on your investments. Put it in low-cost, low-energy ETFs. Start early. You have Your advantage when you're young is time. And you're going to get that bucket of sand. By the way, this right here isn't a lesson in investing. This is a lesson in storytelling. A bucket of sand, I mean, who thinks of this? Move it out the way. No, but it is. It is I've I am I discovered the art and the science of compounding interest too late in my life. And I just wish someone had slapped me in the face with it at 18. Yeah. It's crazy. Honestly, I probably started at 28. That's still earlier than most people, but it goes to the notion of back to the advice for a young person. Most young people don't have the discipline to invest any money they get their hands on cuz a capitalist economy is the the smartest people in the world with the most god-like technology are presenting you with amazing irresistible offers to upgrade from economy to economy comfort to add to add flourless chocolate cake to your order from Balthazar Balthazar lingerie in 1 minute or less. I'm like, "Oh my god. Oh wait, there's three other people looking at this room this hotel room and it's going on sale and I better buy It's so difficult to hold on to any money. You want to find ways of forced savings. A house is forced savings to a certain extent cuz people don't want to be evicted from their house. Going to work for a company and getting options and getting equity that grows tax deferred, that's sort of forced savings. But you want as a young person try and find as many ways as possible to have forced savings. An app that that rounds up to the nearest dollar and then invests no matter what, that is forced savings. It is very difficult to take money that is in ever comes to your hands and invest it. So it find forced savings mechanisms that are taken out of your check. Find out if your company offers any sort of investment or saving schemes that they match or that the government matches and most corporations offer something. Real estate. I've had a lot of guests talk to me like Morgan Housel and others have a sort of mixed view on whether real estate is a good investment. What's your thoughts on it? Should I be investing in real estate? But you know, my brother said something to me when I was 25. He said, "Steve, if everybody is playing the game, the returns probably aren't great from it." Goes back to the stock appeal. Too much capital going in. Well, like Case-Shiller, the brightest people in real estate will say if you really account for maintenance and upkeep, the real estate has not outperformed other asset classes. The reason I like real estate is that one, in the United States it's very tax advantage. There are very few asset classes you can lever up four to one. 20% down payment. I can't buy Apple I can't buy $100 worth of Apple stock for 20 bucks. So it's it's huge leverage. The interest on that is tax deductible. In addition, if you sell a home, this true in the US, I don't know in the US I don't know in the UK. If you buy a home and sell it after hold on to it for at least 2 years, you get a $250,000 tax deduction, $500,000 for married. So if you have, for example, any ability get to know the the homes in your area, find a nice home or a rental unit that you can maybe rent out or or upgrade, maybe you're handy to do that every few years and take advantage of the tax deduction and then roll into something bigger and that is forced savings. You know that mortgage payment is coming every month. Actually, the majority of savings for baby boomers right now is in their homes. It's the equity in their homes. Now, unfortunately, that's there's some bad things. We haven't approved housing permits as quickly as we should, which has made it more expensive for entrants. Young people can't afford homes. The average home's gone from 290 to 420 through the pandemic in the US. And if you look at interest rates, it means the average mortgage payment's gone from $1,100 to $2,300. So it used to be 2/3 of America could afford a home, now it's 1/3. I I whole other talk show, but I just did a TED Talk on the war on the young economically, but real estate is a very tax advantage industry. It is forced savings. Also, there is some I think psychic value, which I think is important to to a home. You start investing in it, fixing it up. It feels like I don't know. It just there's something rewarding about it. But to what your brother said, when everyone's trying to buy homes in an area, that usually means it's probably getting overvalued and like any other asset class, uh lose money. But the reason I like it is because it is a form of forced savings. People generally speaking will make that mortgage payment or try and figure out a way. Now, you want to make sure that not more than 40% of your income goes into a house, otherwise it's just going to be your anchor. It's just going to be a source of stress for you. And I think a lot of people grow up thinking I have to have a home and so they just become over-leveraged in their home and they become kind of house poor. They own a house and that's it and they can't afford to do anything else. be able to able to move then and you talked about geographical opportunity when you're young. That's right. You get tied. You get tied down, especially if your home goes down in value. But I still think it's a in the US at least, real estate's the most tax advantage and if you own commercial real estate in the US, you can depreciate it 2 or 3% a year. You can't depreciate a stock 2 or 3% a year. Is there someone that should and shouldn't buy a home then in your view? Is there a certain demographic or age or person with a certain talent that should and shouldn't buy a home? I would say in general, if it's a home, if you think that you're not going to be able to hold on to it for at least 7 years. If you hold on to a home for 7 years, you should be able to ride out most economic cycles or economic down cycle. Um I think there's some wonderful things about renting. You can slam your keys down and leave. If you're planning to move, um if you don't have somewhat reliable sources of income, um a mortgage is probably a tough thing. I don't know. I think I think homeownership I I'm talking my own book a little bit here because I've made good money in real estate. I've really enjoyed it. But I think it's situational and it goes back to that notion of having a kitchen cabinet of people who can advise you on on on that asset class. Unfortunately, that asset class has become so expensive that the quote-unquote American dream of owning a home has become somewhat of a hallucination, if you will, or a fantasy for a lot of young people. The other thing I I came to learn as I got money and I it was almost like someone pulled the curtain back for me is how wealthy individuals play the tax game. Oh my gosh. And it's a tax game that the average person has no idea is going on. Got to talk about money. Tax avoidance is a key skill to building wealth. And by the way, we don't talk about I speak openly about my I won't call it tax avoidance, but my tax strategies. If you're, you know, it's like they said, if you're a prisoner of war, you have an obligation to escape. If you're trying to build wealth, you have an obligation to pay as little tax as possible. Do it legally, but Apple will issue their IP to Apple International in Ireland and then they will use Apple Ireland, they will license their IP to America, charge them tens of billions of dollars, thereby increasing the income of Apple Ireland at a lower tax rate and decreasing the income in the US, thereby lowering their overall tax rate. That is pure tax avoidance. Every organization, every corporation does this to the hilt and so should you. By the way, I will vote for people who have an alternative minimum tax. We have to raise taxes on corporations. The 25 wealthiest Americans pay between 6 and 8% tax rate. What are the tax games they're playing? Oh, the rich people There's a bunch of them. First and foremost, it's you buy stocks, you never sell them, you borrow against them. Okay, explain that to me like I'm a 10-year-old. Sure. You own $100 in Amazon stock. You need money to buy something. Instead of selling the stock and it say it's gone up 50%. I say it's doubled. You would have to realize a capital gain and pay long-term capital gains on that $50 gain. No, just borrow against it and let the stock continue to grow and you pay a little bit of interest hopefully from your current income, but basically it's invest, borrow against it and die. Put it into a a trust and then pass it on to your kids. There's a lot of um state arbitrage. Jeff Bezos just moved to Florida to spend more time with dad. Isn't that sweet, Steven? Isn't that nice? No, it has nothing to do with his father. Give me a [ __ ] break. He aggregated $160 billion in wealth. He would pay about another 8 or 10% in state taxes in Washington because he's got to leverage the public school system, the University of Washington, the Seattle-Tacoma Airport, the hospital system. But in the US, you're allowed to no income tax. So all the people [ __ ] posting California or New York, show me someone who's all of a sudden can't handle San Francisco politics, I'm going to show you someone who needs to recognize a capital gain and has all of a sudden decided they like Texas politics. It's really not very it's very disingenuous. There's uh the tax loophole I've leveraged. In the US, there's something called 1202 or qualified small business. So when I started L2, What's L2? L2 is my analytics company. I started it. I invested a small amount of money. Um uh because it was a business worth fit less than 50 million. Your business would qualify in the US as QSB small business. If you hold on to that stock in that company for longer than 5 years, when you sell it, the first 10 million or 10 times the basis are tax-free. So the first 10 million out of L2 was tax-free. Zero. That makes no sense. If that sounds like we're screwing the middle class, trust your instincts. I I invested in a company, brought a company out of bankruptcy. I invested 2 and 1/2 million. The first 25 million, got very lucky, the company got sold for a lot of money. The first 25 million were tax-free. These are the tax code has gone from 400 pages to 4,000 and that extra 3,600 pages are to turn rich people into super rich people. Now, the myth around taxes is the following that rich people don't pay their taxes. Actually, the sort of rich pay a disproportionate amount of taxes. So if you make all of your money from current income, that is salary, and you make a lot, you're actually paying more taxes than anyone. So mom's a baller, she's a partner in a prestigious law firm making a million bucks a year. Dad's a chiropractor, has three people working for him. He makes 600 1.6 million dollars a year. Total ballers. In order to make that kind of money, they probably have to live in a urban center in a blue state where at that level they're paying 45, 48, sometimes 52% tax rates. But if dad decides to raise capital and buy a bunch of chiropractic clinics and they become investments and he sells them for 50 million dollars, his tax rate plummets. So you don't want to be a super earner. You want to earn enough money to invest so you can become a super owner. The top 25 wealthiest Americans pay about 8% in tax, right? So actually the bottom half pay almost no tax. They pay a lot of consumption taxes, but it's the super earners that get screwed, what I call the workhorses. But once you makes the jump to light speed and you own things and you make your money from buying and selling assets, your tax rate plummets. The really sort of actionable thing there for the average person as well as probably the the the first point where you said a lot of what rich people do is they'll buy a stock. So I'll I'll spend 10K on Amazon stock and then I go to a bank and the bank give me a $5,000 loan against my Amazon stock tax-free and I just hold the Amazon stock. Now I've got 5,000 tax-free. If the Amazon stock goes to $20,000 in value, then I can I can go to the bank and say it's gone up. Now give me another $5,000 and I just spend and live off that money. Now if the Amazon stock collapses, I'm fine because the loan was against the stock. So they'll sell the stock at a certain point as it's collapsing to get their money back. Yeah, I mean you don't want to get into too much trouble, but leverage is how smart people go broke. But the idea is that one of the great tax schemes in history is that stocks grow. Think of yourself as a stock. You you go up in value a million bucks a year. You're making a million dollars a year doing a very successful podcast. Every year the government in the UK is going to take 40 cents of that, 40% of it. If you own a million dollars in stock and it goes to 2 million, you don't get taxed on it till you sell it. Yes, so just never sell it. Never sell it. And that's what Elon's doing with his companies. People say he's got, you know, 200 billion dollars, whatever. In fact, he's borrowing tax-free against those companies. when he finally needs to sell it to pay off some of those loans, he moves to Texas despite the fact he built all his wealth in California. Smart. I think one of the great advantages of life is as it relates to wealth creation is really getting good tax advice cuz I've sat here over and over again with people that have great tax advice and some people who didn't have any at all and the outcomes are quite frankly shocking. The variance and outcomes are quite frankly shocking from one person going bankrupt to the other person becoming a multi-billionaire and it comes down to some of it comes down to their tax strategy and how they thought about tax. And have you know, being around a lot of people now that are masters in tax, it was like Yeah, I'd describe it as someone pulled back a curtain that I never knew was there and all these people were doing magic behind this curtain and no one ever told me that curtain existed and it's called tax. We don't all pay the same tax. Cuz you're not supposed to talk about it. Yeah, not talking about it is rich people trying to keep poor people down because rich people talk about their taxes all the time. Brightest woman in my entire professional universe is a woman named Lucy Lee who is my tax Yoda who works at a big law firm that I pay 1,800 bucks an hour to to figure out the smartest when I set up a company, I talk to my tax person. When I'm about to get a big payment from my podcast distribution company, I talk to my tax person first. This is it is everything, but the key when you're young is to become an owner, not an earner. You're an earner. You want to bust a move out of earning and develop an army of capital that goes out and kills for you at night. 500 bucks is a lot of money when you're 21. 500 bucks when you're 21 is 10,000 when you're my age, right? And it's going to go really fast. So just start and then once you become a super owner, you have 10,000, 50,000, 100,000, a million dollars in assets, then then you can become a super tax avoider. That sounded awful, didn't it? Sounded awful. That sounded awful. Sitting here with your bucket of sand. Oh my god. That's right. Sorry about this is how we [ __ ] the middle class, Stephen. This is how we really screw over the little guy. We have a clo- We have a closing tradition on this podcast where the last guest leaves a question for the next guest not knowing who they're leaving it for. What is the last thing you learned how to do just because you wanted to learn how to do it? Hmm, that's really interesting. Um you know, it sounds uh this is going to sound so trite, but my boys and I are you know, when you get when you're a dad, you you you uh if you're an you go maniac like me, I just assume my kids were going to be super into World War II history and CrossFit cuz I thought, oh they would think I was such a hero that they'd get Well, you realize if you want to be a good dad, you have to be engaged in what your kids are engaged in. Otherwise, you're just not going to engage. I have no interest in sports. I have become a massive fan of Premier League football because my kids are so devoted to Chelsea and to Tottenham. So I've taken up Arsenal so we could have a lot of fights in the house. But what have I learned? I've learned to love football and the moment my sons are out of the house, I will learn to not care about it again. So I've learned to love Premier League football cuz it's a way I engage with my boys. Well, next year we'll go. Yeah. I'm a Manchester United fan. So Man U. How [ __ ] predictable. Literally Man U. You're such a poser. You're such a You you grew up in Manchester, right? Half my family did. So half my siblings were born there. Yeah, the only thing worse than that would have been Man City, but you have Okay, you have Man U rights then if you're from Manchester. I have to tell people this. They're like cuz you get roasted and then you have to indicate that the like for me the first place we lived in the UK was Manchester. So my older siblings were all born there and then we moved to Devon in the Southwest which countryside, but One of the strongest brands in the world. My my 16-year-old son has a friend coming. They're going to take the train up just to do a tour of the stadium. Oh, really? How many times do you do that? When are they coming? Uh I think it's in a few weeks. We're going to but I mean we're going to Germany for the European Championships, we went to the World Cup. Our whole family, our activity is we explore Europe. We follow uh we go, you know, see FC Barcelona play. I mean it's a position of privilege. But football for us when I stopped playing sports as a college student, I didn't think about sports again for 25 years and now we're just all in on foot- they we plan our lives on not around football, but every week we go to a game. It's wonderful. I'm convinced it's one of the few safe places that men can demonstrate emotion. It's one of the few places men are allowed to hug each other, feel sad, feel joy. 100%. But it's I've been to because I'm in the corporate world, amazing sporting event, the best sporting events in the world, the Olympics this year, but nothing matches Premier League football. Nothing. It really is special. That's what I learned to do. Hey man, well it's super interesting because I read in your work about like buying people buying football clubs and stuff like that and then they're never going to make money, but the the asset is basically valuable because someone else wants to buy it. Greater fool theory. And I'm getting loads of those offers now to like get involved in football clubs and stuff and and actually based on your thesis about men, Yeah. it is actually for me there's there is a thesis there. Well, the thesis is that there's the real thesis is that the number of billionaires in the US has gone from 500 to 2,500. They're men who are in a massive midlife crises. The way to become the most interesting person in Cleveland is to buy the Cavaliers or the Browns. Overnight you're the sexiest man in Cleveland. If you're worth 50 billion dollars, why wouldn't you spend 5 billion to buy buy the Washington Commanders or you know, to buy I think Tottenham's up for sale right now. I thought I got together the wealthiest, most famous Scottish people in the US which is about 14 of us and said, "Let's go buy Rangers." Rangers FC, it's a publicly traded company. I had it all figured out. 10 million pound convertible note. I'm like, we and then my sky my friend of mine is a famous historian of Scottish. He's like, "You'd be the most hated person in the United Kingdom. He was they would hate you. You know nothing about football. You'd be some American idiot over there." And I'm like, "Yeah, you're right." He's like, "Just go to Rangers games." What are you thinking? There's a pain equation with buying sports teams cuz you're buying a tribe and the chances are you won't win most of the time. And then you have to deal with like Dave from I don't know Southampton whose entire life is that football club that you've just bought and he is pissed. And unless you win trophies from day one, you've screwed up. And who does? Yeah, nobody does. a horrible pain sport. Anyway, Scott, we're done. I am a big Manchester United fan and I travel all over the world. One of the big lifesavers for me as someone that never misses a game ever regardless of where I am in the world is NordVPN because NordVPN allows me to watch the game in territories and in countries where it's often not available for a variety of different reasons, but it's not just about football. It's websites, movies that I can access and it helps me navigate those geographical blockers and that's why NordVPN are both a sponsor of this podcast, but a lifesaver for me and it costs the same as a cup of coffee per month. And not just that, when I'm accessing Wi-Fi networks around the world, it gives me a lot of security, which is something that I think we don't think about enough. If you want to check out NordVPN, for a limited time only, head to nordvpn.com/doac and you can access our exclusive deal, which gives the Diary of a CEO listeners a huge discount plus four extra months when you sign up to a two-year plan. And there's no risk with Nord's 30-day money-back guarantee. So, give it a try. That's nordvpn.com/doac or check out the episode description link