Transcription
If you are doing a lot of side hustles, it's very, very difficult to be great at your main hustle. The only way you're going to build real wealth and economic security is to go all in on one thing: greatness. Focus. None of this matters; none of it means a thing if you can't have deep and meaningful relationships.
Scott is a professor of marketing at NYU Stern School of Business; he's a best-selling author and has earned a massive following through his lectures, podcasts, and YouTube channel. Scott Galloway: How do we rewire our relationship with money, because most of us have a stressful relationship with money? I think we should have a class called “Adulting” in your senior year of high school that says, “My kid can do derivatives, but I just figured out he doesn’t understand the interest rate on his credit card.”
You want to be good at money? Put down the facade and start talking to people about their investments, how much money they make, what they do with their money, how they save money. Women are correctly and justifiably, especially young women, blowing by young men. They have more discipline; they have higher EQ; quite frankly, they're just more mature. If you want to score above your weight class economically, romantically, get out a big spoon and get ready to eat [ __ ] . Life isn’t about what happens to you; it’s about how you respond to what happens to you. What I tell young people is you can have it all; you just can’t have it all at once.
If you're actually getting into a committed relationship, how do we start having healthy and effective conversations about money? I think what really screws up relationships is not financial mishaps; it's… J Shett, the number one health and wellness podcast. J Shett, the one, the only J: Why are 30-year-olds today earning less than their parents at 30, and what are the challenges that that will create in the future?
Sure. So first off, that’s the first time that’s happened in our nation’s history, and I think that is a fundamental breakdown in the social compact. If you were to reverse engineer to what is the incendiary port on every social issue we face—which turns a small cut into an opportunistic infection, takes righteous movements but turns them more angry, more polarized—I think it’s that the compact is broken down. If your kids… if you play by the rules, you work hard, get some luck… the basic goal is that, or notion is that your kids will do better than you. And when your kids aren’t doing better than you, it creates shame and rage all around the household. So I think this is really what, if you will, is kind of Ground Zero for what we need to fix in the United States.
Now, why has it happened? The incumbents will say it’s things like globalization or network effects or income inequality with technology, sort of. But I would argue it’s been a concerted effort by the incumbents who ultimately, understandably, weaponize government and put in place, advocate for their own interests and end up passing social and fiscal policies that essentially have transferred wealth from young people to old people. Let me give you some examples: the two biggest tax deductions are mortgage interest rate and capital gains. Who owns homes and stocks? People my age. Who makes all of their money through earned income and rents? People your age, or people your staff’s age. COVID: 7 trillion into the economy; 85% of it wasn’t spent, and it was all debt-fueled. So what did that do? Most of it ended up in the market, which sent housing prices and stock prices skyrocketing. It’s great if you own a house; it’s great if you’re an incumbent; it’s great if you already have stocks. But if you’re trying to get into the market, it just took up the price of everything. We need churn. When you bail out the baby boomer owner of a restaurant, all you’re doing is robbing opportunity from the 26-year-old graduate of a culinary academy that wants her shot. The reason I get to live the life I lead and I have economic security is that in 2008 we bailed out the banks, but we didn’t bail out the economy, and Apple, Amazon, and Netflix were trading at somewhere between eight and twelve bucks a share each, and I was coming into my prime income-earning years. I bought those stocks, and now they’re somewhere between $180 and $700 a share.
Where does a young person find disruption and churn? Because the general viewpoint now is that a virus killing a million people would be bad, but baby boomers getting less wealthy would be tragic. So we borrow the young person’s credit card, we run it up, and we flush the market with capital and liquidity and bail out the boomers. Also, we have a system that is… the demo and Democratic is a little bit… is part of the problem: that old people keep voting themselves more money. 40% of all government spending goes to people over the age of 65; it’s going to be over 50%. Right now, currently, the average 7-year-old is 72% wealthier than the average 7-year-old 40 years ago. The average person under the age of 40 is 24% less wealthy. So there’s this trope that young people are entitled. I believe they’re entitled to be enraged, and that is pretty much every major fiscal policy is a transfer of wealth from young income earners to either older people or owners; so earners to owners, young to old. And as a result, it’s working: it’s champagne and cocaine for people of my generation—not to say they don’t have problems—but young people are really struggling. Education’s more expensive, and I’ll wrap up here: housing is more expensive. So the primary means of starting to form a household, the primary lubricant of upward mobility—education—have exploded in cost. So I think they’re… I think they’re right to be really upset, and I think it creates dissent and polarization and anger across our society.
Looking at life as things we can control and things we can’t control, and hearing that there’s valid reasons to be upset, to be angry, sure, to feel pain… what can an individual do today in order to transform that for themselves? Well, there’s things on a macro level. I mean, the first isn’t… it sounds stupid, but vote right. Vote for people who are going to have some sort of fiscal responsibility; vote for politicians who are going to do things like a child tax credit; vote for people who are going to try and create more housing permits so there’s more housing. If you’re a graduate of an elite college that’s grown its endowment 40-fold—Harvard—but it’s only increased its freshman class 4%, realize that firm or that organization is no longer acting like a public servant; they’re acting like a luxury brand. My industry is really guilty of this. When I applied to UCLA, just down the street or down the hill, the admissions rate was 76%; now the admissions rate is 9%, and people my age like that because it’s taking the value of their degree up. But how many times have you heard people say, “I wouldn’t get into the college I applied to if I applied to now”? Well, that means your daughter’s not getting in. So we need to do everything we can to try and counter this rejectionist, LVMH, exclusionary strategy that has benefited the incumbents.
On an individual level, you still have as much or more agency in America as a young person than any young person anywhere in the world. You might argue, well, maybe someone with a good education in India, with the kind of updraft of the growing economy there. But on average, you know, you really wouldn’t want to trade places with any other young person. And while things are maybe more difficult for young people than they were for my generation—especially my demographic: a white, heterosexual male born in California in the 60s—kind of hit the lot right: free education, came of age during the internet… but I do think young people in America have it better, or have more agency than almost any young person in the world. And you know what it is? It’s about getting certification; it’s about being kind; it’s about making alliances with people; it’s about workshopping your 20s; it’s about trying to find something you’re good at, could that you could be great at; um, it’s a lot of hard work; it’s putting aside certain myths around, in my opinion, balance. I… I can just tell there were 10 or 20 years in your life where I’m guessing you did pretty much nothing but work. There’s not… it’s not easy in a competitive economy to be outstanding, and then surround yourself with people who make you feel good about yourself; make sure that you’re always mentally fit; and then make small investments when you’re young, both in terms of taking 3–5% of your income when you’re a young person, putting it out of your hands into low-cost index funds, such that when you’re my age, even if you don’t go double platinum or have a hit podcast, you’re still economically secure. And also make those types of little investments in relationships, because there’s a trope or a myth that very successful, very wealthy people crawled over other people. This populous Bernie Sanders, Elizabeth Warren argument—it’s not the majority—of very exceptionally successful and wealthy people are generally… generally high-character people. Because the best way to get ahead is to put yourself in a room of opportunities, even when you’re not in that room physically. You want to be the guy or gal that people talk [ __ ] about positively behind your back, right? You want to be the person that thinks, “Oh, my firm is hiring, and I know Jay is looking for a job, and I like Jay; I’m emotionally invested in his success; I’m going to put him in a room full of opportunities.” So just as we talk a lot about the power of compound interest and how $1,000 at 22 can grow to be $80,000 when you’re my age… small acts of kindness, looking out for people, trying to do them a solid, staying in touch, recognizing that… “Hey, you know, are you all right?” “Yeah, I’m fine.” “No, really, are you all right?” Those types of investments… I just went to a 60th birthday of two good friends, were my roommates; we met when we were 17 and 18, freshman at UCLA, and just like the… the affection, the bonding, the joy we’ve… we’ve registered over the last 40-odd years, you know, it’s just so incredibly rewarding. And I… I would instinctively—not strategically, but instinctively—made those types of investments when I was a young person, and… and also just now… Scott… for everyone who’s listening or watching… Scott turned up at my house and saw Amazon deliveries outside and carried them into the home… talking about high character and being thoughtful and sweet. I was very touched by that. You know, you definitely didn’t have to do that, and you went out of your way to pick them up, and so you… you definitely practice what you’re preaching right now.
Thanks for saying that. No, of course, of course. I… I genuinely recognized it, but I want to talk about both. I want to talk about the softer, internal mindsets and habits that you’re speaking about; I also want to talk about the more strategic, systematic focuses people can do. Let’s… let’s start with the… the more tangible. I was talking to my team about this before you came because I love getting into everyone’s heads about what’s everyone worried about, what’s everyone struggling with, what are we thinking about? And one of the big things that came up was, “I don’t know how to save.” Like a lot of young people say this to me today, like, “I don’t even know what saving means anymore.” They’ve not been trained in it; their education system let them down; maybe their parents keep saying, “Save, save, save, save, save,” but their consumption is high. Yeah, if someone’s thinking about saving today, how do they create a framework for healthy and realistic saving?
Well, the first thing: you have to have something to save. There’s just no getting around it; you’ve got to be able to make money. And the best way to make a lot of money is by starting and making a little bit of money. I coach a lot of young men, and typically what I do on the first meeting is I tell them to unlock their phone, and I say, “I’m not going to judge you. You know, I’m on TikTok; I watch porn; I’m not… you know, I’m not easily offended here,” and we’re going to find eight to ten hours a week out of your phone. And it’s ridiculously easy with young men to find eight or ten hours in their phone between Robin Hood, Twitter, what have you, and we reinvest it. And the first thing is we’ve got to figure out… okay, for me it’s physical fitness right away. We’re going to spend two to four hours a week getting strong, especially… I coach mostly young men, but I think one of the keys to mental health is feeling as if, when you’re a young man, that you could walk into any room and if [ __ ] got real, kill and eat everybody or outrun them. I think that should be your goal; I think it’s instinctual; I think it makes you feel strong; they make you feel kinder. The people who break up fights at bars are usually big, strong men. The second thing: you have to start making some money. I don’t care if it’s flipping on your smartphone to be a Lyft driver, a TaskRabbit, going to CVS and stocking shelves… even just a little bit of money gives you a taste for the flesh of money and gets you thinking about different ways to make money. And capital in a capitalist society is intoxicating, so we have to figure out a way to start making some money. Once we start making some money and we have a salary and we work at an organization, 98% of people will spend everything that comes through their hands, right? It just… you live in a society where there are the most impressive people and the most impressive technology ever in the history of our planet have one mission, and that’s to figure out a way to present with the ultimate offer at exactly the right time. “Oh, heading to Cabo for a girls’ weekend? Wouldn’t you like to upgrade from economy to economy comfort?” “Oh, only two of these rooms left. How about upgrade now to the special spa package?” “Oh, you just bought a pair of On Running shoes? What about these Bomba socks?” It is nearly impossible for a young person to save money if it comes through their hands; if they get their hands on it. You want to figure out a force savings; so everything from like the Acorns app that rounds up and puts the money automatically into a low-cost index fund… find out what government programs there are in your nation that… where if you sign up, the money is taken out of your check; maybe it’s matched by the government; maybe it’s matched by your employer: 401K, IRA, Roth… first thing you do: find someone smart at your company; talk to your tax advisor; go on AI and say, “What force savings mechanisms are most tax-advantaged that I can participate in at an early age?” Because you really just need to take somewhere between… between, call it, 3 and 5% of your income. If you start when you’re in your 20s… and in the UK they round up from £4,000 a year to 5,000; there are tax-deferred programs here such that you don’t get clipped 20, 30, 40% each year. So the first thing is, I’ve got to start making some money. The next thing is, I’m going to lean into my advantage. Your advantage when you’re young: everyone has capital when you’re young; you have more human capital; you have more time than financial capital. So I’m going to lean into that advantage, and if I can just figure out the discipline of getting a thousand, two thousand, five thousand bucks a year into one of these programs, I’m not going to touch it; I’m not going to think about it; I’m not going to trade; I’m going to focus on what I’m good at. By the time you’re my age, you’re going to be fine. But the easiest way to do that is a force savings plan. You have agency; make some money, and immediately—I don’t care if it’s… you start off making a couple grand a month as a TaskRabbit or whatever it might be—I’m going to take 2 or 3% of it and find a program; I said it never gets into my hands and goes into a low-cost diversified index fund.
Should younger people today even aspire to own a home, or is the American dream, that version of it, dead? The goal isn’t to be rich; rich is the things you see; wealth is what you don’t see. And this is what wealth is: ideally, it’s by the time you’re 40—it’s usually not—but it needs to be by the time you’re 65 or 70, because that… that release of economic anxiety frees you up to focus on what is really important, and that is deep and meaningful relationships. One of the things I love you talk about in the book, *The Algebra of Wealth*, is you talk about the challenge we have with our goals: the first is we set unrealistic goals, and then they’re super long-term. So we say things to ourselves like, “Well, in the next 12 months I’m going to save $112,000,” and it’s like we’ve never even saved $500. And you talk about this need to set a goal of like, “This is how much I’m going to save this month; like, this is where I’m going to start.” And it’s so interesting you talk about time and your work with young men, because I think time is so interesting because I think today most people would rather finish their workday, and we’d love to just switch on a show or doom scroll on TikTok. Yeah, and so there is more time that could be engaged in creating other revenue streams, etc. But what is really blocking us from doing that? I think everyone knows they have time; they know they want to make more money, but there’s something there that’s just blocking us from getting activated. What have you found that is…?
So I can’t speak for the whole population, but generally speaking, the lack of executive function—that is the part of the brain that controls that—is the prefrontal cortex, the kind of gas on, gas off; the part of the brain that says, “Stop playing video games and start studying”—that is maturing later and later in boys; it’s somewhere between 12 and 18 months behind young women. So many ways… a senior in high school, a woman who’s applying to college and a young man who’s applying to college… senior in high school, the woman is competing against a 16-and-a-half-year-old, and as a result, fewer and fewer men are going to college, and we’re in an economy where 40 years ago one in three jobs needed a college degree; now it’s two in three. Women are correctly and justifiably, especially young women, blowing by young men; they have more discipline; they have higher EQ; quite frankly, they’re just more… more mature. I say this in my own company: I have a lot of young people, a disproportionate amount of young people working in my organization; there’s some very talented young men, but I would describe them kind of as dopey, almost a little boyish. I have some young women in my firm who could be the junior senator from Pennsylvania. Women are just maturing earlier. So there’s certain biological things that get in the way of men having executive function. I also think that there’s so much temptation; I think there’s a little bit of belief of kind of YOLO, you know, “This is it; live for today.” I also think it’s harder for them to save just because everything’s so goddamn expensive, so it’s discouraging for them. It’s like, okay, I’m working my ass off, and I can barely pay for my… barely pay for my rent. So this is anecdotal evidence, but it largely represents the economy. When I got out of business school, the average salary was 100 grand; you know, I went to quote-unquote elite business school; I went to the… the high school… the average house in San Francisco cost $280,000, so 2.8 times the MBA salary. Now the kids at Harvard, still in elite business school, incredible compensation, average 200 grand right out of business school, but the average home in San Francisco is 2.1 million. Why? Because as soon as you have a house, you become very concerned with traffic, and you start showing up to local review meetings and making sure no new housing is built, which is great if you already own a home, going back to the rejectionist strategy, but it’s almost impossible now. It’s almost like saving for a home is out of my reach. The travel industry has boomed, and my thesis is that you have millions of young people who are going into their mating years and decided… let’s say… for a house… let’s save for a house. Then, pre-pandemic, a house is 290k; post-pandemic, it’s 420; interest rates from 3% to 7%; average mortgage went from 1100 to 2200. All of a sudden, the American dream has become a hallucination of fantasy [ __ ] . “It… I’m getting a backpack, and I’m going to do an Airbnb in Bangkok.” Travel stocks, hotel stocks, airline stocks have all boomed because I think young people have given up on the American dream of owning a home. But circling back to your question, it’s… I think recognizing you have agency; realizing that this is hard; it’s hard work; you’re working in an economy… build a kitchen cabinet of people who can advise you; it’s very hard to read the label from inside of the bottle; you got to work hard; there’s just no getting around it; I don’t care how talented you are; Beyoncé works her ass off. I mean, it just… people who want to be successful and influential after work work really hard. And then what I would also say is that forgive yourself. My first job out of college was investment banking; I hit the lottery; everyone was super impressed; I hated it, and I wasn’t… I wasn’t good at… good at it, and within two and a half years I was back living at home with my mother, unemployed. That almost kind of devastated me, but I was… my… my kind of success comes from my ability to endure rejection and move through it, to mourn and move on. So if you’re in your 20s and you’re thinking, “I’m not making a lot of money; I’m having trouble… like having a nice life; I’m… I’m not entirely sure what I want to do,” then you are exactly where you should be. Your 20s are for workshopping; forgive yourself, but keep trying; reach out to people for help; show up; get the easy [ __ ] right; show up early; be courteous; be kind; you know, think about how do I get more certification? And then the moment you lock in on something that you’re good at and could become great at, go all in on it. And I come from the attitude… I’m assuming people want real economic security. Some people say, “Scott, I’m not like you; I don’t want to live to work; I want to work to live.” Fine, but have an honest conversation with yourself around what you need to make to have a reasonable life. If you want to live in LA and you want to have a nice lifestyle, you just have to make a [ __ ] ton of money; there’s just… that’s just the reality. But if you say, “I’m not all about work,” then fine. Do you want to move to Santa Clarita? Do you want to move to the Inland Empire? Do you want to move to somewhere in Oregon? Fine. But have a sober conversation with yourself: what are your expectations, and realistically what kind of commitment and tradeoff are you going to need to get there? What I tell young people is you can have it all; you just can’t have it all at once. I have amazing balance right now, and looking around, I think you do, but that’s because I had almost none in my 20s and 30s, and I… I don’t… you know, this whole life… I don’t know much about you, but the life I lead now, when I’m in LA, I didn’t even know it existed in my 20s because I’m like, I need to make money, and I’m not… I’m not exceptionally talented, so the thing I can control is how hard I work, and there’s no getting around it. It’ll cost you some relationships; it cost me my hair; it cost me my first marriage; and this sounds crass, but it was worth it, because now that I have kids, now that I’m older, I have a lot of balance. So it’s a sober conversation; it’s a kitchen cabinet; it’s forgiving yourself; it’s trying to find something you’re good at; it’s a lot of things… more than anything… more than anything, forgive yourself if things aren’t working out in your 20s, boss; that’s where you should be. It very rarely do people come right out of college and go like this… yeah.
So well said; so much to unpack there, Scott, and thank you for kind of giving us so many points to check with. The first thing I want to ask you is, should younger people today even aspire to own a home, or is the American dream, that version of it, dead?
It’s situational. First off, keep in mind the term “The American Dream” was invented by the National Realtor Association and the Real Estate Association that wants to keep pumping up the price and the commissions on homes. If you live in a place like Los Angeles, where I believe quote-unquote the yield—that is the ratio, the cost to run something relative to the price to buy it—it actually makes more financial sense for most people to rent here. Makes sense for most people in New York to rent. You’re in St. Louis; you’re in Lansing, Michigan; it probably makes sense to try and save some money and buy and take advantage of first-time home buyers’ credits, what have you. So you want to find someone who, quite frankly, if you’re not good at math, is better at math than you, and say, “Does it make sense for me to buy a home?” Because you might be better off… the co-host of my podcast, *Raging Moderates*, is a very successful woman; her name is Jessica Tarlov; she’s the Democrat on the most popular cable news channel show called *The Five*, right? It’s four Republicans and Jess, and she makes really good money; her husband makes really good money, and they’ve decided not to buy in New York because they think putting the money in the market will give them more financial security. So greatness and great decisions are in the agency of others. I would talk to people, but don’t feel as if you’re a failure if you don’t own real estate, because real estate right now, as a percentage of GDP, as a multiple on rents, is at historic highs, meaning that you really don’t want to be house poor; you really don’t want to go all in because the National Realtor Association is telling you you’re a failure if you don’t own a home, because the last thing you want to do is just have no money for nothing else. The market corrects, and your house isn’t worth the debt on it; that is devastating emotionally and financially and from a credit standpoint. So it’s situational. Um, at the same time, there’s no getting around the psychic… there is some psychic income. I remember, you know, before I got married, I was thinking about… I wanted to commit to somebody; you buy a house; you get a dog; it’s sort of these emotional commitments, and also it’s… there is a certain pride of ownership. I think it’s situational: where you are in life, how much money you have, the city you’re in. But buying a home is meant to be an enhancement to your life; it’s not a suicide pack, and it may not… may not be right for everybody.
Yeah, I think what it gave people as a symbol was something to pursue, right? We started talking about… you go to college; you get a degree; you get a job; get married; you get a house; you have kids; like it became one of those template things. And so now when you take it out, it’s almost like, what should people be pursuing, right? If you got married, you… you got a good job; you’re working; you’re with your partner… it’s almost like people think they have to pursue… it’s almost like the assumption that you have to have kids; it’s the same assumption of, “Oh, we have to buy a house.” So what should people pursue instead, financially, when it comes to financial security?
The goal is… what I’ll call wealth. The goal isn’t to be rich; rich is the things you see; wealth is what you don’t see. And your pursuit should be wealth or economic security. And this is what wealth is: wealth is having passive income that’s greater than your burn. Two examples: I have a buddy who runs M&A for a bulge-bracket investment bank; makes between $3 and $10 million a year, depending upon the market, because it’s all current income; he pays 50% taxes between his ex-wife, his home in the Hamptons, and his master-of-the-universe lifestyle that he feels he deserves; he hasn’t saved a lot of money, and he spends most of it, and I know that firsthand; he has a lot of sleepless nights wondering what happens if the music stops; he is not… he is not wealthy. My father, who is 94, between his pension from the Royal Navy, Social Security, and he owns six washing… washer-dryer machines in trailer parks where he goes and collects the money with his walker, he makes $52,000 a year; he spends 48, so he is saving money despite the fact that he’s not working. So his passive income is greater than his burn; he is wealthy. So you want to put yourself on a track to being wealthy; you want to say realistically, “I can control how much I spend.” I’ve just… I’ve been coaching this couple living in San Jose, and they’re in their late 50s; I talk a lot about young people, and they say, “Scott, we’re in our late 50s; what do we do?” “How much money do you have? What’s your house worth?” Da da da. And by the time they’re 65, they’re not going to have enough passive income to pay for their lifestyle. I said, “Well, let’s lean into our strengths here. Why are you in San Jose?” And they said, “Well, we’ve always lived here.” I’m like, “Well, okay, your kids are gone, and… and you just mentioned you go to Costa Rica twice a year. Why wouldn’t you try and cut your burn 40–40% and move to Costa Rica and take that economic pressure away and sell your house here?” I think your kids would love to come visit you in Costa Rica. So the question is, put yourself on a path using basic math and what you really think you’re going to need in terms of passive income, such that at some point—ideally, it’s by the time you’re 40; it’s usually not—but it needs to be by the time you’re 65 or 70, because that… that release of economic anxiety frees you up to focus on what is really important, and that is deep and meaningful relationships. So the reason why I am so much happier over the last 10 years than I was kind of the first 45 years of my life is that economic stress was always there for me. I was raised by a single, grand mother who lived and died as a secretary; I felt like there was a ghost following us around telling us we weren’t worthy because we didn’t have money. Between college student loans, the dot-bomb crash, and the Great Financial Recession, I just never had enough money to have passive income such that I was done. Most… and a lot of people never get there; I got lucky; sold my last company about 10 years ago for a lot of money. Now, unless I really screw up again—which I’ve done a couple times—I can focus on my relationships. The resting blood pressure of a child in a low-income home is higher than the resting systolic blood pressure of a kid in a middle- or upper-income home. I think the majority of divorces are not a function of infidelity or a lack of shared values; it’s those things… one or more of those things might happen, and then again, the incendiary on it is financial stress. Two-thirds plus of… of divorce filings are from women, and we don’t like to say this because we like to assume all men are predators and all women are virtuous, but when a man is under financial stress, the reality is he becomes less… less attractive as a mate, and that can lead to real stress in the relationship. So what you want to pursue, if you’re not pursuing a home, you want to put yourself on a path; you want to get alignment with a partner; you want to track your spending and put yourself on a path to some level of economic security, of wealth, by say the time you’re 65. And if you’re young and you’re killing it, instead of buying a bigger flat screen or a bigger TV or maybe a bigger house, said, “What if I started saving 10, 15, 20, 30% of my salary and I got wealth by the time I’m 40 or 45?” Because to be in America, young and healthy and have passive income that’s greater than your burn, you’re just going to have a wonderful life. So it’s not acquiring anything; it’s getting to a point of economic security or wealth, and that’s a function of two things: how much money you make such that you can save—key to wealth is not how much you make; it’s how much you save—and also the thing you can control is your burn. You know, I have a friend who ran a hedge fund; it closed down; he makes good money, but not great money; living in Tribeca with three kids needed a million bucks a year to live that life; moved to Portugal; lives an amazing life with a beautiful home, great food, childcare, great education on 400 grand a year. I mean, these are… these are problems of privilege, but that has taken the world of stress off his shoulders; he now needs to make a very good living, not an outrageous living. So… but surround yourself with smart people who can help you make these decisions, but wealth is passive income that’s greater than your burn.
First off, recognize the majority of people telling you to follow your passion are already rich, and they made their billions in iron ore smelting. This is your job; your job is to find your talent. I have had a lot of women tell me they’re not interested in dating me; I have sent out thousands of emails to potential clients for my strategy firm; I have pitched hundreds of venture capitalists on my way to raising money. And the reason why I am wealthier than your average bear and get to spend my life with someone who, on a risk-adjusted scorecard, is exceptionally higher character and much more attractive than me is because I was never afraid to endure rejection. And we gamified saving money… who… and we had a whiteboard, and we literally made a game out of it. And the summer
Roll into my next property tax-free talk about money. Get really good at it. Roger Federer, do you think he never talks about tennis? Talks about it all the goddamn time. You do. You want to be great at money? Most people say yeah, I want to be great at money. Is anybody great at anything? If I wanted to be an amazing evolutionary anthropologist, would I never talk about it? Would I never bring it up in conversation? Would I never want to talk to other people about evolutionary anthropology?
If you want to be good at money, put down the facade and start talking to people about their investments, how much money they make, what they do with their money, how they save money, what they do to try and limit their spending. I talk about Stoicism. See if you can find a practice where you get reward, or a dopamine hit, from exercise or relationships. Gamify saving money.
My junior year at UCLA, I was in a fraternity with mostly wealthy Jewish kids from the valley. There were five or six of us out of 120 guys, and everybody knew who we were. We didn't have any money; we always lagged on our house bills. Everyone knew, "Oh, those are the poor kids, right?" And one summer we all lived in the same apartment building, and we gamified saving money. We had a whiteboard and we literally made a game out of it. In the summer of 1985, I survived for 12 weeks on 78 bucks a week, including rent, because if I didn't save 3,000 bucks by the fall, I wasn't going back for my senior year in college because I didn't have wealthy parents.
If you can gamify saving money with a partner, especially a romantic partner that you can be totally transparent with, God, that's powerful. We're building something; we're going to save a ton of money. Can we save five or seven thousand bucks this year together? And it's going to be 8,000 next year, and then it's going to be nine. With compounding, in five or six years, which will go really fast, we have 60, 80, 100 grand. Having kids is, I think, the most rewarding thing it has been for me. I didn't plan to have kids, but it was having kids with someone else and raising what feel like pretty good citizens. But a close second was building economic security with someone else. We had total alignment; we're going to save. We were transparent around our expenses; we were generous with each other. Oh no, you should do that. There's a very unhealthy dynamic sometimes in relationships, and this is sexist, but I found it to be true where the dude uses money to control his spouse, and the spouse turns it into a game of how much money she can spend without him knowing. Fortunately, that's getting flipped a little bit, or it's equalizing, because women are doing so well. Women under the age of 30 are making more money in urban centers; more single women own homes. But there's still, in my generation, this very weird dynamic between the sexes and money.
But going back to your original question, talk about it; understand it. If you want to be good at it, you got to get literate at it. You want to bring it up with your friends, and you're going to start learning. I spent four hours a week, probably, talking to other people about my economic well-being, what tax loopholes there are, where I should be investing. I have a lot of real estate. When interest rates come down, at what point do interest rates get low enough where I should be pulling a second out and putting it in the market? Knowing if I have a 10-year mortgage, over 10 years the market's usually up about 7 to 8% a year. Does that make sense, right? Think about it all the time. You're the average of your five friends; you've seen that study—body mass, politics, sports teams. But what's more interesting is one of those five people will be more economically secure, much more economically secure than the other four, despite not making a lot more money. You want to know those behaviors and those characteristics, and you want to model that person. But this is something we all need to be more open about; it doesn't make you less of a man. You're not supposed to have a lot of money when you're young; everybody screws up. I've been broke twice in my 40s; I was broke, and that was really—I was too ashamed to admit that to anybody else. It was like, well, you're supposed to be smart and great at what you do, right? So I think being a little bit more vulnerable, being open about it, and getting tips and, you know, kind of rules of the road from other people—talk about it.
Yeah. One of the studies I looked at, and you just brought it up here, was that in 2024, 38% of couples reported financial problems as the cause for divorce. Yeah, and it's what you talked about there, of being able to talk to your partner about money. What's a healthy way to bring up the subject, to connect with someone about it? Because, as you said, sometimes in the early dating phases it's really uncomfortable to talk about it because people feel you're a gold digger, people feel that you're just after their money, people are concerned that they don't have enough of it to talk about it. But if you're actually getting into a committed relationship, how do we start having healthy and effective conversations about money? I would say transparency and a budget. You know, we kind of all have that one that sort of got away. I was deeply in love with this woman who was in her residency to be a surgeon, and I was very serious about her, and so I said, "Look, this is what I have," and I kind of went through my assets, how I plan to make money, what money I had, where I'd lost money, where I'd made money. And then she was very transparent and said, "Well, you know, my parents are wealthy, so when they pass I'll get some money, but right now I'll have a ton of debt." And I think it made us feel really much closer to each other, that kind of transparency. So one would say it's transparency, and I would say it's regular check-ins and a budget. I think what really screws up relationships is not financial mishaps; it's surprises. "Oh, you've been day trading, and you've been going into some stock that your buddy at work said was good, and you lost 20% of our savings, but it happened a year ago, and you're telling me now." So I think it's a good idea, on a regular basis, not only sit down and talk about budget, but just say, "This is what's going on with us financially," and go through kind of spending and just being very transparent with each other, and also, you know, not hiding the ball, right? I think that sometimes um people don't want to talk about a financial hit they've taken. Like I said, I think the thing that screws up marriages is not only financial stress, but it's surprises about financial stress. "Jesus, you've been spending this much money on this, and you were trying to hide it from me. We lost 30% of our savings in this one stock, and you didn't—" I check in with my partner, and I say, "This is this is where we are; this is what I'm thinking." I don't make a big investment without running it by her first. She always says yes, but I want her to know because that way, when it—if it doesn't go well—it was our—it's our problem; it's our fault. So transparency, talking about it, and a budget that you review together.
Yeah, yeah, and that's that's great advice, and I think that transparency point is is so huge because you're so right, surprises in any way in relationships are the biggest trust breaker. 100%. And and you're so right that it's it's not even that that person had an issue with what you were doing; it's why you didn't tell them. Yeah, that that's what really breaks it down. You talk a lot about investing in focusing on your talents, not your passions. And I think for a long time we've kept hearing this language around, "Find your passion. Follow your passion. Chase your passion." And yours is, well, no—talent, talent, talent. Yeah. A lot of—first of all, let's talk about why talents over passions, and second of all, a lot of what I hear is, "Jay, I don't even know what my passions are, and I don't know what my talents are." Yeah, where do I go? So first thing, why talents over passions, and second, what do I do if I don't know what my talents are?
Yeah. We get two types of speakers at NYU: really accomplished, impressive people and billionaires. We've just decided, once you have three commas around your net worth, you have insight into life, and they always end their speech, or most of the time end their speech, with the following advice, which I think is just terrible advice for young people: "Follow your passion." First off, recognize the majority of people telling you to follow your passion are already rich, and they made their billions in iron ore smelting. This is your job. Your job is to find your talent such that you could be in the top 10% within 10 years, and then maybe in the top 1% in 15 or 20 years. And this is the hard part, or the important part, in an industry that has a 90-plus percent employment rate, which, by the way, is 90-plus percent of industries. Young people's passions are often conflated with their hobbies. I would have liked to have been quarterback for the Jets. I have a pretty decent arm, a good playing, good field division. I'm 6'3", 190. I thought I was out of Central Casting to be the quarterback for the Jets. Once I got to UCLA, I was fortunate to know this is what real athletes look like, and you're not one of them. So the majority of people don't end up in what the quote-unquote "their passion" is because what they realize is that's a hobby—art, DJ, modeling, athletics, nightlife, you know, designing a jewelry line. The passion industries attract so much human capital that it drives down the return on your human capital. There are 180,000 actors and actresses in SAG-AFTRA. These are the most talented creatives in the world, and it's not easy to get a union card. Last year, 83% of them didn't qualify for health insurance because they didn't make $22,300. So recognize that if you're able to find something you're really good at and it's in an industry with a 90-plus percent employment rate, this is what's going to happen. Passion comes from mastery and the economic accoutrements of mastery of an industry. Now, no one—no one grows up thinking, "I'd like to be—I'm passionate about tax law." But if you have the skills and the discipline to get a law degree and you understand the intersection between the law and economics and you know how to handle clients, the best tax lawyers fly private and have a larger selection set of mates than they deserve. In the top 10 or 20%, to have those sorts of accoutrements in a vanity industry, you have to be in the 0.1%. So I don't want to crush anyone's dreams. If you want to be a DJ or you want to be an athlete, fine, but ring-fence it and say, "Unless I get flashing green lights that I'm definitely in the top 1%," and you'll know. If you're the next Messi, people are going to tell you. You'll know if all of a sudden you start getting invited to Vegas to DJ and people are willing to pay you to DJ. You'll know; you'll know pretty fast. But if you don't get those green lights saying you're going to be in the 1% really fast, maybe workshop something else that's not in the romance industry and try and become good—great at it.
The guy who's installing my soapstone counter is the kind of the the marble guy or the granite guy in Marabon. This is an Iraqi immigrant. Uh, we got to know each other. He told me about what he does; knows everything about marble, knows everything about it, goes to the quarries, can talk about the veining and everything. Uh, immigrated from Iraq about 18 years ago, started working for a guy, got super into it. He makes 2.3 million pounds a year, topline; he himself makes 800,000 pounds a year as the soapstone marble guy, and he's become passionate about it. The relevance, the accoutrements, the economic security—and this is what you become passionate about, Jay. You become passionate about taking care of your kids; you become passionate about helping your parents out; you become passionate about taking really nice vacations with your partner. Anything that provides you with that stuff, you're going to become passionate about. So what I would suggest is, passion comes from mastery, artisanship, ninja-like command of something, and also something that provides you with the economic security that in capitalist society affords you an amazing life. So find your talent; that's your job. If you're good at something, you can become great at it in an industry with a high employment rate. Trust me; trust me, you're going to find passion. And and for those people who are sitting there going, "Well, I don't know what I'm talented at. Like I I don't even know what my talent is. I don't really have anything that anyone's ever validated, noticed, recognized. I'm pretty average at everything. Where do they start?" I think you want to build a kitchen cabinet of people who you can sit down with at any job. First off, don't let perfect be the enemy of good; just start. When I was 18, I thought I was going to be a pediatrician; chemistry disavowed me of that thought. I was going to be an athlete when I was 15; UCLA disavowed me of that thought. I was going to be an investment banker at 22; that disabused me of that thought. I was going to be a health care consultant when I was in business school, and I thought I I don't know if I'd be any good at this. I ended up in strategy and then analytics. I didn't know what strategy and analytics were. So try stuff; be honest with yourself. If you don't give up at the first sign of "I don't like it," well, that just might be work, but you'll start to get feedback on what you're good at and what you're not good at, and workshop it; keep investing. Recognize it's hard to be great at anything, but you'll probably get a feel—I mean, at some point you recognized you're a good storyteller, you have a nice voice, you're good at this, right? And I imagine there was some things along the way you recognize, "I'm not that good at this. I'm trying hard, and I'm not that good." I tried really hard to be a good investment banker; I had no natural skills at it; I just wasn't good at it. And then when I got into consulting and I took data and could frame it into a story where CEOs and CMOS would listen to me and say, "You know, bring in—bring in that—" I started a strategy firm called Profit; "Bring in them; see what they think." I'm like, "Wow, we're good at this; maybe even we can become great at it." So another—again—group of kitchen cabinet people who can talk to you, people who can advise you. Get started; workshop. Okay, it's not the perfect job; I'm not sure I'll be passionate about it. No, no, no. If you can find something better, great. Until then, get in the game; see where the opportunities are, and you'll start getting market feedback on what you're good at or not good at, and you'll start to click in, "Wow, I really—I'm pretty good at this." And ask people around you; ask for reviews. The compensation I think I provide my my younger employees with—I'd like to think I'm good at this; maybe I could be better. As I talk about it, it's not only monetary; what young people need is feedback. If you are in a position as a boss to say, "You know what, you're great with new employees; you make them feel welcome," "Well, should I consider a career in recruiting or HR?" "You're great with clients; Jesus Christ, can you sell? You like to drink; you're ridiculously obnoxious in a funny way; people want to go out with you when they're in town." "Boss, you should be in sales; you should be selling." And you got a decent IQ; you should be selling database software for Oracle or CRM software for Salesforce, 'cause you're going to make a half a million bucks by the time you're 30, taking people out and establishing relationships. Get feedback; workshop stuff, but you'll start to absorb stuff, but you're never going to find out you're good at cricket unless you pick up a—you know, you just not going to find out. So try as many things as possible; surround yourself with people and give you honest feedback and keep workshopping stuff. Don't be afraid; don't—you know—again, forgive yourself if you're not a good investment banker, you're not cut out to be a doctor, you're not going to be an athlete. That's okay; it's out there. Just keep showing up; keep showing up; keep trying, and you will hopefully find that thing. I don't want to say it's a guarantee; I think some people never find anything they're great at, but in this economy you should be able to find something you're at least good at.
Yeah, I I appreciate what you were sharing about the diverse roles you've had, and again your mantra, "Forgive yourself," and I look back at life as thinking that it would be about finding or discovering the thing, and I realized it was so much more about collecting and connecting. That's right. Right. It was like collecting ideas, collecting skills, and then at one point they all seem to connect, even though, you know, in the famous words of Steve Jobs, "You can't connect the dots looking forward; you only can looking backwards." And so now when I look back at my life, I'm like, "Oh, yeah, I remember doing work experience when I was like 15 years old, and I was told to cold call 300 companies, and I had no idea what a cold call was or what we were selling, but I was trained to do it, and it gave me an amazing experience to deal with rejection. And out of the 300 companies called, I think 297 said no, but the three that said yes just gave me this exhilarating feeling." And then I worked at Morrison stacking shelves and doing, you know, extra uh database management work in the warehouse, and I remember what overtime felt like, and I knew I got paid 1.5 times as much when I when I worked overtime, and I was like, "Oh, okay, that's what overtime feels like." And then I remember working in retail, and I knew if I could sell a card to the customer to collect points, then I I would get 10 extra on every card, and it was just fascinating to me that all of those experiences—and then I worked as a consultant at Accenture, too, and again, I don't think I was that great a consultant by their definition, even though I did very well inside the organization. I picked up so many skills when it came to negotiation, presentation deck building, understanding the needs, interests, and concerns of our clients and what they were trying to achieve. And none of that was my purpose; yeah, none of that was my field of excellence; I was not great at any of those things, but all of those skills have become so valuable today.
I love the way you say that because when I look back on investment banking, it wasn't a failed experiment because it had taught me attention to detail; it taught me to get up early and put on a tie; it taught me sort of how to read a room; it taught me how to write a proposal; it taught me a little bit about the the credit markets 'cause I was in fixed income. What you said about being in the services industry, working jobs at Morrison, that is really important because it gives you a sense for one: no one owes you a living. Uh, showing up, working hard, getting along with people, developing a sense of grit. The job you were talking about, the sales job—I think everyone should be in a job where they endure; they deal with the public because they realize that a lot of people aren't nice, and you have to navigate that, or they're just not having a bad day, or there just not having a good day. But also the—and this is the key to my success—is my ability to endure rejection. You know, if you want to score above your weight class economically or romantically, get out a big spoon and get ready to eat [ __ ] because I applied to nine business schools; I got into two. I in high school I ran for sophomore, junior, and senior class president; I lost all three times. And based on my track record, I decided to run for student body president, where I went on to—wait for it—lose. I have had a lot of women tell me they're not interested in dating me. I have sent out thousands of emails to potential clients for my strategy firm; I have pitched hundreds of venture capitalists on my way to raising money. And the reason why I am wealthier than your average bear and and get to spend my life with someone who, on a risk-adjusted scorecard, is exceptionally higher character and much more attractive than me is because I was never afraid to endure rejection; always had the ability to endure rejection more and move on. So if you aren't willing to endure rejection, if you aren't willing to take those types of risks—my current partner I met at the Raleigh Hotel in South Beach; she was there with a friend and another guy, and I promised myself I was going to speak to her; I was very drawn to her. Before I left, went out to get my car at the valet, got angry at myself, went back, walked right up to them and said, "Hi, I'm Scott; where are you guys from?" And now, you know, our oldest son's middle name is Rob. You got to be willing to endure rejection. And here's the thing: most people aren't; most people will never invest in their own company; they're too scared to lose money; most people will not go up and speak to a stranger. This is something I forced my boys to do when we're out; I'm like, "You got to speak to at least one stranger." My oldest one has no problem with that; my youngest has a little bit more of a difficult time. But the ability to open—the ability to call somebody when you were calling—"Don't call me again." So what I think you're saying is I should check back in two weeks, right? I mean, I can't imagine how much [ __ ] you must have—even starting a podcast, right? I mean, it's not—I got to start one with a co-host who already had a following, like you're some kid out of Accenture starting a podcast, right? I mean, it's just a lot of rejection. Yeah, we sent personalized letters and videos to 100 people that we really wanted on the show, and every single one of them said no in year one. And over the last five years, every single one of them have been on the show—three, maybe? Yeah. And and it just showed me that there was such a need to just be okay. I mean, I have a list of—everyone always asks me, "Who's your ideal podcast guest?" And I'm a big soccer fan; we were talking about football earlier, and I've supported Manchester United since I was a kid, and Cristiano Ronaldo is my GOAT, and you know, I have a list—I have a history of DMs to Cristiano Ronaldo that he has never seen, let alone responded to, and I can't wait for the day he sees them. You're just following the wrong club, buai. Saka or Cole Palmer—I think they would come on the show. You got to go Arsenal or Chelsea. That's your fault. Yeah, that's my fault; that's my fault. It's the pain I'm asking for—the pain. Uh, but no, I I couldn't agree with you more, and I love this mantra that you keep repeating, "Forgive yourself," and it's such a powerful one. And you are going to make mistakes; you are going to break things; you are going to get wrong—maybe even one of those clients is never going to want to work with you again, and that's all going to happen. And I think we live in this protective space of like, "I never want to get anything wrong; I never want that person to ever say, 'Oh, I was too pushy or too nudgy.'" And it's like, "Well, they might, and they probably will, anyway; someone will." Yeah. And is that worth letting go of this amazing life that you envision and what you want to create? The only thing you can—or the only thing I feel like I can guarantee any young person—is a certain amount of joy and a certain amount of tragedy in their life, and the ratio of the two is a function of a lot of things, mostly when and where you're born. But what you want to do is try and set yourself up for so many deep and meaningful relationships that those ratios of joy to tragedy are are much greater. So forgive yourself. But there's some great research—my colleague at NYU, Adam Alter, has a joint appointment at the business school and at the um in the psychology department; he's done a ton of great research on end-of-life. He goes into palliative care facilities and he interviews people on their biggest regrets, and people get a lot of perspective at the end. They're never going to walk on the beach again; they're never going to hang out with their, you know, really spend time with their loved ones; they're never going to work again; never going to go to a sporting match, what have you; never, you know, take their dogs for a walk again. So they don't have a lot to lose—lot of perspective—and their biggest regrets kind of come down to three things, uh, in reverse order. Number three: they wish they'd spent more time with their friends. Number two: they wish they'd led the life they wanted to lead, not the life their church or their family wanted to lead, or society was, you know, telling them to act a certain way. But their number one regret is they wish they'd been less hard on themselves; they wish they'd been kinder to themselves. Because when you look back on your failures—made a bad investment, this person didn't love me back as much as I love them, I got fired, I had a business fail—when you look back at the end and you have real perspective, you're going to be more upset about the way you responded than what actually happened to you. Life isn't about what happens to you; it's about how you respond to what happens to you. And recognize that emotion—the present value of emotion is enormous in the moment—your disappointment. You're going to look back and think the only thing you're going to be upset about is how upset you were at it. On the flip side, when things are going really well, also recognize a lot of that isn't your fault; you got lucky; you're in the right place at the right time; you had someone take an interest in you in work and promote you; you had a stock skyrocket. Are you a great investor? No, you're lucky. And you're never more prone to a big mistake professionally or personally than after a big win because you start believing it's you. And it—the time at—when you have a great investment, you have great relationships—what you want to do is try and pull in your horns a little bit and be a little bit humble and as grateful as you can be, recognizing luck has been on your side. And like I said, if you want to lose a lot of money, start believing that your great year in the market is because you're just really good at investing and you should lever up because you're that smart. No, you're sticking your chin out.
I love that advice, especially the humility part, and it's so interesting. Yeah, I remember reading a study that said that most founders who exit, they make their worst startup investments for the next two years that follow their exit, and it's that same feeling of—you start thinking it's you. I wanted to ask you—a lot of people right now are trying to decide between whether they double down on their career at the company they're at or the organization they're at, or have multiple revenue streams or side hustles and things on the side. How would you encourage people to evaluate where they put their efforts? So another thing I've gotten [ __ ] on TikTok for—I hate side hustles. So if you're in a side hustle, that means a side hustle is a temporary means of investigating something else should become your main hustle. The way you get wealthy, in economic security, is you find a professional activity that you're good at, that you become great at, and you go all in on it because the difference—success is in the last 10%. So the guy or gal that applies 90% versus the guy or gal that applies 100%, the latter is going to get promoted faster, get options awards, just make more money, have recruiters calling them. Success is that extra umph. If you are doing a lot of side hustles, it's very, very difficult to be great at your main hustle. So fine, if you don't like your main hustle, but you need it for health insurance, you need it for a base, and you want to investigate other stuff, but recognize the only way you're going to build real wealth and economic security is to go all in on one thing. And I've never been successful—I have two kind of I'd say complexions professionally: the first is I have balance; I'm working 40 hours a week, decent lifestyle—that, for me, is called losing money. I've never been able to aggregate wealth kind of having balance in my life. And then there's a point in my life, and I'm not proud of this, but especially in my early years, were stressed out, working all the time, hard on my fitness, hard on my relationships—that's when I'm usually making money. The marketplace is competitive; it demands a tremendous amount of you, but it's just—it's I think it's more or less okay. How do I have a sober conversation with myself? How do I get forward fast? The best companies in the world, I find, or the most aspirational companies, are the ones that let you go flat out, that say to you—Accenture says to you the following: "Go flat out here; go just—I mean, okay, have a hobby, have a relationship, fine, but go flat out here, and we're going to give you your parents' life at the age of 30 or 35." Those are generally the best companies in the world. Some people decide they don't want that, and they want to do something they're excited about, fine, or passionate about; I get it. But if you're that guy or gal with three or four different side hustles, you aren't going to be wealthy; that's a temporary means of finding your main hustle; that means your main hustle isn't working. But 110% on anyone—you know, Bill Gates didn't have a side hustle; Michelangelo didn't have a side hustle. Maybe they needed a—maybe Michelangelo needed a side job to pay for—but at some point she went all in on poetry and writing and oration. That is greatness—focus.
Yeah, I think that's such a great reminder, and I remember looking at something a few years back which was saying, if someone was going to invest—let's say me and you were going to invest 100 hours into someone's development—how would they split it between what they're good at, what they're average at, and what they're bad at? Yeah, and the majority of people would say 30, 30, 30, right? Like 33, 33, 33. And some people will say, "Oh, well, maybe I'll put 20 into what I'm good at, 20 into what I'm bad at, and then the rest into what I'm average at—60 in the middle." And going back to your point, the most successful people in the world will say 100, 0, 0 or 80, 10, 10 because they know that if they invest that much energy in something they're bad at, they'll only ever be average at it, and if they invest in something they're average at, they'll only ever be okay at it. But if you invest in what you're good at, you will become great. And I think we've lost—well, not lost—I don't think we've ever had that focus because you graduate at 21, you know, from a regular degree, and then you never think you have to learn again. I think there is a sense of—we don't really—we don't know what good to great looks like because you never ever have to grow again, according to the way the education system is set up, in the belief system, at least. What have you noticed about people who, in an organization, in a company, go, "All right, I'm going to be great here"? What do they do differently? What do—what do they build mindset-wise, and also physically?
So we had at L2, which is the business intelligence firm I sold in 2017, we tracked everyone—a lot of data—and found so—and this isn't the Hallmark version of of HR—but I found generally speaking you have five or 10 employees that add 120% of the value, and everyone else is negative—minus 2. Now that's not to say they're not important, but they require a lot of management, a lot of attention; they're good, not great. You can't just scale with great players because great people know they're great, and they demand a lot of equity and compensation. But when we identified that quote that kind of dozen superstars, we said, "What do these people have in common?" And the three things we found in common were, uh, one: they had gone to elite universities, and I hate saying that, um, but they had generally gone to really fantastic schools. Two: they had athletics in their background, competitive athletics. And three—and I didn't write this down anywhere—they were almost always women. So a female from Yale who was on—who was a gymnast there or a diver—that was an automatic hire. I'm not saying we didn't hire someone unless you had sport, but we generally look for people who had two of the three. We also hired men, but those were the three things we found—people who had had some sort of competitive sport in the background or had come from enough adversity that they had to show a certain amount of grit and willingness to break through hard things—people who pushed—who had pushed themselves really hard. You know, I rowed crew in college, and crew is basically—who is willing to endure more pain. And when I had my first job at Morgan Stanley, I realized I wasn't as skilled—I did poorly academically—uh, and I wasn't as skilled as my peers, so I thought, "Okay, what can I control?" Every Tuesday morning, I'd come to work at 9:00 a.m., and I wouldn't leave till Wednesday night at 5:00 or
In order to adapt and be different, I wanted to focus on what you mentioned earlier about palliative care and people nearing the end of their lives. A lot of people feel, at the end of their life, "I wish I hadn't worked so hard." They regret putting too much energy into work. Sometimes, that's easy to say then, because it almost doesn't matter anymore. But when you're living it, it does matter.
It comes back to what you said earlier about having a sober conversation with yourself. I remember many sober conversations with myself. One was: "I can either maintain the myth of balance for the next 10 years, or I can work my absolute socks off for three years and then make more sense of everything." I chose the latter. Those three years probably felt more like six, but that sober conversation was powerful. I had to give up the myth of perfect balance. You've alluded to that in this conversation.
Someone might say, "I don't want to be that successful, that competitive. I just want a good, simple life. How does that work with your philosophy?" My way isn't the only way. There's proximity bias. I teach this in elite business schools. When I survey students about their income expectations in 5–10 years, most expect to be in the top 1% by 35. Unless you're a genius, you'll have to work incredibly hard. When they talk about balance, I push back.
Some people don't want to live to work; they want to work to live. That's fine. Some people want to be good citizens, work decently, have good relationships, coach Little League, and be active in their church. That's great; you can do that in many places in America. It's harder in LA or New York. You might need to move to a lower-cost area, but there's nothing wrong with that. Many people with average incomes ($68–70K) are very happy. They find strength and reward elsewhere.
Most young people I speak to expect to make a lot of money, or they say they don't need a ton, but want a nice place in New York and a couple of kids. That's a million dollars a year! I'm not talking about how the world *should* be, but how it *is*. In American cities, ensuring your kids' well-being, handling health emergencies, and having nice vacations requires a crazy amount of money. You can lower your burn, move for lower costs—more power to you—but most people I know in their 20s and 30s (again, proximity bias) expect a lot of influence and economic security.
We all know someone who seems to have it all—great shape, relationships, money, a food blog, charitable work. Assume you're not that person. If you want to live in New York or LA, you'll need to be relatively successful. You don't have a birthright to live in those cities. It comes back to that sober conversation: are you willing to make the trade-offs? If not, you can be happy elsewhere. People expecting a reasonable life in big cities need to be honest about what that takes.
Thank you for being so transparent and honest. This has been insightful. I appreciate your candor. We can have unhealthy, false expectations, chasing a wild goose, or we can have honest conversations. It's refreshing to help people self-reflect and figure out if they're ready for something. We end every episode with "Final Five," answered in one sentence or less. These are your Final Five, Scott Galloway:
1. What's the best wealth advice you've ever heard? Find your talent.
2. What's the worst? Follow your passion.
3. How would you define your current purpose? To raise loving, patriotic men.
4. How is it possible to create peace with money? Money is the means; deep and meaningful relationships are the ends.
5. If you could create one law that everyone in the world had to follow, what would it be? No economic policy can ever get in the way of love.
I want to unpack the last two answers. It's like the story of the fisherman and the businessman. The fisherman enjoys a simple life, while the businessman seeks more. The businessman wants what the fisherman already has. People think, "Why work so hard if I just want to spend time with people?" But sometimes lack of money *blocks* relationships.
How does scarcity create relationship issues? For men, women are attracted to kindness, intellect (humor communicates intellect), and the ability to signal resources. You don't need resources, but a plan showing you're smart and hardworking.
Did I have a target number? Yes. I became addicted to relevance and money. After selling my last company for $160 million, I wanted to raise $300–$400 million. Billionaire had a nice ring to it. Then a friend passed away, and I had introspection. I hit my number. Why do I need more? My worth wasn't tied to how much more I had. Money is ink; it helps write your story, but it's not your story.
There's a virus among the super-wealthy of hoarding money. Above a certain amount, there's no incremental gain in happiness. I look at my yearly earnings and either spend it or give it away. I'm not virtuous; I love spending money. Anything above my number, I give away. It makes me feel masculine, patriotic, and important. I didn't give away money until 40; now I enjoy it. Having a number is powerful. You can determine what's required and then get off the hamster wheel.
My fear was having a lot of money and influence but never being present. When my friend died, I saw his relationships were everything. Money is a means to meaningful relationships. But be careful; it can become a suicide pact. You focus on the affirmation of strangers and become addicted to more money at the cost of your relationships. So many successful people have poor relationships with their kids and partners. What's the point? It’s healthy to have a number, then enjoy or give away the rest.
Before the final question, I want to discuss mentoring young men. Many feel pressure, stress, left behind, and confused. You're saying they need responsibility, discipline, and accountability. What would you say to them?
First, it's tough out there for young men. Forgive yourself. Globally, no group has ascended faster than women in the last 30 years. More women seek tertiary education. No group has fallen further faster in America than young men. They are more likely to kill themselves, be addicted, and incarcerated. We have a male homeless problem, male incarceration problem, and male opioid epidemic. Many jobs they relied on have been outsourced. There's a lack of empathy.
Start getting into fitness, making money, and get out of the house daily. Be around strangers, building something bigger than yourself—work, church, sports, non-profits. The risk is young men sequestering themselves from society, becoming asocial, prone to conspiracy theories, and isolated. Talented people convince them they don't need friends, they can live on screens and algorithms. We're producing millions of these men.
Many women can't find men to date; they date older men who are economically and emotionally viable. This is a crisis. We need education reform, more freshman seats, national service, more money in their pockets, more housing, and vocational programming. What I'd tell young men is: it's difficult; forgive yourself; make money; get strong; get out of the house; be around people; find friends and mates; endure rejection. You can handle it.
Fifth question: If you could create one law, what would it be? No economic policy can get in the way of love. Family courts shouldn't leave dads with no contact with their kids. People shouldn't be impoverished while working 40 hours a week. Anything hindering deep and meaningful relationships needs to be changed. Growth, AI, GDP—none of it matters without those relationships. New laws are needed to prioritize parent-child relationships, marriages, and teen well-being.
Scott Galloway's book is *The Algebra of Wealth*. His podcast is *The Prof G Podcast*. Thank you for your time. I appreciate your work. If you enjoyed this, check out my chat with Adam Grant. Setting a goal and achieving it in six months can feel like a relief, but it often lacks meaning. You kind of expect it.