The Financial Mistake We Keep Making and How to Stop

22:26Andrew Ross Sorkin:The data bears it out. Women historically have made better decisions around money during crises. And that's something that I think is a fascinating lesson. And when you think about so many of the people who've been in charge during these periods, and by the way, this book is a book, most of the people who were in charge are men back in 1929, almost all of them. but I would argue that I think a couple of women around the table or maybe a lot of women around the table might have helped. Well this is interesting because you found that in the past 100 years women have still not changed their mindset toward managing money.

23:04Andrew Ross Sorkin:Most women when they're polled say they're not confident in their abilities to manage finances and men invariably We are overconfident about our ability to manage finances. Okay. And you say that retirement is a woman's crisis. Tell us why. Well, it's a women's crisis, frankly, because you're lucky that you all live much longer than us these days in America. 81 years old versus 76 years old. And so there's a big gap in terms of just how long men and women are living. and as a result, from a retirement perspective, in terms of having enough money in retirement, just think about what that looks like and how long, hopefully, we will all be here on this planet together, but also how much that's going to cost.

23:55It's a woman's crisis because a woman's going to outlive a man in most cases.

23:57Andrew Ross Sorkin:In most cases, the women are going to outlive men.

24:04Well, something worked out for us in the end. That's really good. Our audience has questions for you. So Ginzi is here. What did you want to ask?

24:11Andrew Ross Sorkin:Hi, Oprah. Hi, Andrew. Thank you for having this conversation today. So a little bit about my story. I worked a little bit through high school, through college, through graduate school, and I worked professionally in health care, and I've had no financial education formally. When I hear rumors of an impending recession, what advice do you have for people like me and also for my parents who are hardworking and are of retirement age, what advice do you have for people like them? Okay, so the first thing I would say, and this is in regards to your parents, it's important, and I sometimes think it's a hard conversation to have, it's important to have an honest conversation with your parents about what their economic situation even is.

24:56Andrew Ross Sorkin:A lot of us don't want to even talk to our parents about our economic situation, their economic situation. So the first thing is, it's just important to get your hands around what that even looks like so you know. Do you know? Not really. I was going to say, yeah. So have that conversation. Find out, you know, whether they own their home or rent their home, have a mortgage, how big that mortgage is, have credit card debt, don't have credit card debt, so that both you and them can try to live, you know, within your means. I think the biggest thing is not about getting money in or out of the market or anything else.

25:33Andrew Ross Sorkin:It's about just figuring out what your current state of play is. And if things went wrong, if for whatever reason someone loses their job for six months, can you survive for six months? Right? Could you? I mean, yeah. I mean. You know, that's great. Sure. But I think that's the important part. I think it's trying to understand. It's trying to understand that and have that honest conversation. How many of you could answer yes? You don't have to raise your hand because I don't want to embarrass anybody. But could you, if you lost your job, could you survive for six months? Can you answer that question?

26:12Could you? Yeah. And should it be six months? It used to be like three months, but now it's six.

26:20Andrew Ross Sorkin:I like six because I'm conservative. Yeah. I want to know that I'd have six months to try to come up with another game plan. Yeah, yeah. I think that's the key. It's being able to buy yourself enough time to come up with a game plan. I think most Americans aren't there. And most Americans are not there. They're like two or three paychecks away from being out. Exactly. And that's the hardest part. So if you can get ahead of that. Yeah. So having an honest conversation starts first. I think that's the key. And it's also, by the way, about having an honest conversation with yourself, too, about your own finances, about your spouse's finances, about what it takes to take care of the kids, and about what your options could ultimately be if you got into a tough, tough moment.

27:08Andrew Ross Sorkin:So I understand that I think there is benefit with having spouses, and there's a difference, I shouldn't say. I shouldn't say that there is a benefit for those who are single like me. You know, not... Don't go getting a spouse because you think you're going to get a better benefit. No, no. That is not a reason to get a spouse, okay? Yeah. You're saying the tax benefits of being married? I don't... I honestly, I really don't have that much knowledge on finances, but if there is, there is a difference. You know what? Get married if you fall in love. Don't do it for the taxes. Yeah. Do not get married for a tax break, Jensen.

27:46That's it. No. That's both of our advice to you here today, okay? 100%. Okay? As a single woman, you are capable of taking care of yourself, okay? Period. That is it, okay?

28:01Should I get married for taxes or have children for taxes? You get more tax breaks with children, too. No reason to have them. Like, Gail, you should have children because you want to have children. Gail used to say, you should have children so our children could grow up together and be friends. And I go, that is not a reason for me to have children, to be friends with your children. Anyway, Debra, you have a question? Yes. Yes. Hello, Oprah and Andrew. Thank you so much for having me today. Andrew, my question is, as a 33-year-old middle school art teacher whose job provides stability and an entrepreneur whose business, Godly Innovation, focuses on marketing and social media, I'm curious, with the rise of AI and hustle culture, will traditional milestones like buying a home, getting married, settling down, be pushed back for millennials?

28:54Andrew Ross Sorkin:So I don't know if they're going to be pushed back for millennials or not. I think that the idea of the hustle culture is going to expand in remarkable ways. Meaning that because AI hopefully is going to empower us in certain ways. So there's a lot to be excited about when it comes to AI. And I think that will sort of push this hustle culture, if you will. But I also think there's going to be a downside. I mean, I often talk about, you know, what happens in an AI bubble if it pops. That's the bad news. But I often worry also about what happens in success. Because there's going to be a transition period invariably where people are going to lose their jobs.

29:37Andrew Ross Sorkin:However, it depends what kind of job you have. I actually think if you're a teacher or if you're a nurse, you actually probably have better job protection. And in fact, I think the need for human connection is going to be even greater. So jobs where people actually connect on a human level, I think that's ultimately where the greatest opportunities are ultimately going to lie. And at least be the most protected jobs. Yeah, yeah. So you're safe. Thank you. I think you're safe. What is one financial mistake that you see people making over and over again that you would just like to say, stop it? Look, I think actually post-pandemic, we moved into this YOLO world, right?

30:24Andrew Ross Sorkin:You know about this? No. What is the YOLO world? YOLO? YOLO. You only live once. Oh, that one. And because people sort of have this you only live once idea, they're not saving money. They're going into debt. They're saying, you know what, something crazy could happen on any given day. So I got to do it now. And I get that. And I appreciate that point, too. But I fear that there are people who are going into debt who aren't thinking about what the future looks like. and that to me is the hardest place to be because if you do get into one of these moments where there is a crash or a crisis or something that's not great, then you're really behind the ball.

31:09Andrew Ross Sorkin:You've YOLO'd. You've YOLO'd. You've YOLO'd. Yeah, but I see that attitude for everything though. People are like, oh, well, no, I don't really have the money for vacation, but listen, you only live once and so I might as well do it now because who knows if I'll even be living five years from now. But I think that's actually been a change in the culture, literally in the last, I think it's that. I think it's social media. Social media. Because you see these images of everybody who's on their vacation and they're doing this and fabulous that. And they're YOLOing. Yeah. And, you know, in the moment when everything's working out, YOLO is great.

31:42Yeah.

31:43Andrew Ross Sorkin:If it's not working out, it's going to be a different story. Right. So if you don't, you should not YOLO unless you have six months saved. Yes. Then you can YOLO. Then you YOLO. Don't you agree? You should not be YOLOing without six months in the bank. Kyle, what did you want to say? Hi, Oprah. Hi, Andrew. Hi. I'm a CPA. I've had a number of different finance jobs. And as part of that, this conversation really resonates with me. My wife and I have 13-year-old twins. and they are already talking about college. When we graduated, our degrees were a fast path to the careers that we still have today.

32:34Andrew Ross Sorkin:And I really question whether that's going to be a reality when they're older. Do you think, I guess I'm curious what conversations you've had with your family, your kids about this, and whether you feel that a greater emphasis on unconventional approaches like train school should have a higher priority. So I have twins too. Two 15-year-olds, and I also have a nine-year-old daughter. And my wife and I talk about this all the time, especially in the age of AI, and who's even writing their papers, by the way. Talking about writing books, who's going to write the papers? I still think that a college education is valuable for a couple reasons.

33:24Andrew Ross Sorkin:One is I think the act of learning, the act of the logic train with which you learn, even if the information itself, you know, I have a son who says, I'm never going to need this information again, right? Or, you know, I'm doing this math or this science, but I'm not going to use that later. And it's not about, I always say to him, it's actually not, it's not about that. It's about the active learning. And in an age of AI, by the way, where I worry about what it's going to do to our own sense of learning or lack of learning, I'm pushing on them two things. One is they're going to need to go to college.

33:59Andrew Ross Sorkin:College, I think, is actually going to be very, very valuable. But also at college, I think the hope is that not only are you learning how to learn, you're creating relationships with other people. And I think that those relationships can be both valuable professionally, but also valuable to learn your way through life. What are the most important financial lessons you and Pilar are trying to instill in your kids? The six months rule, I know that, yes. The value of a dollar. The value of a dollar. The value of a dollar. The most successful people that I know, and some of them are billionaires and all sorts of people I've covered over the years.

34:43Andrew Ross Sorkin:The people I respect the most value a dollar. Warren Buffett still lives in that home of his in Omaha, and he still values a dollar. A dollar saved is a dollar made. Okay, so how do you teach your children to value a dollar? Well, that's harder. Okay. Yeah. I think for us, it's about, I talk to them about money. I talk to them about how much stuff costs. And I talk to them about how hard it is to make money to pay for the things that they want. You know, they want fancy sneakers or they want, you know, this or that. And I say to them, do we really need that? Do we? You know, my father, we used to drive around in a Buick Century.

35:34Andrew Ross Sorkin:You remember what a Buick Century is? Of course. And I always wanted him to get a fancier car. I thought that a fancy car. Yeah. And he was a guy who always talked about the car gets you from A to B. It doesn't have to be something else. And I think that that instilled in me, I have great respect for frugality. and even people who have an extraordinary amount of money who have an extraordinary amount of money with what I call discretion. Meaning they can go spend it, but they don't spend it in a flashy way in front of other people. Absolutely. You know what? You were talking about that. Obviously, I don't have kids, but I have observed over the years that teaching children the value of a dollar comes when that child gets their first job.

36:19And I've seen people who have, you know, obviously you're around a lot of wealthy people. I see a lot of wealthy people. with kids who don't work, have never worked, and those kids don't seem to, they have a greater sense of entitlement than people's kids who do work. I think the greatest thing you can do for your kids, no matter how much... Yes, make them work early. Make them work early and get them to understand. Because you don't know what$500 is until you've had to work at a store for two weeks to get that paycheck, the first paycheck.

36:51Andrew Ross Sorkin:Even if it's making sandwiches, scooping ice cream. I would agree. I just think, look, in this day and age, by the way, because of social media, I have a son. He's taller than I am. We get on an airplane. He says, Dad, we got to get a lease premium economy. We got to get into business class because I can't fit back here. Yeah. He's got to fit back there. I was like, I've been fitting back there for years. Well, you've interviewed, you were talking about Warren Buffett. And I know with DealBook, you've interviewed some of the most powerful, famous, richest people in the world. So have you. Yeah.

37:23Andrew Ross Sorkin:If not more so. Yes, but I want to know what you specifically interview a lot of powerful people. And I want to know what lessons you've learned from them about the nature of power and actually what it does to people. I think there's two things that have always been the big surprises for me. The first is that no matter how much money you have in your bank account or whatever title you have on your business card. the money is not emotional armor i've always thought and i think a lot of people project onto people you think oh goodness they got a lot of money yeah they can handle the criticism the critique the whatever it is and in a way i think it's almost the opposite um oftentimes when people have great success they have a lot of yes people around them yeah yeah and so it becomes even more You know what?

38:17Henry Kravis told me once that rich men and pretty women never hear the truth. That came from a rich man. Yes. Rich man and pretty. And I think that's true because the more you have, the more people are always trying to tell you exactly what they think you want to hear. And so it's really important as you become successful in your own lives that you surround yourself or at least have people that you know are going to tell you the truth no matter what.

38:48Andrew Ross Sorkin:And the other one, and I keep thinking about this now actually with the kids, how do you instill this in kids? I almost think some of the most successful people I know and successful people you know, their drive comes from a sense of insecurity.

39:07Andrew Ross Sorkin:and that drive that they have comes from what I would describe as hopefully a healthy sense of insecurity. I think about this because how can you instill in your kids a healthy sense of insecurity but not an unhealthy sense? Right. Because I think some of the people who've really shot the moon, it's driven by a place of trying to prove themselves. And then when they get to the top of the mountain, just when everybody would think that they should want to ski down the mountain because they got to the top, then they want to stay there. And so they got to keep going. Yeah. And what is motivating, incentivizing people to do it?

39:41Andrew Ross Sorkin:Ultimately, no matter how successful you are, I think most people, they just want to be relevant. And they want to matter. And they want to matter. Matter. Everybody wants to matter. Okay. So obviously you're known for covering inside workings of finance and tech and now AI. I just was interviewing these folks from the AI doc, you know. Yes. And there is going to be like lots of trillionaires in the future. How does that sit with you? I have very complicated views of this. Yeah. I love success. I want all of us to be successful. So I don't have a problem per se with people getting super, super rich.

40:25Yeah. In fact, I think it's something a lot of people can aspire to.

40:29Andrew Ross Sorkin:Can you believe the people in 19... Could they believe where we are now, the people of this era? Could they even believe that we are where we are now? There were two billionaires in 1929. Yeah. Now, there's going to be, as you said, we're going to get into this trillionaire category. So the future of humanity is going to be in the hands of about eight people. Well, and that's scary. I think when you think about the power that those people have, that part is what makes me anxious. And the question is... Not the fact that they're going to make trillions of dollars. Not the fact that they're going to make trillions of dollars as long as they didn't make it off of everybody else's back.

41:04Andrew Ross Sorkin:Yeah. And that it gets redistributed in some way in the form of taxes and they actually pay their taxes and they don't lobby not to pay their taxes. I mean, I think one of the problems we have today is we have some people who made extraordinary amounts of money who then have figured out ways because of how much money they have to not pay their taxes and or aren't giving their money away or things like that. And so that to me is the thing I worry about. But the power piece, that's much more complicated because we now are about to get to a place where there are going to be people who are going to be the equivalent of nation states.

41:37Yeah.

41:37Andrew Ross Sorkin:Yeah. So when you finished writing this book, I know you must have felt like, oh, my goodness, I have given birth. I didn't know I could. That's true. You sent it off to your publisher. And what did you most want? I mean, obviously, every author wants his book to hit the New York Times bestsellers list. But what did you most want the culture and those of us who walk away from the reading of it to leave with inside ourselves? Probably two or three things. Yeah. I wanted people to go on the journey of being with these characters. I wanted them to feel them. It's a romp of a story. It is a romp. And so I want people to think about the sort of different morality questions about these people and about what they were doing.

42:24Andrew Ross Sorkin:I think some of them are super complicated. There are moments where I think that you'll think they're great and then you'll go, oh, my goodness, I can't believe they did that. Are they still as great as I thought they were? Look at how he double-crossed him. Oh, my gosh. All of that. Yeah. And then I think the larger takeaway is I think we today can still identify with those people. Mm-hmm. And do we make some of the same mistakes that they did? And how can we prevent those things? And I think that's really what I'm going for. Yes. And it brings us back to the enduring lesson is not that booms can be prevented or that busts can be fully averted.

43:02is that we need to remember how easily we forget. Easily we forget. Thank you, Andrew Sorkin. Thank you. Thank you. Thank you. It's a delight to talk to you. Y 'all, don't let the number of pages, because when I was telling Gail about this, she was like, whoa, that book is big. That's a big book. Don't let the number of pages intimidate you because the print is so beautiful, the font is so beautiful, and it's a romp. It's like reading a novel that is also social history. And it's available wherever you buy your books. Thank you so much, Andrew Ross. Thank you so much. Thank you.

43:40Andrew Ross Sorkin:Can I say thank you to you? You can say thank you to him. I just want to say one thing just for everybody, just for you. I mean, if you're me, this is like you can't even believe you're sitting in this chair. Aww. Seriously. That's so sweet of you. Thank you. So sweet of you. But I am so proud of you because we went to one of these conferences and I, you know, met Andrew and we were hiking. We were having a good time and we made it to the top of the hill. And I enjoyed our conversation. I thought you were pretty smart, but I know you're smart. Well, I grew up watching her every day after school.

44:17Andrew Ross Sorkin:And I told you this when we first met, I think, in the city maybe 10 years ago. And then we went on the hike a couple years ago. And I just, this is unbelievable. So thank you. Thank you so much. I can't believe you read this book. Yes. You're like a hero of mine. Yeah. Great. I love that. So well. Fantastic. Well, I hope this conversation sparked your curiosity. Andrew Ross Sorkin spent eight years researching his book, 1929, Inside the Greatest Crash in Wall Street History and How It Shattered a Nation. Andrew brings to life the people, the decisions, the missed warnings that led to one of the most pivotal moments in American history.

45:01It's an eye-opening look at the lessons that can help us better understand the economy we live in today. Scan the QR code on your screen to get your copy. I think you'll find it fascinating. Our listeners tell us that the podcast is resonating with you and is serving as a bright spot in your day. That means a lot to me. So here's the thing. I would really appreciate it if you like and subscribe to the Oprah podcast on YouTube or wherever you podcast. It's just a quick tap of the subscribe button. And that way you won't miss an episode in your queue. You don't have to pay anything. I know subscribe usually means you're paying something.

45:40But this time it means you just are notified when there's something new. There are many more to come that we're excited about. So thank you for watching and listening.

45:52Thank you.