The Compound and Friends - Wall Street Legend Joe Moglia's Next Act, Bill Sweet on President Biden's Tax Proposals

Episode Date: March 26, 2021

Joe Moglia went from being a college football coach to Merrill Lynch's top producer in the world to the Chairman of TD Ameritrade. And then, when the opportunity presented itself, he returned to his coaching roots and took over Coastal Carolina's football program. Now he's back in business, bringing OppFi public on the NYSE. Joe stops by to talk to Josh about the new stuff he's working on and the important stuff he's learned over the course of his legendary career. Plus! Ritholtz Wealth Management CFO Bill Sweet jumps in to discuss the Biden tax proposals - what they mean for your household, your business, and your portfolio. Please leave us a rating and review wherever you listen, it really means a lot! Obviously, nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

All right. Today on the compound show, Bill Sweet is in the house. Bill Sweet is the CFO at Ritholtz Wealth, and he's going to tell you everything you need to know about the Biden tax proposals. What does it mean for you personally? What it means for your portfolio? What it means for your business or the company you work for? So that's going to be really good stuff. And Bill is the man you've heard him here before. And then we've got a big interview today with a living legend, Joe Moglia. Joe was the CEO of TD Ameritrade during their unbelievable run right up until after the great financial crisis. It was one of the top performing stocks in all of finance. And he's also a celebrated college football coach, which is something he had done prior to being on Wall Street and then after as like his second act. So Joe's going to come on

and tell us about his next act. He's getting involved in an area of finance that has a lot of potential to help a lot of people and change a lot of people's lives. So Joe is absolutely the man. You're going to love hearing from him, too. I got nothing else. Let's get right into it. Duncan, hit the thing and let's go. The Compound Show with Downtown Josh Brown. How you doing? What a modest financial podcast on Wall Street. How we're helping millions of people to make smart decisions, grow wealth, and secure the bank. Welcome to The Compound Show with downtown Josh Brown. Josh is the CEO of Ritholtz Wealth Management. All opinions expressed by Josh or any podcast guest are solely their own opinions and do not reflect the opinion of Ritholtz Wealth

Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. The Compound Show. One other thing we have to talk about. I can't be logging into the Monday morning Zoom and have people talk about deer hunting and shit. So we don't have to fix this now. But one solution I thought of was to have music playing. before i pop on how do we do that can i like make a playlist with you yeah and then you can flood you could

flood the zone yes with music so that i don't have to log in and listen to that shit so maybe let's just do like nickelback yeah for like get people started for the week for like 10 minutes like we start we start the music when do you log in for this uh usually like five minutes prior all right fine so five minutes prior five minutes prior we we start with photograph we go right into this is how you remind me there you go right yeah yeah just get everybody started. It's Monday. I think we go to Hero from the Spider-Man 1 soundtrack.

And we just like, we see what happens. Duncan's losing his shit. No, but I just. You literally, you might have resignations if you did that. Let's just do it anyway. And see if anyone has success. Michelle and Daniel, their first day, the CEO looks like he's wearing an Enron t-shirt

and we're playing Nickelback. I mean, can you really? What could be better? It's the perfect way to get started. All right, we'll figure it out. But I think we'll test that on Thursday. I don't, we'll put on like innocuous, almost like a hotel chain, like the W Hotel.

You know how they play that cocaine music when you walk into the lobby? Thievery Corporation. It doesn't get good until about 2 in the morning. Lebanese Blonde from Thievery Corporation, right? Isn't that like the ultimate hotel lobby song? Yeah. Whatever that shit they play in the bathroom at the W Hotel. Let me dig up.

Let me dig that music up with all the spare time I have. All right. We're going to talk about taxes. I probably should have introduced you before I went into that whole thing, but I'll introduce you now. This is Bill Sweet. Bill is the CFO of Ritholtz Wealth Management. This is Bill Sweet. Bill is the CFO of Ritholtz Wealth Management, also our in-house tax expert, a practicing accountant, and just an all-around kick-ass. I don't really know how else to describe what you do for the firm. I feel like you do a little bit of everything. And so much of it is

like, if you weren't doing it, I don't know what we would do. I know that you can't fit that on a business card, but is that an apt description of your day, would you say? I'll take it. I'll take it. You said a couple of days ago that I'm the guy that jumps on the hand grenades, and I take that as a point of honor. I've always appreciated that very much. You really do, and that's important because Barry and I are the guys that throw the hand grenades. So it's good that somebody's jumping on them. Okay, let's get into this. So it looks like anyone making over $400,000 is an enemy of the state.

And what we're basically going to do is find a way to make them pay for it through the tax code. I'm just joking around. But it really seems this is a Bloomberg headline. I want you to react to it. Not the ideology behind it, but just like what it might mean for investors. Biden determined to tax the rich after windfalls from COVID crisis. So I totally understand that mentality. The reality is that most people who have wealth in this country, it's more likely that they have more wealth a year after the crisis than less.

Do you agree with that? Yeah, I think so. And it's a K-shaped thing. Everybody's been talking about it for more than a year. But yeah, if you had assets, you experienced that decline. You watch things go down in real time as things panic. But certainly in the recovery- For like six weeks. Yeah, for a short amount of time in hindsight, everything seems to be happening quicker. Market recoveries too. And now we're seeing the result of the Recovery Act, which went out about two weeks ago, another $1.8, $1.9 trillion of revenue of spending that's going out from the federal government into the economy. It's not hard

to paint a picture that that's just the beginning of what could be coming next. Okay, so that is what's coming next. And even if we don't think all of these proposals become law, if even some of them do, it's a very different environment from what we lived and invested and worked under during the Trump years. So why don't you walk us through what you think are some of the biggest items being discussed right now? Yeah. So all we really have is a proposal at this point from the campaign. The treasury green Book is this document that literally was a green book passed around from the executive branch on the Congress. And when each budget will come out, that is not, we haven't seen that thing in a couple of years. The Trump administration wasn't really interested in that level of forward planning. And we haven't seen this yet from the Biden administration. But we know what was basically promised on the campaign and Bloomberg and others have been reporting on a couple of the items. So a couple of things are pretty painful to think about. The first is you mentioned it, a 12.4% increase in tax for anybody earning $400,000 or more. And so if you think about that in summary with the state

and local tax exclusion that was removed from the 2018 tax code change. I think that does target and hurt high income and high cost of living taxpayers. It's a relatively small portion of the tax base. You're talking about probably the top 1% to 2% certainly. But it would end up targeting, I think, folks that make most of their money through wage income, because we're not talking about a tax that applies to capital gains. We'll get there in a minute. But 12.4% additional payroll tax above that amount in a weird donut hole. So the first $140,000 are taxed at that rate, and then you have a gap, and then it kicks back in over 400,000. To me, it seems like pretty bad policy. I don't think it's going to be very hard for most corporations to figure out where they need to set their

payrolls and then work out things like stock options, find other ways to compensate executives and high earners to get around something like that, especially if it's got a hole that you can literally drive a truck through on the tax change. I was talking to my father-in-law, Harry, and you know Harry. And we were just talking about, imagine what this does to someone's financial situation who is wealthy, owns a business, living in New York City. So first of all, living in New York City of the highest cost of living in the world, right?

Or the highest cost of living in America, let's say, probably. San Francisco might take issue with that, but close. Okay, so now you own a company. So you're paying the entirety of that 12 social security tax right you're not splitting it with the firm you work for right okay now you're paying new york city tax above above what dollar amount are you paying 8.8 new york city tax uh 8.8 yeah no it's very low because you're talking about four just from New York City alone. So I think after like $60,000. It's 7% at one level and then 8.8.

Okay. So you're paying 12% plus 8.8 plus 37% federal, which might go up to 39. Correct. Okay. And then New York state tax, which is what? Yeah, the state. I mean, that's state and city combined, what you just quoted. New York city tax is combined? Yeah, the state. I mean, that's state and city combined, what you just quoted.

New York City tax is combined? It's four. It's combined with that state number that you mentioned. Right. So you add those things up and your income tax could be like 60% of what you earned. Yeah, pretty easily. Right. Now people are like, well, whatever. You make a million dollars.

Who cares? See how fast 400,000 net of taxes goes living in Manhattan. Private school tuition is like 40 grand a kid. Yeah. Yeah. So look, not that we're breaking out the violins, but I'm just making the point that for people in high tax states, like this is going to force a lot more, in my view, of people running to Dallas and Austin and Miami. I almost feel like this tax policy and some of these changes are going to accelerate migration away from the high-tax states. What do you think about that?

Yeah, I think it's already underway, Josh. The phenomenon that you're talking about certainly started to accelerate, as I said before, in 2018 with the cap on state and local tax deductions at $10,000. You could debate whether that was a good or bad policy, but it certainly began, I think, that exodus from the Californias, from the New Yorks, from the New York cities to lower cost of living, lower tax states. This would just accelerate that, put it on steroids. In addition to what's happened in the last year, where if you are a working professional, if you're working in information technology, if you're lucky enough to work in an industry like ours even, what do I need to be in New York for? Why can't I live in Nevada,

Texas, Tennessee, a state without an income tax, like I said, it could probably have a lower cost of living too, just depending on where the schools are. It's a great debate. And so I think folks on the right would say, well, that's going to force the cities, that's going to force the higher tax locations to earn that, to earn that and be like, I want to pay that money by delivering costs and services. I don't necessarily see that where I live, but I think that change that you're mentioning is already well underway and you're seeing it in the migration patterns here in the last year, probably influenced mostly by COVID though. The CFO of the state of Florida, who knew

there was such a thing? I thought that was called a, is that a comptroller? Yeah. Comptroller, treasurer. Yeah. That's weird. This guy, Jimmy Petronas, he told the New York Stock Exchange to move down to Miami. These guys like writing op-eds like to Goldman Sachs, like, dear Goldman Sachs, please come to Florida. Well, at least for two months out of the year. Wouldn't be a bad idea. Well, they got my in-laws and they got Jeter. I don't know what else. What more do they want?

They want it all. Yeah. They want it all. All right. So what are some of the other things that jumped out at you from the proposal? What's really actually interesting about the Biden tax proposal is a lot of the middle-class targeted benefits are already in effect. And so the American Recovery Act, that $1.8, $1.9 trillion bill that I mentioned a minute ago, that actually has a lot of provisions that end up being temporary benefits to American middle-class working families. And so one that came out of the tax proposal that is duplicated almost exactly in the new bill, a $3,000 child tax credit. And so that's an increase from 2000 before. If you remember back in 2018, exemptions are gone now.

So that's a way to help working parents, to help parents with kids, basically give them some funds. It's refundable for the tax year 2021 in full. And that's all the way up to $3,600 per child for a child under the age of five. And so that's part of the Biden proposal. That's a lot. I feel like that's very helpful. That's not lip service. They're really doing something. No. Median income US is around $60,000, $65,000 for a household. And so you're talking about 10% for a family of two, just in child tax credits alone. Another proposal that did go in is-

You know why that's so, by the way, you know why that's so smart? Having two kids myself, I can promise you, if you give people $3,600 as a tax credit, they are definitely spending it. Yeah. Like immediately. That money doesn't end up at Vanguard.

I promise you that. So, all right, go on. So in addition to that amount, just one more note on that. The proposal, it's not clear how this is going to work exactly, but it's meant to be refundable throughout the year. And so potentially we could see as early as the summer, a portion of that credit being paid in advance. And so it's not something you have to wait till the end of the year to file your income tax return for if you're under certain income. So that's interesting. And there's still some details that the treasury and the IRS need

to work out. It's not like they don't have their hands full. I want to talk about that in a couple of minutes. But the other thing is for childcare care credit, there's a child care credit that's different than the child credit itself. So if you're paying a daycare provider, if you're paying a nanny, the amount that you can claim as a credit towards that is now 50% up to $4,000 per child for a maximum of two. And so in addition to the credit itself, just for having a child, if you are working, two spouses are working and you're paying for child care, there's a federal incentive to subsidize that in some part. The issue with these tax provisions I'm talking about, these expire at the end of the year with the new CARES Act. And so in order for those to become part of a broader proposal, they would need to be made permanent. And I think that's one of the reasons why you're hearing chatter of this start to come out now from the Treasury. I

think they're floating ideas out there in the public, see what the public reaction is, see what people are talking about, what's pro, what's con, because ultimately it is politics. I feel like child tax credit, making that go from temporary to permanent is not going to be particularly unpopular with anyone. I don't know. What do you think? No, I think it's pretty much across the economic spectrum. That's something that I think has had a lot of lasting benefits. The headlines are all about these stimulus checks that are going out because people love checks. You have 70%, 80% approval rating just for obvious reasons. You get a direct deposit and you get to pay for a pool or whatever

else. But the child tax credit specifically for working families, that's a big deal. We talk a lot about inflation in our business. That's one of the places where you've seen cost inflation increase pretty rapidly relative to base rates of inflation in child care. I know for me, we're looking at bills north of $2,000 a month for our two children when they're going back here in about three weeks. So it's a lot. And that, as I said, for a median household, that's a big deal.

And birth rates have really taken a dive, a steep dive here in the last year. You would have thought that everybody being home, everybody stuck and getting used to each other, you'd see an increase potentially. But it's more or less a straight line down on birth rates across the globe, but in the US specifically. And there are some economic polls out there that say that's a really bad thing for the future of the economy. I don't necessarily agree with that. We've seen Japan and other countries cope with it pretty effectively. But it's interesting to think about what a replacement weight of 1.5 might look like, because that certainly seems like the direction we're going to be in the next decade. Right. So offering child tax credits are not going to get

people to have children. But I guess we're talking more about families that are further along. Let me read you this. The richest 1% of US households added more than 4 trillion in wealth last year as stocks hit record highs and property values swelled, fueled in part by record low interest rates. The bottom 50% saw their net worth gained by a much smaller 470 billion, and that was bolstered by the extraordinary income support provided in the March 2020 CARES Act. That doesn't sound very sustainable that the richest 1% get 4 trillion in wealth added to what they already have, which is already most of it. And then we throw $1,400 checks at the bottom half of the country and hope they don't complain too loudly.

Like nobody should really look at that and say that's something that can go on every year or every financial crisis. So my question to you is, do some of these proposals look like they will legitimately chip away at some of that? I don't want to say income inequality, but let's call it wealth inequality. Like, do some of them look like they have a real shot at major redistribution? I don't personally see it, but I feel like you know better than I do. So the tax rate on income, we all understand, but what's really going to change that equation and make it so that bottom 50% have more wealth? I can't see it. Yeah, I can't either. And maybe like revealing some of my inner political preferences that have been dormant here for the last five or six years.

But it's hard for me to envision, like you said, a case for sustainability in a model like this. But I also don't think that income inequality is a problem, frankly, that can be solved by the tax code. As much as it's tempting and politically popular to run around saying, look, we're going to tax the top 10%, the tax wealthy. I understand the need to create some level of fairness. I think it's more about opportunity, frankly. And that's it. It should be a question of how can we incentivize? How can we make it apparent so the middle class feels more comfortable investing savings in markets? It's something that we do in our work every day. Let me stop you. Giving them a child tax credit that's double what it used to be is part of the way there. Arguably, it'll allow some kids to be enrolled in early development

childcare or be able to keep up with the latest electronics that kids now need to do part-time remote schooling, let's say. So there is an argument there that that is part of the equation is making it so parents with very young children who have not yet made any money aren't going to have their kids automatically start 50 yards back. But I guess some of the rhetoric like from Elizabeth Warren about a super millionaires tax. And at first I was like, wait, you're going to tax the millionaires who have superpowers only? That doesn't make sense to me. And then I read super millionaires is like, what she's talking about is families that have so much wealth that it's impossible for them to ever not be wealthy, like billionaire families. And to me, that seems like such an easy political win. Like who wouldn't

be for that? but i guess the reality is different when you go to vote on these things and that's why that hasn't happened yet but like most of trump's base are not super millionaires and definitely are struggling and they definitely think more people on the other side are right when you think of like a trump base voter not that they matter right at the current moment, but like their conception of what a billionaire is, they either think of Donald Trump or they think of like some Hollywood celebrity that they can't stand. So I'm surprised we haven't had bipartisan support for that kind of attacks, but that doesn't really seem like it's going to be a big part of this.

I don't think so, because I think a lot of the donor class is there. They tend to be there. They can be political influential. They can hire the lobbyists. They can get their voice be heard. I think the incentives do matter, too. I think that's one of the things that's going to be interesting to watch is that if we if we are in this model where there's more distribution by the tax code, what does that do for incentives? What does that do for economic incentives? Because to me, there's a pretty clear incentive to start a business, to form a business. One of the things I like about the 2018 tax code is this 20% deduction for small businesses. It's a powerful incentive to have people be more dynamic and have them go out and be entrepreneurs.

I think that's a very relevant and very real part of it. And so I think it's just in the interplay of how this all works out. But incentives can work on the disincentive too. The danger I would see by continuing to extend, even though it's necessary at the moment, unemployment benefits or other tax credits is if you're disincentivizing people to work. For people who could earn more staying home, playing video games if they don't have a better option or doing whatever else they do with their time, that's what I like the most about the child tax credit or the child care credit is that you're giving people an incentive to basically subsidize their child care so they can go out and be productive in the workplace if they want to. Okay, let's turn

to the stock market. Biden's pre-Trump corporate tax rate. Goldman Sachs is basically saying higher corporate taxes are likely to cut S&P 500 earnings by about 3% in 2022, which sounds like not that big a deal. And then JP Morgan said it would be a drag on earnings growth and buybacks. Okay, fine, We get it. It doesn't seem like the stock market is particularly worried, at least not in the way the Dow is making new record highs every week. So what is the market missing or looking past or what am I missing in terms of what's likely to pass? Yeah, we don't have to predict that the corporate tax rate is going to increase by law. The TCGA, the Tax Cots and Jobs Act of 2018, is due to expire in 2025.

So there is a sunset. It looks like there will be a corporate tax change. And absent of a compromise and accidental extension of the bill, that'll happen. From my point of view, corporate income tax is a relatively small portion of federal revenues from the federal side. It does obviously play a significant factor in planning I just don't see a lot of revenue, a lot of benefit in tinkering too much with the corporate tax rate, given how diversified, given how cross-border all these companies are. There's really no reason that a company couldn't operate in the US or any other country from just about anywhere. And so I think that's the danger of tinkering too much with corporate tax rates. I've always found that argument to be very effective. And roughly 20%, 22%, that's the OECD average of tax rates. There does seem to be in the last couple of 20, 30 years, this race to the bottom

of corporate taxation, similar to like the film industry handing out benefits for states, right? Come film in our state. And there's a question of whether that's why every, that's why every show is made in Georgia because Georgia is being super competitive with the rest of the States. And if they want the business, they have to, they have to lower theirs. They subsidize it. Yeah. And in the Yellen testimony before Congress, I think about two weeks ago, one of the things I thought was interesting was there were a couple of senators who are asking her very specific questions about taxing information technology. Now, political slant, right? I think it was meant for, you know, let's go after Bezos and Amazon

and all those profits that they're generating. Yeah. But her answer was interesting. She said the majority of profits globally for information technology is, these are U.S. companies. These are U.S. companies that are domiciled in the U.S., that are paying U.S. wages. So in the theory, and again, if you take my proposal that any tax revenues generated on the corporate side is just going to mean lower wages or potentially elsewhere, disincentivize that reinvestment into R&D or other factors, I think that's a compelling argument. I think there's enough moderates in the Senate that see it. So it's not just everybody talks about Joe Manchin, and Joe Manchin's the actual president. You know, it's Tester in Montana.

It's Collins. And there are four or five. And those are folks that I think kick and looper, including Colorado. Those are folks that I don't think really want to mess too much. And I think it's going to be politically toxic to be talking too much about raising taxes in a recession with everything going on. So my prediction is that if there is an increase in corporate taxes, it'll be a compromise thing, 20%, 25%. That's, I think, why the stock market doesn't really care, because I don't think that's

going to be a meaningful change to most corporate balance sheets. Yeah. One of the banks is saying capital gains tax increases in 1987 and 1993 had only a modest intramonth impact with a drawdown of less than 5%, I guess, on the S&P 500. And Kostinat Goldman is saying like infrastructure is probably outweighing a change in corporate tax, like a true infrastructure bill that actually gets signed, like not just Ivanka running around with a gold shovel, but like a bill would actually outweigh any concerns in terms of like a different tax rate for investors. At least that's the way it seems now. So I totally get your point. If you were a quote unquote million dollar household right now and staring down the next four years. All the rhetoric aside, just like in terms of what is likely to change or happen, what moves would you be making? What are we telling our clients or what are we thinking about preparing on our clients behalf so that they are ready for this and are kind of optimizing everything they're doing. Yeah. So the interesting thing, I sort of re-listened to your interview

with Patrick O'Shaughnessy from last year. The interesting thing that I think is on the table in his shift to direct indexing through Canvas that you had a discussion with him about is the ability in my mind to sort of use your what you would call a passive index based strategy to deploy that in a tax efficient manner. So that for Patrick's point of view, that was one of the number one cases. He thought tax would be a relatively low sort of a priority for new investors on the Canvas platform. But that to me is an interesting thing. So if you think about a let's say- Oh, he was saying he didn't expect tax to be a big reason for people to allocate, but then working with advisory firms like ours, he was like, oh, wait a minute,

you guys really care about this. Exactly. And so your priorities were things like concentrated positions. So a corporate executive, let's say, that has a high concentrated position, Canvas allows a pretty powerful ability or direct indexing. One of the things, the use cases I've really been working with a lot of advisors on is setting up that sort of that big liquidity event. So let's say a family has a vacation home that they're going to have a capital gains tax on. They were lucky enough to have it be in Florida here over the last couple of years. Or let's say that there is a big corporate stock event or sale of a company, or let's say you had a taxpayer that was really lucky in cryptocurrency. You know there's a large embedded gain. And so the question is,

what can you do to sort of whittle away with that if you know it's coming? And direct indexing to me is a really powerful use case of how technology's evolved to effectively unlock from a quote unquote passively or index managed portfolio, those tax losses that occur in an ETF and a mutual fund, those all get kind of locked in and distributed amongst the shareholders of the class. But if you have a direct indexing model, you can effectively reap out those tax losses, build them up on a tax balance sheet because they carry forward every year against that windfall event, be it from crypto, be it from the sale of a business or sale of an investment property. That to me is the interesting thing. And as you know, we it from crypto, be it from sale of a business or sale of an investment property.

That to me is the interesting thing. And as you know, we're CFPs, this is the stuff that we think about. It's not about looking backwards. If I have a criticism of most of the accounting industries, if they're driving looking at the rear view mirror, in many ways we all are there, but they're worried about 20 tax returns. The IRS is still processing 3 million tax returns from 2019. What can we do to get ahead as you laid out the 2022, 2024? So I would say using technology to its fullest for obvious reasons. And we have a very neat way to do that through O'Shaughnessy. But then again, back to my point about the TCGA, taxes are going up. They will go up almost certainly by 2025, if not sooner.

From sunsetting alone, they're going to go up. Even if Biden gets nothing done. Exactly. And so maybe not for that $1 million household, but somebody will say $3 million, they're potentially have some estate stack exposure. It's not present right now for a married filing joint couple. You're looking at $22 million. So the federal limit is so high. I don't think it's going to come into play. But again, in that business owner client, the mass affluent, the person selling a business, add up all the properties, especially if they're New York or another high tax, high value area, that getting ahead of the future tax changes that we know are coming is key. And so estate tax is one of the big ones. Okay. So either convert a

portfolio to direct indexing or literally move to Florida, but start, start, start getting ready because things are, things are going to change. Last thing, when do you think like we'll have a better idea of what's likely to, what's likely to pass and, and become law? Is that in two weeks or is that in two months? Like what, what would you guess? I know it's hard. My guess is, and again, this is just looking at the political Rubik's cube and taking a stab. It's really the virus that's a priority, right? That's it for the next, I would say, two months. I think these things are being floated prematurely to gauge public opinion, and we'll see how it goes. But the other thing is this weird quirk in the budget

reconciliation rules of the Senate. It's jujitsu on a different level, and I studied the tax code and I don't know what the heck is going on there. But from what I understand, they can pass one per like budget season bill. And I think that because the last bill had to do with spending and revenue, this is not the 50 budget or the 50 vote in the Senate ceiling is not on the table until next year. So they have to wait a full budget year, according to just my really, you know, amateur analysis. I thought you about to say they have to wait a full budget year, according to just my really, you know, amateur analysis. I thought you were about to say they have to wait for a full moon. I swear, I thought that was common. When John Hickenlooper howls at the full moon. So, and again, because I see there's no margin for error in the Senate. There's none. Like I said, Tester before, he's a senator from Montana, a state that voted for Trump, something like 60 or 70%.

There's no reason he can put his name on a tax increase, again, in the middle of a recession. So I think this is, frankly, more of a 2022 issue. It's red meat for the base. We're going after the wealthy. It's meant to sort of bring the progressives on back into the fold. And we'll see where it goes. I could be wrong about that. I was wrong, you know, a fool any time I offer political predictions, but I don't think this is a hot bush in the

shoe. I think it's virus, virus, virus, at least through the summer. Yeah, I do think you're right. It's red meat for the base. It's like a payback for the people that turned out for Biden, even though they're not excited about him because he's an old white guy and he's a centrist. But like, this is like, all right, see, he's really going to do this stuff that he talked about. And I think that's important politically. And then there's that caveat that tax the rich, it turns out is only so popular.

And then it crosses over and you've got a lot of people who are not rich, but think they will be someday. And they just hate the idea of it. And so even if these things are being done to benefit them, they don't see it that way. So it's interesting that tax the rich just isn't an automatic, easy policy to get through. So we'll, I guess we'll, we'll see how things play out, but I feel good knowing that you're in the seat guiding us. And hopefully the folks listening

have somebody that they can go to who uh, who knows, who knows, uh, how to navigate this stuff. What else is going on? Anything? No, I think the, the number one point here on my list is just,

if you're, how's, how's, how's life? We're okay. I see you. I see you in the sunshine with the kid. All right,

boy. So yeah, it's been nice. Yeah. Uh, seven month old, she sleeps for like two hours, three hours at a time and she's not in the house right now.

Otherwise he would have heard her. Uh,, life is good. And it really feels like we're coming in to some really good days here. 60 degrees yesterday. And I'm feeling it. I'm feeling it. You guys, you guys in upstate New York, you get about, I don't know, 10 days of spring. Is that exactly that typical? All right. So you got to enjoy it while less solar panels are losing policy up here. It's just not enough sunshine. No doubt. Bill Sweet, thanks so much for joining us. We'll talk to you later. Thanks, Josh. Okay. So Joe Moglia, most people know you as the former CEO of TD Ameritrade, just an absolute legendary career in financial services on the brokerage side. You had Merrill

Lynch prior, but more recently, many people have side, you had Merrill Lynch prior. But more recently, many people have heard of you in connection with college football. And you became the head coach of Coastal Carolina University's football team. But we're going to start off talking today about your newest investment, which is in a company called Opportunity Financial or OpFi. And just for the audience, your SPAC, which is called FG New America Acquisition Corp, announced a merger with OPFI earlier this year. And when the transaction closes this spring, you'll be trading on the New York Stock Exchange under the ticker OPFI. So I want to start with why this deal? Why at this point in your career, what excited you

enough about it to want to be involved and what will your continuing role be post de-SPACing, which hopefully happens soon? I had stepped down. My last season of football was 2018 and I needed to make sure that our deal with Schwab closed. So all those things happened in effect this year. So, so the beginning of the year, this is the merger between TD Ameritrade and Schwab, which you were instrumental in, in making happen. And it's a blockbuster deal.

So at the end of the day, yeah, I got together with my team and I'm also a founder and a chairman of an asset management company. That's fundamental global. And then a chairman of a wealth management company, Capital Wealth. So our team kind of got together and we talked about the world's changing before our eyes. Indeed, there's going to be a new America. Now, how do we best take advantage of that? And ultimately, we came up and thought that what gave us the greatest flexibility would be a SPAC. So Fundamental Global, New America became

the SPAC. Now, I'm aware of history with regard to SPACs. I'm aware of the numbers. By the way, as of March 16, there has been 512. And the beginning of 2020, there have been 512 IPOs, SPAC IPOs. And I recognize that a lot of times, first of all, that's way too many. But a SPAC will try to do a deal as best it possibly can. It winds up getting paid reasonably well for that. The deal gets done and they get out of there. Now, that is the exact opposite of the way I ran my career, both at Merrill Lynch and TD Ameritrade. So our goal was to make sure that we find a company that we believe in enough that when the deal is done, we are going to stay with that company. So that turned out to be OpFi. So when you look at the 107 deals that have been announced, there are only seven of those that are profitable. OpFi is one of them and probably the most profitable.

In fact, they've been profitable since 2015. 2017 through 2023, they got a 47% CAGR. They got about $100 million in cash. They have access to $500 million as far as credit goes. They probably use 20% of that. They're in great shape with regard to the balance sheet and their business. Well, Joe, why don't you tell us what their business is? Because I don't think it's a household name among my audience, which is, let's say, financial advisors, high net worth,

families. This is really for a very different demographic. So tell us what OpFi does and what you like about it. Yeah. So are you just taking a shot at me now, making a point that your audience is big, big time? No, no. My audience are people like you. But people like you don't have trouble accessing credit. There's a huge slice of America that does. And I think that's why what this company's mission is, is interesting to me. But I want to hear it in your words, why you're getting involved with this. 60 million people in this country that don't have access to credit. 60.

60 million don't have access to credit. Now, our entire economy is based on credit. So you think about what goes to 60 million people in the United States. That's a significant percentage that just can't get it. So you have a problem with your car. You need some maintenance. You break the window in your home. You need some extra medical bills. whatever it may be. You don't

have the money for that. So what OpFi does, OpFi wants to come again. We've got an incredible platform that has the ability through AI, it's got an AI-empowered credit search engine. And of the 60 million, we're trying to find, there's about 20 million, by the way, that have the ability and the willingness to be able to pay back, but we've got a bad credit score. So they're the people that, in effect, we wanted working with. So we help them, in effect, be able to do the things they wouldn't be able to do without that.

And these are routine things. They're not buying timeshares. These are people who need to fix the car so they could drive their kids to school. Exactly. Now, there's actually an interesting segue here as far as this goes. So the mission, Prop 5, is to be able to literally bring the ability to live your life the way you should be living your life by allowing credit to the people in our country that don't have that. When I began at TD Ameritrade, our mission was we want to bring financial literacy to every family in this country. And one segue as well from a personal perspective for my Josh, my father was born in Italy. He came here when he was 11, never finished eighth grade, sold bananas and apples in the Bronx.

I worked for him from the time I was 10 to the time I was 22. Very often in my family. Hold on. It's my father's father did. Wait, wait, wait. Bananas and apples? Fruit man? My father's father was in charge

of the guys unloading the crates all fruits and vegetables in the bronx at hunch point my dad said basically he remembers and hunt yeah so he said he said basically he remembers seeing his dad three four times a year because that job you were up at four in the morning or two in the morning and yeah you were asleep when your kids got morning or two in the morning and you were asleep when your kids got home from school basically so i don't know if you remember it like that but my dad's about your age okay so i remember what like 45 50 my father yeah just about yeah so okay so but your grandfather then would have been loading the trucks that would have been bringing the produce to my father's store. Got it.

Unloading this stuff on the other end of my father's store. So when I think about what's kind of going on now, how great would it have been for my dad and our family? I was the oldest of five, seven of us live in a two bedroom, one bedroom apartment up in the back of the street area of New York city. It was a gang area then. And how much better off might we have been if every now and again,

he was able to borrow $1,000? But he never had that opportunity. So there's a passion here. Or you could borrow it from the kind of people you don't want to borrow it from, which still exists today. Yeah, yeah. Agreed, agreed.

Okay. So that's why it all comes together for me. So we make a big deal about fintech and insurtech and a lot of things that are hot in the market today. But to me, any important decision I ever made was on people. So I think you have to have the right management team who's sophisticated enough to have a strategy that handles different contingencies,

but wise enough to be able to simplify that strategy so they can execute and they get a competitive advantage in the market niche that they choose to participate in. Jared Kaplan is the CEO of OpFi. That's his management team. I believe in these guys. And again, they are already profitable. So they're doing something that I can align to from an emotional, spiritual perspective

almost. But as a business guy and an investment guy, I think it's a great opportunity. But as a business guy and investment guy, I think it's a great opportunity. So, Joe, the company has been running longer than a lot of the newer fintech startups that you hear about coming to market. It looks like it's part of the, I guess, the Schwartz family in Chicago controls this or they seeded it or they own it. Yes. So were you aware of OpFi prior to your SPAC coming to market? No, I became aware of OpFi when we started to look at the different businesses. Because when we looked at a business, again, this would have to be a business that we wanted to be with long term.

So we'd see one business, no. One business, no. One business, no. Then we started to find the ones that, you know, these wind up making the most sense. And then we did tremendous due diligence with regard to that. And that's what we did with OpFi. So I was not familiar with OpFi. As you said, I'm not a customer.

And I was not familiar with OpFi in the past. But when we started to really look at the companies that we would want to align ourselves with long-term, OpFi would have been atop of that list. Okay. So the idea that there are better ways to assess the credit worthiness of potential borrowers than FICA scores is not new. And I think the Lending Club IPO was a decade ago already. And there have been similar companies that have come to market with this idea. proprietary or how much you want to get into, but like, what was it about OpFi's technology or approach to this, this segment of the market that you felt gave it enough of a competitive

advantage to want to be a long-term investor here? They have, now I am not a tech guy, but I recognize the criticality. Don't worry. A lot of people that are experts in that area. Yeah. So what OpFi's got is an incredible platform, not an okay platform, like a joke, like an incredible platform that is almost immeasurably scalable. And with regards to the loan, it's got an AI-empowered credit search. So by being able to ask the right questions, find out the right information, do all those different things, you're trying to find that 60 million to 20 million or so that are able to get an okay job and willing to wind up paying back. And then the way that APPFI structures the loan is they don't begin with, okay, here's the terms, this is it. It's

an installment loan, but we begin by, if we're going to do the loan, we ask you, how much can you afford to pay back on a monthly basis? And that's how we work it out. There's also, by the way, a referral program. So if you opt into it and if there's a better rate somewhere else, because you might maybe you're a little bit better credit, then you have the opportunity to do that. So again, it operates what's truly in the best interest of the individual. And at the end of the day, you're really providing a service to a family that can't get this done without you. Okay. And now the second piece of this is it seems like there's a network of banks who are interested in buying these loans from you guys.

I don't know if that's immediately or after there's some performance and some payments on the loans. How does that piece work? And what do you think is unique about that approach versus other versions of this that exist out there oh yeah so if you look at some of the other firms for the most part you know they they want to sell they're selling the loans we don't do that we keep the loan on our balance sheet so in effect we all so the the the title to the loan is with the bank but we'll buy 95% of the loan and we keep it on our balance sheet. This way we can do a really good job with regard to servicing. And we make more money because it's on our balance sheet and rather give it away. And what we provide that is the servicing.

Okay. So I'm reading here, you guys have a really great deck out there, but I guess you put out when the deal was announced. So there's a deck about OpFi, but it looks like the average loan size is something like $1,500. And OpFi has facilitated one and a half million of these with volume over $2 billion since their founding and a five-year revenue CAGR of over 100%. So doubling the business on average every year over the last five years is very impressive. Doing so profitably is even more impressive. Do you think that that's why the deal has gotten the reception it has? And do you think that that augurs well in year one as a

public company where the rubber really meets the road? Like, can they keep those numbers up? Realistically, Josh, what happens is as your numbers become significantly bigger. So, for example, 2022, we just had earnings in 2022. Like we're anticipating $418 million of revenue up from 291. Now, they're good numbers, but the bigger the numbers, that percentage, as you know, starts to drop. Of course. So whether or not we're going to continue to double our business, it would be foolish of me to try to predict that. But can we continue to grow our business at a really significant rate?

I think the answer is yes. Now, one thing you said that I think I almost have to correct you on. So the reception in the marketplace, we're still trading around 10-ish. So we've not gotten the jump that some other SPACs that have made announcements have gotten. And we are, you know, we're a real company. By the way, I have a two-year lockup that I discussed with the Schwartz family and said, I wanted that two-year lockup. And my intention is to stay with the firm, you know, in some capacity as an advisor, whatever it might be, because I've got a great interest in terms of

its success. So we're not doing a deal and getting out of there. We're not trying to do a deal and get it checked for ourselves. Other people have done that. That's not the way we're approaching this. So it has not received the reception that I believe it deserves in the marketplace yet. How much of that is timing? Like I'm looking at IPOE, which is probably the one that people, you know, throw at you when the conversation of SPACs and this kind of next generation finance comes up. So this is Chamath SPAC that's going to merge with SoFi,

social capital. And I mean, that got up to 25 post-announcement and it's down at 17, which doesn't sound like a big drop, but percentage-wise it really is. So I think there's some timing element to this and you really can't control that now. Like when you came public and when you announced the deal, all you could do is execute. And I know you can relate to that. I guess that approach, it's like, look, the market will figure it out eventually if we do what we do. So I almost feel like that's better for you guys, because if the expectations are calmer and the glare of the spotlight is not as intense, then you guys can run the company. I think you really hit the nail on the head then. So Ted Schwartz is the father of that family

office that you referenced earlier. And when we were talking about doing something together, we really did talk about this being truly a partnership. Thus the alignment to be locked up longer, et cetera. And when we did the deal, I know Ted was anticipating we'd get a pop in the stock right away. And I actually said something similar to what you said. I said, let's not worry about that. Now, all the time, we've got to get the right institutional,

fundamental buyers that are going to come in here and they're going to want to hold the stock for a long period of time. So we want to establish a good base and that's going to kind of build up over time. Now, we went out and did something like 80 virtual roadshows to talk about what we're doing, why we're doing it, etc. And we know we have people that are interested, but nobody's really kind of, of course, they're actually stepped up, but nobody's really, really stepped up per se. And I thought the proxy had not been out yet, but the proxy just printed last week. And we just had earnings.

And the earnings were great. So instead of a jump with the earnings, by the way, I'm not saying to go from 10 to 14. Well, like 10 to 1030, you know, something along those lines. And I felt pretty good about that. Now, when that didn't happen, we met with our team last night. And I said, okay, whatever we're doing, we're not doing a great job getting our story out. So we've got to be more clear in our messaging. We've got to be able to comfortably compare ourselves to anybody else that they may want to compare ourselves to.

And we've got to make sure that people understand that we've got to compete in an area that we really own. A lot of our competitors are more upscale as far as the actual borrower goes. And that space becomes very, very crowded. Our space is not particularly crowded. So we've got to do a better job, I think, as a team of telling our story. So there's a company called Upstart Holdings, which I'm sure you're familiar with. Yeah. They reported earnings last week. The stock, I kid you not, audience, Joe knows this. The stock went from 60 to 160 in two days. I don't think I've ever seen anything like that before. They reported, I guess, after the close on St. Patrick's Day and maybe a market maker after the close fat fingered some trades.

But whatever it was, this is their description. Credit services, proprietary cloud-based AI lending platform. So like a lot of the same ideas. I don't know who their target audience is, but that type of response is possible in this space when you deliver. So you guys reported as a non-d-SPACed company, but your numbers look really good. Just objectively speaking, it looks like in Q4, revenue up 25%. I mean, gap in income up 124%. So to your point, maybe these people just haven't seen our numbers is probably a better

answer than they've seen them. They're not impressed. You can't not be impressed. No, I think you got to be impressed. You have to be impressed. You know, for example, Upstart, they're a good company. I have a lot of respect for them. They've got good technology, they've got good platforms. They began with a lot of venture capital money and in effect, got a head start on us. We pretty much funded ourselves and we're doing it by just building the business slowly. And we're going to diversify as well. We're going to go in and get payroll deduction.

We're going to do credit cards. We're going to do all the product by the end, before the year's out. So, but if you look at it from a credit score perspective, which I'm not crazy about anyway, but the subprime market is 580 to 650 in to $650,000 in terms of credit scores. They would probably be the upper end of that. We'd probably be the lower end. So if they do a loan, I think their typical loan is probably five years. Our typical loan is like five months.

But we feel good about what we do. Now, we're going to expand over time when we're strong enough to be able to do those things. I think strategically from a business perspective, what Jared is doing and the management team is doing strategically as a business guy, I like everything that we're doing. One of the things that comes along with doing multiple raises from venture capital is there's a little bit more sex appeal when you come to Wall Street and you can point to we got money from this guy, we got money from that guy. And, you know, Wall Street investors are no different than teenage boys and girls. They look at what their friends are wearing, and they want to wear the same thing the next day. And so I agree with you that there is a difference there in perception, even if it's not really a difference in reality. One of my leadership philosophies, though, they call it, call it BAM, and it's generated from

football, but it's generated from football, but it's take responsibility for yourself. Always take responsibility for yourself. There are no excuses. So with regards to me and my team, we got to do a better job telling the story because we got a great product, i.e. company, to be able to talk about.

We got to do a better job of that. What's the CEO, Jared? Jared Kaplan. You got to get Jared in some Twitter scandals. That seems to be the thing these days. Making memes and shit. You got to. We're going to start one right now.

Just got to throw something out there. Yeah. Does Jared like controversy? All right. Let's talk football. He's not a politician. Good. By the way, I'm hoping Chicago is one of my stops when I can get out of my basement post-pandemic.

So maybe I'll come see you guys. I want to talk about the football thing because it's fascinating to me. You're the only person to have written a bestselling book on both investing and football. No one else has done it, arguably. I don't know who could do it. It's become almost a cliche for CEOs, and I'm guilty of this, in the boardroom to use football metaphors with their employees. But it's probably less common to hear a coach bring business jargon into a locker room full of young football players. So I think that's kind of cool. So tell us about what originally led you

to start coaching the team. I know you've had a ton of success there on the field, but you've probably had a lot of success in these kids' lives as a result of their having your mentorship. So tell us about that because I don't really know that much about it. So we back up kind of the beginning of my life. I mentioned my dad, Italian immigrant, mom, an Irish immigrant. I mentioned I was the oldest of five. I know you coached football prior to business. I began coaching, right.

I became a father very young. And I needed to give up sports. I needed to support my family and put myself through school. I was going to Fordham. Now, my first year doing that, I was driving a truck for the post office, old Chelsea Station on 18th Street, a yellow cab, and, of course, working at my father's food store. And that wasn't the most fun, you know,

a college student probably ever had in his lifetime. And it was the first year I was going to have sports. So Fordham Prep, Old Boys Catholic School in the Bronx, on the same campus as Fordham, I had a wonderful career there. They offered me a job coaching. So my sophomore, junior, senior year, I coached ball during the season.

And I worked in my dad's store in the off season. Major in economics, really wanted to go to Wall Street. I just was fascinated by it. But I so loved the coaching. It took the impact I had on others. I feel that way in the business world too. The thing that drives me is the impact you have on other people. So I decided that if I could get, when I was graduating, if I could get a head high school job, I'd try to pursue a career in coaching. If not, you know, I was only 22, but I coached three years. What the hell? We're going to give it a shot. And if not, I'm going to try to go to Wall Street. So at 22, I became the youngest head football coach history state of Delaware.

Very proud, very proud of my career. Now jump ahead. It's 1981. I'm the defensive coordinator at Dartmouth. And that same girl that I married when I was a kid, we now have four kids. The sheriff from town interrupted a staff meeting. And he said, coach, I'm sorry. You handed me divorce papers.

I couldn't afford to, I couldn't afford to live on my own and take care of my family. So I got permission to move into a storage room above the football office. Now the problem with the storage room, I didn't mind that so much, but I had no heat. This is New Hampshire. Dartmouth is in New Hampshire. It's like zero degrees all the time. I could see my breath during the wintertime. And my goal was ultimately to be, you know be the head coach of a major, major school.

Well, January 1984, Orange Bowl, Miami upsets Nebraska for the national championship. Bottom line is, they offered me a job to go down there as a secondary coach, and then ultimately take over as a defensive coordinator. I cannot find a better job in my career path in the world. Who offered you

the job? Miami. Got it. Okay. They were the team, they had their school in the 80s, without question in the world. Who offered you the job? Miami. Got it. Okay. They were the team. They had their school in the 80s, without question, in our country. And so, but people, a football coach works seven days a week for five months, eight hours a week.

Your entire career is dependent upon what you're doing on Saturday. You don't get a day off. So that's the career path. So back then, we didn't make a lot of money. And I got my, I'm going to live in Carl Gables, Florida, but my children are still going to live

in New Hampshire with their mom. So I can't afford to fly back and forth. So toughest criticism I've ever made in my life. I turned down the job because I didn't think I could look, I didn't think I could do my job as a coach if I couldn't live up to my responsibilities as a father. So what else was it that I really entered? Wall street. That Miami football job would not have been a cakewalk in the eighties

because that place was pandemonium. It was pandemonium, but every one of those guys got major college jobs or professional jobs. Yes. But I agree with what you said, Catholics versus the Commies. You had all those things kind of going on there. Yeah, yeah, yeah. So then I was fortunate enough that Maryland gave me an opportunity

in our institutional NBA training program. There were 26 of us, 25 MBAs, one football coach. How old are you at this point? 35. Okay. I said, this football guy is never going to make it here. But a few years later, the MBAs were working for me, loved my career in Maryland for 17 years.

Then I go to Ameritrade. Now, in Ameritrade, I stepped down there in 2008. That's after the financial crisis. Our previous five years, we had a 500% return to our investors. We got it right during the crisis. And we outper, we had a 500% return to our investors. We got it right during the crisis. And we outperformed every financial firm publicly traded in the globe, in the globe. So when I stepped down and became chairman in 2009,

I had never been more in demand in my life. And I got a call from a group of alumni at Yale telling me at the end of that season, there was a chance the football job would be open. Would you be interested? And Josh, I remember like looking at looking at the phone, I said, guys, I've not coached for 20 years. So we know that, but we spent time looking at the skill sets

that Kyle's coach is supposed to have, and we really think you've got those. In fact, we think you've got competitive advantage over other guys. There's only one problem. What's that? They bring out the problem at the end. I said, in 135 years of Kyle football, this has never, ever happened before. So it's going to take a special presence, special opportunity to be able to make this happen. But think about it.

I did. I really spent time on this. And six months later, I began at Nebraska. I was at Nebraska for two years. Then the Oman, I coached the UFL, beating out Jimmy Fossil, Denny Green, Marty Schottenheimer. And then in 2012, I was recruited for the Coastal Carolina chapter. Oh, so you didn't have a connection with Coastal Carolina. They recruited you based on knowing that you didn't have a connection with Coastal Carolina. They recruited you based

on knowing that you were available as a coach. Correct. The president, the president was recruiting me, Dave DeCenzo. He was following, they had done some features of Sports Illustrated and some features on television and he had followed my career and he was the one that reached out. In fact, when he reached out, he said, it's not going to be easy for a typical college president to hire somebody like you because we don't think that way. But someone will. Before somebody does, I want to be the guy to hire you. They took a big risk because, like,

if they hire you and the first season is a disaster, everyone could very easily look at that decision and say, what were you thinking? Obviously, it didn't turn out that way. And then everyone in hindsight says, yeah, of course he's a great coach. We knew he would be. But I mean, we do that all the time. It's hard.

Actually, in the very beginning, and this is the South. We love football in the South. So you've got an Italian-Irish guy coming from the North into the South, a brand new job. They like the previous coach, but he wasn't doing well enough. And they bring me in, and people don't even do their homework. I'd already been back coaching three years, and I coached for 16 years to begin with.

So I coached for 19 years, and they said, in fact, the president actually got death threats. And then there was blogs all over the place. And one of the blogs said that our president should be fired because he let go of coach. That was an icon. That's a question mark. But, and they hired this wall street reject who couldn't find a job. Reject who ran TD Ameritrade.

Where is coastal Carolina? It's in Conway, South Carolina, which is on a Conway Myrtle beach border. About 25 minutes from the ocean. You see Duncan nodding his head. Duncan's from North Carolina. He's an insider on the Carolina scene.

So to put it in perspective, Duncan, like we were ranked well ahead of every one of the schools in North Carolina. We finished country rank 14th. That's ahead of Nebraska, ahead of Michigan, ahead of LSU, ahead of anybody in North Carolina. That's great. All right. So what is that like now?

So now you walk into this situation. You had success. These kids must look at you like, yeah, thanks for teaching me football. Get me a job, though. Teach me to be like you when I really grow up. What is that vibe like? Do you love it? I do love it.

And again, that's a big reason why. That's also what drives me in the business world as well, that impact on others. But what really teach the kids, most people take a job because the parents, they're something else, some other reason. One of the most important decisions you make in your life is your career path.

So how do you go about that? And we help the kids try to make that decision. So what are the skill sets that are required to be successful in a particular field you think you're interested in? Do you have those skill sets? If you don't, do not go down that path, period. If you do, you still got to ask yourself another question. Would I be passionate about this? If you both have the skill sets and the passion, you got a competitive advantage right away from the beginning.

And that's how you decide what career path. In fact, I'm a huge advocate of, then it's well after that, you should pick your major, like going into your junior year. They say, oh, we pick a major, we're going to be in that. No, no, it's the other way around. The intelligentsia of academia doesn't necessarily agree with me on that one, but I think I got that one right. Okay. And then when these kids finish with football or football finishes with them, depending on how it goes, what are you telling them in 2021 that's different from what you were telling young men in the 1980s who were facing their future? Because a lot obviously has, you know, it's decades and a lot has changed. Okay. So I am passionate about this point.

Everybody assumes that now things have changed, right? The technology, the internet, passionate about this point. Everybody assumes that. Now, things have changed, right? The technology, the internet, everybody's wired today. We got a million things kind of going on. The access to information is incredible. The world has changed. But when I was growing up, when my children were growing up, the kids I coached the first time around in the 80s, 70s, and the kids I coach today,

the stuff that you care about inside peer pressure, tension maybe with your parents, how things are going with your girlfriend or boyfriend, all of those things. How am I doing in my school? All those things, that's the same pressure that has existed since I was a kid. Yeah. So when you really understand that, that's what you're appealing to in the individual. You're not necessarily appealing to what hip hop he likes.

Although if they ask me, who's my, who's my favorite rapper? I'm going to say, I'm going to go ludicrous. No, really. That's so cool,

coach. I don't know who ludicrous is, but I can say that. Yeah. That's the kid's dad's favorite rapper. That's my, that's my favorite rapper. Yeah.

I get it. So the things that these kids face, the technology changes, maybe the speed of all this stuff. But in the end, a teenage boy, a teenage girl, it's the same pressures. It's the same desires and wants and needs. It's just sped up maybe in the modern era. I don't know. I feel like it's harder. maybe in the modern era. I don't know. I feel like it's harder. My daughter's 15. I'm scared for her generation because like Joe, they can't put the phone down for 30 seconds. If they do, they feel like their whole social life ran past them. Like I'm missing all this stuff. Everyone's talking about. I'm like, can we watch a movie? I'll give you the, I'll give you the phone back in 90 minutes. Nothing's going to change. I don't know really what to do about that. And I know everyone, my generation on up is worried about that. I don't know. You have a take? Well, yeah, I think bottom line is I think there's got to be

standards. And I think parents in a family should have a standard with regards to interaction with the rest of the family when your son or daughter is home. So, for example, during meals, we're not doing this. And then there's going to be a period of – there's family time. Family time, the phone goes away. That's it. I mean, our players are always on the phone. But, you know, we're getting ready for a game.

The phone goes away. That's it. They don't have their phone with them at practice. They don't have their phone with them at meetings. And if I walk – if I'm going into our field house and one of my guys is walking past me and he's on the phone and he doesn't say hello to me, I got 120 guys in a team. 120 guys going to run that afternoon because he didn't realize. They said, hey, coach, how you doing?

So there are ways to be able to get that across. But I think at home, I think you've got to have some guidelines along those lines. And ultimately, in the beginning, they fight that. We're trying to hold the line. The thing that happened during the pandemic is they needed the phone to actually function as students. So that was tricky. So you said, give me the phone. Well, my teacher is emailing us the next assignment.

So I don't even know how to win that one. Your teacher is emailing you the next assignment 24 hours a day. This is some teacher. You're more involved with school now than you've ever been involved with your life. It's the greatest teacher ever. Oh, man. Joe, I want to be respectful of your time. I could talk to you for hours.

I just find you to be somebody who has been a leader in our industry for so long and so well-respected. And I love what you're doing for this new market segment, probably that you really never had a chance to address at Merrill and even at TD. Like this is a part of America that's been left out of the financial system for a long time. So I love what you're working on. And I hope you'll come back sometime and tell us how fabulously successful

the whole thing turned out. Does that sound good to you? I would enjoy it. I'd enjoy it. I really like it. All right. And we're going to tell everybody to check out OpFi. Hit the website.

Look at their deck. See what they're working on. And Joe, thanks so much for today. I really appreciate it. Thank you, Josh. Thanks for listening. Check us out at thecompoundnews.com for daily investing and market insights. You can watch all of our videos at youtube.com slash thecompoundrwm. Talk to you next week.