Something You Should Know - How Regular People Get Rich & What You Never Knew About the Clothes You Wear

Episode Date: September 12, 2019

Do you ever eavesdrop? Be honest now. The fact is we almost all do – it is human nature and once served an important purpose. This episode begins with a discussion on eavesdropping and snooping and ...why we mostly all do it. (John L. Locke author of Eavesdropping (https://amzn.to/2O7an63)  When you hear the typical advice on managing your money it is to stopping spending – cut back – no more lattes. Well my first guest today has radically different advice on managing your money that will not only allow you to live a life you enjoy but can actually make you rich – and still allow you to have your morning coffee without guilt. Listen as I speak with Ramit Sethi, author of the wildly popular book I Will Teach You To Be Rich (https://amzn.to/2A7GqKG) which recently came out in a new revised, second edition. You may not give a lot of thought to your email subject lines – but they have an enormous impact on whether people read and/or respond to the email. I’ll tell you which common subject lines are golden and which ones are deadly. https://www.yesware.com/blog/best-email-subject-lines/ You probably don’t give a lot of thought to your clothes – you just wear them. However, there are some real concerns and problems in the clothing industry according Dana Thomas. For example, millions of garments are thrown away having never been worn by anyone. And wait until you hear about polyester! Dana is a writer who has served as cultural and fashion correspondent for Newsweek, contributor to the New York Times Style section and she is the author of a book called Fashionopolis: The Price of Fast Fashion and the Future of Clothes (https://amzn.to/2PXFgMr). This Week’s Sponsors -Simplisafe. For free shipping and a money-back guarantee, go to www.Simplisafe.com/something -Capterra. To find the best software for your business for free go to www.Capterra.com/something -Proactiv. Go to www.Proactiv.com/SOMETHING and with your order, you’lll also receive Proactiv’s “On the Go Bag” (close to a $100 value!) PLUS FREE SHIPPING & a 60 Day Money Back Guarantee! Learn more about your ad choices. Visit megaphone.fm/adchoices

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Starting point is 00:00:00 As a listener to Something You Should Know, I can only assume that you are someone who likes to learn about new and interesting things and bring more knowledge to work for you in your everyday life. I mean, that's kind of what Something You Should Know was all about. And so I want to invite you to listen to another podcast called TED Talks Daily. Now, you know about TED Talks, right? Many of the guests on Something You Should Know have done TED Talks. Well, you see, TED Talks Daily is a podcast that brings you a new TED Talk every weekday in less than 15 minutes. Join host Elise Hu.
Starting point is 00:00:37 She goes beyond the headlines so you can hear about the big ideas shaping our future. Learn about things like sustainable fashion, embracing your entrepreneurial spirit, the future of robotics, and so much more. Like I said, if you like this podcast, Something You Should Know, I'm pretty sure you're going to like TED Talks Daily. And you get TED Talks Daily wherever you get your podcasts. We'll be right back. spend extravagantly on the things we love, as long as we cut costs mercilessly on the things we don't. So I want to start by asking people what they love. And the most common answers are eating out, travel, and health and wellness.
Starting point is 00:01:35 Plus some of the best and worst email subject lines everyone should know. And a peek behind the curtain of the clothing industry. And there are some real problems. We produce about 100 billion garments a year, but we only buy 80 billion. So that means we have 20 billion that are destroyed in one way or another. Then, of those 80 billion, the average garment today is worn seven times before it's thrown away.
Starting point is 00:01:59 All this today on Something You Should Know. Since I host a podcast, it's pretty common for me to be asked to recommend a podcast. And I tell people, if you like Something You Should Know, you're going to like The Jordan Harbinger Show. Every episode is a conversation with a fascinating guest. Of course, a lot of podcasts are conversations with guests, but Jordan does it better than most. Recently, he had a fascinating conversation with a British woman who was recruited and radicalized by ISIS and went to prison for three years. She now works to raise awareness on this issue. It's a great conversation. And he spoke with Dr. Sarah Hill about how taking birth control not only prevents pregnancy, it can influence a woman's partner preferences, career choices,
Starting point is 00:02:49 and overall behavior due to the hormonal changes it causes. Apple named The Jordan Harbinger Show one of the best podcasts a few years back, and in a nutshell, the show is aimed at making you a better, more informed critical thinker. Check out The Jordan Harbinger Show. There's so much for you in this podcast. The Jordan Harbinger Show on Apple Podcasts, Spotify, or wherever you get your podcasts. Something you should know. Fascinating intel.
Starting point is 00:03:19 The world's top experts. And practical advice you can use in your life. Today, Something You Should Know with Mike Carruthers. Hi, welcome to Something You Should Know, episode number 314, if you're counting. You're probably not, but I count. I kind of have to. We start today with eavesdropping. Have you ever eavesdropped and maybe felt guilty about it? Well, it turns out that eavesdropping or snooping is something pretty much everybody does.
Starting point is 00:03:51 It's human nature and it once served a very important purpose. Survival. In fact, all animals eavesdrop. In order to protect ourselves from our enemies, we're wired to try to discover things they don't want us to know. Conversely, we keep secrets from people about things we don't want them to know. Think about the purpose of a whisper. The only reason people whisper is to tell something so that someone else doesn't hear it. Although it's considered bad behavior to eavesdrop, it's pretty hard not to do. Even though we don't need
Starting point is 00:04:25 to do it for survival so much anymore, we still have that curiosity to know what other people are doing behind closed doors. We satisfy that desire today with things like reality TV, social media, all of those things tap into our biologically driven need to peek into other people's lives. And that is something you should know. Money is always a fascinating topic because I think we all have our own issues with and beliefs about money and how we approach it. Ramit Sethi is somebody who has a really good understanding of money and how people relate to it and ways to make that relationship better. Back in 2009, he published a big best-selling book called I Will Teach You to Be Rich. And a revised second edition recently came out and has again become a big bestseller. I think because his advice is different from most advice you hear about money,
Starting point is 00:05:27 he has a really refreshing way to look at it and will make you feel less guilty about how you spend your money. Hi, Ramit. Welcome. Thanks for having me. So start with the one thing you think really makes people uncomfortable about money, either because they don't understand it or because it's difficult to grasp or it's hard to do the number one thing is that people are scared of investing and right now i can tell you there's tons of people listening saying yeah investing feels like gambling to me
Starting point is 00:05:58 and what people don't understand is that if you save money, that's a good thing. Give yourself a pat on the back, but your money is still losing money every day it's in your savings account. And the way to true wealth is not winning the lottery or some insurance settlement. It's actually simple, low cost investing. It's not that hard. It's pretty straightforward. We can talk about it, but it's not gambling. And so I want everyone to be able to take their own wealth and their own money into their own hands. And the way you do that is by investing. In what? Okay, let's talk about what most people think. When they think about investing, what do they do? They think there's some massive computer screen in front of them with all these green things rolling by, PE ratios. That's nonsense. That's what people put
Starting point is 00:06:44 in movies. You don't need to have those screens. In fact, you don't need to spend more than an hour a month on your money. You shouldn't because the more time you spend looking at the stock market, you're going to lose money. The way that you invest is to pick a simple, low-cost target date fund. And you basically, let me tell you how it works. If you go to a typical low cost company, all you need to know is how old you are. That's it. People think investing is about picking stocks, but it's not. What you want to do is you want to pick something called a target date fund and a target date fund. I'll tell you why it's special. Number one, it's one fund that automatically includes stocks, bonds, all that stuff.
Starting point is 00:07:27 So you don't have to sit there and pick it out. And it's a good thing because most individual investors are not very good at that. The second thing that's really powerful is that as you get older, it automatically rebalances. It becomes a little bit more conservative. And that means that as you get older, your money stays safer. This is a really, really simple way to invest. And all it means is you set it up automatically every month. Money comes out of your paycheck.
Starting point is 00:07:53 It goes into your investment account. Boom. Your money will start to accumulate and grow and grow. And that's where the magic of compounding comes in. And where do you get these funds? Okay, you can find these at any fund company. So I invest through Vanguard. I don't have any association with them. But any of these great companies, Fidelity, Schwab, they all have them. But let me tell you why most people don't know
Starting point is 00:08:17 about these. So if you go outside and look at a billboard, you're going to see these nonsense advertising that say things like, be better than average. And this really hits home with Americans because in our relationships, we want to be better than average. At work, we want to be better than average. But in investing, average is absolutely perfect. That's exactly where you want to be. So what happens with the typical American is that they absorb these messages that, oh, I really need to pay some guy to look after my money. And what we don't realize is there's a lot of secret things that Wall Street bundles in that they hide from the average investor. I'll give you one number that most people don't know. Did you know that if you pay someone to manage your money, let's say you pay
Starting point is 00:09:09 a 1% fee. Well, that doesn't sound like a lot. 1% for me to not have to worry about it. Some guy takes care of it. Guess how much of your returns you're now paying because of that 1% fee. Take a guess, Mike. Oh, I have no idea. 28% of your returns. What? 28% of your returns are now going to someone's pocket. Why would you pay that? It doesn't make any sense. It's not like hiring someone to come clean your house or mow the lawn. That's a flat fee. What people don't understand, and the math is very counterintuitive, is that if you're paying 1%, that's 28% of your returns going away. 2%, that's over 56% of your returns going to this person. How does that math work? I don't get it. Exactly. So you think, oh, 1%, that's not that much. But you have to remember, it compounds over time. But here's the basic
Starting point is 00:10:05 gist of it. You pay 1% and you say, oh, I have $1,000. So I'm paying 1%. That's not that much. But remember, your money is growing over time. You keep contributing. And it's 1% of all assets under management. So as your money grows, they continue to take 1% and that money compounds over time. Time, it becomes bigger and bigger. You want to use compounding to your advantage, not to some financial advisor's advantage. So here's what I'm saying. Most people who complain about money have never spent one weekend reading a good book about personal finance.
Starting point is 00:10:44 I want people to take this seriously. I want you to read a good book and personal finance. I want people to take this seriously. I want you to read a good book. And I want you to realize you can take control of most of the finances in your life. So let's talk about more of the day-to-day stuff, I think, that gets people in trouble. Credit cards and bill paying and saving and all that and where people go wrong. First of all, I just want to say that I have a pretty realistic approach to money. I think you should use credit cards. I don't agree with some of the popular advice out there that credit cards are evil and you should stop using them. Guess what? If you use credit cards and use them wisely, you get massive returns, rewards like free hotels, free flights, et cetera. But the critical thing is you need to use them wisely. So everyone already
Starting point is 00:11:25 knows that they should pay off their credit card debt. That's a given. And yet they don't. Why is that? Because the credit cards, number one, are engineered to get us to spend more. And number two, we don't understand the math behind it. So step number one is you want to make sure that you have the right accounts. That means the right bank accounts and the right credit cards. So let me get a little bit specific here. I think many people use the same bank accounts that he used when their parents opened an account for them. There are a lot better accounts these days. They offer better interest rates. They let you withdraw from any ATM with no fees. Then with your credit cards, there are great credit cards that offer you amazing rewards. We're talking about 2% cash back,
Starting point is 00:12:10 we're talking about amazing travel rewards. Get them. And then the third, and this is really important, you need to automate your payments. So what happens with a lot of people is they don't want to give up control. So what they do is they get these bills at the end of the month. And because they don't have a spending plan in place, they sort of get all these bills. They shrug and they go, oh, I guess I spent that much. And that is how they start to get on this hamster wheel of debt. I can talk about how to pay off debt and I can share some pretty interesting psychological findings about people in debt. But those are the three components. Get the right bank account, get the right credit cards, and automate your payments. All right. Talk about debt and the problems people
Starting point is 00:12:53 have with it. Okay. If you ask people who are in debt, for everybody listening right now, if you've got any sort of debt, if I asked you how much do you owe, guess what percentage of people don't even know the answer to that? Oh, I know that. That's got to be really high. That's got to be almost everybody. You're right. It's over 90%. Now, I ask a second question. What is the date that your debt will be paid off? Almost nobody knows the answer to that. But if you have debt, it's not the end of the world. I've talked to people who have $3,000 of debt. I've talked to people who have $250,000 of debt. It's not the end of the world. You absolutely can make a plan to pay it off. But you should know the exact month and year your debt will be paid off. That means that you have a debt payoff plan.
Starting point is 00:13:48 It means that you know exactly how much money you're contributing and it means that you've automated it. And just think of the relief. Once you know that date, it could be two years in the future, two months, five years, but at least you know what's happening. And what is amazing about that is once people make a plan, they start to become pretty aggressive about it. For example, if you have student loans and you pay an extra hundred dollars a month, you can often cut that down by years. Okay. People don't understand this because it's just this murky number in the back of their head.
Starting point is 00:14:23 So make a debt payoff plan if you've got it. And most people, again, they don't know how much they owe. They don't know what their debt payoff plan is. But it's not that hard. And once you plan it out and automate it, it's like, wow, I can see a light at the end of the tunnel. So let's talk about spending money and advice for people who are maybe spending too much money? You know, most of the advice that we hear is someone coming on a show like this and starting to berate everyone listening
Starting point is 00:14:50 and saying, don't spend money on lattes, don't buy jeans, don't go on vacation. And I just never wanted to live life like that. And I frankly don't even think that's good advice. Saving $3 a day doesn't even really add up to that much at all. What matters and what is more important is getting those five to 10 big wins in life right.
Starting point is 00:15:14 If you get those big wins right, just five or 10 of them, you never have to worry about ordering a latte or coffee or an appetizer ever. So some of those big wins are automatically saving and investing, are finding a great job, and if possible, negotiating your salary. I think if you're in a relationship, finding a relationship with the right person is a huge financial big win. Sounds counterintuitive, but it's one of the most important determinants of your financial health. So if you get these five to 10 right, you don't need to worry about $3 expenses here and there. And that's the difference in how you approach money once you integrate your psychology versus just this random advice that you see on the news all the time. I got to say, it drives me nuts.
Starting point is 00:16:00 That's why I'm really happy to be able to be here and share this different perspective. Well, it's great. And it's kind of fun and empowering to talk about money this way. Ramit Sethi is my guest. He is author of the book, I Will Teach You to Be Rich, the revised second edition. Hi, I'm Jennifer, a co-founder of the Go Kid Go Network. At Go Kid Go, putting kids first is at the heart of every show that we produce. That's why we're so excited to introduce a brand new show to our network called The Search for the Silver Lightning.
Starting point is 00:16:31 A fantasy adventure series about a spirited young girl named Isla who time travels to the mythical land of Camelot. During her journey, Isla meets new friends, including King Arthur and his Knights of the Round Table, and learns valuable life lessons with every quest, sword fight, and dragon ride. Positive and uplifting stories remind us all about the importance of kindness,
Starting point is 00:16:51 friendship, honesty, and positivity. Join me and an all-star cast of actors, including Liam Neeson, Emily Blunt, Kristen Bell, Chris Hemsworth, among many others, in welcoming the Search for the Silver Lining podcast to the Go Kid Go network by listening today. Look for the Search for the Silver Lining on Spotify, Apple, or wherever you get your podcasts. People who listen to something you should know are curious about the world, looking to hear new ideas and perspectives. So I want to tell you about a podcast that is full of new ideas and perspectives,
Starting point is 00:17:22 and one I've started listening to called Intelligence Squared. It's the podcast where great minds meet. Listen in for some great talks on science, tech, politics, creativity, wellness, and a lot more. A couple of recent examples, Mustafa Suleiman, the CEO of Microsoft AI, discussing the future of technology. That's pretty cool.
Starting point is 00:17:46 And writer, podcaster, and filmmaker John Ronson discussing the rise of conspiracies and culture wars. Intelligence Squared is the kind of podcast that gets you thinking a little more openly about the important conversations going on today. Being curious, you're probably just the type of person Intelligence Squared is meant for. Check out Intelligence Squared wherever you get your podcasts. So Ramit, I think most people, when they think they're going to listen to somebody talk about financial advice, that the advice is going to be cut back, overall curtail your spending. And often it is that spending that got people in trouble. So it sort of rings true. But what you're saying is really it's not cut back everything. It's spend money on the things that make you happy and cut back on the things that
Starting point is 00:18:39 you don't need to spend money on. Well, let me provide a different perspective on spending. Okay, Mike, let me ask you a question. What is something you love to spend money on? Not just like, but love. So my boys love hockey. They play hockey. So I love spending money on them, on hockey things. Perfect.
Starting point is 00:19:00 Okay, this is amazing. Now, one last question here. If you could quadruple the amount that you spend on your kids for hockey or anything else, what would it look like? Oh, I don't know. You know, go to more NHL games, travel to other NHL games, get them some great coaches to improve their game, I guess, that kind of stuff? Okay. First of all, I just want to point out a couple of things and I want everyone listening to follow along. Mike, thanks for having the courage to answer that question. Notice that you were a little uncomfortable answering the quadruple question. Why is that?
Starting point is 00:19:35 Because most people have never thought about spending more on the things they love. Most people have only been told to cut back on everything. If I asked you right now, Mike, what do you spend too much on? What should you cut back on? You would have 50 answers for me. Coffee, this, that, my car, my house, whatever. But when I ask people, what do you love spending on? They all have an answer. And then I ask him this question about what I call a money dial. What if you turn that dial up 2x, 4x, 10x? Nobody's ever thought about it. But the answer, I love what you said about taking your kids to a NHL game. Maybe you would do a meet and greet behind the scenes with the greatest hockey player
Starting point is 00:20:17 of all time. Maybe you'd hire them a different tutor or coach. There's so many things you could do. I share this example because I believe that we should spend extravagantly on the things we love as long as we cut costs mercilessly on the things we don't. So while everyone else is busy here feeling guilty about $3 here, $5 there, I want to start by asking people what they love. And the most common answers are eating out, travel, and health and wellness. Those are the most three common by far. So if I ask people what would it look like to spend more on eating out, they typically give very linear answers. They're like, oh, I go out once a week. I'd go out four times a week. And I challenge them. What if you actually went deeper than just more?
Starting point is 00:21:11 Might you eat at a different restaurant? And I remember I asked this guy in DC and he said, first of all, he just said I would eat out four times and I pushed him. He finally said, I have a list of every Michelin starred restaurant. I would go to every single one of them. And I said, awesome, who would you take with you? And he stopped, he stepped back, he smiled and he looked at me. He said, I would take my parents because they've never been able to afford something like that. So that is the power of using money to live a rich life. It's totally different than feeling
Starting point is 00:21:40 guilty about cutting back here and there. And that's where I want people to start, is to think about spending extravagantly on the things they love, but cutting costs mercilessly on the things they don't. When you talk about wise use of credit cards, is wise use of credit cards paying off the balance every month, is that wise use of credit cards? Absolutely, yes. And do you ever think that, well, some expenses, some purchases might need a couple months to pay off? Never. If you do that, you're making a mistake and you
Starting point is 00:22:14 should not be buying that right now. I'm generally very generous with people when it comes to their financial management, but I'm a stickler for a couple things. If you can't afford to pay off your credit card debt this month, then you need to not buy that. But some people will have car expenses because their car broke and they can't pay it all off this month, but they need their car. So it might take them a couple of months to pay it off. Well, that's different.
Starting point is 00:22:37 So first of all, that's an accident. That's something that was not predictable up front. But given enough time, almost all of these unexpected expenses are predictable. I'll give you an example. I used to get parking tickets and to me I was like, oh man, this parking ticket came out of nowhere. But when I looked at a year and a half of expenses, they were actually pretty predictable.
Starting point is 00:23:01 Every few months I got a parking ticket. So I created a sub savings account, which everybody can do. And you can start to put money away and you can put them away for things like, you know, car repair. You can also put them away for things like Christmas gifts that you know are going to come up in December or vacation. So when you go on vacation, suddenly you've got this money set aside. I heard somebody once say, and I really think this is true, that people have that emergency car expense or that emergency something goes wrong with the water heater thing. And yes, you can't plan for those, except that if you look back at your expenses, something always happens. You may not be able to tell exactly what's going to
Starting point is 00:23:46 happen, but something always happens and you need to plan for that. And that makes a lot of sense to me. Me too. And I have to say, I have a lot of empathy for people who always feel like they're trying their best and then something comes up. And I can understand, especially if you've got an old car or you live in a place that's constantly breaking down. I completely understand that. The answer, though, is not to just keep trying to put a Band-Aid on it. The answer is to step back and realize, wow, I might need to play a totally different game. And that game means I need to make a plan, set an emergency fund up, automate it, and then if I have to use it,
Starting point is 00:24:28 I'm set. That way I don't fall two steps behind when something comes up because it always will. Well, it's kind of refreshing to hear this advice because you're really coming at it from a different perspective rather than the usual, you know, stop spending money here, don't waste money on that, cut back on everything. You're saying, spend money on the things you like and don't waste money on the things you don't. And it makes perfect sense. And I think people need to hear that. Thank you. Thank you for saying that. And that is exactly how I feel. I think when you ask most people, what are the first words that come to mind when you think of money? They will almost always say the same things.
Starting point is 00:25:06 Shame, guilt, embarrassment, and is it too late? These are super common. Every single one of them is negative. What I like to hear people say after they read my book is calm, cool, collected. I have a plan and I'm living a rich life. And what I love about this concept is if your rich life is sitting front row at a hockey game, or if it's buying a really nice leather jacket or eating out at a amazing restaurant once a month, once a week for that matter. Great. Be my guest. I'll show you how to
Starting point is 00:25:46 do it. And I think that there's too much judgment in the personal finance world. I think that honestly, people want to spend money on the things they love. They do need a little bit of guidance as to how to make it all work. But if they focus on the five or 10 things that matter, and they learn certain things that are super counterintuitive, like the power of investing. If they learn about how to negotiate their salary, if they learn that, wow, buying a house is not always the best investment and that renting can be a really good financial decision, that's super not talked about. Suddenly people start to realize, wow, I can take control of my money and create my rich life. It's totally different than what everybody hears every day.
Starting point is 00:26:31 Okay, lastly, since you just brought it up, negotiate your salary. What's the best way to tackle that? Okay, when it comes to negotiating your salary, I have helped thousands of people do it. And a lot of them negotiate between $6,000 and $20,000 on average. That's a big number, but it depends on how much they're already making. So the typical advice that people think is that they're going to kick down their boss's door and just stick out their hand and say, give me money. That's not how it works.
Starting point is 00:27:00 There's a much better approach, but it means you have to slow down. So the first thing you want to do is you want to ask your boss, can I set up a meeting? I'd like to understand what it takes to be a top performer here. You meet your boss. You ask him, look, I think I'm doing a good job, but I really like to do a great job. What would it take? And you discuss that. You summarize it.
Starting point is 00:27:22 You start to execute on that. And then by the time you go back and meet your boss, which is typically three to six months later, you've got the data and I show you where to pull the salary numbers from. And you come there and you're polite and happy. Your boss is happy too because you're making him or her look amazing. You pull, like theatrically, you pull these papers out of your briefcase or your bag. It's called the briefcase technique. And you show them this is what I've done.
Starting point is 00:27:49 This is what people in my role are typically paid. I'd like to discuss a compensation adjustment. And notice that there's no surprise because your boss already knows this is coming. Now, I'm simplifying the whole thing here. But what you can find is that most people are underpaid by thousands. And to get a three, five or $10,000 raise is a massive change to people's lifestyle. So people forget there's a limit to how much you can cut, but there's no limit to how much you can earn. And you can earn more by negotiating your salary. There's so many ways, but people forget and they
Starting point is 00:28:24 focus only on cutting. They forget that you can earn more money too. Well, I appreciate you sharing the insight and the advice. My guest has been Ramit Sethi and he is author of the book, I Will Teach You To Be Rich. There is now a revised second edition and you'll find a link to that in the show notes for this episode. Thanks Ramit., Mike. I really appreciate it. But Am I Wrong, which is for the listeners that didn't take our advice. Plus, we share our hot takes on current events. Then tune in to see you next Tuesday for our listener poll results from But Am I Wrong. And finally, wrap up your week with Fisting Friday, where we catch up and talk all things pop culture. Listen to Don't Blame Me, But Am I Wrong on Apple Podcasts, Spotify,
Starting point is 00:29:20 or wherever you get your podcasts. New episodes every Monday, Tuesday, Thursday, and Friday. Do you love Disney? Then you are going to love our hit podcast, Disney Countdown. I'm Megan, the Magical Millennial. And I'm the Dapper Danielle. On every episode of our fun and family-friendly show, we count down our top 10 lists of all things Disney.
Starting point is 00:29:41 There is nothing we don't cover. We are famous for rabbit holes, Disney themed games, and fun facts you didn't know you needed, but you definitely need in your life. So if you're looking for a healthy dose of Disney magic, check out Disney Countdown wherever you get your podcasts. Unless you just stepped out of the shower
Starting point is 00:30:02 or you're relaxing on a nude beach somewhere, you're most likely wearing clothes. Everyone wears clothes. Fashion is a big business. Yet there are some problems with that business. I'm sure you've heard about sweatshops where a lot of clothes are made in horrible conditions and people make very little money. And that's just one issue. The clothes we wear and wash and throw away also
Starting point is 00:30:26 have an impact on the environment, and I suspect most people don't really know about it. Dana Thomas is a writer who has served as cultural and fashion correspondent for Newsweek. She is a contributor to the New York Times Style section, and she's author of a book called Fashionopolis, The Price of Fast Fashion and the Future of Clothes. Hi, Dana. Thanks for having me. It's great to be here. So talk about what you found when you peeked behind the curtain of the clothing business. We produce about 100 billion items, garments a year, but we only buy 80 billion.
Starting point is 00:31:03 So that means we have 20 billion that are just sort of left over and destroyed in one way or another, whether it's thrown away, burned, incinerated, whatever. And then of those 80 billion, the average garment today is worn seven times before it's thrown away. And in China, I've heard it's as little as three times. And when we do wear them, the way we wash them releases microfibers. We have way
Starting point is 00:31:29 too much polyester in our clothes. Polyester is basically plastic and 60% of our clothes are made of polyester today because it's cheap and because it's light, which means that you can ship it easily too. And polyester releases microfibers when we wash them and we wash our clothes way too much. And now we have microfibers in our water systems and in fish that we eat and in the ice in Antarctica. Polyester never biodegrades. Polyester is like plastic. It's made of petroleum, which we pump out of the ground. It's a horribly environmentally damaging product. And yet 60% of our closet has polyester in it, our wardrobe. We have to start thinking more carefully and more thoughtfully about our clothes. We have to look into how they're made, why they are so inexpensive, how long we
Starting point is 00:32:27 wear them, and how we discard them. If 20% of the 100 billion garments that are manufactured every year go unsold, why? What happens to them? Why aren't they being sold? Ah, that's that old business model of the economies of scale, that it's cheaper to make 100 than it is to make 80. So we make 100 and we throw 20 away. It's a crazy model that's so, so wasteful. And it's ruled business for eons, since the birth of the Industrial Revolution 250 years ago, essentially. So that's one of the things that we sort of need to rethink. Maybe we should be making to order. Maybe we should go back to those pre-industrial revolution ways of thinking and consuming and shopping, where when you need something, it's made for you. Back before the Industrial Revolution, you went to your dressmaker
Starting point is 00:33:21 and you're like, I need a new dress. Or you went to your tailor and said, I need a new suit. And then it was made. So we can do that now. If we meld this with the digital age through the internet, where you go online and you order something and then it's made once you've ordered it. And you can do this on a global scale at a retailer like Moda Operandi, where you're ordering from Marc Jacobs and you put in your order six months in advance and then they make the clothes based on those orders. Or you can order from a place like Alabama Channon in Florence, Alabama, where you see a dress online on her website, you order it and she has it made by a local seamstress and shipped directly to you within seven to 10 days. Now these clothes do cost more, but they should cost more. One of the great aha moment was when I was reading a piece from 1940 in The New Yorker talking about Hattie Carnegie, the wonderful New York retailer.
Starting point is 00:34:13 And during the Depression, she had a line of clothing for the middle market consumer called Spectator Sport. Raymond Chandler called it the Secretary Special because it's what secretaries could afford to buy during the depression. And those suits and dresses cost $19.99. That's the same price we pay today in Zara and H&M. Not $19.99, you know, scaled with to, you know, based on inflation and real prices and all. No, it still costs $19.99, which is what we were paying at the height of the worst economic situation in the history of our country. So if the price of clothes hasn't gone up in almost 100 years, it shows that they've really dropped to a point that makes them throwawayable, that we don't invest in them financially, so therefore we don't invest in them emotionally. And we should be paying more for our clothes and caring for them and caring about them more.
Starting point is 00:35:06 Something I've always wondered about is when you go into a department store and you see clothes in the men's section, right? And the next day you could go into that same department and all the clothes you saw the day before are gone. And now the new stuff is in, the new fall fashions or whatever are in, and the summer clothes are gone. Where do they go? Where do all those clothes go after the day when they switch everything? Well, they get incinerated, they get shredded, they get put in outlets, they get marked down and marked down and marked down again. I remember I went to an outlet once and I saw something from a luxury brand company, and it had been started out at sort of like $1,000 and marked down to $500,
Starting point is 00:35:53 then marked down to $250. I mean, each time it's like with a line through it and a new price on this price tag, this poor worn-out price tag. And then from $250 down to $125, and then $125 down to $39.99. And there it was sitting in a cardboard box on the floor of an outlet, and the box said, anything in here, $15. And it had started out at $1,000. Now, if that company could still make money on that item at $15,
Starting point is 00:36:18 that shows you what the profit markup was. So, you know, that's where they go. They go to these, you know, they just go, they get marked down, they get thrown away, they get burned, they wind up in landfill. What we need to think about is recycling them or recirculating them somehow, whether we swap clothes with our friends, we resell them, we give them to charity, though watch out for that because charity is overwashed too, or, you know, overwhelmed with donations as well.
Starting point is 00:36:48 We can resell them on consignment in places like The Real Real. We can repair them, dye them. When you have all those unmatching socks, we tie-dye them, and then they don't match anyway, but they look really cool. You can give clothes a new life in many different ways. And there's also cool technology like Evernew that takes cotton T-shirts and regenerates the cotton, breaks it down to its molecular level and regenerates it into virgin cotton that can be used again.
Starting point is 00:37:20 There's all sorts of cool innovation like that in what we're calling the circular economy where things are back in circulation and they stay in circulation. That it's not linear anymore, where it's birth of a product, use of a product, and death of a product, but the product carries on and on and on. The impact of that is great because it doesn't go in the landfill, but it also means that we don't have to grow so much cotton. Now you say, oh, what about the poor cotton farmers? But the poor cotton farmers are using genetically modified cotton that turns out four times more than it should or exponentially more than it naturally would if it were organic. You know that story about the cow that's fed hormones
Starting point is 00:37:59 and it gives you four times as much milk? Well, we've done that, manipulating in science and chemicals and genetic engineering to do for cotton. That's why cotton has a reputation of being a thirsty plant, because it requires so much more water because it's producing so much more cotton. And then it causes erosion because it's sucking so many more nutrients out of the land than original organic cotton. So if we regenerate the cotton, we can go back to organic cotton, which is better for the planet and for humanity as well.
Starting point is 00:38:29 Talk about blue jeans, because you say they are the most popular garment on the face of the earth. They are. At any given moment of the day, half the planet is wearing blue jeans. Now, when I first read that, I said, get out of here. And then I found myself standing on a street corner, when I first read that, I said, get out of here. And then I found myself standing on a street corner and I looked around me and sure enough, half the people were wearing blue jeans. And then I was at the gate of an airplane. I looked around me and half the people were
Starting point is 00:38:53 wearing blue jeans. And then I was giving a talk in a class and I asked people to raise their hand who had either worn jeans that day or were wearing them right then. And more than half the hands went up. I'm like, right, it's true. It's really true. And blue jeans were the original sustainable garment. I mean, if you think about them, when they were made for the California miners in the 19th century, the pockets and seams were reinforced with copper rivets so they would hold together and last longer. And they were made of this really sturdy fabric that would be worn in the mines and didn't tear. So they were totally sustainable. And they were passed down from miner to miner. They were also the original great hand-me-downs. And somehow along the way, that all got bastardized. And now they are pre-washed. When I was a youth,
Starting point is 00:39:46 we had to wear our jeans and break them in ourselves. We bought shrink to fit, two sizes too big. They were made of this stiff, stiff cardboard-like denim that, you know, took six months before you sat down. You're like, oh, that hurt. So, you know, now they're pre-washed for us. They're shredded. You know, they're broken in for us. They're frayed for us. You don't even have to... They're cut off for us. I mean, cutoffs used to be what you did to your jeans when you wore them out. And now we buy cutoffs. And all of that, that finishing process, as we call it, is very destructive on the environment. It requires five gallons of water to wash a pair of jeans. And that five gallons is at once, not spread out over years.
Starting point is 00:40:28 And people, I've seen, I've been to sweatshops and factories where they're distressing the jeans and it's 100 degrees and their fans blowing all the dust around and they're drilling and sanding and rasping by hand and not wearing masks and inhaling all the fibers and indigo dust. And it's, you know, it's just awful. Let's be frank. It's just awful. And they're being paid pennies. So the impact of genes has traditionally been really terrible.
Starting point is 00:40:55 But happily, there are companies like Genealogia that have invented a way to distress genes with lasers in an air-conditioned clean room by a computer person who is operating it. You know, a bit like the dentist who steps outside the office when he's about to x-ray your teeth and he goes behind in that little booth and does the x-ray. Well, that's what they do now to distress your genes with lasers and they have a vacuum that sucks it all up in an enclosed environment. Or they have a water system that uses one glass of water to five gallons and then to wash the jeans. It's a super high-tech and sophisticated system. And then that water is
Starting point is 00:41:36 recycled. And Levi's recently contracted this company, Genealogia, to finish all their jeans and Levi's is the largest producer of jeans in the world. So we have hope. You've said a couple of things, suggestions to help solve the problem, like, you know, you could order your clothes six months in advance and you pay more for them and get them six months later, or you could swap clothes with your friends. Well, I'm not going to be swapping clothes with my friends. I don't
Starting point is 00:42:05 have those kinds of friends. I mean, these suggestions may be wonderful, but I just don't think most people would do them. Teenagers are totally swapping clothes. They're completely into it. My daughter walks in the kitchen and I said, what's that shirt? I don't know. Oh, it used to be Maya's. I gave Maya my sweater and she gave me her shirt. I'm like, okay, cool. So there's definitely a generational thing here. The millennials are also picking up really cool things like they're starting to sew again. There's a rise of knitting circles and embroidery circles and sewing circles, which I love. And I recently met a woman getting on the bus to Shelter Island in New York City who was carrying a little spinning wheel.
Starting point is 00:42:46 And I'm like, what are you doing? And she said, I'm spinning my own wool, which I'm going to dye with my own indigo in my kitchen garden. I thought, oh, here's some crunchy granola hippie sort. And it turns out she's in finance works on Wall Street, and this is how she spends her weekends. I'm like, ah, there's hope. And she was young and hip. I think after 30 years of the digital revolution and globalization, there's this young generation who wants to go back to a way of doing things that's slower and to craftsmanship, working and making things with our hands
Starting point is 00:43:20 and not just staring at screens all the time and tapping and scrolling. And I think this is where we're going to see change. It's just going to come because we need it. It's in our DNA. We need to make things and we need to appreciate things and we need to touch things and we need to craft again. Comment, if you will, on the argument that, yes, you know, pennies to make clothes, but if you stop it, then they don't make anything. So at least they're making something. Yes and no. I mean,
Starting point is 00:43:51 that's the traditional conservative argument. Oh, we're giving these good jobs to good people, and they're rising up the economic ladder, the middle class. Well, I've been to Bangladesh, and that middle class is a long way from suburban America, believe me. It's not middle class. You're re-sign them from maybe extreme poverty to poverty, but they're still very much stuck in poverty because they're not paid a living wage. They are not paid enough to cover the basic expenses of food, clothing, and housing for their families. So they have to work two or three of these jobs to make ends meet. And they're stuck in these jobs.
Starting point is 00:44:28 They can't get out because they are so cash strapped. So, no, that's a lousy argument. Instead, coming up with things like the genealogy of machines, which I saw, you know, the laser distressors, which I saw in Vietnam, you're creating better jobs, cleaner, safer jobs. They're not in sweatshops and factories that collapse. They're not in a hundred degree warehouse with fans blowing the dust around and people not wearing masks and walking around in inches of black indigo water. They're working in air conditioned environments that are clean and silent. They're given better skills. They're paid
Starting point is 00:45:05 better because they're bigger, better jobs. And then we're creating other jobs in making the machines, building these buildings, all of that. So while we're getting rid of the crummy jobs, we're creating better jobs, cleaner jobs, and safer jobs. Nobody wants to work in a sweatshop, honestly. I mean, anyone who says that should go try it for a day and then we can talk my observation here is that with all the things troubling the world today that this is not something that's really going to get most people's attention maybe some people will you know weave their own clothes and trade clothes and all that. And, you know, you're attacking the fashion industry. You're attacking seemingly industry and the capitalist way of doing business. And, you know,
Starting point is 00:45:52 you can wag your finger at it all day, but it is the way it is. So what do we do now? Well, we can change it through the power of the purse. We cannot buy those clothes, and then it will change. I mean, the model is proving that it isn't necessarily a good economic model. One of the big companies in the fashion industry, Forever 21, who has sourced in sweatshops in downtown Los Angeles, it says it didn't know it was, they were being subcontracted. But if you can't keep a hold and follow your supply chain within city limits, you're not managing your company very well.
Starting point is 00:46:30 And sure enough, they're teetering on bankruptcy. So it shows that even if you're paying super low prices to produce your clothes, you aren't necessarily going to be a winning company. And if you're overproducing to economies of scale, you're not going to necessarily be a great economic winner. You could also be teetering on bankruptcy. And it's because people will stop buying those clothes. And then what do you do with them all?
Starting point is 00:46:55 Well, this whole idea of, you know, thinking about maybe washing your clothes less. I mean, we do wash our clothes an awful lot. And I remember being in other places around the world, and people were amazed. What? You're washing your clothes every day? What? Yes, it's true. Now, the CEO of Levi's, Chip Berg, says you should never wash your jeans. There does come a point when your jeans are so embedded with everything that they could probably walk out of the room on their own. When they get to that point, you should probably wash them. But at the same time, he's right that we shouldn't wash them after one or two wears.
Starting point is 00:47:34 You can wear them for a week or two at least, and they'll be perfectly fine. A friend of mine from Jamaica said that they didn't wash their clothes so much. What they did when they got dirty, they put them out in the sun, and the sun cleaned them, which I thought was a really curious and probably an old-fashioned idea, like putting them out on the laundry line and just letting the air and the wind and the sun clean them. There are ways to clean your clothes without putting it on the long wash in hot water. And doing that, putting it on the long wash in hot water, beats up and breaks down your clothes and gives them a much shorter life.
Starting point is 00:48:05 They wear out more easily. The man from Procter & Gamble that I talked to said, you know, wash your clothes on the short cycle with cold water. And he wants us to wash our clothes. That's his business. And he says, if you do that, you're saving water because it's the short cycle. You're saving electricity because it's the short cycle. You're saving electricity because you're not heating up the water. You're giving your clothes a longer life because you're not boiling them and spinning them to death. And he said it also releases less microfibers because it's not in hot water that releases them
Starting point is 00:48:39 and it's not a longer wash that releases them. And so we're getting less of the plastic microfibers from polyester in our water system. And he said, you know, it's a win-win for everybody, even Procter & Gamble somehow. I'm not sure how, because if you just wash cold short, simple as that, big impact. Well, this is interesting to me because this is a topic I didn't even know was a topic. And so I appreciate you shedding some light on it. My guest has been Dana Thomas, and she is author of the book Fashionopolis, The Price of Fast Fashion and the Future of Clothes.
Starting point is 00:49:15 You'll find a link to that book at Amazon in the show notes. Thank you, Dana. My pleasure. My pleasure. Whether or not people bother to read and respond to your email depends a lot on what you put in the subject line. The people at Yesware did some interesting research. They powered through subject line data from more than 100 million emails sent by over 7,800 companies to uncover patterns of open and reply rates to email. Here are some of the things they found.
Starting point is 00:49:49 Immediacy helps. A subject line that says, Today's meeting will more likely be read than if it says, This week's meeting. Putting the phrase, Can you chat? in the subject line will lose about 98 out of 100 people who will never reply. The phrase check in in the subject line works much better than can you chat. The phrase something of interest in the subject line has a very low response rate, probably because it sounds pretty spammy.
Starting point is 00:50:19 And the phrase next steps has a very high open end response rate, as does the phrase follow up. The phrase touching base falls pretty flat, likely because it doesn't mean much and it's pretty vague. Thank you as a subject line is golden. It gets a high open rate and a high response rate. So thank you emails are well worth the time. And by the way, any subject line more than five words long is probably not good. Open and response rates fall dramatically for emails that have a subject line that's five words or longer. And that is something you should know.
Starting point is 00:50:57 We are always looking for new listeners, and you can help by sharing this podcast with someone you know. I'm Micah Ruthers. Thanks for listening today to Something You Should Know. Welcome to the small town of Chinook, where faith runs deep and secrets run deeper. In this new thriller, religion and crime collide when a gruesome murder rocks the isolated Montana community. Everyone is quick to point their fingers at a drug-addicted teenager,
Starting point is 00:51:24 but local deputy Ruth Vogel isn't convinced. She suspects connections to a powerful religious group. Enter federal agent V.B. Loro, who has been investigating a local church for possible criminal activity. The pair form an unlikely partnership to catch the killer, unearthing secrets that leave Ruth torn between her duty to the law, her religious convictions, and her very own family. But something more sinister than murder is afoot, and someone is watching Ruth. Chinook, starring Kelly Marie Tran and Sanaa Lathan. Listen to Chinook wherever
Starting point is 00:51:58 you get your podcasts. Hi, I'm Jennifer, a founder of the Go Kid Go Network. At Go Kid Go, putting kids first is at the heart of every show that we produce. That's why we're so excited to introduce a brand new show to our network called The Search for the Silver Lining, a fantasy adventure series about a spirited young girl named Isla who time travels to the mythical land of Camelot. Look for The Search for the Silver Lining on Spotify, Apple, or wherever you get your podcasts.

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