1074: Scott Galloway | Solving the Algebra of Wealth

1074: Scott Galloway | Solving the Algebra of Wealth

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[00:00:00] Jordan Harbinger: Coming up next on the Jordan Harbinger show.

Scott Galloway: Anyone who tells you to follow your passion is already rich and the person telling you to follow your passion made as billions in iron ore smelting. Your job is to develop economic security for you and your family by finding something you're great at.

[00:00:18] Jordan Harbinger: Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger Show. We decode the stories, secrets, and skills, the world's most fascinating people, and turn their wisdom into practical advice that you can use to impact your own life and those around you. Our mission is to help you become a better informed, more critical thinker through long form conversations with a variety of amazing folks, from spies to CEOs, athletes, authors, thinkers and performers, even the occasional drug trafficker, former jihadi, economic hitman, or real life pirate.

If you're new to the show or you wanna tell your friends about the show, I suggest our episode starter packs. These are collections of our favorite episodes on topics like persuasion and negotiation, psychology and geopolitics, disinformation, China, North Korea, crime, and cults, and more. To help new listeners get a taste of everything we do here on the show.

Just visit Jordan harbinger.com/start or search for us in your Spotify app to get started today on the show, Scott Galloway is back. Prof g always such a popular guest with a ton of knowledge to drop as usual. Today we're talking wealth, economics, careers. There's actually a lot here. If you're starting out in life, there's plenty.

Even if you are middle aged or even retired, how hard do I need to sell? A guy like Scott Galloway, so many of you love him and his content and I'm frankly, I'm on vacation in the jungle right now, so I'm gonna leave it there. Here we go. With the one and only Scott Galloway,

when I was prepping the show, I thought, okay, I'm gonna make a big list of sound bites and wind them up and let 'em go. But I didn't make the list, I don't think, you know, I don't want, I don't think it's what the people want. I don't think we would need it. I've got some great notes from the book. Okay. But like you're like a ninth degree black belt at creating sound bites and memorable stuff that has actual impact.

So I don't know about that, but thank you. I don't know man. You see it on social media, right? And I hope one day I have any single talent that's as good as your ability to digest data and then relay that to an audience in a way that they find relatable and impactful. I think it's, it's quite something and I think it's done well for you, but I think it's not like those hypey reels on Instagram, like it's actually valuable information.

So that's, I think I appreciate that. A unique confluence of uh, I dunno, talent and hard, hard work, whatever. Why am I, why am I fluffing You like the guys, the rest of this episode is me fawning over Scott Galloway. So either there you go bail or turn up the volume and settle in. Um, I was reading this article that I think probably is right up your alley, something about boomers bequeathing money to millennials and Gen ZI suppose as well.

$18 trillion worth of wealth. And I was sort of surprised, but I guess they shouldn't have been. Many people will get zero or they will actually have to support their Boomer parents on their, you know, salary that they have at whatever job they have. So this seems like the widening wealth gap on steroids because a lot of people who were maybe raised with good financial habits are gonna inherit like 10 or $20 million from their parents who had those habits.

And people who are raised without those habits and are learning them from your book, the Algebra of Wealth or other books, or from no one, they're gonna inherit a hundred thousand dollars double mortgage in a house that needs to be fixed up and medical debt and you know, the care expenses for their parents.

[00:03:17] Scott Galloway: Yeah. So first off, it's great to be with you, Jordan. I feel as if there's a lot there, but I feel as if whenever I see one of these articles, it's basically Latin for it. Shut up millennials. You're about to get rich. Stop bitching. You're about to get bank. Right. And unless you're not, you're exactly right.

It also goes to something that's unfortunate America, and that is, America used to be about a large inheritance tax. We had a progressive tax structure. We didn't mind billionaires, but we weren't trying to turn everyone into a billionaire. We were trying to turn everyone into a millionaire and no demographic group has grown faster in the last 10 years than billionaires.

There used to be 500 in the us. Now there's 2,500. And so that number of 18 trillion, you think, wow, that's great. We don't need to worry about young people. Well, you're exactly right. There's a small number of people who are creating so much wealth that it's dynastic. It's turning into Europe where there's a small number of people that just have a crazy amount of money that they pass on to their kids and things ranging from a.

Capital gains tax treatment that is tax at a lower rate than current income to an increase in the amount of money you can put into a trust. So you can put up to now, I think it's 23 or $26 million if you're a married couple into a trust that passes onto your kids tax free. That's what you can put in.

And if it continues to grow, you're gonna have a lot of kids with 50, a hundred, $200 million across America in terms of a trust or the next generation. Wow. Now whether you think that's good or bad, that's a different conversation, but the notion somehow that the next generation is fine because of this massive transfer of wealth, this massive transfer of wealth is incredibly lumpy.

And you also have the, what's actually more staggering is 50% of baby boomers don't make more than $30,000 a year and have very really scant resources to depend upon. And the fact that they're living so incredibly long and quite frankly, their lifespan. Has increased much faster than their health span or quote unquote, their work span.

We keep talking about how older people will become more productive. No, they've just become more expensive. And whereas about a couple decades ago, 20 to 25% of the nation's government spending went to people over the age of 65. It's now 40%. Within 10 to 20 years, it's gonna be more than half. And unfortunately our seniors, it's a social good to make sure they're not living in poverty.

But it's not an investment in the sense that it doesn't pay off. The same way that investments in infrastructure or space exploration or science or r and d, investing in education. So when senior investment, or for that matter, government spending goes beyond a certain percentage of the GDP, your growth lowers and we become a less prosperous nation.

And I'm convinced of being an ageist and I am an ageist. And also I think biology is ageist and economics unfortunately have proven. That seniors in the United States continue to vote themselves more and more money, and it's coming at the expense of an increasingly smaller, younger population that is now supporting more and more seniors.

And I'm very transparent about my situation. I'm blessed. I got lucky early. I'm also very good at what I do. Not a lot of modesty here, but I also am smart enough to recognize how lucky I got. But my dad just turned 94. He's suffering. You know, they don't even like to say the word dementia, but the bottom line is that 94, most people have some form of dementia and he can't take care of himself.

And he's in an assisted living facility in San Diego. And it's nice. It's not lux, but it's nice. I have this wonderful woman who hangs out with him all day, call him his health aid, and then he's been falling lately at night. So I have to have full-time care at night. I'm spending $280,000 a year on my father's care.

And the question is, what do you do? If you're the 99.99% of America that doesn't have that kind of money, and the answer is mom and dad move in with you. And the majority of the responsibilities fall to usually the mom and the household who's now taking care of kids and aging parents. It's incredibly taxing on that family, the kind of sandwich generation.

And we have a less and less investment to put into young people such that they can make enough money to even afford this. So the question is, you know, what do we do? I think we need to start looking at more non-conventional means of forcing people to save such that when they turn 65, they have some money.

I'm a fan of the idea of you give every baby $7,000 when they're born. You infantalize them, you don't let them touch it. They get it when they're 65. They should have about a million bucks by the time they're 65. And then we get rid of social security. And I think getting rid of social security would be good for the deficit, bring down interest rates, but we have this issue we don't wanna talk about, and that as we have a population of seniors who all vote and keep voting themselves more money.

A demographic issue around fewer and fewer young people supporting more and more older people and an aging population that a small number of them are exceptionally wealthy, most of them are not. And this creates a society that is gonna really struggle. It's gonna be an increasingly big issue, but it's a boring and depressing issue to discuss.

[00:08:18] Jordan Harbinger: Yeah, it scares me. I have aging parents. I move them across the street from me and then when I tell my friends this, they go, let me get this straight. You got a house in the Bay Area and then you just got another house in the Bay Area on your own street for your parents. And I was like, oh yeah. Not maybe an option for everybody.

Yeah, that's right. And they come over every day 'cause they're 32nd walk, depending on how, how, how long it takes my dad to get his shoes on. Uh, but it's easy for us to go over there and check on him. We have our speaking of privilege nanny go over there and make sure they're okay on days where we're not around all the time.

They come over in the morning, they come over in the evening. I don't know how I would do this if, you know they moved from Michigan. What if I were a teacher in California? What would I do? How would I take care of them? The answer is I have no, absolutely no idea how I would do that. I would not be able to, I would just be shit outta luck, man.

And that is, like you said, 99.9% of people are just gonna have to figure that out somehow by moving their par, going, taking time off, work, going, emptying their childhood home, sending everything, getting rid of donating stuff, and then bringing their parents back to their house that's maybe already too small, and then taking care of them and then getting up and going to work.

It's just like, I don't understand how this is sustainable at all.

[00:09:32] Scott Galloway: Yeah, I don't think it is, and I don't, I don't have a silver bullet answer other than trying to figure out. For saving mechanisms where people have some money as they get older. It's a tough one.

[00:09:40] Jordan Harbinger: Yeah. 25% of Gen Z It is. From your book, uh, the Algebra of Wealth, 25% of Gen Z thinks they'll never retire.

Is that fear or is that a realistic proposition that they will never retire or they'll retire when they're, I don't know, 75? What does never mean, I guess is what I'm asking you.

[00:09:56] Scott Galloway: I think it's both. I think that young people, generally speaking, enjoy their work. Uh, but keep in mind, physical labor until about 40, 50 years ago was mostly men working and mostly more physical, and a lot of it was backbreaking work.

So by the time you got to 60 or 65, you're like, physically, I need to rest. I'm injured, I'm tired. I can't continue to deliver refrigerators. Or working on the plant floor has been really difficult on my joints. Now, I think most people see themselves as aspiring to a career that they'll want to keep productive, they'll want to continue working, whether that's the truth or not.

But also, the majority of people are not able to retire comfortably at 65. Even with social security, they don't have the money. So I think it's both. I think people assume that I'm gonna find something I like and I'm gonna wanna stay. The greatest bump in mortality for men is one, when their spouse dies, and two, when they stop work.

Because women have are much better at creating a diverse social fabric. They have friends, they stay in touch with their sister-In-law, men's, mostly their social fabric for most men is work. Yeah. And when they lose their social fabric and their purpose, they get inactive, sometimes depressed. And when you get inactive and depressed, your brain kind of sends out a hormone or a message saying, oh, it's time to die.

This person isn't adding any value. So staying engaged, staying engaged to work. Supposedly for every additional year you work, your life expectancy actually goes up. So I think that the kind of basic nature or notion of work is changing. And a lot of I Can you imagine, do you imagine yourself retiring?

[00:11:30] Jordan Harbinger: Yeah. So I was gonna chime in on this. No, but I was gonna ask you, does it matter if you work in an office? Because my team is all remote, but I, no, I cannot imagine myself retiring. My wife's like, can you retire at 50? In theory, yes. But if you're asking me to retire at 50, the answer is absolutely not. Yeah.

Because speaking of hormone that says you're ready to die, thinking about retirement makes that hormone pump through my brain and body. I don't even wanna think about retiring. I would be, boredom isn't the right word. It's, I would just feel like a useless sack of carbon. I don't think that would be good for my sanity at all.

I.

[00:12:02] Scott Galloway: Yeah, everyone has an addiction or needs my addiction and my need is really pathetic. I have an addiction and a need to for the approval or affirmation of strangers. And so, okay, and it's totally pathetic, but at least you're in the right business, you know? I know it. So, yeah, I'm in media. I like quote unquote thought leadership, and I enjoy catalyzing a conversation, ideas, having people discuss 'em.

I like being recognized on the street. It makes me feel good. It makes me feel affirmed, but the idea of hanging it up right now, it doesn't make any sense to me. Now, remote work, I have pretty strong feelings that it's an unbelievable unlock for people like you and especially someone like me. I travel a hundred eighty, two hundred twenty days a year.

I have a remote podcast kit. I'll be in Scotland on Friday, kept on Teeb on Monday, Olan Wednesday, Munich on Thursday. I won't miss a beat in terms of work, because if you're in the information economy and your work can be distilled down to zeroes and ones, I can be anywhere. I do podcasts, do my writing.

I'm doing a hit. I'm going on Jake Tapper's show on CNN tonight from Marla Bone in London. So Covid and the acceptance of remote work or digitization of content has been just an unbelievable unlock for people in my industry. For someone like you is your podcast studio at home? Yeah. I'm in my house right now in a studio, right?

So you get to go upstairs, maybe spend some time with your kids when they get home, maybe be a better partner, be a little bit more engaged at home. It's a wonderful thing. Have your own mental health. It's accretive of your own mental health. Now, a young person, the office is a feature, not a bug. One third of relationships begin at work.

Young men especially need work because they need guardrails. They are less mature than a 22-year-old woman starting work. The prefrontal cortex doesn't fully mature until it's 25. It's 12 to 18 months behind a woman's. And I remember the only kind of real job I had, I worked at Morgan Stanley. It was so important to me because learning how to get up every morning, put on a tie, put on a suit plan, get to work.

Learning how to read a room. Having a boss who would take me out of a conference room and go, don't say that again. That was a stupid thing to say. Don't say that. Or occasionally, not as often. Pull me in a room and go, that was great. Keep doing that. To have the discipline not to get high or drunk every night was really important for me.

Coming outta college, if I were working for some podcast and I was a producer, and I'm just shocked that all of my people aren't walking their dogs all day and trying, you know, ketamine and then going to the movies in the afternoon, that's what I would be doing if I were 23 and working from home. Yeah.

And, and also people don't like talk about this one in three relationships begin at work. So where are young people supposed to meet other people? They're not drinking as much, so they're not going to bars as much. The attendance at religious institutions is, is way down. They're not going into work. Where on earth do young people meet?

So when I coach young people and they talk about jobs, they'll say, I have one job, and I'm like. One's remote. One, I have to be in the office. I'm like, go into the office. That is a, a fantastic place for socialization training, finding colleagues, mentors, mates, is the office.

[00:15:06] Jordan Harbinger: One thing I should maybe highlight is you mentioned you learn so much at the office from learning from others.

I think I also found out that I just was not suited for success in any sort of actual corporate environment. Yeah, a hundred percent. I got my ass handed to me at the law firms that I worked at. It was not good. HR was like in the room a couple of times, like, Hey. We're giving you a job offer here, but we just want you to know that you made it by the skin of your teeth and we don't really like you.

You know, that was, it was a couple of those welcome. There was a couple of those, not maybe that explicit, but it was like, but you know, a lot of the stuff where it was like, well, you work really hard on things that we told you not to work that hard on and you, you know, you have this and you have this obsessive trade and you have this thing and this communica.

And I thought, oh, and then when I started my own business, it turned out that a lot of the things that they really didn't like about me were quite desirable traits if you are running your own business. That's right. And I was sort of caught in the middle as the owner of a quote unquote media company, which is a fancy, inflated name for a podcast that I ended up naming after myself.

I know you can relate Professor Galloway, host of the Prov G Show. Um, but you really learn a lot about how maybe you are not cut out for one thing and you should try this other thing that no one's telling you about.

[00:16:17] Scott Galloway: Yeah. But you did exactly what you're supposed to be doing in your twenties and that is you're work shopping different careers to try and find something you're really good at, such you can establish the currency in the marketplace.

To find a career where you can make more money than you spend, start, develop, deploying an army of capital and do something that you could become great at and make really good money, and making really good money and having mastery of something makes you passionate about whatever it is. That's is what you're supposed to do in your twenties.

I took a job at Morgan Stanley because my roommate, a wonderful guy named Gary Lush Gold, he desperately wanted to be an investment banker, and I was very competitive with Gary, and I thought, well, if Gary wants it, I'm gonna get it. Mm-Hmm. The day I got my offer from Morgan Stanley, I can interview. Well, I had no idea what investment banking was.

I had no idea even what it was. Somehow I managed to talk my way in, and I worked there for two years. I was terrible at it. They didn't like me. I didn't like them. And I realize like you, and it's not a humble brag, I am not a cutout for big companies. And I don't say that because I'm so awesome and I gotta do my own thing.

And they were all idiots. No, I am too insecure. To work for a corporation. Every time more than three people went into a conference room, I was convinced they were talking about me. I had no idea the night before I got my bonus, what I was gonna get and I couldn't sleep. I resented anybody senior to me who I didn't think was as smart as me 'cause I knew they were making more money.

And you gotta realize that's called the corporate world and people romanticize entrepreneurship. I've stayed in touch with a couple people. Morgan Stanley, not a lot 'cause see above, I hated them and they hated me. But the person I do stay in touch with, that's been at Morgan Stanley for 30 odd years, became a vice chairman.

I've been extraordinarily successful by most standards as an entrepreneur. He has taken a, the route, much less risky in some ways, much less stressful, probably not as rewarding. My highs have been higher, my lows have been lower. We ended up in a similar place economically, and he got there I think with less stress and less risk.

We romanticize startups. When kids come to me during office hours, when I say my kids, my students, they don't want to talk about brand strategy. They want to talk about careers, and it's usually something like this. I have an offer with JP Morgan and Google economy's really strong right now. If you're coming at NYU average hours, $212,000.

Wow. The average kid has three to five offers. Or I'm thinking, but I'd like to start my own business. And you started your own business and I'm like, don't be a fucking idiot. Go to work for JP Morgan or Google. Yeah, because once you leave the corporate world, it's kind of a one-way door, and two, there is no better way to get rich slowly, but to get rich with near certainty or at least economically secure, then the greatest wealth generator history, and that's the US corporation.

It requires certain skills that I don't have. It requires a certain level of patience. A certain level of maturity. Yeah, a certain appreciation that in a big company to scale, they maybe don't get the nuance right every time. Maybe they make some dumb decisions. There's just certain shit you have to do.

Yeah, you have to put on a tie, at least you did at Morgan Stanley. But if you're willing to navigate the politics, be patient, put up with the administrative bullshit, and you can survive 5, 10, 20 years, you generally find you wake up and you have a half a million, a million, 2 million, $3 million in stock.

They have removed all the molds from your body and paid for your partner to have a kid. They train their people. They invest a lot of human capital. So the reality is probably two thirds plus of entrepreneurs do it because they have no options. The guy who owns the carwash and the dry cleaner didn't get an offer from Google.

HR is not calling them. The majority of entrepreneurs, or a lot of them are immigrants who don't have access to the corporate world. So we romanticize entrepreneurship, but the two of us did what we're supposed to do in our twenties. And that is, it's very difficult. The way you find what you want to do is you find out what you don't wanna do.

And it's sort of a process of elimination, I think, to believe that you're gonna come out of college at 22 and find the right job and the right career right away. Wow. That happens. But it's really unusual, and what I say to a lot of 23 and 24 year olds who I talk to and are, quite frankly, a little bit depressed, maybe a kid graduates from law school at 25 goes to work as a first year associate.

I can't imagine a worse job. It's an awful job. It's reviewing documents, ton of pressure, boring with a lot of pressure placed on it, just drudgery, right? And they'll say, I don't like it. And I don't think I like the law. I don't think I like investment making. I'm like, well, you're kind of where you should be, and that is your first job sucks.

But you also have to decide, well, maybe this isn't the right career for you Now don't just bail on it because it's hard. That's called work. You're kind of where you should be. I don't know very many people who in their early twenties think, yeah, I just loved my job. I loved being in PR and fashion and finding out that means stuffing bags full of stupid giveaway, Chanel shit and doing a ton of work for no money.

I. Your twenties is about workshopping to find that thing you're great at.

[00:21:14] Jordan Harbinger: I think that's a really important thing to highlight. You're right, we romanticize the entrepreneurship. Everybody wants to run a startup. People ask me about this stuff all the time. How do I get into media? I mean, it's, back then, this was a scary thing to do.

It was, I'm unemployable. Why would you leave your good job that you actually enjoy to do this? And a lot of it, it's sort of midlife crisis. It's like, I've always wanted to start my own company. Go ahead and do it, but don't quit your job to do it for God's sake. If you want to, you know, start selling bracelets on Etsy or something on the weekend, man, you don't have to leave.

Like you said, Morgan Stanley to make an app. I mean, pay somebody to do that with all the money they're throwing at you and see if it takes off the go. All in strategy is what really bugs me. A lot of these online influencers are like, burn the ships. I don't think you should burn the ships. That ship can take you back to safety if you need to.

I, and I think that whole like, oh, having a safe backup plan is why you're not successful. I think that's actually largely bullshit and flat out irresponsible. If by the time you're married and have a kid, I think you keep that ship. It's not just your ship anymore.

[00:22:18] Scott Galloway: Yeah, there's a lot there and there's some nuance.

The first is you probably should, when I speak to a lot of people will say the following, I wanna start a company, but first I'm gonna, I need to get some experience at a big corporation. I wanna accomplish some things, so I'll get some national security and then I can start a business. I'm like, you're never starting a business unless you know pretty much right away you can't work for a big corporation and you are just have almost no choice.

I feel like entrepreneurs are a little bit born, not made. You're probably not going to start a company because. Anybody who is common sense and is in any way risk averse, never wants to take the leap, this is what it means to be an entrepreneur. When I started L two in 2009, I had just had, I had two babies at home and I used to come home and tell my partner, oh, I can't be home for bath time.

Oh, I can't go to anything on Saturday and I gotta work half day on Sunday. Huge strain on my relationship. Didn't see my kids at all. Oh, in exchange for doing this, I need to write the company a check for $50,000 at the end of the month. That's what we get from me being an entrepreneur. And it's awful.

And unless you're willing to do that in the beginning, 99% of people aren't willing to sign the front of checks and only willing to sign the back of checks. The stat that always blew me away, the observation when L two was about to be acquired, I was always very transparent, we're about a hundred, 120 people.

I said, we're probably gonna be acquired in the next year. We've had a bunch inbound. Inquiries, companies jamming, market strong, I would bet What will be acquired in the next 12 months? Everybody in the company, you know, we kind of adopted the tech company thing. Everybody had options. If you exercise your options and buy the stock and hold it for a year when it's acquired, you pay a much lower tax rate.

You pay cap gains. So I would've thought everybody would exercise their options. Sure. Now you have to write a check. If you own what ultimately might be, call it a hundred thousand dollars in equity, you might have to write a check for 15 or 20 grand. Do you know how many people actually converted their options to equity?

Oh man. How many? Zero. The only people who did it? No, the only people who did it were the people who are already wealthy on the board. Geez. The idea of writing a check to a company, even though it might pay off down the road, people just aren't willing to do it. When the company got acquired, then they exercised their options to equity and sold the equity and they all paid ordinary income to be an entrepreneur.

A couple things. Incredibly risk aggressive. Be willing to sell like crazy and be a little bit sociopathic because you're gonna have to be able to stand up in front of your team and constantly rally them and be a little bit disassociate from the risk and how shitty things go on a regular basis.

Especially, especially if you have a family. 'cause sometimes you feel irresponsible. You know, my business as it happens, the first, you know, when my first son came marching outta my girlfriend, my business was going terribly. And I'm like, well, I'm not only a failed entrepreneur, I'm, I'm failing as a father.

That was like really on day one. Yeah, that really kind of messed with my head. Oh man. But I would be very honest about the kind of person you are. I think the sweet spot. So what's instructive here? The sweet spot I think for joining a company, if you want a little bit of taste or upside of that entrepreneurship is that, and by the way, the upside's huge.

When I sold my company for 160 million, only one in seven companies survives small companies. So I started nine and I had two successes. And by the way, that's all you need. And the great thing about American. Economy is, it doesn't embrace failure. That's bullshit, but it'll tolerate it. But all you need is once you have huge, huge potential upside, and what a company does is it kind of guards you.

Not against all the downside, 'cause you can get a memo or a voicemail saying you've been even laid off. But it's just a path that's less risky going forward. And I know a lot of entrepreneurs and these people that got written up in Forbes or the Wall Street Journal who started several companies, a bunch of 'em got close, never made any money, maybe even lost money on the whole borrowing money from people to start their companies.

And it's just devastating. I've had that happen to me, you're more risk aggressive. You have to have almost a disassociated ability to separate yourself from stress. You have to be willing to sign the front of checks, not the back of checks. And you have to show incredible resilience. 'cause the only thing I can guarantee you in life, much less entrepreneurship, is a series A, a decent amount of joy, but also a lot of tragedy and failure.

And success in entrepreneurship is your ability to endure rejection, ability to endure failure and entrepreneurship is really just a synonym for salespeople.

[00:26:42] Jordan Harbinger: Yeah,

[00:26:43] Scott Galloway: I was always selling clients, selling employees to join me, selling investors. I'm just constantly selling all, uh, time. So the core attribute, the core competence of an entrepreneur, whether it's Jeff Bezos or someone starting a podcast, a simple storytelling.

You've gotta be able to explain to them why this is an interesting podcast, why you should advertise, why you should come to work with me, why you are gonna benefit here, why you shouldn't go to work for Google and join us. But it's one of those things where I think it's more, actually, it's like kids. I think it's more nature than nurture.

That's interesting.

[00:27:13] Jordan Harbinger: I think a lot of people, they get sold a bill of goods 'cause their commencement speakers said, follow your passion. Oh God. And they're like, oh well I need to start a business then. And I think that follow your passion is bullshit. It's always told by people. What's the Scott Galloway quote?

The people who told you to follow your passion made their billions in iron smelting. It's like universally the case. No. What I've said is,

[00:27:33] Scott Galloway: anyone who tells you to follow your passion is already rich. Mm. And the person telling you to follow your passion made is billions in iron or smelting. Your job is to develop economic security for you and your family by finding something you're great at.

And here's the thing, very few kids grow up thinking they're gonna be passionate about tax law. The best tax lawyers enjoy it. They're good at it. They get comradery, relevance, a larger selection set of mates and they deserve and they fly private, which makes them passionate about tax law. So what I can guarantee you is that here's the bad news, the quote unquote passion fields.

Most of them for most of us, are not passions they hobbies. I would've liked to have made my living as an athlete when I got to U-C-L-A-I found out that was never gonna happen. Be a DJ on weekends, maybe you're a good writer, but to be a great writer, you have to be one of the hundred best. Or to make a really good living, you have to be probably one of the hundred best authors in the world.

To make a really good living in journalism, you have to be great at it for 20 years, and then get a book deal, passion, romance, industries, modeling, fashion, sports, just the lowest return on investment of any industry. The good news is that getting great at anything. The guy who installs my soapstone here in Marle Bone, this Iraqi guy can tell you everything about Soapstone.

I talked to him very openly about his business. He's been doing it for about 18 years. He's the soapstone guy for all these people renovating their homes. He does about 3 million pounds a year installing soap stone and everything, and he clears about 1.2 million. He is great at it. He can tell you about the veining and the marble and the quarries, and he, you just listen to the guy and it's almost like he's describing rock as if it's poetry.

And he's great at it. And the fact that he's great at it is known for being great at it and makes that kind of money, makes him passionate. This is what you become passionate about, is when you get to our age, I'll say in your forties, I'm older than you, you become really passionate about taking care of your kids.

You become really passionate about taking care of your parents and being able to take your spouse to really wonderful places. You become passionate about the absence of stress from your relationships that not having economic security and jacks into every relationship. And I wanna be clear, I don't wanna crush anybody's dreams.

If you want to be in sports, if you want to be a fashion designer, if you think you could be a world class dj, fine, have at it. But set some guardrails and that is okay. In order to make a living in this industry, I need to be in the top 3%. What does it mean to be in the top 3% of DJs? It means that I need a record contract and this many downloads on Spotify or whatever.

Okay? How long should that take? Well, I should be able to do that in two years. Fine. Hold yourself to it. 'cause the worst thing that can happen to you. You go to your 35 and 40 as an actor and you get a few signs of success and at the age of 40 you're driving an Uber and just coming to the recognition that you know, motion Picture and Television Association are the SAG after union, which has 180,000 actors in it, that 83% of them didn't qualify for health insurance last year 'cause they made less than $23,000.

You don't wanna be one of those 83% that doesn't have health insurance, even though it was a ton of fun when your friend saw you on Will and Grace. Right. The vanity industries are notoriously low. ROI.

[00:30:38] Jordan Harbinger: My Algebra of Wealth involves you all supporting the amazing sponsors who support this show. See how that works.

It's a simple equation, really, we'll be right back. This episode is sponsored in part by Dell and a MD. The latest episode of The Cybersecurity Tapes is out, and you don't wanna miss it. Imagine this. Silverwood Heights, a small town that suddenly becomes one of the fastest growing smart cities in the country.

Sounds great, right? Well, things take a wild turn when their fancy new tech fails on election day. And Edgar, a local guy trying to vote, gets completely caught in the chaos. From confusing smart parking meters to voting machines crashing, his day goes from bad to worse. If you've ever seen somebody older wrestle with new tech, or you experienced it yourself, this episode might hit close to home.

Edgar struggle is so relatable and it really makes you think about how dependent we are on this technology. But more than that, it dives into how cities can keep all this tech safe from hackers and vulnerabilities. Tune into episode four of the cybersecurity tapes on your favorite podcast platform to find out how a smart city stays secure.

And if you've got your own cybersecurity story, leave them a review. Who knows your experience might inspire the next gripping episode. This episode is sponsored in part by Audible. Alright. If you've got a gamer in the house and you're wondering how to set some healthy boundaries without turning into the bad guy, you need to check out how to raise a healthy gamer by Dr.

Alo Kenia on Audible. Dr. Kenia isn't just some Harvard trained psychiatrist. I mean he is. He's also a former hardcore gamer himself, so he totally gets it. He actually struggled with his own gaming addiction in college, and now he's one of the top experts on video game psychology. Audible makes it super easy to absorb all kinds of information while you're doing other things.

Whether you're commuting, doing chores, getting a workout in, you can listen anytime, anywhere. Plus, Audible's got a massive selection, which means you can find parenting advice, motivation, or just entertainment to mix things up. So if you're tired of guessing and you wanna real plan to help your kid develop a healthy relationship with gaming, grab How to Raise a Healthy Gamer over on Audible.

It's like having a personal guide through the modern parenting minefield of video games. Sign up for a free 30 day audible trial and your first audio book is free. Visit audible.com/jhs. If you're wondering how I managed to book all these great authors, thinkers, and creators every single week, it's because of my network, the circle of people I know, like, and trust.

Networking is a dirty word. Nobody likes to hear that. I'm teaching you how to build your network for free over@sixminutenetworking.com. This course is about improving your relationships skills. It is not cringey. It's not gross. It's not gonna make you look like a schmuck. It's gonna make you a better connector, a better colleague, a better friend, a better peer, even if you're retired, even if you don't think you need it, give it a shot.

Do the first couple exercises. It takes a couple minutes a day, and many of the guests on the show subscribe and contribute to the course. Come on and join us. You'll be in smart company where you belong. Scott Galloway recommends connecting with people. You can do this, you can find the course for free over@sixminutenetworking.com, and there are no upsells.

I promise. Nothing annoying happens in there. Alright, back to Scott Galloway. I think looking back, you mentioned the role of luck earlier, 2020 hindsight. I. A lot of success. And for this podcast, for example, is almost an accident, right? I was passionate about something I loved. I wanted to talk on the radio when I was little.

When I was in law school, I started a podcast because I was giving talks and people kept asking questions about the previous talk. So I recorded 'em to CDs. Somebody told me about podcasting, then I just kept doing it 'cause it was fun. And then somewhere along the line, the market decided podcasts were worth millions of dollars a year.

And here we are. But it just could have easily decided that YouTube was the only thing that mattered in podcasts weren't worth anything. And I would've had a fun hobby and I'd be doing it on the weekends while I do real estate law at whatever firm in New York or not. And it's just, I think it's important to acknowledge that.

But it's also important to acknowledge the, the idea that you can follow your talent. But it sounds like what you're saying is cultivate mastery and the passion follows from that, or may follow from that.

[00:34:14] Scott Galloway: Well, what I su would suggest is if you wanna have economic security, I. You have to have a sober conversation.

Where do you expect to be in terms of your weight class economically? I survey my students at the end of the course. Where do you expect to be economically by the time you're 35? About 80 plus percent of my students expect to be in the top 1% economically in the United States, and that's not even that much.

It's like six or 700 grand a year, I think, which is a lot of money for some people. But that's the top 1%. And given they're making $212,000 on average at 28, they think, yeah, by that time I'll be making that much money. So when I say it's okay, and I don't know anyone other than people who are smart enough to inherit money, they get to the top 1% without doing pretty much nothing but working for 10 or 20 years.

I'm not saying you can't have fun. I'm not saying you can't find a maid and have kids, but your primary gig of your life is gonna be work. It's gonna take priority. We all say our family takes priority. My family did not take priority on the weekends. My job did. If there was something really important, yeah, I figured it out.

But for the most part, my job was priorities one, two, and three for me. 'cause I wanted to establish economic security. So I have a sober conversation around the trade-offs. And I would suggest when you're young, that's the time to make that real commitment because when you get older and you have kids that are a little bit older and you're getting a little bit older, I have a lot of balance now.

And the reason I have a lot of balance now is 'cause I had almost none in my twenties and thirties. It cost me my hair, it cost me my, my first marriage and it was worth it. And that's a crass thing to say, but my life now is wonderful. But nothing's for free. I grew up with no money. Economic security was hugely important to me.

It was my priority. I didn't wanna save the whales. I didn't wanna be a good person. I didn't wanna find my passion. I wanted to make money so I could take care of my mom. And I also figured out early on, the guys who had more money and who's, I've noticed in the fraternity of UCLA, that if their parents had a place in Palm Springs or Aspen, women seemed to sort of gravitate towards more towards those guys as they were getting to their senior year.

And I thought, okay, I wanna take care of my mom. And I like the idea of being one of these guys that has a larger election set of mates. These were very base kind of crude observations, but I thought, there's things I can control, there's things I can't control, and one of the things I can control is how hard I work.

And so I kind of went all in and I wanna be clear my way is not necessarily the right way, which is my way. A lot of people decide they're not gonna live to work. They're gonna work to live. But be clear. If you're not planning to work that hard, then you need to, I balance is super important. Then move to a low cost area.

Make sure you have dual incomes. Just be sober about your cost of living, because I find there's a mismatch and a misalignment sometimes between partners and people's expectations and they're like, oh, I would never leave New York. Okay, if you wanna raise kids in New York, how many kids you want? Two or three kids, okay?

You need to make a million bucks a year given the weight class you expect to be in, in the lifestyle you expect to have with a 47% tax rate. Add it all up. You need to make a million bucks a year, which means you have to be outstanding at something. And most young people don't really have what I call a sober conversation around this stuff.

And then they get lectured at by people who would literally have sex with her sister for a nickel about, oh, I never thought about money. I just wanted to build something great. Give me a break. I don't know a single entrepreneur, venture capitalist who's not in the back of their mind adding up the dollars and making sure they're gonna have some semblance of economic prosperity.

So I say, get very serious about money. Very early. We're all supposed to pretend every woman is supposed to be. We disproportionately evaluate women unfairly based on their looks, and we disproportionately evaluate men unfairly based on their economic success. And women are supposed to be accidentally hot and men are supposed to be accidentally super ballers.

Like, oh, I'm just so talented. I, I slipped and broke a hit and fell into millions of dollars. 'cause I'm just so good at what I do. But I don't think about money. No. Think about it. Learn about it. Ask your friends how much money they're making. What are they doing with their investments? How are they planning their taxes?

What's their approach to building wealth? There's this taboo around talking about money that I think's largely been fomented by the rich to try and keep the poor down. 'cause there's an asymmetry of information. Rich people talk about money all the time, and the people who understand a certain language can speak it much more fluently than the people who don't learn about money.

I think in every senior class in high school, there should be a class called adulting. What is the interest rate on your mortgage and why is it important? What role do taxes pay? Why are. Why are the credit markets different than the equity markets? I'd also like to see a course part of adulting on mating.

How do you approach someone and express interest while making them feel safe? These are things that most people sort of figure out, but a lot of people don't. And I'm speaking from history here. I always made a lot of money, but I never really saved any. And I didn't diversify. And I ended up 42 with a new kid and broke.

And if I'd just been a little smarter or a little less stupid, a little less arrogant, thinking that a baller like me who's running a company that's about to go public, I should borrow money against the stock and double down. 'cause that's the mythology of Silicon Valley. Well, no, Scott, if a great financial recession comes down and your company can no longer access credit, and then there's a longshoreman strike and the merchandise gets cut off.

The Long Beach coast. Your company could go chapter 11 despite how awesome you are, and you could end up being worth negative 3 million about the time you have your first kid. That could happen, and there are a few easy things I could have done to protect myself from that, but I was too arrogant and I hadn't learned the basics of diversification and financial literacy.

[00:40:00] Jordan Harbinger: There's a lot about that in the book for those who are interested in learning about that. The Algebra of wealth will obviously link it in the show notes, and when people use our book links, it helps support the show. One huge insight from the book that it is almost a throwaway line, but you just reminded me of it.

You should talk to your friends and contacts about money, salaries, what you get paid, what they get paid, the job market. Because the only, I think you said something like, only your employer benefits from your ignorance and lack of connection and knowledge in this area, and I thought that was really insightful.

People will talk about their sex life with their spouse in front of their buddies, but if someone's like, Hey man, what are you guys making? I'm wondering if I'm not making enough, no one will have that conversation. I mean, you would have to be blind drunk before somebody throws that one out there.

[00:40:40] Scott Galloway: This is a fa it's, it is, again, a myth fomented or a zeitgeist encouraged by the incumbents, basically management and shareholders of companies.

For some companies, it's a fireable offense to talk about your salary. Some explicitly say, if you talk about compensation, we can fire you. Why? You can bet the senior people know what everyone's making, but you might find out that Bob down the desk who's not doing any better, maybe even worse job for you is making 30% more because you didn't threaten to leave.

If everyone had perfect symmetry of information, then compensation costs would go up and the shareholders and the senior managers wouldn't be as profitable and be able to pay themselves enough money. So asymmetry of information, benefits, the people who have perfect symmetry. Also young people, especially young men, are worried that they're gonna reveal themselves as not being the baller that they're trying to portray.

You know, I make $84,000 a year. It's tough for me to pay my rent. I still get some money for my parents. I'm really worried about it. My student loans are weighing down on me. It's helpful to talk to other people. 'cause what you generally find when you talk about kids, you find out anyone who has more than two or three kids, one of the kids is struggling with something, device addiction, A DHD, you know, whatever it is, right?

And the moment you kind of break the seal, especially with men and you start talking, you just get this outpouring, oh yeah, I'm worried I'm gonna get fired at work. I've been sending home money home, I can't afford it any longer. My student loan payments are, my spouse is not aligned around money and he or she's disappointed in me that I'm not making more money.

And I've been loathed to tell her about one of our investments doing really poorly. 'cause I think he or she's gonna be very disappointed in me. Money creates so much stress in people's lives. The majority of divorces aren't reverse engineered infidelity or a lack of shared values. They reverse engineer to stress about money, and you have to have alignment and literacy, fluency, alignment, and be able to talk about it with your friends and be able to say to your friends, I'm making 150,000.

You're like, I'm making 90. What are you doing? Well, I work in CRM at Salesforce. Wow. What are the skills? This, this, and this? Do you think there's any way you get me an interview? Men hate asking their friends for help because you're supposed to be such a baller that you don't need anybody's help. You know what?

Strengthens friendships, asking people for help. There was a study at Google when they put out a job opening. They get 200 cvs in like, you know, 30 minutes. They pick the best 20 and of the 20 people that come in, 80% of the time, the person that's hired has an internal advocate and friend in the company.

So how do you be successful? You put yourself in a room of opportunities even when you're not in the room. Now, a lot of that comes down to being a good person, a generous person. Any opportunity to help someone who's younger or your age or who's struggling is a gift because they will remember it. If there is a job opening at your firm and you work at a good firm, you should be scouring your head for anyone you know who might be good at and benefit from that job.

Because that person will be forever grateful. And at some point you might need them to get a job. But one of the reasons I think kids need to get, or young people, it's so important that they're social. I've been advocating, I'm jumping all over there, pa. I think kids drink more. You know, I have, I have Peter Aty and Andrew who ran on my podcast.

They've basically declared war on alcohol.

[00:43:57] Jordan Harbinger: Yeah.

[00:43:57] Scott Galloway: When I look back on the most important things in my life, the things that have really paid off, they've been my friendships and my romantic partnerships, and almost all of them early on, alcohol was a key component of it. These guys see drunkenness and bad health and alcohol.

What I see among young people is togetherness and bonding. I'm not suggesting everyone start getting fucked up and day drinking, but I do think more young people need to go out, spend more time together, push their boundaries, maybe drink a little bit if they enjoy it, and develop more bonds and more sense of comradery, and occasionally make a series of bad decisions that might pay off.

[00:44:35] Jordan Harbinger: That's a really funny idea and I, I get it. I get it. Because we kind of, for a lot of us, especially guys. We need that two whiskeys to go Here are all the real problems I'm having in my life. Can any, does anybody relate to this? Because before that, you're right. It's all about like, oh yeah, I'm going on vacation here.

How did you meet your wife Jordan? Uh, on Twitter, which she doesn't use, and I

[00:44:57] Scott Galloway: don't use, lemme ask you another question. The first time you kissed her, were you drunk or were you, did, had you, had you or her had alcohol? No. Okay. You're unusual. All right. Well, you've just

[00:45:05] Jordan Harbinger: dispelled my entire theory. Not really, because my, my old job before this was all that dating stuff, so I had to be able to function without alcohol.

She doesn't drink. So that was part of it. It would've been weird if I was the only one drinking on that date. I think that would've been a bit of a red flag.

[00:45:19] Scott Galloway: But think about the entire podcast world now. It's all about optimizing. I'm a huge fan of physical fitness. I've worked out four times a week for 40 years.

I get it. I'm trying to tone down my alcohol intake 'cause I, I drink too much. And as you get older, your, you know, my liver can process alcohol the way your can. I do not regret drinking. Some of the drug abuse I did mostly around THC when I was younger. It was a ton of fun. It made me feel closer to people, lowered some of my inhibitions.

I'm not suggesting it's for everyone. I think people should do an audit of their addictions. Everybody's addicted to something because industrial production or instincts haven't kept pace with industrial production. Everyone has a certain level of addiction, whether it's online shopping or trans fats, or I said, my addiction is the approval or affirmation to strangers, which is really pathetic, but find out where your addictions are.

And if you're addicted to alcohol, you got a problem. You gotta figure it out. But the vast majority of young people will figure out a way to manage alcohol and pot and their job and their relationships. And I would argue, and this never gets reported in many relationships. It's a feature, not a bug. You mean the consumption, the vice that you have.

I think going out and getting a little bit fucked up with friends or using it as a means to perhaps lubricate a relationship. I see. Or giving you the confidence to approach strangers. I think that's a positive.

[00:46:35] Jordan Harbinger: Yeah. I mean, I can't fully disagree as long as it doesn't get outta hand. I mean that's, I think you just described most people's twenties in the first place, or even their thirties depending on, on their status during that time.

For me, everyone's probably wondering what my addiction is. I don't know if I'm addicted to it per se, but I definitely cover a lot of my other bullshit with work, if I'm being honest. You know, like you're addicted

[00:46:54] Scott Galloway: to work, but why are you addicted to work? Are you addicted to money? Are you addicted to the affirmation?

What are you addicted to? I think I use it as

[00:47:00] Jordan Harbinger: an escape from, you know, I work from home, I work with my spouse. She's great. My kids are here all the time. 'cause they're little. So me being in the office with the door closed is like the only refuge I get. And sometimes on weekends it's like, do you wanna go to this birthday party?

It's 95 degrees outside and it's in a park with no shade. And they're ordering cheese pizza, which you don't eat. You could bring a salad. It's gonna be hot though when you get there. And I'm like, no, I gotta read Scott Galloway's book today. I gotta read the whole thing. Oh, I thought you finished that.

Yeah. Maybe I gotta read Chase Jarvis's book. There's a book I gotta read. I can't go do this thing. And it's this like, it's the only refuge that I got and it's, I wish it was only when it was a hot birthday party on the weekend, but I probably lean on it a bit too much if I'm being honest. How old are your kids?

Two and a half and five.

[00:47:42] Scott Galloway: The two and a half year old. You're in the stage of what I loosely refer to as awful. Mm-Hmm. So zero to three. I think for dads we pretend to like it and maybe some guys do. I think it's awful. I was mostly, it's a science experiment. You're trying to keep alive, keep it away from a body of water, two and a half or three to five when they start getting into you and it's fun and you really feel some of that, I don't know, unique bonding with your spouse around raising this thing and seeing it evolve.

That gets less awful. And then from five to 15 is what I call, you're with your older one entering just the best decade of your life, you're gonna look back, just take a ton of pictures because in videos too. 'cause you're gonna look back on those pictures and you're like, that was why I'm here. These things evolving, the way they look at you, they're into you.

The way they see the world, the way they see the world in ways you did and you recognize you and your parents and you realize your partner's DNA, the purpose. You feel that when you work as hard as you do and it pays off the things you can provide, the protection you can provide for them, it's just so immensely rewarding.

And you're not expecting it. You don't even can't even understand it or feel it or explain it to someone who doesn't have kids. And then they turn 15 and they kind of, I thought I was gonna lose my kids when I was 18. My oldest is about to turn 17 and he is still wonderful, but I'm basically following him around the house trying to find things he would do with me.

And he's kind of, kind of interested. Not really. He's into his own things and his own friends. But that you're about to go into the golden decade that I think for most men who are successful and well balanced, such as you, that is the best decade of your life. And what I would tell people is, especially for someone like you who's recognized a little bit of success, or actually a lot of success, really lean into it.

Plan a lot of trips, do trips with each of the kids individually, take a ton of photos, talk about it a lot, and try and imprint it. 'cause I'm finding, I relive that stuff. You know those Apple I, they're called memories reels.

[00:49:40] Jordan Harbinger: Yeah. Where the iPad shows like, Hey, three years ago, here's you and your wife in Thailand, whatever.

Yeah.

[00:49:45] Scott Galloway: You and the dogs, or the kids and dogs. And it says, at night, I stay up and I will, I'll watch those things for 30 minutes. And it's like I've already planned out. I'm an atheist. I think at the end of my life I'm gonna look into my kids' eyes and know our relationship's coming to an end. And I'm really not excited about it, but I'm already planned the music.

I'm gonna have Tom Petty and Tomatoes where I want to die. The drugs I want, and I'm just gonna have all this media that I recorded during those 10 years and I'm gonna get to live that decade over and over again. But you are going into what I would call, especially the little, I know about you, the best 10 years of your life.

But the way you cement it is you really wanna lean into it. Take a ton of pictures every night, talk about that day with your kids, with your partner. And I did about, I knew I was doing it. I still wish I'd done more of it. Also, you have two. I wish I'd had a third. I wish I'd had a girl. 'cause I don't know who's gonna take care of me.

But anyways, enough of that.

[00:50:37] Jordan Harbinger: Yeah, I got a boy and a girl, so my wife's like, let's just stop. One will take care of you slash us and the other one's gonna be your best buddy. And it, it's true, man. He runs home from school. He is like, where's dad? I wanna build Legos, then I wanna go biking, then I wanna go to the park, then I wanna build the marble thing.

I don't wanna go to bed because dad's not in bed. So I have to go to bed with him and I think it's fun. I think it's hilarious. Then he wants to watch YouTube videos with me on my phone and watch me study Chinese on. Duolingo. I mean, it's just, I realize that's fleeting. That's not gonna be forever. It's only a handful of years.

[00:51:08] Scott Galloway: It's somewhat linear. Zero to five, it's too much. It's just too much. It's just a lot. Five to 15 is the perfect amount, and then 15, it's too little.

[00:51:16] Jordan Harbinger: Oh man. I'm gonna, I'm gonna tear up here in a second, so I gotta change the subject. Um, money means less the more you have of it. I've talked about this a little bit on the show before, but the diminishing marginal returns, the income levels where happiness stops increasing.

And I've sort of read recently that that might be a myth. Money kind of can buy happiness, but you have to use it to focus on relationships. And many rich people that I know, and I'm sure you do too, they, they really only have valuable things. They got a boat or two, but their kids don't talk to 'em or they don't care about it.

The relationship's not there.

[00:51:49] Scott Galloway: There's a lot of research around this, and that is the bad news is that money can absolutely buy happiness. Middle income homes are happier than lower income. Upper income homes are happier than middle income. The breasting blood pressure of a kid in a low income home is higher.

And then the resting blood pressure of a kid in a middle income home. That's the bad news. Money does buy happiness. The good news is that it tops out. Now it tops out at a pretty high level because what do you need? You need housing. You need to take nice trips. You need to feel like you could survive an economic hit.

But if you live in a city, you're talking about several hundred thousand dollars a year. It's a lot of money to get to that point of diminishing returns. But once you get above kind of the level where you could say, for example, just live off the interest or the passive income, which is a pretty good definition of wealth, passive income, that's greater in your burn, I think that's what it means to be wealthy.

You're not gonna get any happier with a bigger number. You might, at least with me, I've been on the hamster wheel so long that I'm totally driven to have more and more money, and I haven't been able to stop. But the research shows the returns become negligible above a certain amount, which leads to a couple things.

One. You know, I'm a big fan of having Uber progressive tax rates, say above $10 million, you make more than $10 million. I don't understand why they wouldn't pay 80% tax rates, because it's not gonna provide anyone with any additional happiness, except for the person who gets a $8,000 earned income child tax credit who's making $40,000 a year.

The difference between 40 and 48 is huge for someone. The difference between making 10 million and 12 million for someone is almost negligible, and it's also impacted my life. When I sold my company in 2017, I was done at least economically, I could survive just off that money for the rest of my life at a pretty decent lifestyle.

I thought, well, fuck it. I'm gonna double down. I'm gonna start a private equity fund, got some seed investors because I wanna be a billionaire, and I could do that based on my contacts, my age, my domain expertise, and I just thought, I like the sound of Scott Galloway billionaire. I just thought that sounded good.

Then I thought, okay, I've paid a pretty big price not being around my kids. It's been pretty stressful. It's put stress on my relationships, stress on my health. Why don't I just continue to work, do something I really like, and try and cure this virus that infects a lot of people in America called hoarding.

And that is pick your number. And for some people that number's a million. For some people, that's 10 million. For some people it's a hundred million. But once you hit that number, anything above that, I would suggest you spend it. It's a ton of money to spend money. I spend money like a gangster in the fifties that's just been diagnosed with Ask Cancer.

I do crazy shit with my money and I absolutely love it. I have a great time. We live in a capitalist society. It is amazing the things you can do with money. And then anything above that I give away, and I don't do it because I'm a good person. I do it because it makes me feel strong. It makes me feel masculine.

It makes me feel like I have higher character as opposed to just bitching about shit all day. If I talk about teen depression enough, I'll give some money away. If I talk about vocational programming enough and how young men need more opportunity, I'll give some money away. And that is just so rewarding because dying with whatever tens of millions versus tens of billions not gonna get you anything.

And along the way, spending it and giving it away is so much fun. So I just don't understand this virus that infects America. I don't think there's any reason for anyone to be worth more than a billion dollars. I'll call it even a hundred million. It adds no value. And at some point, when you have individuals that are that wealthy, it does take money out of the treasury.

It takes away opportunity from people, and it also power corrupts. And when you have individuals who can turn off battlefield communications technologies or sway elections or whatever it is, or demand that they get subsidies for their EV or their turning off the satellite system in a country. There's too much money, which in a capital city translates to power in our economy.

So I think a lot about this virus of hoarding, and I decided I made a concerted effort at 2017 that I was not going to increase my wealth, my net worth anymore. I was either gonna spend it or give it away. I think that's the right decision. I made that decision seven years ago. And these are high class problems.

The majority of the people will never have this problem. But I think as a general zeitgeist in our society, we want to say, why does anyone need to be worth more than this? And I don't mean to go all Bernie Sanders, Elizabeth Warren, I don't like class warfare. But if someone isn't gonna be any happier having more than $10 million a year in income, why are we taxing it at a lower rate than someone making 50,000?

So I think our tax system needs to reflect what Kahneman called loss aversion theory. And that is the pain of making very little money is so much greater. The incremental joy of making a lot versus you know, a super a lot. So I've sort of switched minds around. I think a lot about hoarding money and I think about how we need really aggressive progressive tax rates above a fairly high number.

[00:56:56] Jordan Harbinger: It's interesting of course, 'cause you wanna vote it in your own interest, but also you realize it's not good for society in a lot of ways. It's a tough pill for people to swallow. I, I do find it ironic that a lot of the people who are complaining online about whatever wealth tax for people who earn over $10 million or whatever it is, I look at their profile and I'm like, you're never going to be there.

This photo was taken in a room that looks like a bomb, hit it. You know, you're 30 years old, single guy, not even really working in like a high level corporate. Like why are you going to war over this? That's what sort of always mystified me. I. What's the term? Like temporarily inconvenienced millionaires, a lot of these people will absolutely go to war over this kind of thing, and they're never going to enjoy those benefits.

It's like they're brainwashed. They're in some sort of weird cult. I've never understood it.

[00:57:43] Scott Galloway: Really, the kind of superpower of Americans is our optimism and the downside of that, there are $5 in venture capital available to invest in businesses for every one that's available in Europe because investors here are more optimistic that two crazy kids in a dorm might come up with the next Google.

We're just more optimistic and that has some wonderful things, wonderful features about our society. We will shoot a rocket into space thinking this might work. The downside is that we believe all of our kids are in the top 1%, and we said, well, no, let's continue to grant tax free status to Harvard with a $54 billion endowment who's increased their endowment 40 fold, but has only increased the size of their freshman class.

4%. Why do I not mind? Because my kid's in that top 1%. It's kind of the lottery ticket phenomenon on that is people know the lottery is a bad idea that it doesn't pay off. But baby, my numbers are gonna work. I mean, this is what happens when you get, my kid is gonna be applying to college next year, and I'm part of this enforcement system of the caste system called higher education where we artificially suppress admissions rates such that we can raise our tuition faster than inflation, such that we can pay ourselves more as academics and administrators while reducing our accountability because we've created this scarcity value that's similar to a Chanel bag or in our ME birken bag, and it is total bullshit.

It's totally contrary to the basic notion of public service, and that is if you're Harvard and sitting on $54 billion and you're only letting in the number of students that would roll through a good Starbucks, you are no longer a public servant and you should have your tax status, your tax-free status revoked.

Harvard could admit and build the resources with a fraction of that $54 billion endowment. They could expand their freshman class to 15,000 kids and have no sacrifice in quality. But instead, me and my colleagues stand up and applaud the dean when he or she says we rejected 88% of our applicants. We stand up and think that's a good thing, in my view, that's tantamount to a homeless shelter saying he or she rejected 90% of the people who showed up last night.

We have to get past this notion that we're luxury brands. We're not, we're public servants. So there's this exclusionary rejectionist culture that's evolved in the US because all of us think we're gonna be in the top 1%. Our kids are remarkable that my investments will pay off that. No, we need to treat rich people better.

'cause I expect to be one. And we're not thinking enough about what is the purpose of America, the platform that is America, is it? To identify a super class of freakishly remarkable kids and rich kids and turn them into billionaires. Or is it to give the bottom 90 a shot at being in the top 10%? And I look back to where I was when I was a kid, UCLA had an admissions rate of 76%.

It was one of the 24% that didn't get in the first time I had to appeal. And then I got in the admissions rate this year, guess what it'll be Jordan.

[01:00:41] Jordan Harbinger: I have single digits something

[01:00:43] Scott Galloway: nine. Wow. And you'd think there'd be an uprising. This is a public good. Yeah. Look what it did for this guy. This son of a secretary wasn't that impressive.

Look what it's done for him. But instead it's like, no, I believe one of my kids had those 9%. I. So I, I think we've sort of lost the script and slowly but surely moved to this rejectionist LVMH exclusionary bullshit strategy. That, in my opinion, is just not what America should be about.

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Now, for the rest of my conversation with Scott Galloway, I'm looking up University of Michigan 18%. Oh, that's so much higher than 9%. It's twice as much. This even says on this whatever, prep scholar.com. This means the school is extremely selective so that, I don't know what that says about UCL. Extremely, extremely selective, and these are public schools.

Doesn't that mean you should have like a fighting chance at getting in if you also went to a public school, but instead you have to be, I don't know, the son of a diplomat to get in here. That's insane to me and it, it was probably maybe a little higher when I went there, but it should be trending. The o other direction.

We can find out when, when did you apply? I ap gosh, uh, 1998 probably

[01:04:48] Scott Galloway: Michigan acceptance rate. 1 9 9 8 50 5% ish. Okay. It's gone from 55 to 18.

[01:04:55] Jordan Harbinger: That's crazy. 55 to 18.

[01:04:56] Scott Galloway: You had three times the likelihood of getting in in Som Jordan. I don't know if you were a scholar athlete or something like that, you probably wouldn't get in now.

No, I wouldn't get in now. I got listed even then. And guess what? It's paid off for everyone. The fact that they were not that exclusive in letting you, it's paid off for everyone because here's the thing, no organization are much less in university. I can predict greatness. When a kid was 18, did you have your shit together at 18?

I didn't.

[01:05:20] Jordan Harbinger: I had all this sort of like varsity football exchange student, did all these unique things and then I got into Michigan law, which is way super selective back then. Harder now I'm sure. And I don't think they regret letting me in there either. So what's the problem?

[01:05:35] Scott Galloway: Well, we need alumni and I'm trying to do this and I would hope to enlist you to say, okay, we need to stop donating money to put our names on buildings.

I donate back to UCL and I'm about about, I want more kids. I want less impressive kits. 'cause there's no such thing as less impressive at 18. There's just different and sure continue to let in the freakishly remarkable. But guess what? A lot of good kids don't get their shit together until their twenties, sometimes their thirties, and they can become great.

I. And that's the whole point of government and public education in my view. And we have totally gone the other way. I find it very discouraging. Not everyone's lost the script. The University of California is trying to expand their freshman seats by one full campus. Michael Crow at a SU wants to educate hundreds of thousands of students.

Purdue has not raised tuition in 10 or 15 years. West Virginia Tech, some schools get it, but there is, there are a lot of universities, especially the most well known that have decided they're no longer public servants, but luxury brands.

[01:06:35] Jordan Harbinger: Scott, I know you hire or have hired a lot of people throughout your career, how often is too often to change jobs?

I keep hearing about how millennials change jobs faster, but I assume that trend is even accelerating with Gen Z. Maybe not, but at some point, somebody who has a new job every, I don't know, two years, starts to look like somebody who gets trained up and then figures out the reality of the job is hard or not fun, and then they just quit and move on to something else.

That's not somebody who I wanna hire. My own team been with me for like a decade, some people even longer. So the last thing I wanna do is hire somebody who's gonna quit after 18 months or 24 months. But on the flip side, changing jobs is one of the best ways to get a pay raise. So how do we balance getting a raise, making more money with changing jobs too frequently in giving the appearance of somebody who just doesn't stick around?

[01:07:18] Scott Galloway: So the research shows that job switchers, if you show up with five jobs in five years, you just smell and it's gonna be hard for you to get a job. You know, either you can't be counted on or you interview well, and then people decide you're not very good. But the reality is, people who switch jobs every 2, 3, 5 years over the long term tend to make more money because we have this phenomena where we tend to see people through the lens of when they came into the company.

So my editor in chief, a kid named Jason Staffers, I've been working with Jason for. 30 years. I have trouble forgetting that Jason is not some 22-year-old outta Yale that I can pay $60,000 to. That he went to law school, that he was a partner at a law firm, that he's incredibly bright and that he has unbelievable opportunities elsewhere.

And we have a tendency to be drawn to the unknown in strangers. This happens a lot on boards. They have a tendency to pick an outside candidate because it's easy to come across as perfect in a series of one hour interviews. And as a result, we tend to undervalue existing people and wanna bring a new player thinking they're gonna be the answer to all of our problems.

So the way you benefit from that, quite frankly, is to switch jobs every once in a while. What I would suggest is the following, and this is what I've done at NYU for the last, I've worked there 22 years. Every four to five years I would do a market check. And that is, I would return the call from Cornell or Wharton or Columbia.

I would go talk to them, get a sense for the comp, and then go up to my dean and say, look, uh, the 2000 eyes ring to it. I wanna stay here. This is my worth in the marketplace. I need you to match it. So what I would suggest is on a regular basis, do a market check. If you find that the market opportunities are much greater somewhere else, then have an honest conversation with some people you trust and your spouse and your parents are just people who can inform you.

'cause it's very hard to read the label from inside of the bottle around whether it's time to change. Now, on the flip side, as an employer, what you sort of have to do is forget what you know. What do I mean by that? Imagine that person one leaving, they're gone. What would you pay them now that you know they left two, imagine they just walked in the door.

Someone with this skills that's doing this kind of work, what would they be worth you? What would you have to pay them? And then if you're blessed enough to be in a high margin company, a media company, pay them a little bit more and also try and figure out other means of compensation. So my assumption as a manager growing up was that everyone wanted what I wanted.

They wanted to be awesome and rich. So I'd give them equity and say, we're gonna sell this company for a lot of money and we're gonna be awesome and rich. And what I found out is, sure, economic security is important to people. Pay people well, but some people wanna be managers. Like if you give someone a direct report at the age of 25, that's like huge for them.

Go out, interview people. We want to give you a hire that's like huge for them. Oh, we got an inquiry from the New York Times. Someone has a big ego like I do. I want you to call them and talk to them on behalf of this study. Oh my God, their name in the New York Times. Hugely important for them, right? This person is from Europe.

There's a conference there. Do you want to go there? We're gonna send you, we know you have family in Germany. If you can show that you have learned enough about that person and that you have a vested interest in their professional happiness, and you're willing to put some resources and effort into delivering against that unique form of happiness, and quite frankly, there's just no getting around it.

Pay them well. Loyalty is a function of appreciation. Full stop. My superpower is storytelling. That's how I make my living. But my core competence is I've been able to find and retain really talented people. I turn through a lot of people. A lot of people come in and wash out one year, two years, fine.

We're generous with them. We let them go. Anyone who survives longer than that, I create long-term incentive plans. I mutualize almost everything I do. I sign a long-term podcasting contract for whatever, 10 million bucks. I tell everyone, if you're here in 1, 2, 4 years, you're gonna get 4% of this. Because if I'm successful, I'm always gonna make more money than you.

I'm the star here. Let's be honest. But if I do really well, so are you. And this is exactly what I mean by that. And I am very talented and gonna do super well, which means you're gonna do really well. I want you to be economically secure. I want you to make money for you and your family if you're in a position.

There's nothing like surprising people to the upside, which is difficult to do in compensation. 'cause people generally speaking, especially good people, have an inflated sense of their worth. But my job growing up in the professional world was how do I pay people slightly less than what they're worth?

So I can extract as much profits as possible than sell the company. And then they participate in the equity. And now that I'm a little bit older and I have the luxury of a company that's very profitable, our business is the definition of income inequality. The top 200 podcasts make 90% of the revenue.

But if you're fortunate enough to be in those top 200, you can pay people really well. I have flipped a script. Now, my objective, and I think most of my employees would agree with this, maybe not, is to overcompensate them, is to say, okay, this is market. I'm gonna pay you what I think is about 1.3 market.

And the nice thing about that is that if no one is ever leaving, it means you're paying them too much. But that's fine. But the cost to find new people and train them and train them up. Especially in a small company is really difficult. I think the key to a small company becoming a medium sized company is you identify the stars.

People like to think, oh, everybody's great. No they're not. I'm convinced 10% of your people create 120% of the value and the other 90% subtract 20%. Those people who know who are really good, you want to bolt them to the ground. I think you are outstanding. And also try to ignore age. Occasionally you'll find a 24 or 25-year-old who is outstanding and the temptation is to think, oh, they're young, you know, we'll pay them.

Well. You don't pay them what the value they're adding 'cause they're young. You take that person aside and say, you're a star. You know it. I know it. Or this is, I wouldn't even say, this is management philosophy. It's my philosophy. I'm gonna give you 3% of this company. These are the revenues I plan for the next five years of the company.

This is why I'm gonna sell it for between 40 and 60 million, which means you owning 4% means at the age of 28 you're gonna get $2.4 million. I am that definitive. And I say it might be less, it might be more. But I am committed to making you much wealthier, much more successful than your parents were at that age.

And I find that as really powerful. 'cause if you find the right, the core, the core of excellence in a company and you don't worry about them ever leaving or walking in and saying, oh, I got a job at Google or whatever, it makes growing a business much stronger. Compensation I find is the hardest part of a business.

I serve on a lot of boards. You know, we have meetings, consultants, trying to figure out how to compensate the co, who's already making 400 times what the average employee is making. It is the most difficult part. And it's probably the most important part, is does this person feel appreciated? And the final thing I would say, in terms of compensation, I try and have a ridiculously social.

Work environment. What do I mean by that? I am not a social person. I'm paid to be an extrovert. The last thing I wanna do is hang out with my employees, but I have a deal with 'em. We're mostly remote. What's interesting is the young people actually got their own office. If there's any four of them together at any time, whether it's going to the US Open, going to Tulum, going out to dinner, they have my credit card.

Just as long as there's four of them there. They can do whatever they want. And it's my credit card because the number one source of retention in a company, I would've never guessed this. It's not compensation, it's not the values of the company, it's not the benefits. It's whether that person has a friend at work.

People love coming to work. When they have a friend or friends there, it makes them happy. So you want to create an environment where people can establish friendships and relationships. When we interview people, we let everyone interview them such that they think this is the kind of person I would like to hang out with.

I dunno how scalable that is. I've always built small companies. I haven't built big ones. You know, maybe you can't do that with 18,000 people, but my kids, when I say my kids, they 15, 16 people that work with me, they like each other and I think they get a ton of psychic income from coming to a place where they have a good time together and generally feel they're surrounded.

They don't have to be best friends, but they genuinely enjoy each other's company.

[01:15:52] Jordan Harbinger: This is really interesting. I, I'm tempted to, to give out my credit card for that reason, but also Jace and Ian and everybody listening don't, don't count those chickens just yet. I gotta, I gotta let that one marinate for a bit.

Maybe anything over a couple grand. I also have to be there just so they don't go to hog wild without me. Plus I don't wanna miss out. I get phone. Wild. That's the

[01:16:12] Scott Galloway: key though. You can't be there so they go hog wild. Ugh. You leave, you leave at 10:00 PM or you don't go on the trip to Tulum. That way they have a much better time.

They're not as self-conscious. You know what

[01:16:21] Jordan Harbinger: you're, you're right. That's the sad truth. Look, we're skipping over a lot of the stuff that's in the book about stocks, investments, a lot of sort of introductory principles that I think are super important. I did find it interesting that you recommend people who are awarded stock or stock options at work sell that stock as soon as possible in the most tax advantaged way possible.

Because a lot of people, I'm in Silicon Valley, right? A lot of people I know in tech, for example, they will sit on that stock for years and years and years. There. There's guys that have millions of dollars in Apple stock. I'm curious why you recommend selling it. I'd love to hear this. 'cause I think people that their instinct is to just sit on that stock for as long as possible.

[01:16:57] Scott Galloway: So I'll go to the equation. There is an algebra of wealth. The first is focus. Find your talent. Find something you're good at. They can become great at it in an industry with a 90 plus percent employment rate, which will create the currency to make good money. Stoicism. Realize people aren't thinking about your shit as much as you are.

Try and get more enjoyment. Control your emotions. Invest in things you can control. Realizing most things are outta your control. One of the things you can control is how much you can spend. Don't be that idiot that buys a bottle of vodka for 400 bucks at 1:00 AM in the club. Try and reduce stomach expenditures.

Really track your spending. Try and find high quality basics that you use over and over if you have a partner and you're saving, gamify it. I spent $78 a week for 12 weeks, my sophomore to junior summer at UCLA so I could save enough money to go back. I got four other guys in fraternity and we gamified.

We we lived off of bananas, milk and Top Ramen. Develop a savings muscle. Recognize one of the flaws in our species is time. Time will go much faster than you think. Your weapon when you're in your twenties is time. You're gonna be our age. Before you know it, realize that if you put a thousand bucks away now at 22, you're gonna have 30,000 when you're our age and it'll go really fast.

So if someone had a magic box, or you could put a thousand bucks in. And get a 30 back in what feels like an instant. How much would you put in? Well that's called compound interest and time. And then finally what you were speaking to, diversification. This is where I really, myself, Jordan, and that is, I thought if I threw myself at any one company, 'cause I'd had enough signals of success, this thing would be so huge that I should be all in.

And my investors were always telling me to be all in on something. Show commitment. And you believe, oh, we're about to go public. And your investors want you to be kind of in it to win it. And there's all this mythology in the press about Mark Zuckerberg pushing back the napkin to see bomber and going all in.

And Steve Bomber borrowing against his Microsoft stock to buy more Microsoft stock. And it always ends well. Not always, diversification is risk-free return. You may not have the choice to diversify when you're younger. You have to save a lot of money and put everything into a first house. You're starting a business.

You have to put it all on the line. In a business, I get that the moment you have some assets. You have the ability to take some off the table for God's sakes, start diversifying. I could have easily taken $10 million off of the table at red envelope. Instead, I just levered up and ended up negative 3 million.

When I went chapter 11 and 2008 during the great financial recession, I would've been set or mostly set for life. I don't invest Last week, it's actually last month. I found out the one investment I was most excited about that I made two or three years ago preventive healthcare via text messaging, selling into the enterprise Baller, CEO.

Tier one VCs elbowed my win. I put in 5 million bucks a lot of money for me last week, they shut down zero. But here's the thing, I don't invest more than three or 4% of my net worth in any one thing, no matter how lucrative or amazing it sounds because I took a bullet to the chest, but diversification is my Kevlar, so it knocked me off my feet.

I was bummed out for about an hour, and then I got right back up. Whereas when I was younger, I didn't have that bulletproof. I didn't have that Kevlar. I went all in on shit. So when I took a bullet to the chest, and keep in mind, no matter how much of a baller you are, the market is bigger than any individual.

You can take a bullet to the chest from a random sniper called the market or bad fortune, and if you aren't diversified, that shit can kill you. It almost killed me. I almost wasn't able to get up. I was so devastated, emotionally, much less economically. I almost got sort of stuck. So what they don't teach you is the smart thing to do is the moment you have assets, start diversifying.

And here's the thing, you don't need to be a hero. You don't need to find the needle in the haystack. You can buy the whole haystack. The market has returned 9% since the beginning of the market. 9%. That's nothing, Scott, that means every eight years. It's doubling meaning in 24 years, which will go by really fast.

If you're 22, your investments are gonna go up eight fold. Figure out what you're good at. Find a way to save more than you spend, or spend less than you make such you can save money and deploy an army of capital at night. Realize how fast time is gonna go and diversify is all adds up to kind of one thing.

I absolutely understand how to get you rich. That's the good news. The bad news is the answer is slowly, and it might seem slow now, but looking back, it'll seem as if it happened really quickly. I got lucky later in life, which saved my ass. But if I had just put 5% of my income aside every year from the age of 22, I've always made a lot of money.

I would've had somewhere between 80 and 90 million by the time I was 44 and broke. Again, don't be an idiot like I was. Don't be an idiot. Follow these simple equations and you're gonna be fine. Assume you are not gonna go double platinum or sell a company or have a Top 10 podcast. You don't need to find something you're good at.

Make some money. Save some money, understand how fast time is gonna go and diversify.

[01:22:05] Jordan Harbinger: One last thing 'cause I know we're running outta time. One last thing that has nothing to do with money. I know you train your sons in communication. I just heard it sort of as an offhand comment. I'd love to know how you do that and of course why, even though it should be self-explanatory, but how and why you train your sons at communication.

I think most of our dads were not good at this. It's not, maybe they didn't, I don't think it's that they didn't want to. I think it's not where a lot of men's talents lay. Also, it might be generational. It's a good idea maybe to break that, if we can figure out how to break that.

[01:22:34] Scott Galloway: Yeah. I don't know. I try.

I'm not sure I'm very good at it. The first thing is I try to encourage my kids and I used to do this test. I no longer do it. 'cause it started putting a strain on relationship that every time we left the house, they had to speak to a stranger. I think the key to professional and personal success is your willingness to endure rejection.

If you wanna score above your weight class professionally or romantically, you have to develop the ability to endure rejection and to even present yourself with the ability to endure rejection. You have to approach strangers. Hi, my name is Jordan. I just left law school or my legal firm. I'd like to speak to you about a job and this, that you're subjecting yourself to rejection.

It's passive rejection. Online. You approach a strange woman at a bar. Hey, where are you guys from? I met my wife at the Raleigh Hotel. It was the middle of the day. It was sunny out. She was sitting with another woman and another man, and without the benefit of alcohol. I approached her, which was very difficult for me, and I teach my sons to approach people, or I said, I need you to talk to someone, a stranger, or I'm not letting you back in the house.

Easy for my oldest son. Not easy for my youngest, but I think it's important that people have the ability. Talk to the person in front of you and in back of you in the line at Starbucks, get used to opening. That's the beginning. Get used to opening. Then find a medium for practice. Establish what your medium is, TikTok, texting medium, Twitter threads, PowerPoint.

Figure out a medium for storytelling that you can become a Maya Angelou, where you can become fantastic at it and double down on it and commit to becoming a great storyteller. And one of those mediums. A lot of it is just what I call practice. And then what I do with my boys is I'll say, I'll hear something on the radio.

We just talked about diversification. I'll say to them, you know, Nolan, what do you think we mean by diversification? And I'll just ask them questions and try and get them to explain concepts. And then really, and it's hard to get your sons to do this, but I think most, I think if you wanna be a truly great storyteller, the basics, like if you wanna be a great athlete, you have to have a certain level of fitness.

I think the basics of fitness around storytelling probably begin with writing. I think it's difficult to be a great orator. Great at any type of storytelling unless you can write fairly well. And so I would suggest that everyone commit to who wants to be a great storyteller, has the ability to organize their thoughts in the written form.

But if there's any one thing I could bestow upon my kids that I think will stand the test of time, it's not Mandarin or information system. That's just bullshit. It's storytelling. If you think, I don't care who you are, what industry, anyone who's super successful has the ability to hold a room or hold a chat group or get a bunch of applause on medium, they can craft an arc storytelling and they understand how to kind of massage and manipulate and kind of illuminate that medium, if you will.

It's all about, in my view, it's storytelling.

[01:25:29] Jordan Harbinger: We are out of time. And look, what I love about the book, the Algebra of Wealth, again, linked in the show notes, is for all the practical tips in the book. And there are a ton, there's a ton of like real rubber meets the road instruction here. You keep coming back to the idea that I love to harp about myself here on this show, which is that money is essentially a means to freedom and time and energy and resources that you can then invest in your relationships because that's the real end game.

I think it's really easy to lose that idea, lose the plot. I think it happens to people who don't have money as much as it happens to people who have plenty of money. I don't think anybody hits a level of wealth where they're immune to that particular trap. So thank you Scott Galloway once again for coming on the show.

I always love our conversations. Sorry I kept you one minute longer than I promised I would.

[01:26:12] Scott Galloway: Jordan, it's always great to see you. Congratulations on your success. I see you. I see you just killing it. And I know you well enough to know you're a good person with a young family, and I really do get reward from how well you're doing.

Congratulations on everything. Thank you.

[01:26:26] Jordan Harbinger: You are about to hear a preview of the Jordan Harbinger show with Professor Scott Galloway, who's here to give you uncomfortable truths on life strategies for success and happiness.

[01:26:36] Scott Galloway: Most of the people, young people I deal with, envision themselves in kind of the top economic class, or at least aspire to it.

Mm-Hmm. Two basic rules. Get certified and get to a city.

[01:26:46] Jordan Harbinger: I know, of course, most people wanna be in the 1%. You know what? Actually I take it back. I think now most people wanna be in the 0.1%. They just think that's what the 1% is.

[01:26:57] Scott Galloway: A hundred percent.

[01:26:57] Jordan Harbinger: A

[01:26:58] Scott Galloway: hundred percent. The myth of balance is a myth. And the other big myth is this notion that you should follow your passion.

And the notion that you should follow your passion is dangerous. 'cause most passion sectors are over invested. If you wanna open a nightclub, go to work for Vogue or play professional sports or music, just recognize you better get a. Great deal of psychic income from those things because the monetary income relative to your effort will be dramatically lower than other asset classes.

Your job as a young person is not to follow your passion. It's to find out what you're good at and then invest the time, the grit and the energy to become great at it and the accoutrements that follow. Being great at something. Status, respect your colleagues money, access to better healthcare, the ability to take care of your parents and your kids.

You will become passionate about whatever it is that lets you do those things. Happiness is love. Full stop. So the depth and number of relationships across work, family, and friends is the best practice around happiness.

[01:28:04] Jordan Harbinger: Scott has a bunch of great advice, whether you're young or old, and you wanna live a rich and happy life, whether that means economics or not.

And that's episode 2 0 4 with Scott Galloway, solving the Algebra of Happiness here on the Jordan Harbinger Show. Man, I always love talking to him. There's always a bigger boat, right? Same thing with fame. Look, I'm not really famous, I guess you could say, but I never cared about it. The internet happened and it became something I had a sliver of, right?

And then it was like, oh, you can monetize this. That used to drive me nuts until I realized that all of this is ephemeral and mostly useless, right? It caters. Only to ego. It's like, I don't need more money. Ooh. But now that, now maybe I wanna be more recognizable. It's such a weird, stupid vice and stupid kind of drug.

And by the way, the most famous person you can think of probably wishes that they were a different, more famous person with more money or a different trait or some other thing. It is useless to run that game on yourself. There's always a bigger boat. One of the worst things, by the way, is to have just a little taste of fame and then be the kind of person who really enjoys that.

See also, every YouTuber ever, you put two whiskeys in front of those guys, and the next three hours are that conversation. I do not envy those folks. The trick is to realize how small time and irrelevant you really are, and realize that the only people who actually give a crap about you are the two little kids that you're ignoring by working all day.

And that is the best way to get over yourself. Doesn't work for everybody, but I highly recommend it. The bigger boat thing also comes in with lifestyle creep. You know, you upgrade one thing. Well, now I gotta upgrade the other thing. Oh, I upgraded some of the stuff in the house. I gotta upgrade some of the other stuff in the house.

I upgraded the house. Gotta upgrade the car. This is really a dangerous and slippery slope. Abstract rewards, by the way, aside from the material stuff, those are even more pernicious, right? Oh, I flew this way. I can't go back to flying the other way, man. I'll tell you, I just started flying business class where possible, especially on flights that are over like three or four hours long.

The best thing I've done is every couple of months. Fly economy. I know that sounds really douchey, but hear me out here. I want like the least comfortable economy seat. For an overnight flight, just to remind myself, oh yeah, okay. Your real privileged SOB, that you can actually afford to do a different thing.

And it's almost like working out really hard. It's like maybe you're already in great shape, maybe you get the genetics for it. I don't, but just to kick your own ass and you know, take an overnight red eye from SFO to Miami in between, in a middle seat, between two people that should not be in economy, if you know what I'm saying.

That keeps you humble, at least a little bit. You gotta do that to yourself every now and again, man, you gotta keep it real. One thing that it seems like Scott and I always agree on is that economic security. Is really just a means to an end, right? It sets us up for a life where we can focus on our relationships without economic stress.

Most marriages and relationships dissolve or end up in fights because of money. So free of the pressure to earn 'cause you've earned enough money. Now we can choose how we live. We can work on our marriage, we can work on our relationships. We don't have that cloud hanging over us. Relationships aren't shadowed by the stress of money.

It's really, really important to get a handle on this stuff. And again, folks, it's not about earning more, it's about keeping what you get. There's a lot in the book about consumption, burn rates, stocks, budgeting, investing. I didn't wanna get into details here because it, it gets really sort of. Technical, but if you're in your twenties and thirties and you wanted to get started with this stuff, or even your forties, it's not too late.

I can recommend this book for that stuff as well. And by the way, a lot of people go, oh, I don't want economic security 'cause I wanna keep working. Fine. Economic security doesn't mean you don't work, it just means you work without as much stress. I. I should speak for myself. People perform better though when they don't have worries looming over them.

The reason for work goes from necessity to fulfillment and purpose, and I've realized that this has happened to me over the past few years, right? I, of course I need to work, but I don't need to work because otherwise I cannot eat. I need to work because it keeps me sane. It keeps me feeling good. It keeps me feeling on track.

That's a much more comfortable place to be in. When I ran my old company, I had to work because we were going out of business in 30 days. If I didn't crush it, that's not a great way to live. I definitely got gray hair from that. I had my hair falling out from that sometimes. Thank God I grew it most of, I think most of it back.

It's just a better way. If you can shift from necessity to fulfillment and purpose, I realize that's also privilege, but a lot of us can at least have that as a target. One more note on economic security. Scott and I also have this a little bit in common, his economic insecurity. Really motivated him. I personally, growing up, I never cared about being rich.

I never wanted to be rich. I literally didn't even want it. I grew up around rich kids and their families were so messed up. It was like the richer they were, the more problems they had. Middle class was where I was. It was fine for me. I wanted to stay there. That changed when my business took off. I still do not care for the sake of clarity, I do not care about being rich for the sake of status.

The problem is I do care about it because it's the only way to live in the United States. If I lived in Germany, for example, and I had healthcare and I didn't have to worry about education costs, I'd be way less motivated and frankly, probably a lot happier because my workload would be one fifth of what it is right now.

But in the United States, the unfortunate reality is if you want great education and you want great healthcare and you don't want stress over your relationships, you kind of have to hit a certain point. I'm not saying you have to be filthy rich, but you, you kind of have to be in the top 10 or 20%. That is really unfortunate, but that is the reality of our lives here in America today.

One last bit of wisdom that didn't make it into the conversation, but that I loved Scott in his book wrote Squander Money and you can earn it back squander time, and it's gone forever. That hit hard because I cannot help but think, man, I squandered a lot of time in my twenties and thirties. I spent way too much of it drunk.

I know we touched on that towards the end of the show. Then again, though, one of the reasons I'm here right now with the life that I have is because of sacrifices I made in my twenties and thirties, not the drinking, I mean the working all the time, six, seven days a week. I assume nobody goes into their forties with absolutely no regrets and nothing they wish they could do over again.

I have a lot of those. Uh, but then when I really think about them, I feel like they set me up to be where I am now. So I don't know if those regrets are actually legit squander money and you can earn it back squander time and it's gone forever. Thanks again to Scott Galloway for coming on the show yet again.

I love his stuff. All things Scott Galloway will be in the show notes@jordanharbinger.com. Advertisers, deals, discounts, and ways to support the show. All at Jordan harbinger.com/deals. Please consider supporting those who support the show. Our newsletter, wee bit wiser, goes out every Wednesday. It's a two minute read.

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