Open Book with Anthony Scaramucci - How Presidents Managed & Mismanaged Their Money with Megan Gorman

Episode Date: December 10, 2024

In this conversation, Megan Gorman discusses her book 'All the President's Money', exploring the financial struggles and management styles of various U.S. presidents. She highlights how personal financial health can influence policies and the perception of leadership. The discussion delves into historical examples, including Thomas Jefferson's financial mismanagement and Calvin Coolidge's frugality, while also addressing the modern implications of wealth and risk, particularly in the context of Donald Trump's approach to finance. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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from authors and historians to figures and entertainment, neuroscientists, political activists, and of course, Wall Street. Sorry, I can't resist. Before we get into today's episode, if you haven't already, please hit follow or subscribe, wherever you get your podcast, and leave us a review. We all love a review, even the bad ones. I want to hear the parts you're enjoying or how we can do better. You know, I can roll with the punches, so let me know. Anyways, let's get to it. So joining us now on Open Book is Megan Gorman. The title of the book is All the President's Money.

What a great title. How Men Who Governed America govern their money. It turns out a lot of them don't know how to govern money, apparently. So, I mean, it's a phenomenal insight that you're providing. Great to have you on. The book is already a USA Today and publishes weekly bestseller. But tell us about Megan Gorman before we get into the book. Yeah, yeah.

So first of all, thanks for having me on. So I am an attorney like you by training. And I started my career at a division of Goldman Sachs, like you. But I was at a division called Aco. I was there for like 12, 13 years working with corporate executives, had a brief stop at Bank of New York Mellon. And then I launched my own boutique practice 10 years ago. So I run like a multifamily office platform.

My clients are typically corporate executives. So, and I've had some of these clients for 20 years. It's been a long time. So if you don't mind me asking, what's the name of the firm and how can people find you? Sure. My firm's called Checkers Financial Management, Checkers like the House in England. And you can find me at checkersfinancial.com. And that's checkers with a cue, like the House in England.

So, yeah, so that's sort of a little bit about me. And I'm a bit of a history geek. And I've always loved the presidents. I've always been fascinated. Let's go to checkers for a second. And that's the, is that Churchill's home? His is Chartwell. So that's the Prime Minister's home, right?

It's the Prime Minister's home. But it went through like 800 years of family wealth transfer and then a wealthy American couple inherited it. And they gifted it to the British government because there was a lot more self-created men becoming Prime Minister. And so they wanted them to have an ability to entertain in British society. Okay. So I thought it was a good description of wealth. So you're a Churchill fan then probably too, right? I am. I am. I do like Churchill. And apparently there's a book about Churchill's money as well, which I haven't had a chance to read. But I think it would be sort of fascinating. I can't imagine him being good with money. Yeah. He was always in debt, always in debt, always in dead. He only started really making money after the war when he started publishing those books on the second war. And he said he was going to come out very well in history because he intended to write it. So that's why he was going to come out so well.

And he had very good taste. But this book is fascinating. I'm sure you're giving it out to clients because what happens is you're working on something else and your life goes untended. Or what do they say, you know, the shoemaker's shoes are always in disrepair. These guys are moving trillions and they're working on the economy, but they're not really doing that great of a job managing money. Some of them are. But not a lot of them. Do I have that right? That's what I sort of got for it. You know, here's the thing. I think the thing is we put presidents up on pedestals, right? You know, Washington, Lincoln, Roosevelt, but a lot of them have the same money stresses that we do, right? And over the course of my career, and, you know, you've been in the money world for years, people don't think that people who have money or those types of skills that presidents have actually stress about money. And so when you do a deeper dive into the presidents, what you find is a lot of the same issues that we have today, they had in the 17, 18, 19, 100. and, you know, people just don't think about the fact that Abraham Lincoln worried because his wife spent like crazy or that FDR was a little laissez-faire with his money. And so some of them were really good with their money. And surprisingly, some of the ones that were really good with their money were not great presidents. You know, you don't think of Warren Harding as one of the greatest presidents, but he was pretty good with money. Same thing with Herbert Hoover. So it doesn't always correlate to who they are as presidents, but it does sort of give you an insight into, their personalities and also the times that they're living in. Okay, fair enough. Let's go right into it then. So you also make the point, you know, that financial health of the president, it does have some influence on policies, though, too, maybe, right, in terms of where they come from, their upbringing, you know, a little bit, right? I think a little bit. I think it allows them to

relate to people and the struggles that people have. But at the same time, you could look at a Hoover who grew up as an orphan who struggled in life and then made his money. And he probably didn't relate as well to people during the beginning of the Depression. Whereas FPR, who always lived in comfort, I think could connect to the average person on a greater level. So it's not about their fiscal, you know, it's not about their present. Not to interrupt you, but I read that differently, see. Okay.

Because I know a lot of upstart people, you know, I grew up in a blue collar family. And so I have great empathy for that struggle. but I have a lot of friends of mine that grew up like me, and they have a little bit of a callous disregard because they think, well, I did it, so these people should be able to do it, you see? Whereas FBR was like, hey, man, I didn't have to do that. That looks like it's really hard and sucks.

Yeah, and I think maybe you're bringing up the Reagan conundrum, right? Exactly. Right. Right. He grows up poor. Father's an alcoholic. You know, they literally are leaving town in the middle of the night to escape their landlord at times.

You know, and Reagan, I think, because he was a quote unquote bootstrapper, right? When he became governor of California in particular, he really went after the UC system and, you know, thought that people were making a big deal out of nothing that they would have to eventually take loans to get education, right? So I think to your point, Reagan is a very good example of that. But Hoover, too, right? Or no?

I thought Hoover was a little bit too. Maybe a little bit. Yeah, he did bootstrap. And I think Hoover, from a personality standpoint, I think internally was a warm person. but I don't think he knew how to exude it, right? You know, part of the brilliance of FDR is he had a charm that allowed him to connect to everybody. Yet I always find FDR a little bit of a cool character underneath that sort of correct level. Well, he was very detached.

He didn't, yeah, when he rolled away from the microphone, it was a real sense of detachment. And his children complained about that. And, of course, he was eventually estranged from his wife. And by the way, I think Churchill find that frustrating with him. You know, Churchill was such a big, warm. character. And I think the fact that FDR never was a great connector in that sense. It was a cool character was something that was frustrating for Churchill. But remember, FDR got snubbed by Churchill when he was under Secretary of Navy. And he went to see him and he snubbed them. And it was always a sore spot

for him, you know, because it's like, okay, now I'm important, you know, if you remember what Churchill said about FDR and FDR countered, Churchill once said meeting FDR for the first time, is like opening a bottle of crisp champagne. But FDR said, well, when you met me for the first time, you didn't even give me water. And he said, what are you talking about? He says, well, you met me. Here's where you met me.

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I just love my job. Get tickets now. The Devil Wears Prada 2 in theaters May 1st, directed by David Frankel. So it just goes to show you that, to present. personal interaction, Megan, is all of it, right? It totally, totally is, yes. But I think you bring up a good point about the bootstrapping, right? Because, like, in looking at the presidents, and, you know, I grew up middle class in

southern New Jersey, right? Like, you know, I've had to pull myself up by the bootstraps. And you do, I always found in looking at these presidents, you relate to the ones who had to work really hard to get ahead. Yeah. Whereas some of the ones where, you know, the Roosevelt's and the bushes, and the Kennedys, you know, it's a little bit harder to relate to their stories. Yes, makes sense.

Let's go to Jefferson for a second, if you don't mind. I thought that whole thing was fascinating. I mean, he always struggled to maintain his lifestyle. So tell us about him. He's had slaves, obviously. He had a big estate. Have you ever visited Monticello, by the way? I have years ago, yes.

It's a beautiful place. It's stunning, right? And look, you think of him at the University, Virginia, but he was living, you know, how do they say? hand to mouth, right? Totally, totally. Big asset base, right? We have 12 slaveholding presidents. He was one of them, but he was always illiquid, right? And he did things that didn't always work in his best interest, right? So he took on his father-in-law's debts when his father-in-law died. He would often loan money to people when he really wasn't in the position to do it. And he didn't actively manage his plantation,

right? And in comparison, right, his peer, George Washington, similar type of asset base. But Washington, and you see this even in his letters throughout the Revolutionary War and his president, was always actively managing the plantation. So, you know, with Jefferson, it all sort of catches up. And Jefferson also spent so much time in France, he had really good taste. And so at the end of his life, as you know, he gets to a point where he can't afford his lifestyle, right? And the debt is just accruing and accruing and accruing. And at that point, what you find is he sort of decides to put Monticello up for auction. And it appears in the Saturday evening post, right?

An ad, you could buy tickets and so on. And, you know, he puts it out there and people start buying tickets. And then a group of people get together and tell him, you know, really, you shouldn't be putting this up for auction. We'll help raise money for you. And, you know, he does take it off auction. They don't really raise a lot of money for him. And he does struggle through the rest of his life.

And then when he does die, the Monticello does get put up for auction. And so, you know, it's a story of someone who was really never present. with their money, really not engaged at the level you would want to be, but yet gave off this aura, right, that everything was fine, everything was good. And they even said, like, at the time of his death, Monticello was very run down. You know, he just couldn't keep up with the maintenance. So what makes this happen? You're a student of psychology because you're a wealth manager, so you know you've got to give out psychotherapy. I have to coach my, you know, when I put the Bitcoin position on these people flipped on me, and a lot of them told me to scram.

and they redeemed. Now the ones that are with me that are up three and a half to one are like delighted, but I had to coach these people, I had to calm them down. I feel like people and their money, there's like a weird psychology. So these people seem so focused on their jobs. They're not really that focus on their money, right? Or no. It's not that.

I mean, I feel like with Jefferson and, first of all, he just never made the sacrifices to create liquidity, right? So in the situation you just told with what you're dealing with, with the Bitcoin and so on, you know, I mean, if you're going to go and do these illiquid investments, you've got to have a ton of cash on the sidelines, right? Dry powder is a good thing. And Jefferson really never understood that or never chose to understand it. Like he just wasn't willing to be present. And I think the thing is there's this disconnect, right?

You have to be present with your money, but you also have to project out 10, 20, 30 years, right? So with everything you're just talking about with an investment, you know, if we think, think about where the U.S. will be in 10, 20, 30 years, it's a great idea to invest today, right? How many times do we wish we had invested years ago? But it's hard in the moment. And that's the thing with Jefferson is he could never project out and realize he would have run up all this debt. So I think in his situation, it's, you know, being able to be tied into what's going on and be willing to make the sacrifices and understand, you know, that particularly to get what you want, you have to give up something at times was something he wasn't willing to do.

Yeah, it makes sense. I mean, you know, listen, I mean, you know, I mean, you got a whole range of people in here, though. I mean, let's go to Calvin Coolers. The guy never bought a house. Oh, my God. Yeah, totally. He was this, Mary, I think he came up with a line, the business of America is business. And he was a tightwad with the budget.

You know, he was really trying to keep some fiscal stuff. But he was a very frugal New England Yankee, right? Or do I have that wrong? Totally. He was very thrifty. But one thing about Calvin Cool, you have to remember is the whole time he was, you know,

in his 20s and 30s out in the world, he was also getting an allowance from his father, which, you know, you see it in the letters between him and his father. His dad's always sending him money. So it was easy for him to be thrifty. And I think he was just,

I think at some point there was also a hesitancy about actually doing things like buying a house, right? I think that that requires you to take a leap of faith. And mortgages back then worked differently than they do today. They were often five-year mortgages with a balloon payment. Yeah.

But he worked in banks. He was in a lucrative career path. He just was incredibly sort of almost punishing to himself. And he really didn't do it like buy a house until after he left the presidency. But he was also not good at sort of assessing some of the opportunity sets in front of him. So for instance, you know, when he leaves the presidency, Charles Merrill of Merrill Lynch comes to him and offers him a seat on the board for $100,000 a year. This is 1928.

And, you know, what's fascinating with Coolidge is Coolidge is Coolidge. sort of says, I don't know enough to help you there, right? Which is shocking because it's the president, right? Like, you propel yourselves out to the future to the time that, you know, Jerry Ford's on corporate boards. And he was amazing with what he could provide from an insight standpoint. And so Coolidge, you know, only buys his first house when he's out of the presidency and, you know, there's people that are crowded outside his house trying to get in. So he's like, I got to get behind a gate. But even then, he's just not really into building great wealth. He's, he's, It's just sort of someone who wants to be comfortable. These are awesome, awesome stories in the book. I love the way you laid out the book where it's literally like allegory after allegory. You're telling the story of their financial health and wealth or lack thereof through things that they're doing in their lives as things are coming up. But also, you know, because I can't remember exactly how you described the prime ministers that come. There's bootstrappers, I guess is what you said.

So there was a lot of American presidents that came from abject poverty to the president's unit. Isn't that one of the most wonderful things about the country? It's awesome and it's fabulous and that's how it was. I think the challenges, right, like you look back to Hoover or Lincoln or Nixon or Ford and Reagan and all of them. And the question is they had it hard, right? We all have it hard. But some of the hurdles they had, I think, have gotten even higher today, right? with Richard Nixon goes to college for $230 a year.

Reagan goes to college for $150 a year. You know, it's a very different dynamic that they have in trying to be able to handle those financial issues than we have today, right, in terms of somebody trying to go to school. I mean, you went to Harvard, right? I mean, it's like $80,000 a year. Don't hold it against me, Megan. I won't. I won't.

But you're, you know, you think about like Barack Obama. We've only had two presidents that have had. had student loans. Barack Obama and Bill Clinton, both primarily from their law school careers. But it's very hard for, you know, if you think about it, right, that idea of struggling with loan debt is a very hard thing unless you really lived it. Of course, the two of them have been able to pay off their student loan debt. And in particular, Obama's path to paying off his debt, you know, is a path that pretty much very few of us could take. I mean, he wrote a book in the 90s that gets reprinted in 2000s when he becomes runs for senator. And he makes over the period of time

in public office $16 million from it. So in retrospect, the student loans were nothing. It was a rounding error. Well, he writes in his book, The Promised Land, that he had tens of thousands of dollars of credit card debt and he was unable to book a flight to the 2008. He had spoken in 2004, but he was unable to book a flight to the 2008 Democratic National Committee Convention in Los Angeles. It was a fascinating part of his life, you know, who's very honest. Let's go to Donald Trump, who's our new president. Okay. You write about him in here and tell us some of the Trump stuff that's in the book.

Yeah. So, I mean, Trump, look, I'm looking at the skills and traits of people, right? I'm not trying to opine politically. So, you know, Trump is an interesting person who has certain skills that I think, Americans could take to heart, right? And what I mean by that is he's very comfortable with risk. And I think he's very comfortable using charisma at getting opportunity sets. But he runs a little bit differently than the rest of us because he looks at the world from a generational wealth standpoint, right? He inherited 400 million from his father. And so when you look at his money,

he is much more about passing generational wealth down. Right. So there have been books written about his money and some of the techniques he's used. He's using techniques that we use all the time, you know, grats and so on. But when he's using them, he's pushing them to the limit, right? He's sort of getting as aggressive as one can do it, almost testing the IRS to question it. And the IRS has audited him. And what's been fascinating is even when he's taken very aggressive positions, the service doesn't really wind them back as much as you would think they would. Right. So it also tells you a little bit about the IRS and their ability to sort of rein in aggressive taxpayers. But I would tell you with Donald Trump, tax and estate is incredibly important to him. And he is always looking to

push the envelope, which I don't think is a surprise when you see his personality set, which you know firsthand. And I think if we looked at this, if we actually got to really go do a good look at his finances, what you would see is a lot of estate planning techniques at work. Right. And he also gets access to a section of the code that unless you're a real estate investor, you don't get access to. Yeah, I need to push through a lot of losses. Yeah, trust me, my clients had tax increases with the Tax Cuts and Jobs Act. They didn't get decreases.

No, no, of course. Yeah, so I think he's very good at using risk, very good at using charisma. And I think the average America, when you look at their finances, most people would be better served embracing a little bit more risk, not pushing the envelope like he does, but really being comfortable in the equity market and not being afraid to like put put more money into equities. I want you to pitch me. You want me to pitch you on what? I do.

No, I'm being your client. I want you to say, okay, I've read your book. I'm calling you up. I'm saying, Megan, wow, this book is awesome. It's got a lot of content. It's got a lot of great stories about running money properly, running money improperly, being overly aggressive, having somebody to have to auction your house at the end of your life. why should you run my money? Give me a pitch. Yeah. So the reason I like working with people is, first of all, I like working with people who are intellectually curious about their money. And I don't know you very well, Anthony, but I've listened to your show and seen you on TV. I know you have that curiosity. And that curiosity is going to be really important because I work with people holistically. Everything feeds into itself, right? Estate planning feeds into tax, which feeds into investing, which feeds into cash flow. And so I really work with you on a 360 degree viewpoint to make sure

that all of it is in sync and it's reflective of who you are. And I'm not going to be afraid to challenge you when I think that you may be going off course or where I think that you may need to have the healthy debate about money. Did I pass the past? I'm hoping this ends up on one of your websites somewhere. I know. I should take it. You could just cut this piece.

It's very good. But you've worked on money. Money's a fascinating thing. And people's behaviors around it just really, it's sometimes it's mind-boggling how people behave. You know, I feel very fortunate. I work with corporate executives, so they're a little more strategic. But I found what's the president, some of the stuff that they do could be, you know,

was a little bit, you know, interesting and a little bit out there. You know, I never thought I'd figure out that president and I were used to play poker to pay, you know, pay for things. Seems a little bit crazy. You know, I mean, Trump got there later in his career. He was focused on money from zero to 69. But most these guys are focused on their political careers, you know, or getting, getting to those jobs, you know. Do you remember Greg Ho Camp?

Does that name sound familiar? He worked at Goldman. Yeah, he worked at Goldman. He was responsible for that ACO acquisition, but I guess he was probably an M&A, not. All right, so we're down to the five words. If you've heard our podcast, my producer comes up with and distills five words from your book.

Okay. I'm going to say the word. You give me a sentence or two or a word. Something comes to your mind. Okay. I say the word money. Money is all. psychology. It's all about brain work. It's interesting because I say it's an albatross or it's freedom,

depending on how you look at it. But yeah, it's psychology. Okay. What about the word power? Power. It's all, you know, when you think about power, I think it's all, it's about getting access to a lot of different opportunity sets and trying to navigate it without falling. All right. What about finances? I say finances. You say what? finances are the nitty-gritty day-to-day money-making aspects of money and wealth building things with budgeting it's like management okay what about wealth let's go right to wealth then wealth is empowerment it's the ability to have a lot of choices to say yes and more often than not saying no and that's how you build wealth well said all right last one you're ready i say the word president you say what the american dream

in the sense that I love the fact that there's these people that, I mean, so far been men, grow up regular people in small towns in America and they grow up and they achieve the highest office. It's so exciting and it couldn't happen anywhere else. Yeah, or my life and perhaps your life too couldn't happen anywhere else, which makes a place so unique and so interesting and why we all have a love affair with us. So the title of the book is all the president's money, how men who govern America govern their money. What a great book. What great stories in this book, you know, and thank you very much for joining us on Open Book,

and I hope you come back. Are you going to write another book? You know what? I may have it in me. I don't know. My husband might strangle me if I tried to write another book. This took four and a half years with all the research, but I think I have another one in me. All right.

Well, I'm looking forward to having you back on. Write another book. I will. Thanks for having me on. I really appreciate it. Great pitch, though. I thought that was really good. I am Anthony Scaramucci, and that was open book.

Thank you for listening. If you like what you hear, tell your friends and make sure you hit follow or subscribe wherever you listen to your podcast. While you're there, please leave us a rating or review. If you want to connect with me or chat more about the discussions, it's at Scaramucci on Twitter or Instagram. I'd love to hear from you. I'll see you back here next week. When a country's productivity cycle is broken, people feel it in their paychecks, their communities, their futures. What does this mean for individuals, communities, and communities?

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