Change Your Relationship with Money with Steven Bartlett

0:00I've never actually said this before, but when I got my student loan, I took half of it and I bet it on a football game. You know, one of the things... What game? Okay, good. What game? Honestly, it wasn't even a good game. It wasn't a good game. But it was just, it was Stokes. I didn't even like the team.

0:23This episode of IMO is brought to you by Progressive Insurance. Hello. Hey there. How you doing? I'm great. We got a good one today. Oh, I cannot wait. I cannot wait. I'm very excited to talk to our guest. But to kick it off, we're going to be talking about finance. Finances, we're going to be talking about how do you manage money. These economic times are really a little scary out there. And I know a lot of people have questions. but we were talking before the show, just trying to think of how did we think about money when we were growing up. And we talked a little bit about this in some of our other podcasts, but we've said that we grew up pretty, I would say we grew up poor.

1:19Right, poor but not knowing we were poor. That was a real testament to our parents because we didn't have disposable income and they were managing paycheck by paycheck, but we didn't know that. And when Stephen gets out here, we should talk about how dad taught us the value of money, you know, because that was a real great lesson. But our father worked as a, he was a city worker for the city of Chicago, worked in the water filtration plant, blue collar worker. He was the sole breadwinner because he and mom made a decision for her to stay home. Right. So that, you know, she'd be able to be an involved and engaged parent in our school, which she was.

2:14She was very active in the PTA. So we sort of had that typical, we came home for lunch every day. So him being the sole breadwinner afforded her the luxury of being more engaged in our upbringing. But it meant that we were, you know. We had to sacrifice. We had to sacrifice a lot. And it just, sacrifice just became a habit. You know, little things like, you know, Christmas was, you got three gifts. You could ask for three things. You could ask for three things. And another thing Dad focused on was never stretching or using credit. Yeah, right. He paid his bills at the end of the month. He never carried balances on his credit cards.

3:05He never bought things on time. I mean, he never used the system that way. When you say bought things on time, what do you mean by that? So back in the day, you could buy things on layaway, similar to what you can do now, but it was called layaway. So you'd put$20 down on a$100 couch, and then you'd pay$5 a month, and eventually you'd own that. He thought that was like quicksand. That was financial quicksand to him. And so he never did that. He never carried a balance on his credit cards. and I think the only time he actually went into debt was when it was time for us to go to college, when it was time for me to go to college because there was no way we were going to afford that.

3:52So you had to take out a loan that he couldn't pay back at the end of the month. So we got in the habit of not really asking for things because we didn't want to put our parents in a bad situation. But that meant that, for example, you almost didn't go to Princeton. I almost chose not to go because it wasn't a full scholarship to pay for everything. You had gotten a full scholarship to another school. To other schools. And Princeton was, you know, you had to pay what you could afford. And they told me - Wouldn't it have been nice if we had gone to school when there was blind admissions, financial admissions?

4:32I mean, you imagine our parents being working class people and a school that rich requiring them to have a financial contribution to the point that they went into debt when a school like Princeton had such a huge endowment. It's amazing, but I don't want to digress. I know, let's not digress. But you know what, this would be a good time to bring Stephen Bartlett out so that we can continue this conversation with him because his background was very much like ours. So Stephen Bartlett is an entrepreneur and one of the most influential voices in modern business and media. He's the host and creator behind the widely popular podcast, The Diary of a CEO.

5:20And what a great name for a podcast. I want to find out how he came up with that. He's the founder of a media investment company, Flight Story, a leading media and publishing company. and the Flight Story Fund, a global investment fund. Stephen, come on out, my friend. So good to have you here. Good to have you here, man. Oh, good to have you here. I'm trying to learn more about Manchester. It's so good to see you. Looking for Michelle, please. I know, I have to give permission to call me by my name. When he's calling me Mish, you can't be Mrs. Obama. We've called her Mish since she was a baby.

6:00Yes It was Michelle If you heard my mom say Michelle She was about to get into something That she shouldn't You know I used to live in Rush Home Stephen Did you actually? When I lived in Manchester I lived in Rush Home And we played our game I played professionally overseas In Manchester England For the Manchester Giants Basketball Not football But I lived in Rush Home And we played in Stockport Oh wow That's my area It's my old stomping ground. Love it. I'm looking forward to getting back there. I haven't been back there since I played. Are you a football fan? I am. So I lived right by Manchester City.

6:38So that's all I knew. I know. And you're a United fan. Oh, and Steven's face just went dark. It's rivalry. It's like, ooh, and he started to scratch over there. It's like, oh, why did I ask that question? It was going so nicely until we got there. Oh, man. It's a beautiful place, though. It's a beautiful place. Yeah, it's terrific. Terrific. Well, it's great to have you here. Just excited to hear about all your success, the podcast, your books, your advice. And we need people like you at this time. You know, somebody so young who has such knowledge. But, you know, the thing that is really unusual, you know, probably not to us, is your background, your upbringing, you know, where you came from, how you, you know, how you wound up here.

7:33And we were hoping to start with you telling us just something about you, how you grew up and how you came to be in this spot. First and foremost, thank you for having me. It's a real honor in so many ways. but to answer your question, I was born in Botswana in Africa, moved to the UK when we were very, very young. There's four of us, four siblings in my family. My mother's Nigerian, my dad is English. And this is important context because, you know, being of having two parents with two different ethnicities plays a role in shaping how you understand yourself. We moved to the Southwest of the UK in a place called Plymouth, which was predominantly white.

8:09In fact, I didn't know another black family in the area. And it's interesting listening to your upbringing where you had this healthy, stable, secure attachment to money, I think I very much had the opposite. Because in life, generally, we understand the value of things by the context in which we see them. So if you go to, you know, they've done the studies. If you go to a restaurant and there's three steaks on the menu, we use the expensive one and the cheapest one to make the decision that the middle one is the right one. And if you remove one option, we make a different decision. It's context that helps us to put value in perspective.

8:38And in the case of my life, we were the black family in a middle-class area that ended up losing our money, remaining in the middle class area, becoming the poorest family in the area and the black family in the area. So at a very young age, I internalized this belief that I was less than. And I believed, which I heard you talking about money a second ago, I believed that money was the antagonist in my life. So, you know, I always think that the things that invalidate us when we're younger end up being the things we seek validation from when we're older. And for me, money was one of those things.

9:08I had a unhealthy relationship with it because it was the reason why my parents were screaming. It was the reason why I had so much shame every day going to school. It was the reason why I didn't tell my friends where I lived. Because if they saw my dilapidated house and the smashed windows and the high grass, it was already hard enough to fit in. And that would just exacerbate the massive further. So that was my context. So why were things so unstable financially? Yeah. So my dad had a good job and we'd moved into this area. And my mother got into business. And she left school when she was extremely young in Nigeria.

9:42five seven ten years old roughly she didn't get an education so when she in Africa business is in my mother's village is put out a stall and sell everything you have business in the UK was different so she really really struggled to adapt she she hadn't learned to read or write um so that was an exacerbating factor and all of that meant that the family money was invested into the businesses the businesses failed they failed they failed they failed they failed and that kind of took the money out of our home. And it was kind of a downward spiral from there until, you know, properties, we had our stuff repossessed at one point.

10:20And it was a downward spiral from there. As I was listening to you talk backstage about your relationship with money and the lessons that your father taught you, I was thinking to myself, money is this other person in the room for our entire childhood. And we're developing, just like we're developing a relationship with people and other things. We're developing this really clear, explicit, emotional relationship with money. In the same way that we talk about attachment styles, we say you're an anxious attachment style or you're secure or you're avoidant. In my household, I learned to be both anxious and avoidant with money.

10:54And you can see that in me as an adult, avoiding bills, hiding bills, not looking at my banking app. Because as a young age, my relationship with money, which is also kind of a proxy for your relationship with yourself, was that this person, this second person in the room, which I'm going to call money, isn't around enough. And its absence is making me feel insecure. Yeah. And this is a bit more sort of esoteric. But when you think about the concept of wealth and money, it isn't something that our prehistoric human brain knows anything about. We had tribes. We didn't have wealth. It was what you could carry back then.

11:27We had food. We had love. We had tribe. We had status. That was a really important thing. And we shared. We shared. But money is this alien thing to the brain that we still have today. So it's actually just an emotional proxy for how you feel about yourself and that early context of love, attachment, abundance. And I think if you see it as a person in the room, and then you ask yourself the question, how did that person treat me growing up? Did I have that secure attachment to it? Were they absent sometimes? Was there a longingness to be closer to them? Then it helps you to understand the relationship you have today.

12:00Well, this is a good opportunity to share some of this knowledge with our listeners. We've got a question. Hi, Michelle and Craig. It feels like debt is just an endless abyss. I'm in my 40s now and I find myself still living paycheck to paycheck. What do wealthy people know that I don't? What did you do to educate your children on setting up for financial success in the kind of world we live in today? Thank you so much, April. Let's start by looking at the first part about debt, right? How do people end up in debt? For many, many reasons. The reason why I ended up in debt was because of my unhealthy relationship with money.

12:50Essentially, my spending is very, very simple. my spending was higher than my revenue, but I also didn't understand this thing called credit because nobody had told me. I didn't have financial literacy at all. When I was 18 years old and I started working in call centers and I got my own money, when I got my paycheck, I would go and buy a plasma screen TV, the biggest one I could possibly buy, and get this. I'd put the plasma TV up like that. I couldn't afford cable to actually. And then a week later, because I couldn't pay my rent and I couldn't feed myself, I would sell the plasma TV. And that would be a cycle?

13:26This was a cycle. Wow. I had all kinds of really unhealthy, toxic relationships with this thing called money. I've never actually said this before, but when I got my student loan, I took half of it and I bet it on a football game. You know, one of the things... What game? Okay, hang on. Honestly, it wasn't even a good game. It wasn't a good game. But it was just, it was Stokes. I didn't even like the team, but it was, I was so, it goes back to what I said earlier. The thing that invalidates you when you're younger is the thing you end up seeking validation from when you're older. So the dopamine hit I could have got from winning would have filled some kind of hole in my insecurity.

14:05One of the things that I talked to, because I talked to a lot of young students, college bound students, students in school. And, you know, and I saw this, I was an associate dean at the University of Chicago. I had the experience on my own. And what you know is like early debt starts right at that college age because, you know, not only do a lot of kids, kids of color, kids from working class backgrounds that have never had money, you go to school, you get that loan check that's supposed to go to paying for books and food and all those things. And because nobody's taught you how to use it, and you do not have a healthy relationship with it.

14:46We see over and over again kids who do exactly what you did, or they do something even more magnanimous. They take the money and try to help their family by using it to pay an electric bill or to buy shoes for a kid. And time and time again, one of the most powerful things I tell young people is that they have to be wary of that. that's going to be an instinct that they have when they get a large check is to use it. And then I try to remind them, if you don't have that money for books, they don't give you more money for books. You still owe the money. And now you won't be able to get the books and you'll be in debt and you won't have anything to show for it.

15:31I'm so glad you shared that because that occurs among so many young people who were trying to figure out how to manage their money in college and to top it off, they're handed credit cards. Oh, my. You know, and I don't know if you went through that too. Yeah. I had destroyed my credit rating by the time that I figured out what it was. No one told me what a credit score was. And I had four credit cards that I'd been given because when you're a student, they just want to give you these cards. I went out, I spent the money. And then someone explained to me that you have to pay it back. at 25 % interest.

16:08What's that? I had no money. I had no money. And because I then dropped out of university, my parents didn't want to speak to me because that's complicated. And I was the only child in my family that left university. So I'm hundreds of miles away from home. I have managed to achieve these two CCJs, which is a county court judgment, where the court comes for you because you've not paid any debts back. I've dropped out of university. I'm shoplifting food to feed myself at this point. I can't call my parents and ask them for anything, not that they would be able to help me in that situation anyway.

16:37And I've destroyed this credit rating that apparently is really important and that nobody told me was critical. And that's the situation I found myself in at 18, 19 years old.

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18:35I want to hear what was the point where you realized that this other person or this relationship with money, you had to change direction because at some point you figured it out. And we were lucky enough that, you know, our father was so worried about debt that he just hammered it into us. And so I want you, while you're thinking of this question, I want to tell the story of how I learned the value of money. Because as Mish had talked, we went to a school. It was more working class than middle class. So we didn't feel less than at all. We felt like it's just stuff you can't get when you're in this position.

19:26But because we had lunch every day, people came to our house and ate lunch with us from school. We would get the occasional pizza on Friday for good report cards. One of my friends said, hey, Craig, are you rich? and he hit me with that, and I was like, well, I've got food to eat. We get pizza every now and then. We go to the drive-in movie once in a while. Maybe I am rich. I went home, and I said to Dad, hey, Dad, are we rich? And he said, do you think we're rich? And I went through the whole thing. I was like, well, maybe we are. He said, let's talk about this tomorrow. I'm getting paid. He got his paycheck the next day, went and cashed it, the whole thing, and laid it out on the bed.

20:26And it had, you know, who knows what it was, but let's call it$500. And he laid it out in 20s, 10s, 5s, and 1s. And I walked in there and I said, oh, we are rich. And he was like, oh, wait a minute, wait a minute now. he said you have to pay some bills and I was like oh yeah okay and he said the first thing you do he took $20 he said you pay yourself you put this in your savings account and I was like oh okay and then he said and rent is this and he took some money out and he said now we've got a nice car gotta pay for that and he went down all the bills till he got to maybe there was$30 left.

21:19And I was like, yeah, baby, we got$30. We're getting a quarter for allowance. So$30 seems like a lot. And then he was like, no, we have pizza on Friday every now and then. And he took some out. And he got to the point where it was like$10 left. And he said, this got to last me the whole two weeks till I get paid again. And it was a blessing is all I can say, because I realized that so you can have a job and you can have money, but it doesn't necessarily mean you're rich, number one. And number two, the most important thing he said was pay yourself first. And I have been doing that ever since. And I don't know if Misha's been doing it, but I always take a little bit and put it away.

22:14And it was the best thing that he could do for us, which gave us that secure relationship you're talking about. And I hadn't heard it put that way, but I've always been secure. and even when I graduated from school and I'm working in finance myself and I'm making more money than I ever needed, I'm still leery of not overspending. So interesting. I wish all parents did that because I was thinking about what's actually going on there and what he did is he pulled back the curtain on how the system works. He gave you like certainty through information on how this thing called money operates. The opposite approach is what I experienced, which is total uncertainty.

23:06And there's nothing humans hate more than uncertainty. Money was this person in my life that was stood behind the curtain wreaking havoc. I didn't know who he was or who she was or what she was doing, but I could see the consequences of her. And I didn't have a relationship with her. Your dad pulled back the curtain and gave you a direct relationship with money as if you think of it like a person and showed you how they operate, how they think and what they do. Right. And that kills the uncertainty. So you can be at peace with this thing. Whereas I didn't know. I could just see the downstream consequences in my everyday life.

23:38I could see the argument. I could see the stress. Stephen, when did you start right-sizing your relationship with money? And how did you do it? There's a few things that sprung to mind when you ask the question. The first is at 18 years old, when I dropped out of university, my friend had given me this diary. And I'm alone in this room in a place called Mosside slash Rushholm in Manchester. and I write in the first page of my diary my goals before I'm 25 years old. Number one, I'm going to buy a Range Rover Sport, right? Bear in mind, I'm stealing Chicago Town pizzas to feed myself at this point.

24:08Number two, I'm going to be a multi-millionaire. Number three, I'm going to get a six-pack and number four, I'm going to get a girlfriend. That was my entire orientation in life and I thought if I achieved these four things, I would achieve happiness. And again, if we look at this list, seeing the insecurity of my mother's and father's relationship. That's why probably number four was there. I was always the smallest of my siblings. I was always a small kid growing up as well. I had a bit of a growth spurt. I couldn't drive. All of my rich white friends could drive. I was the youngest in my year, roughly.

24:37So I got my driving license. I would be eligible for a driving license latest if I could even afford one. So I'm always in the back of my friend's car. And of course, the issue of money. So my list was a list of my own insecurities. And then I spent the next five years making sure that by the age of 25, I ticked off everything on the list. And I did. And upon the day when I bought the Range over, it was my first car, and I had a girlfriend, and I had worked on my body and all these things, I felt a tremendous sense of anticlimax because someone had lied to me. And the person that had lied to me was myself and my own insecurities.

25:09So sometimes in life, it's not a popular answer, but you have to have your BS failure for you to realize that it's BS at all. And sometimes our own self story is so strong and our insecurities are so strong that it's not until we confront them by accomplishing the thing it told us to confront that we realized that it was lying to us the whole time. And at that point, I could reorientate my life towards something else. And I could say what actually matters. What I found really interesting about her question was, my brain has this orientation that I've learned over time, which is to focus on the other part of debt and wealth, which is wealth creation, which is how can I improve my financial situation by first increasing my income and the second part of that is reducing my overheads.

25:52And I want to say this because I don't think enough people are talking about it and I think this is a great platform to talk about it. The world in front of us is changing extremely quickly at the moment. This thing called artificial intelligence, I think is going to have a profound impact on so many industries, so many lives in so many ways. I spend so much of my time obsessing about this. It also presents us with this generational opportunity to build a new type of wealth and to build wealth And that opportunity will be captured as it was across history from the industrial revolution to the dot-com boom by those that focus on filling that first bucket at this moment in time.