The Prof G Pod with Scott Galloway - Examine Your Burn

Episode Date: May 7, 2020

Josh Brown joins Scott to share his thoughts on PPP and how you should be assessing the stock market. Scott also discusses the difference between tech giants Elon Musk and Jeff Bezos, and why Amazon is positioned for the biggest unlock in recent business history. Today’s Algebra of Happiness: Stop howling in the money storm. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Episode 8, The Last Jedi. Rey, a young woman who shows strong signs of the Force. Her desire to learn the ways of the Jedi Force is looped to make a decision that changes their lives forever. Imagine me as Rey minus the talent, the good looks, and the Force, and BOOM! It's the Prop G Show! Play that funky white music! Oh wait, play that funky music, white boy. Go, go, go. Welcome to the eighth episode of the Prop G Show. In today's episode, we speak to Josh Brown, CEO of Ritholtz Wealth Management. I always learn when I speak to Josh. He's also the voice of CNBC's Halftime Report. I was banned from CNBC.

And there is literally, as I was told by an employee of NBC, a note next to my name in their booking calendar that says, do not book. So I hauled my ass down there every Wednesday for about four years. And then boom, they stopped calling the dog back. Anyways, that's neither here nor there. The guy who hasn't pissed them off, Josh Brown, will be on the show to talk about markets and whether PPP, as I believe, is a giveaway. He does not believe that. We don't mind. We're secure enough in our own whatever you want to call it, our own ideas that we bring

on people to push back on the dog, a little push back, a little choke on the chain. All right. Before this episode gets going, I have one thing to share, and this is very important. Tonight, May 7th, that's tonight at 10 p.m. Eastern Standard Time, the premiere of No Mercy, No Malice on Vice. Tonight, we are discussing the bailouts, which I think are nothing but a hate crime against future generations. And we're also doing an interview with CEO of Salesforce, Mark Benioff. What on earth was he thinking coming on? And we have guest appearances from the Jungle Cat, Kara Swisher.

And then I do an Algebra of Happiness episode. So tune in and please email me and tell me what you think. Only if you liked it, because I'm fragile. I'm fragile. I'm a delicate little flower. All right, enough of that shit. Let's talk about leadership in a time of COVID. And let's use both Rocket Men in a series or an example of compare and contrast. We're talking about Jeff Bezos and Elon Musk. In my view, last week demonstrated the difference between these two individuals. They're both

brilliant, both visionaries. So what happens? What happens? I think a lot of this success has resulted in arrogance and a lack of self-control from first rocket man Elon Musk, as evidenced last week by this errant tweet where he decided to put out that he felt Tesla's stock is overvalued. This is just an asshole move. This does nothing but create disruption and chaos within his company. I mean, he has literally for the second time committed blatant market manipulation, which is, guess what, against the law. It'll be a test of whether the SEC is here, in fact, to protect investors or just to protect management. And if any CEO, as long as they can land two rockets concurrently on two barges, can commit blatant market manipulation,

take the stock down 10%, the market believed him that the stock was overvalued, and Tesla shed the value of Southwest Airlines. Let's contrast that. Let's contrast that with Jeff Bezos, who in a time of crisis has decided to totally re-engage. And what happens when Jeff Bezos re-engages? Watch out. Specifically, the rest of the business world and retail need to hold on because this guy thinks two, three steps ahead of everyone. He's an incredible visionary. But what he has, other than his ventures in amateur photography, of big Edna twins, which I get, which I get, but still, give them a rest. It's not time for their close-up, Jeff. But besides that, distinct to that, this guy has incredible discipline.

He's turned on the jets. And he has, in my opinion, absolutely recognized what I believe will be the biggest unlock. You heard it here, the biggest unlock in recent business history. What do I mean by unlock? That is a decision, a gangster decision that unlocks hundreds of billions of dollars in shareholder value. You heard it here first. You heard it from the dog. You heard it from the dog, the unlock that is the vaccination of Amazon supply chain. Now think about this. If you're a customer, a vendor, a worker, a delivery person, and you think, I'll opt for the near COVID free supply chain, whether it's fear of a virus sticking on a piece of cardboard or a product, whether it's worrying about workers, whether it's buying products that you think are more ethical. By the way,

Amazon got some probably well-deserved heat and recognition that supposedly they're suppressing free speech and any sort of unionization at their plant. So let me just take a quick commercial as I'm French kissing Jeff Bezos to say, fuck you. Let people say what they want. Don't fire people less fortunate than you because they're speaking their minds. But anyways, back to my making out with Mr. Bezos. What if they can on demand figure out a way to test effectively, efficiently for antibodies and for the virus as part of prime membership? Even distinct to that, they are making this enormous investment that I don't think anyone else can probably make.

And they're vertical, right? What I mean by vertical, Walmart doesn't own their distribution. Amazon owns the majority of their distribution. So they're in a position to do something that even Walmart may not be able to do. And then no other retailer has the capital to do. And then no other company has the vision to do.

And that is they are vaccinating their supply chain. This is just staggering. The market took the stock down 7%. What does it mean when Amazon loses 7%? It means it loses the value of Boeing in a trading day. Think about that. Think about the size of a company like that. But I digress. I digress. Like always happens, right? The short-termers get angry. You keep teasing us. You keep giving us shareholder blue balls, Bezos, with your promises of profit. And then you leave with your profits. What he's doing, though, is he's saying, I'm investing for the long term.

And just honey badger, just don't give a shit what investors want. I'm investing in the long term. And boy, investing in the long term is, what's going to happen? The stock is going to rip back. By the end of June, Tesla's stock price is off 10 plus or more percent. Amazon's stock price from where it is today is up 10 plus or more percent. Leadership is about vision and discipline. It's not about arrogance and a lack of self-control. We'll be right back. Support for this show comes from Constant Contact. You know what's not easy?

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Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca. Okay, so here it is. My conversation with Josh Brown, CEO of Ritholtz Wealth Management and voice of CNBC's Halftime Report. I really liked it. I learned from Josh. He just kind of opened my eyes to the notion that markets should rise and fall to their natural level

and that the market declining is bad for my generation that's trying to hold onto their wealth, but maybe isn't the worst thing in the world for younger people trying to accrue wealth. Anyways, I always learn something from Josh. I think he's an exceptional thinker and understands the markets. Here's Josh Brown, CEO of Ritholtz Wealth Management. So Josh, what's going on here?

Are the markets in consensual hallucination about a V snapback? What do you think is going on? It's a great question, Scott. And it's the one that we've gotten most from clients. So I'll tell you how we answer it when people ask us that. They say, how could I be looking at this much destruction all around me in the town where I live, talking to friends all over the country, and see the stock market down 11% or 12%? And we remind them that the stock market and the economy are not meant to match up linearly. And if you go back and look at the last crisis, it's very instructive. From 2007 to 2009, GDP only contracted by 5%, which when you tell people now, they're surprised.

They said, that's it? After all that commotion, yeah, 5% GDP contraction. The stock market, however, fell 57% in that crisis. So by 2008 logic, if we're going to have a 30% contraction in GDP in the second quarter of this year, maybe the stock market needs to be down 100%. And of course, it doesn't work that way. So a lot of variables in play. The big variable this time that I think explains what you call the hallucination, or some people would call it disconnect, is the rapidity with which both fiscal and monetary authorities reacted. It was way, way deeper into the last recession and crisis that we got some kind of a reaction out of Congress. This time, it was literally within days of us all agreeing,

okay, this is really bad. Aren't we taking massive stimulus to prop up the equity markets only at the cost of future returns and future generations? It just seems to me, this strikes me, I understand the idea of stimulus and trying to jumpstart the economy, but this feels as if we are really robbing from future generations. Where do I have this wrong? And why doesn't the stock market test new lows in the next 90 days? Well, here's the answer. First is that you don't have to agree with every aspect of the fiscal or monetary rescue programs to understand the fact that we actually need one. So you're not going to love every single aspect of any financial rescue. But I think it's important to point out, we've been here before.

Even before there was a Federal Reserve, there was somebody coming in to rescue everyone. It just so happens it was a private banker named J. Pierpont Morgan during the crash of 1907. So now it's this mutual corporation owned by 12 banks, sort of answers to the federal government, but not really. And they are the buyer of last resort. And the thing is, they acted really quickly. And the one thing they're doing this time that they didn't necessarily do in 2008 is they are literally trying their best to put money in the hands of people on Main Street. That was not part of the effort 12 years ago, and it should have been, and arguably it led to a lot of the political issues that we have right now. This time, they're not making that mistake. They're lending money to small businesses,

mid-sized businesses. They're working hand in glove with Mnuchin on the enhanced benefits for unemployment insurance. They are being very deliberate about trying to help regular people while they also fund some of the corporate rescues. And I think that that sets this apart from previous Fed actions, and I'm actually happy to see it. If we're going to bail out someone, it should be the most vulnerable people, not the most politically connected people all the time. Aren't you worried or I'm worried that effectively what we've done here is this massive reckless giveaway because the cohort that is the wealthiest in the United States are actually small business owners. And while there's this cartoon of an owner of a cupcake bakery, a single mom who

needs bridging to the other side, which I get, which some of this will end up helping, there's also a lot of small business owners out there that are wealthy, have wealthy investors, and who are applying for enormous PPPs and receiving them almost overnight. We're going to find out that a lot of this, as in, I mean, tens, if not hundreds of billions of dollars, did nothing but flatten the curve for the already wealthy. Well, I guess I don't see it that way because, look, if there's fraud, there's fraud. That's going to happen no matter what. And that's going to be very tough to uncover in the moment when you're in a rush to get money to businesses so they can keep their employees. But businesses keeping their employees is the key part of this. If you're just going to do straight up UBI and give money to people with

the lowest amount in their bank account or who paid the least taxes or however you want to do that, unfortunately, that money will run out when the emergency ends, but those people will not be gainfully employed. That's not going to help them longer term. It's going to help them for a few weeks. Literally, that expanded unemployment benefit that we talked about runs up in July. And then what? So you have to focus on helping people keep their jobs because the only way to justify spending this much money to, quote, save the economy is to have an economy on the other side of this. I don't think any program should be judged until we can say, did this help people keep their employees? Did this help employees keep their

positions at the company they worked for? And then let's deal with that when we can catch our breath. Right now, we have 30,000 people in the hospital where I live, and it seems to be getting better, but at a very slow pace. Kids aren't in school. We really can't dot every I and cross every T. So if a public company accidentally gets in on a small business loan and then says, we'll return it, I don't think we should take an outlier and say the whole thing is bad because Harvard managed to file. I always learn when I mean, and I mean this sincerely, I always learn when I speak to you. Let's agree that net aim here is a good one, and that is to maintain employment.

What I worry about is that a lot of these companies are not going to need those employees in a post-corona world. That there is a serious reshaping and unfortunately destruction in certain large key categories. And all we've done is delay the inevitable and we've taken this fighting force of Wolverines called American small business and turned them into soft zombie companies. I think some will make it through. It'll have the intended consequence it does have. The reason I think America hires faster

than any country in the world is we can fire faster. And I wonder if getting in the way of firing employees that may end up going away anyways, or getting rid of jobs, ultimately does not serve us well. Any thoughts? I would agree with your point. If we were talking about permanent zombification, we're talking about two and a half months worth of payroll protection for small business. Like the world will evolve. And you're right, some small businesses that were thriving in 2019 will not be viable in 2022. But I don't think that sort of revolution is happening in a two-month period.

So again, I do not think that this is the treasury trying to decide winners versus losers or picking favorite. Actually, if you look at the distribution of these main street loans and the payroll protection loans, if you look at industry distribution, these main street loans and the payroll protection loans, if you look at industry distribution, it's all over the place. Construction was the number one beneficiary, 13% of the first round. I'm guessing somewhere near that for round two. So this is not a case where the federal government is saying, okay, these are winners and we're going to support them no matter what. This is literally two months. This is to prevent civil unrest. I agree with your premise, though. But I think what you're saying is more applicable

to the $500 billion corporate rescue fund that's going to be used for things like airlines. The question is, how culpable are these businesses for what they're going through versus a failure of the early warning system that we always assumed the federal government was using to keep these kinds of things away from our shores. People say, oh, the airlines, let them go bankrupt. They deserve it. They did buybacks. On what planet are you suggesting that airlines should keep enough cash in the bank so they could literally have 95% of planes grounded for six months to an indeterminate period. So we have to say, yes, it's not ideal to do corporate bailouts and completely remove

the responsibility of staying alive from boards of directors and executives. That's not what's actually going on here. What's going on here is the federal government failed to act and prevent this from coming here. And the result, rather than spending pennies on masks and early social distancing, we're spending $10 trillion instead on cleaning up something that could have been stopped earlier. Problem is, I think the people who are going to end up paying it back are your kids and our grandkids. But anyways, I want to talk a little bit about stocks and specific sectors because it's just a different world than the last time we spoke. So big tech, if you owned Apple, Amazon, Facebook, and Google, year to date, I think you're up 6%. And aren't the strong just getting stronger here? And other than some specific industries, just take the strongest company with the strongest balance sheet in every sector, except a few that will obviously be really hard hit. And they just begin to pull away from everyone else. Isn't the ecosystem becoming less and less robust?

I would say that that is like one of the most peculiar aspects of the bear market we had this year. There had been this assumption for at least seven years, as long as I can remember, 2013, 2012, that the big tech giants that had been leading the market, when there was finally a bear market, that's where all the pain would be. And it worked out being precisely the opposite. The biggest companies were also the best equipped for this moment in time, not just because of how much cash they have, but because of what they actually do for a living. Like they were literally, these are companies that entertain you from home, allow you to work remotely. You could not dream up a better

conglomerate than Amazon. It's literally like Amazon and Walmart shareholders couldn't have dreamt this up in the wildest imagination, what has gone on here. Well, I love what Jeff did this week. Say more, say more. What did he Well, I love what Jeff did this week. Say more. Say more. What did he do? I know exactly what you're saying. Go ahead. He just came out and said, hi, shareholders. I know you were all expecting about $4 billion or so in quarterly earnings. Sorry, we have to run a business for the long term. And that money is going toward preparedness and healthcare. And we're going to space our employees out. And we're going to invest in testing. And we're building our own lab. And this is what it means to be invested with Jeff. And I came away from the Berkshire Hathaway

thing this weekend very dispirited. I felt like it was just the decline of Buffett and Buffettism. And if Berkshire is on the way out as like the bastion of capitalism as a religion, maybe it's the Bezos letter that we start to enshrine as like that annual check-in with the world's greatest capitalist. So last question, Josh, take your business hat off, coming out of this, or hopefully we're coming out of this. What advice would you have for other people? Are there any kind of one or two learnings you would want to share when you speak to your friends, when you speak to colleagues? What is your learning here? So this is the best piece of advice that I ever got. And I'm going to relay it to your audience. Make yourself useful. What does that mean in practice? Go up to the most successful

person you can find and say, what is the 20% of your job that you hate the most? What is the 10% of your job that's total shit and you wake up hating it and you go to sleep hating it and you just don't want to do it anymore? Let me do it for you. If you do that, you will gain a mentor and you will gain a foothold into a situation where you have become indispensable to somebody. Josh Morgan Brown is an American author, columnist, blogger, commentator on CNBC and CEO of New York-based Ritholtz Wealth Management. Josh, stay well. All right, it's time

for a quick break. We'll catch you in a few for office hours and algebra of happiness. trajectories? And how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Hey, it's Scott Galloway. And on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you? And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts.

Okay, we're back and it's time for Office Hours, the part of the show where I answer your questions. By the way, if you'd like to submit a question, please email a voice recording to officehours at section4.com. Caroline, roll the first question. Howdy, Professor Galloway. You've spoken in length regarding the dismal long-term outlook of the traditional college classroom experience as you foresee many of the top-tier universities pivoting to online higher education, with the best instructors getting headhunted while the rest of the old school professors are set adrift. But many of my professor friends claim that this is impossible because teaching is only a small fraction of their job responsibilities. While bringing in research dollars and earning academic prestige is where professors' real value lies. Where do you see both those careers and those dollars going? Will private research pull future grants and seed funds away from schools?

How long will massive state schools with multi-billion dollar endowments last versus more prestigious schools with smaller bank accounts? What about the non-tech colleges such as pure science and the liberal arts that don't have a big four corporation to fund non-marketable research? And finally, will the tenure model die as research-centric professors have to find employment in the private sector? Thanks for all your stuff. I really enjoy it. Benjamin Selinsky. Wow, a lot there, Ben. So thanks for the thoughtful question. So your colleagues claiming and stating correctly that it's only a small part of their job is correct because research is how you get promoted. Unfortunately, I think that's out of sync with the market, and the market is about to remind universities that they are subject to

market forces. The reason why, quite frankly, my power has grown dramatically at NYU or my currency has grown dramatically because I put a lot of butts in seats paying $7,000 to listen to me rant and rave 12 nights. As a matter of fact, the university gets $100,000 a night when I teach, 170 kids, $7,000, 12 class, 100,000 a night, which is not sustainable. But the really strong professors or really strong teachers, I should say, are gaining currency within the academic institution. And the researchers, unless it's what I call research that impacts industry, are losing. And that is if you're a typical professor that has entered into this kind of bullshit

artificial relevant circle jerk of peer-reviewed research that goes in academic journals, but that submission in that academic journal doesn't make its way into the business world, which 95% of it doesn't. There are way too many of those people at world-class universities that can't teach their way out of a paperback, aren't generating revenues, and their research, quite frankly, is irrelevant and are still feeding at the tit of tenure, which is nothing but debt on young people. So what happens? You will, to your point, have research centers evolve, think tanks that do fantastic work

and hold these people accountable based on what they're good at, and that is research. It is very hard to find someone who's both great at research, a scholar, research that is relevant, and also teach as well. We actually have some of those people at Stern and Aswath Damodaran, at David Yermak, at Jennifer Carpenter. I mean, we have the full package. This is the 1%. It'll disarticulate into research-only think tanks that justify their being with world-class research. What we have now at a lot of universities is people that aren't very good at any of it. So I do see a dramatic shifting. I do think you're going to need class traitors in the form of deans who say, all right, tenured professors, we need you to hold your feet to

the flame like every other person in society and actually pull your weight. Whether that happens the next five years, 10 years, or 20 years, I don't know. But you can see a lot of middling schools, as the destruction begins or the disruption begins in education, absolutely go away. And for the first time, universities are really going to have to focus on cost cutting. And the place they're going to immediately zero in on is tenure. And that is, at every university that has tenure, there are dozens, if not hundreds of people making hundreds of thousands of dollars a year who are not only not adding in value, they're adding negative value as they feel their relevance waning, so they become obstructionist and disruptive. So yes, a disarticulation, research-only think tanks, universities that focus more on teaching, a flexible workforce

that is paid based on the value they add, which will be great for the top 1%, okay for the top 10%, and bad for everybody else who has been dramatically overpaid with the social welfare for the overeducated called tenure. Thanks for your question. Next question, Caroline. Hi, Scott. This is Tom in Boston. So I've been hearing you talk about philanthropy lately and about billionaires, some of their billionaires mega donations and whether those are stemming from altruism or the billionaires are just polishing their own images. And you've been focused on the amounts they give relative to their wealth. What I wonder about are whether these amounts of money are being used effectively. In business, you don't look at putting money into something as a sign of success. You want results. So why aren't we holding ourselves to higher

standards on the impact of some of these mega donations? And that doesn't just go for billionaires, especially for major issues like COVID-19. The stakes are higher and the bar for results should be higher for donors. So billionaire philanthropy is a huge topic of discussion. In sum, I feel that there's no reason not to applaud those efforts. I think they deserve the recognition they get for it. I think it's important that the media make sure that the proportionality of that generosity is registered, what it really means to them to be generous or not generous. I think we should look at making some donations not tax exempt when it's clearly more consumption than it is generosity. And also in general, I think we should be less dependent upon the generosity of

billionaires to put us on Mars or to test us for COVID-19. And we just need to fund our CDC, our World Health Organization, and NASA to the extent that they need to be funded, and have a progressive tax structure where the mother of all welfare queens, Jeff Bezos, actually pays his fair share. So the bottom line is we just need to be less dependent upon photo shoots of billionaires giving away one thousandth of their net worth such that they can spread Chanel lipstick all over their photoshopped images. Thanks for the question. Next question. Hi, Scott. Michael McCluskey from sunny San Diego here. Thanks for taking my office hours question. Scott, off the bat,

just want to say I love this idea of a new Corona Corps. And I think this type of disruption in how we approach education and development for young people is exactly what our country needs right now. I am 33 years old now, work in e-commerce retail for several years, graduated in 09 at the peak of the Great Recession, and only fairly recently finished paying off my undergraduate loans. I share this context to say I'm perhaps reluctant right now to stop working and take on any more school debt. I've also been very fortunate to be able to work through this crisis on Zoom without financial disruption, unlike so many. The past week or so, I've been thinking a lot about this idea of the Corona Core and also developing functional speed. So I am obviously too old to join a Corona Core, but curious to know what advice would you give to someone like me thinking about picking up functional speed?

But I'm also thinking about this time in the post-Corona time as an opportunity to hone new skill sets that are needed in the market. What do you believe will be the most in-demand and needed functional areas and skills required in business over the next five to 10 years? And without going to spend a boatload of money on higher ed, what's your perspective on the best way to go about developing those skills? Thanks again, Scott. I appreciate your honest and sometimes vulnerable take on business and life every week. Michael, that was a really generous question. Thank you for your kind words. It's really generous of people to say nice things to other people.

And I try and pay it forward. I try to, when I recognize nice things in other people or accomplishment, I try to be generous. And what I found is I suffered from this bullshit cartoon of a male that somehow when you were appreciative or express admiration for other men that you were losing something. You were less masculine. So anyways, Michael, thank you for being more self-evolved at 33 than I was. Okay, so at 33, you're right. It's probably not the right time. You're at the point in your life where you should be collecting dogs and kids and trying to set yourself up for

economic security. So to join the Peace Corps, AmeriCorps, the armed services, or do something of that type that's a greatness in the agency of others probably isn't, the timing probably isn't very good. And also sounds like you have some nice professional momentum with e-commerce and retail. What I think, and it sounds like you understand this, I talk a lot recently about variance and this notion of functional speed. And you're in a position right now where with e-commerce retail, where you're able to work from home, I would say that the best opportunity you have is not a side hustle or not even

school, but to go from good to great around e-commerce and really invest and turn the jets on, whether it's employing new skills around how to sell on new platforms, be it Twitch or be the guy that understands Jomar, be the guy that understands how WhatsApp might be monetized, but really understand the new platforms, creating the funnel around e-commerce or being the supply chain or the operations person, which is going to be increasingly important. All of a sudden, what's boring and old is going to be the new black supply chains and operations. So being that guy or gal that really understands to write the consumer, and it sounds like you already have a lot of momentum, but I would say doubling down on what you're doing. And it's

situational. I don't know how good or bad a job you have, but it sounds like you already have a lot of momentum, but I would say doubling down on what you're doing. And it's situational. I don't know how good or bad a job you have, but it sounds like you're in a pretty good seat. If you're in e-commerce retail, you sound like a very thoughtful, impressive young man. So I would say double down. And in this era, what I've been telling people is if you're blessed enough to have good health and a job and a job that recognizes your talent and quite frankly needs you right now, then just turn on the jets. Be just the one up early, goes to sleep late, new ideas, trying to understand how this crisis turns into opportunity. This is really the time to shine. And an X amount of effort over the next three months are going to be worth 5X in non-crisis

times. So I need to know more specifically about your situation. But I would say I hate the whole side hustle thing. My feeling is find a different hustle. If you need a side hustle, then find a different hustle and make it your full-time gig and commit to it. This is an extraordinary opportunity to double down on what sounds like a great seat for you. And again, thanks for your confidence and your generosity and your kind words, Michael.

Algebra of happiness. What is rich? Rich is having passive income that is greater than your burn. Tale of two households. One household is my father's household. My father turns 90 in August and his combined income or his previous combined income as he just went through his fourth divorce at the age of 89, which is really a lot of fun, meaning that I got to get divorced because I had to handle all his bullshit. Anyway, it's fourth time for each of them. Way to go, guys. High character people. But that's neither here nor there. That's neither here nor there. His household pre-divorce, pre-fourth divorce, was they made about $52,000 a year from his pension from the Royal Navy, Social Security, his fourth wife's Social Security, and they spent about $45,000 a year.

My dad throws around nickels like they're manhole covers and constantly would remind me that he's a child of the Depression. They're rich, passive income greater than their burn. And that creates a certain peace and dignity and just relaxation. And I love this notion that they did a study, seven of the 10 happiest nations on earth are socialists. And it's not a function because they have more, because capitalist societies, if you're a winner, you get more. But in general, they cut the tops off the trees. There aren't as many billionaires such that everybody has an absence from fear of things being taken from you. And that is an absence of the fear that you're going to find out you have diabetes and that

you're going to go broke trying to pay for your diabetes treatment, an absence of fear that you're not going to feel the shame that your daughter gets into a great school and you, the parents, can't afford to get her there or to send her there because it's too expensive. That's shame. The deaths of despair have dramatically increased in the United States. That's shame. The amount of the deaths of despair have dramatically increased in the United States. That's opioid overdoses or drug overdoses, suicide, alcoholism. And a lot of it's a function of fear about having things taken from you, specifically your indignity, things like homelessness, things like not living up to the expectations our Instagram world puts on all of us. So there's a dignity in living below your means. And the

definition of rich, passive income greater than your income. Another household, a good friend of mine runs a large division, about 700 people at a bulge bracket investment bank, makes between three and 10 million a year, depending upon the markets that year. He is poor. Between his ex-wife, his alimony, his master of the universe lifestyle, his NetJets card, his house in the Hamptons, he spends all of it. And I know firsthand that there are nights that he lays awake staring at the ceiling wondering what happens when the music stops. Now you say, well, just save money. And that takes a certain, what I call leadership and recognition and discipline in your own lifestyle because the tendency is as you grow older, you believe that your trajectory of making more money each year, which most young people manage to do, is going to maintain

that trajectory. And you have all this temptation around you in terms of your friends living larger, wanting to signal to other people that you're successful and to spend more. I have always raised my spend to my compensation. I've been very immature that way. I always thought that I'm just so fucking awesome, it's going to keep raining money. And I found myself at the age of 40 in the Great Recession with a new kid who had the poor judgment to come rotating out of my girlfriend. And when the Great Recession hit and I was broke, it was incredibly shaming. I wasn't broke, but I had a lot less money than I thought I was going to have. And I felt emasculated and really, really did a number on my self-worth. And then as things have

recovered, I've of course raised my lifestyle to some crazy fucking burn every month between all the accoutrements of me trying to signal to the other sex that they should have sex with me so I can spread my seed to the four corners of the earth and have smarter, faster, and stronger children than by checking that instinctive evolutionary progress box, even though it makes no sense at my age and I'm not out there, if you will, prowling. But still, nonetheless, I have that need, that need to exhibit success through monetary items, which is a flaw. And I am trying, I am trying, and I want you all to think about how do you get off? When you're young, be competitive, make more money.

But how do you stop howling in the money storm? How do you show some grace and some dignity and live below your means and start investing, start investing in things that spin off passive income, buying rental property, buying stocks with dividends, buying fixed income investments, making investments in companies where you will get cash flow. Because as successful and as fortunate as I am, I am still howling in the money storm. And that is every night, well, not maybe every night, but every other night, I have economic stress. I make more money than I ever dreamt possible. Well, that's probably not true. I can dream pretty big, but

that I ever thought was going to happen. But at the same time, I lack that peace and I lack that dignity because I've lacked the discipline to maintain a reasonable burn. And so I want to invite you to do as I say, not as I do, and to be thoughtful about examining your burn. And this is an extraordinary opportunity to examine your burn. And that is go through every line item in your life and either decide to reduce it, eliminate it, or negotiate it. You're going to find that you're able to cut your burn by 5%, 10%, maybe even 20% and start on that path off the wheel, off the hamster wheel. Stop howling in the money storm and find that dignity and that peace around a lower burn and that comfort around knowing that your passive income is greater than your burn.

That is what it means to be rich. Episode eight down. Mark Hamill, take that. Mark Hamill's actually been married for 42 years and he was he played an instrumental part of my life do you know that he played grant goody's role in the pilot of an incredible show called eight is enough remember that show remember that hallmark channel bag of donut show he was also in he had guest appearance in three's company, the Partridge family, the Brady Bunch. So Mark Hamill is who I am.

He is who I am. Anyways, episode eight, In the Can. Catch you next week for another episode of the Prop G Show, produced by Caroline Shea-Grin and Drew Barrows from Sex and Four and the Westwood One Podcast Network.