The Investing Expert: We’re Raising The Most Unhappy Generation In History! The Unseen Link Between Marriage & Wealth! Hard Work Doesn't Build Wealth! - Scott Galloway

31:08What was your number? My number was a hundred million 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 ten million I'm done and then things got so expensive and my greed glance kept going And my number was a hundred 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 gonna need So if you figure out I'm gonna need a I'm gonna need 80 ,000 pounds a year to live The definition of rich is having a ton of shit 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.

31:54So you work you work out of Out of a option or you work because you want to not because you need to that's the definition of wealth So having a number is just backward integrating into okay I want to have at least three million dollars a year to live the life I want to live All right, assuming a four percent return that means I need 75 million dollars. So I round it up to a hundred 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 4243 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 because I'm thinking about The lens that I kind of think about this conversation through is like different stages of my own journey and the advice that I would have wanted from you At different steps in my journey and I just flashed back to working in those cool 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 by when I was poor.

33:08I was reckless with my money So I would get the 500 pound disposable income on payday leave the cool center going by 400 pound TV Yeah, flat screen TV and put it in a room where the TV was as big as the wall if my room right and I'm trying to I'm really trying to zoom in on that person who is so far away from nine figures And they're like okay, I want to be Scott Galway. So what is the set of steps? Well the mindset the fishing rod I need out of my mind To become Scott Galway nine figures. Well the first is the first is some of it is luck Again a lot of my success if I've been born in Europe. I don't think I'd have that number Europe's not as forgiving of entrepreneurs have failed.

33:44I'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 say 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 wants me 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 the majority of the young people I hear from Realize the 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 credential.

34:41We live in a LinkedIn economy What you did your success is especially impressive Because on average people who get a college degree are in 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 from 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.

35:19I get that the second thing is get to a super city Two thirds of all economic growth up in the next 30 years is going to take place in one of 20 cities So if you're really 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 the 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 amazing in Stuttgart The amount of economic here's the thing.

35:55I'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 where I go to Aspen after a fresh coat of snow I'm like I'm a decent skier. No, you're not the snow in the waves are fucking amazing anyone could be a good skier in this shit Get to where the waves in the snow are amazing and that's generally speaking in cities And when you're young you can be in a city because 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're 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 because 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 and Florida when I say have to we have 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 because that's where the action was so one credentialing But to absolutely get to 120 super cities when you say 20 super cities 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 I also reflect on that and I 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 because 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 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 a third of my class and why you They get on a plane for San Francisco the day they graduate There's just within a seven mile radius of San Francisco International Airport There's been more wealth created.

38:14I think in the last six months Then then Germany's created in the last decade Nvidia's worth more than the entire UK stock market and videos 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 get stock options and when a company goes from From 300 billion to three 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.

39:01I'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 wins 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 books called the algebra wealth I tried to distill it down to a small number of Features the first is focus Go all in on something once you find you workshop in your toys When you find something you're really good at that you could be in the top 1 % at And here's the key part is 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 means your main hustles I'm working you side hustle to workshop new main hustles But once you find something you're really good at Go all in on it.

40:06Can I pause there just as we keep going because I want to just Provide counter arguments just in case the certain people are objecting in their own minds I think about Me and the southwest of England as I grew up and I was Implement working in a McDonald's I worked there for two days 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 could 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 listening says 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 Burger King For example, and they just like how do I get out of this Burger King scope I'm a cashier at Burger King Yeah, look I don't 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 among young people and that is the notion that in America especially anyone can be anything Well, not really boss because the problem with thinking we live in a meritocracy is that if you don't make it You fucked up at your fault.

41:18Yeah, and there's dignity in every work What I would say to someone working at 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 a QSR They don't like to turn foot Someone who was hard working and showed up at work every day on time and worked with their colleagues and acted like they own the place Probably within two 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 and work There's always opportunity for people who work hard and act like owners and are good people In trying to look out for other people and are good managers That might just be for you a means to an end where you're workshopping other stuff to say how do I get to school How do I get to training?

42:06How do I find a better job? How do I save for one year apprenticeship program to become an electrician? How do I start meeting people you got to pay your bills there's dignity and 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 McDonald's I'm like yeah, you are Because 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 those 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.

42:44Is 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 that is there anything And 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 McMillan is the CEO of Walmart started Loading trucks he worked in the loading docs But he was also working for the retailer the group faster than any retailer in history So is your company growing First thing growth kind of solves all problems Right if you were mediocre at Google you did a lot better Then if you were great at general motors the last 20 years because one was growing one wasn't So is it growing too is more situational do I have Someone who's emotionally invested in my success here Is the manager the store like me and saying you keep doing us?

43:42I'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 the parking lot no stress No upside the market is really good at trading up 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 had a company that's growing? Am I in a city with this economic vitality?

44:14Do I have flow? Flow of interesting people flow of interesting friends that I might start another business with Flow of potential room one and three relationships begin at work and every HR is hairs on 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 series and then more importantly I think that 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.

44:55They want to make me Managers that in and out burger make about a hundred and ten hundred twenty thousand dollars a year in the US And they're even given a chance to participate in profit sharing And I'm not suggesting being 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 the so much money I'm making These are my opportunities these are This is what I'm good at when I'm not good at what do you think I should do? Who are those people in terms of are they people that are ahead of you 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 because that's a high bar and a lot of people are really busy It's like Hey, 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?

45:49Can 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. It 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 hopefully you meet some people and say hey, can I just get some advice? And by the way, it might be someone else working a burger king and he's like this person has a rack together This person just has a rack to just smart.

46:33We all know those people We meet them and we were going to like you know this person just kind of switched on They just seemed 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 a dignity and all work and any company even something you'd see as low -brow 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 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 Because 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 that 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?

47:27You go up and say do you want to have a conversation? Do you want to have another dream? Do you want to go to 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 guys 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 five 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 respect you I think you're so smart about this stuff.

47:58I'm 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 five or a ten in a 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 asks me to be their mentor, there's just no way. I don't have time to you know I can barely mentor me right now 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 the specific issue and then what happens?

48:32You hear that they're Either raised by a single mother like me. They're a good person. They're struggling. Their sisters got a needing 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. You 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.

49:07I think there's a lot of people out there You doesn't have to be a baller like Stephen Barlett There's a lot of smart people out there that can give you good advice Because I think this is really important. 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 park your interest so much so that you'd give them 15 minutes when a zoom call Is that is there a sort of a psychological formula that gets to you Well, the first is 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 make a connection We're both graduates of Berkeley or I met you I came up to you and said hi to you it 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.

50:05I'm writing because I'd love some advice around this I'm writing because I'd like an introduction. I'm writing because I'm applying for your position for managing editor for propg media just like get to the point. What's the ask And try and make some sort of personal connection and the other thing I would say although I hate you know I don't encourage you to do this be persistent Because a lot of times I get an email I think I was a good kid. I should really set up a call or something And then I go on to the next 85 emails I have not 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 your time.

50:42I'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 under 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 talk kids You know your kids my future kids How to ask for things in life the impact that they would have on their long -term trajectory Is unbelievably profound because I if I think back through my life One as 18 years old stealing those pizzas and Manchester or every step along the way Some of my big pivotal moments in my trajectory were 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 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 Spings 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 gonna live for a hundred years and I'm probably gonna 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 Kind of like what you said about you only need a couple of wins to really be successful in life You only need if you send 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 How do kid does young kid come up to me I was just in can I'm a big fan kind of take a picture with yourself.

52:27Yeah, boom done seconds take a selfie Send me an email yesterday with a picture of the self and said we met we'd have chance to say hi I'm struggling In he was quite vulnerable. They're talking about some of the stuff he's going through and said I'm struggling and Would you mind doing a ten or fifty minute call with me any includes a picture of me and him How the fuck am I gonna 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.

52:59It's the reason I'm wealthy Nothing wonderful is gonna happen to you without 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 just sit outside the door for ten minutes. Just go Ask them what breed their dog is over there. Just go over there. Just ask them about their dog Because he I think a good strategy especially for young men who for some reason seem to be sequestering and becoming much more isolated Whenever you're in a line Talked to the person in front of you and behind you.

53:36Just talk to them Just get used to opening Just get used to eye contact Just get used to being friendly and having a conversation Because I think people are spending so much time indoors in behind screens. They're losing the ability to establish professional and personal connection So I think it's certain cognitive behavior or or training around how to be friendly And how to endure rejection One of the most revealing things I've noticed about you as a person Is what you just said about that kid that emailed you yesterday Because as you said it 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 because I was one of them And so this stuff really sometimes You know What you want in life is 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.

54:48That's the most rewarding thing right there 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 don't want to divulge but he's struggling. He's really going through some issues 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 as a high profile job And is struggling with addiction and self -harm. I mean and you think Jesus this shit is real, right? This is really really tough for this kid and You just realized I think so many young people We're raising my colleague at NYU wrote this book.

55:36That's This is the book we wish we written The anxious generation Jonathan Hyde. Oh, yeah, it's literally The most 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 and time 210 times a day The 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 parting in Santa pay.

56:26I'm a failure Right and they're their opportunities for professional In Romantic success are going down people are 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 a young people are really Really struggling and I think about that a lot and You know, it moves me because few fortunate decisions a few random emails You know things could have been much different from me and I So I really I do relate to these especially the young man. I relate to the struggles they're facing You you talked about making decisions in the algebra of wealth Um, 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 yeah 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 not this business 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.

57:43I 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 Then to make the right decision What you want is you want to get to the correct decision that is 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 if 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.

58:50What 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 wait to order for me. I have a uniform at work. I don't pick up my own clothes I have a group of people who manage You know, I'm think 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 But generally speaking for a young person that's not in a position of outsourcing a lot of decision -making What I would say is get a kitchen again goes back to the notion of a kitchen cabinet get a group of people Who will you might end up at the same place?

59:41But 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 -wire zad or I think you know who 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 coming up profit brand strategy strategy firm Six years later when I was 33 I was offered 55 million for it Um from sapien nitro and another firm called science 55 million I owned 60 70 percent of the company So I would have been done But I was under the but no, this is the internet. It's gonna be huge. We're gonna 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 fuck you thinking?

1:00:28I 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 got let me get the okay, so Scott You've been offered 18 times revenues for a small strategy services company Also around relationships, right? I talked to some of my friends or younger Men I know who are really upset with their spouse. I might 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 You're married to this person or anyone else is not gonna survive I didn't figure this out so 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.

1:01:23You'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 % 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 Have long -term relationships and earn a monogamous relationship.

1:02:09They're married because The team is a fantastic way to build wealth But if if the stance is true 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 58 % 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 prenup 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 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 meet with poor men And 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 jet -base us on it on a yacht with his new girlfriend and everything But the majority of wealthy people are actually Stay married and the team is really powerful You know, you were both working together.

1:03:10We're both making a lot of money That is really powerful and she's doing 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 the marriages for anybody or state 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 Well, there's a whole person project There's a myth that rich people are bad people the Elizabeth Warren Bernie Sanders the billionaires crawled over other people to get there It's just not true Well, you generally find among wealthy people especially people who have 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 the 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 where 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.

1:04:37Maybe 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 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 Then bite 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.

1:05:26I 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 an anodopopular 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 Monte 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 still a company?

1:06:24And you'll be 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 gonna go get a job at Google or JP Morgan for a few years Then I'll have the credibility to start a business. I'm like you're not an entrepreneur Most entrepreneurs 70 % 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 kind of my office hours when I say kids are my students And they want to ask they don't want to talk about brand strategy.

1:07:05They want to talk about careers And 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 fucking 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 is that because they didn't have any choice they didn't have access to corporate America They had to open a dry cleaner.

1:07:52They had to start a soapstone company Entrepreneurship you have to be risk -aggressive willing to take risks To to be really successful at it you have to be 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 that if you're successful They're going to be successful. What's the best way to train that muscle if I'm young I don't know for me it was um Look I I think the core competence you would want any kid your kid doing her it If I could give my kids any skill I remember in the Tonya's preschools and I'm sorry high schools.

1:08:37They had Mandarin I mean, I was just stupid We're computer science. I believe that replacing history and civics class with computer science You get Mark Zuckerberg you get these mandatious fox who are billionaires, but don't care about the health of the Commonwealth The greatest skill you can develop whether 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 I'm going to say this is the technology.

1:09:10This 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 jet -based was 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 health care 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 give you my angeloo rucy synac 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 in 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 a entrepreneur But but more generally in life whether you want to be a president or prime minister or philanthropist is a society 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.

1:10:37Oh, 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 linked in 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 the 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.

1:11:18I'm pretty terrible one -on -one I come across as a luf 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 rider. I aspire to be a great rider. 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 a 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.

1:12:06I'm not suggesting that you That everybody Has the same opportunities, but the opportunities the reason why Hollywood is struggling the reason why the riders for striking for four 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 a half million New storytellers have come into the media market and the half a million in LA You think they'll work is so fucking precious and are trying to figure out why their industry isn't a climb like You're competing against 8 and a half million new storytellers that aren't asking for peppereebment leave or for a trailer with catered food The ability to tell craft a narrative find your medium and then say i'm gonna be the top 1 % What is the algebra to Story tonight if that had to be one if you know you've not had to be interesting I'm thought about that.

1:13:06I think if it is 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 cancelled within like four 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 white 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 white space Guys my age don't talk about their failures.

1:13:55They 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 white 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 I think the specific crowds out the general you want to focus on a niche Own something all right I'm going to be 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.

1:14:43What 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 two years both of our careers have sort of hit a tipping point I feel like I've worked my ass off at 35 years and I'll summon 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 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 Q1 is often when businesses start implementing new systems and processes in hopes of creating efficiencies for the year ahead And over the course of my career I've learned just how crucial having the right systems in places one which has helped me across many of my investments is net sweet They're also a sponsor of this podcast net sweet is the number one cloud financial system through their streamlined platform You'll find all of your accounting financial management inventory and HR in one place Their technology has been a real game changer Especially for my team at flight studio as over the last year We've moved out of startup mode and into scale at mode We no longer have to juggle multiple systems and having everything together has reduced the number of manual tasks and errors Over 41 ,000 businesses have chosen to future -proof their business with net sweet So if you'd like to learn how it can help your business head to netsweep .com slash Bartlett And free download the CFO's guide to AI and machine learning that's net sweet .com slash Bartlett 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 value of the work because I worked four or five years of my life in places like call centers and The McDonald's etc But just as that's the jump of point for many people I get up to managerial position.

1:16:43I have a little bit of disposable income now Should I be going all in on crypto or my friend has this company? He said it's gonna 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 now as I do I was went all in on things and when you 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 it In 99 I was looking at jets by 2000 after the dog bomb explosion. I was broke Crawled my boy back was wealthy again by 2007 all in on tech By the end of 2008.

1:17:21I was broke again And what I've learned since then is I've crawled my way back gotten very lucky Markets of boom, but now I diversify like crazy What does diversify mean? You're never more than a certain amount of your net worth and any one thing and you try and make sure those things aren't correlated to each other It's harder when you're young because 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 and an aircraft maintenance company in El Salvador I love it.

1:18:06It's totally different than anything I do that way if my world goes to shit 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 percent of people who day trade lose money You want to be in a low -cost diversified ETF what's an ETF you say and traded funds so they basically say okay We're going to create a synthetic of the entire market and all health care stocks So like I can invest in a tech ETF or a solar ETF.

1:18:58That's right or I don't know AI ETF Let me make it easy go to Vanguard I don't have a relationship with Vanguard SPY that's the index that tracks the smp 500 and so People the email I get most is from young men looking for guidance and mothers looking for guidance for their for their songs the second most Frequent email is the following is it too late to invest in Nvidia And the honest answers I don't know I can imagine a scenario where it gets cut by 80 percent I can imagine a scenario where it triples. So this is what you do you invest in SPY Because about 20 percent on the dollar will go into the magnificent seven because they're about percent of the market cap of the smp SPY is again a basket of different stocks.

1:19:43It's it's a index fund that mimics the smp So there 500 companies in the smp Nvidia is probably three or five percent of the total value of the smp so five cents on your dollar goes into Nvidia Right about 20 percent. Is all right 24 25 percent 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 that My net conclusion is that none of them have any fucking 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 an aggregate They're less than the smp by the amount of their fees.

1:20:51It'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 For 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 For savings plan find out at work if they have profit sharing or IRAs or Ross Whatever the the I figure 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 figured it's called if you save five thousand pounds through your work the government.

1:21:44I think we'll match it Put in a thousand pounds There's all sorts of saving schemes at work eight corns 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 Because 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 uncomplicated from someone that's 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 an account in a couple of minutes.

1:22:20I probably asked 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 pull someone or know someone and you can invest what's the minimum you can invest a dollar a dollar a dollar Go to public dot com. I mean start with a basic a basic low -cost ETF for index fund 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 You're gonna 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 and video unilever No, but Nordisk whatever you think you have inside 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 Because 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 stowishism.

1:23:26We 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 dollars a week my summer between my junior and senior year including rent Because I need a $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 shit as much as you are Right try and find reward from exercise from relationships not from signaling wealth with kind of stupid shit Right, I call that stowishism.

1:24:08It's really more about discipline develop a savings muscle one and appreciation for time and how fast it's gonna go I was stupid I remember my best friend Lee Lo is picking me up to go to the beach when I was in college And he was scrambling to find two thousand dollars to put into something else an IRA Roth Whereas company a bank he was working for is just out of college if you found two thousand dollars They would match it with another two thousand I thought I said to him these exact words of two thousand 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 Because he was that lame guy scraping together two thousand dollars when he was twenty three I went out and spent my first bonus check at Morgan Stanley.

1:24:55I got twenty eight thousand dollars my first year out of college Morgan Stanley 28 ,000 dollar check I go out and I buy a thirty five thousand dollar BMWs hung swim goggles from the rearview mirror thinking that would impress people I don't know what I was doing. I figured out if I bought a Hyundai For nine thousand bucks, which you could get in 1987 or whatever it is and invested the other 20 In SPY never looked at again. I would have enough money now to buy eleven for ouries Including that new electric Ferrari that for some reason appeals to me which makes no sense an electric Ferrari anyway You're gonna love us.

1:25:27I tell the people who work for me that I drive up in a Ferrari and I say if you work really hard someday I'll have two foraris I don't have a Ferrari by the way My other joke about a Ferrari is Ferrari is like having a long consistent erection. I don't have a Ferrari anyways Anyways, where were we going? At realize people aren't as impressed with your shit 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 in video. 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.

1:26:39You're gonna realize Nothing beats over the long term Warren Buffett what a third wealthiest man I'm giving you the same answer he gives If someone has 10 ,000 bucks higher than best and he's like low cost index funds To two and a half hour conversation I know it's it's the boring shit that makes you rich. Yeah, it's also I I've got a lot of CS. It's the boring incremental stuff the most shareholder value 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 on my head.

1:27:24I 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 1000 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 zoom a beach Oh Oh my god.

1:28:11Thank 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 gonna wait till I get I have 500 pounds I'm gonna 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 gonna get old We don't recognize how fast time is gonna 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 time your advantage when you're young is time And you're gonna 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 and who thinks of this I But it is it is I 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.

1:29:16Honestly. I probably started at 28 That's still early the most people but it goes to the notion of back to the adversary young person Most young people don't have the discipline to invest any money they get their hands on Because a capitalist economy is the the smartest people in the world with the most godlike technology Are presenting you with amazing irresistible offers to upgrade from economy to economy comfort to add To add flareless chocolate cake to your order from baltasar balangerie and one minute or less something oh my god But wait there's three other people looking at this room this hotel room and it's going on sale and I bet everybody It's so difficult to hold on to any money You want to find ways of for savings a house is for savings to a certain extent because people don't want to be evicted from their house Going to work for a company and getting options and getting equity the gross tax deferred That's sort of for savings But you want as a young person try and find as many ways as possible to have for savings and I opted That rounds up to the nearest dollar and then invest No matter what that is for savings.

1:30:20It is very difficult To take money that is in ever comes to your hands And invest it so it find for 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 Where that the government matches and most corporations offer something Real estate. I've had a lot of guests talk to me like Morgan House or the others that have a sort of mixed view on where the real estate is a good investment What's your thoughts on it? Should I be investing in real estate? My brother sits in the big thing when I was 25 he said Steve If everybody is playing the game there are times probably aren't great from it Goes back to sex 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 that real estate has not outperformed other asset classes the reason I like real estate is that one In the United States is very tax advantage There are very few asset classes you can lever up four to one 20 % Down payment.

1:31:25I can't buy apple. I can't buy a hundred dollars with an apple stock for 20 bucks So it's it's a huge leverage The interest on that is tax deductible in addition if you sell a home this true in the US on the US I don't know in the UK If you buy home and sell it after hold on to it for at least two 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 round 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 for 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 improved housing permits This quickly as we should which has made it more expensive for entrance young people kind of forward homes The average homes come from 290 to 420 through the pandemic in the US And if you look at interest rates it means the average mortgage payments come from 1100 to 2300 dollars So it used to be two thirds of America could afford a home now.

1:32:38It's one third 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 for 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's 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 It can lose money, but the reason I like it Is because it is a form of force savings people generally speaking will make that mortgage payment or try and figure out away Now you want to make sure that not more than 40 % of your income goes into a house otherwise.

1:33:24It'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 grew up thinking I have to have a home and so they just become Overleavoured 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 And they might be able to able to move then and you talked about geographical opportunity when you're young That's right. You get tied get tied down especially if your home goes down and value But I still think it's a in the US at least real estate's the most tax advantage and if you're on commercial real estate in the US You can depreciate it two or three percent a year You can't depreciate a stock two or three percent a year Is there someone that shouldn't buy a home then in your view Is there a certain demographic or age or person with a certain talent that shouldn't 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 seven years If you hold on to a home for seven years you should be able to write out most economic cycles or a economic down cycle Um, I think there's some wonderful things about running 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.

1:34:33I don't know. I think I'll I think home ownership 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 is become somewhat of a hallucination if you will or thank you for a lot of young people The other thing I came to learn is I got money and I it was almost like someone pulled the curtain back for me is how wealthy individuals Play the tax game.

1:35:08Oh my gosh, and it's a tax game that the average person has no idea is going on Gotta 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 a 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 charts some tens of billions of dollars thereby increasing The income of Apple Ireland at a lower tax rate and decreasing the income in the US They're by lowering their overall tax rate.

1:35:56That is pure tax avoidance Every organization every corporation does this to the help 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 paid between six and eight percent tax rate. What are the tax games they're playing? Oh, this 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 say sure you own a hundred dollars in Amazon stock Yeah, 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 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 that Isn't that sweet Stephen?

1:37:05Isn't that nice? No, it has nothing to do with his father give me a fucking break He aggregated 160 billion dollars in wealth He would pay about another eight 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 piece out to Texas or Florida and pay no income tax So all the people shit post in California in New York Show me someone who's create all of us and can't handle San Francisco politics I'm gonna show you someone who needs to recognize a capital gain and as all of a sudden decided they like Texas politics It's really not very it's very disingenuous.

1:37:42There's The tax Loophole I've leveraged in the US or 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 Because it was a business worth fit less than 50 million your business would qualify in the US is QSB small business If you hold onto that stock in that company for longer than five years when you sell it the first 10 million or 10 times the basis Our tax freeze 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 invested in a company brought a company out of bankruptcy.

1:38:28I invested two and a half 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 3600 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.

1:39:11He makes 600 $1 .6 million 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 is 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 make still 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 It's probably the the first point where you said a lot of what rich people do is they'll buy a stock So 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 Right, and I just hold the Amazon stock now.

1:40:28I'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 the level of 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 know I want to get into too much trouble, but leverages 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 gonna take 40 cents of that 40 % of it If you want a million dollars in stock And it goes to two million You don't get taxed on it till you sell it.

1:41:19Yeah, so just never sell it never sell it And that's what Elon's doing with his company's People say he's got you know 200 billion dollars whatever in fact He's borrowing tax free against those companies and then when he finally needs to sell it to pay off some of those lands He moves to taxes Despite the fact it built all this wealth in California Smart I think one of the great advantages of life is um it as it relates to wealth creation is really getting good tax advice Because 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 variants 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 it you know Being around a lot of people now that are masters in tax it was like Yeah, I describe it as someone pulled back a cut and that I never knew was there And all these people were doing magic behind this cut and no one ever told me that cut and existed And it's called tax or we don't all pay the same tax Because we're not supposed to talk about it again Not talking about it is rich people trying to keep poor people down.

1:42:22Yeah, because rich people talk about their taxes a lot 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 1800 bucks an hour to to figure out the smartest when I set up a company I talked to my tax person and I'm about to get a big payment for my podcast distribution company I talked 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 a bust of 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 gonna 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 Sounded awful that sounded awful Sitting here with your bucket of sand This is how we fuck the middle class This is how we really screw over the little guy We have a closing tradition this podcast leaves the question for next I don't know who's anything at fault What is the last thing you learned how to do just because you wanted to learn how to do it That's really interesting You know it sounds Oh this is gonna sound so tried but my boys and I are You know when you get when you're a dad You Ego maniac like me I just assume my kids we're gonna be super into world war two history And crossfit because I thought oh they would think I was such a hero that they'd get Well, you realize if you want to be good dad you have to be engaged In what your kids are engaged and otherwise you're just not gonna engage I have no interest in sports.

1:44:43I 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 because it's a way I engage with my boys Well next year we'll go yeah, I'm a Manchester United fan. So man you how fucking predictable Literally man you You grew up in Manchester right off my family did so my siblings were born there Yeah, the only thing we're worse than that would have been man city, but you have okay.

1:45:28You have man You rights then if you're a man I have to tell people that like like because 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 Dublin in the southwest which countryside but One of the strongest brands in the world my my six -year -old son has a friend coming They're gonna take the train up just to do a tour of the stadium. Oh really how many times do you do that? Do they coming? I think it's in a few weeks. We're going but I mean we're going to Germany for the European championships Our whole family our activity is we explore Europe we follow We go you know see FC Barcelona play.

1:46:08I mean this is a position of privilege. Mm -hmm, 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. We plan our lives on not not a round 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 Yeah, it's one of the few places men are allowed to hug each other feel sad feel joy 100 percent But it's I've been to Because I'm in the corporate world Amazing sporting event the best sporting events in the world and the Olympics this year Nothing matches Premier League football.

1:46:43Nothing. It really is special That's what I learned to do. Hey, man, it was super interesting because um I've read in your work about like buying people buying football clubs and stuff like that And they're never going to make money but the the asset is basically valuable because someone else wants to buy a greater full 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 come from 500 to 2500 They're men who are in a massive midlife crisis The way to become the most interesting person in Cleveland is to buy the Cavaliers of the Browns overnight You're the sexist man in Cleveland if you've worth 50 billion dollars Why wouldn't you spend five billion to why buy the Washington commanders or You know to buy I think Tottenham's up for sale right now I've 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.

1:47:49I had it off for good out 10 million pound convertible note I'm like we and then my sky my friend of mine's a famous historian of Scottish is like you'd be the most hated person in the United Kingdom It was they would hate you you knew 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 Think what do you think yeah? There's a pain equation with buying sports teams because you're buying a tribe Yeah, and the chances are you won't win most of the time And then you have to deal with like Dave from I'd know Southampton whose entire life is that football club that you've just bought And he is pissed and unless you went trope who's from day one you've screwed up and who does yeah No, it's a horrible pain.

1:48:30Yeah, anyway, let's go put it on Oh Q1 is often when businesses start implementing new systems and processes in hopes of creating efficiencies for the year ahead And over the course of my career I've learnt just how crucial having the right systems in places one which has helped me across many of my investments is net suite They're also a sponsor of this podcast net suite is the number one cloud financial system through their streamlined platform You'll find all of your accounting financial management inventory and HR in one place Their technology has been a real game changer Especially for my team at flight studio as over the last year We've moved out of startup mode and into scale at mode We no longer have to juggle multiple systems and having everything together has reduced the number of manual tasks and errors Over 41 ,000 businesses have chosen to future proof their business with net suite So if you'd like to learn how it can help your business head to netsweek .com slash Bartlett and free download the cfo's guide to AI and machine learning That's netsweek .com slash Bartlett