Examine Your Burn

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

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Scott Galloway?

  Episode eight, 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.

• 0:32Scott Galloway?

  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

• 1:17Scott Galloway?

  bring on people to push back on the dog. A little pushback, 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 10:00 PM Eastern Standard Time, the premiere of No Mercy, No Malice on Vice. Tonight, we are discussing, 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, Marc 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

• 1:59Scott Galloway?

  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, the 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.

• 2:40Scott Galloway?

  This does nothing but create disruption and chaos within his company. I mean, he's 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 reengage. And what happens when

• 3:21Scott Galloway?

  Jeff Bezos reengages? 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 him a rest. It's not time for their close up, Jeff. But besides that, distinct to that, this guy's 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?

• 4:02Scott Galloway?

  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's supply chain. Now, think about this. If you're a customer, a vendor, a worker, a delivery person, and you think, you know, 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.

• 4:47Scott Galloway?

  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 that no other retailer has the capital to do, and that no other company has the vision to do, and that is they are vaccinating their supply chain. I mean, this is just staggering.

• 5:30Scott Galloway?

  And 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, 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.

• 6:15Scott Galloway?

  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 the show comes from Built. Most of us work hard to earn our keep, but usually there's no one around to hand you a cookie when you successfully pay your monthly housing bill. No one except Built, that is. Built has expanded from their original rental rewards program, and they have a lot more going on for members now. For example, members can earn points on mortgage payments, too. Every housing payment gets you points that get you a lot more than baked goods, such as flights with top travel partners, including United and Hyatt, Lyft rides, Amazon.com purchases, and much, much more. Here's another benefit of Built membership.

• 6:58Scott Galloway?

  You also get access to what they call a neighborhood concierge. You can make restaurant reservations, book fitness classes, and find new local spots, all while rewarding you at more than 45,000 merchant partners. It's simple. Being a renter and now owning a home feels a lot better with Built. You can download the Built app and join the membership for where you live at joinbuilt.com/profg. That's J-O-I-N-B-I-L-T.com/profg. Use our link so they know we sent you.

• 7:36Scott Galloway?

  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, 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 on to 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 is 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?

• 8:14Josh Brown?

  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 say, "That's it?" After all that commotion, 5%, yeah, 5% GDP contraction. The stock market, however, fell 57% in that crisis.

• 8:56Josh Brown?

  So by 2008 logic, if we're going to have a 30% contraction in GDP in the second quarter 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."

• 9:36Scott Galloway?

  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?

• 9:59Josh Brown?

  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-

• 10:44Josh Brown?

  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,

• 11:28Josh Brown?

  not the most politically connected people all the time.

• 11:30Scott Galloway?

  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, you know, 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.

• 12:08Josh Brown?

  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. Like, 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?

• 12:52Josh Brown?

  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. Like, 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",

• 13:36Josh Brown?

  like, I don't think we should take an outlier and say, "The whole thing is bad because Harvard managed to file."

• 13:43Scott Galloway?

  I always learn when I, 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 then 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

• 14:28Scott Galloway?

  ultimately does not serve us well. Any thoughts?

• 14:31Josh Brown?

  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, this is, 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, 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.

• 15:14Josh Brown?

  So, it's, 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 it's, 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, uh, let them go bankrupt, they deserve it, they did buybacks."

• 15:55Josh Brown?

  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.

• 16:40Scott Galloway?

  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%. This feels like more of an accelerant than a change agent. 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?

• 17:16Josh Brown?

  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.

• 17:57Scott Galloway?

  It's literally like Amazon and Walmart shareholders couldn't dream this up in the wildest imagination. What has gone on here?

• 18:02Josh Brown?

  I love, I love what Jeff did this week.

• 18:05Scott Galloway?

  Oh, say more, say more. What did he do? I know exactly what you're saying. Go ahead.

• 18:09Josh Brown?

  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, like very dispirited. I felt like it was just like. 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

• 18:50Josh Brown?

  to enshrine as like that annual check in with the world's greatest capitalist.

• 18:55Scott Galloway?

  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?

• 19:11Josh Brown?

  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.

• 19:48Scott Galloway?

  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. Support for the show comes from Upwork. Trying to scale your business? At some point, you're probably going to hit a point where you need some help. Sometimes the best way to break through that is bringing in the right talent at the right time. Upwork can help. Upwork is a one-stop platform where you can find, hire, and pay expert freelancers across more than 125 categories. Whether you need specialized skills for a single project or extra support to keep up with demand, it's easy to connect with experienced professionals, review their work, and find the right fit.

• 20:32Scott Galloway?

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• 21:16Scott Galloway?

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• 22:01Scott Galloway?

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• 22:30Scott Galloway?

  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 [email protected]. Caroline, roll the first question.

• 22:44Speaker 02

  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 the 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

• 23:29Speaker 02

  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 Solinsky.

• 23:41Scott Galloway?

  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 seeds 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 classes, $100,000 a night, which is not sustainable. But the really strong professors or really strong teachers, I should say,

• 24:25Scott Galloway?

  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 into 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 paper bag, 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,

• 25:10Scott Galloway?

  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 Aslach de Mutteren, David Yermack, 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 traders 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."

• 25:54Scott Galloway?

  Whether that happens in 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 any value, they're adding negative value as they feel their relevance waning, so they become obstructionist and disruptive. So yes, 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

• 26:39Scott Galloway?

  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.

• 26:52Speaker 03

  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.

• 27:30Scott Galloway?

  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

• 28:15Scott Galloway?

  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 1,000th of their net worth such that they can spread Chanel lipstick all over their photoshopped images. Thanks for the question. Next question.

• 28:33Speaker 04

  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, worked 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 am 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 Corps and also developing functional speed. So I am obviously too old to join a Corona Corps,

• 29:18Speaker 04

  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 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.

• 29:46Scott Galloway?

  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 expressed 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 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...

• 30:33Scott Galloway?

  Of that type, that's greatness in the agency of others probably isn't, the timing probably isn't very good. And also, it 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, it's 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

• 31:15Scott Galloway?

  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. And 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 if, you 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

• 31:58Scott Galloway?

  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 at non-crisis times. So I don't, 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. And this is an extraordinary opportunity to double down on what sounds like a great seat

• 32:41Scott Galloway?

  for you. And again, thanks to your confidence and your generosity and your, and your kind words, Michael.

• 32:56Scott Galloway?

  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. Anyways, 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,

• 33:39Scott Galloway?

  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 of 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.

• 34:23Scott Galloway?

  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 send her there because it's too expensive. 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,

• 35:06Scott Galloway?

  runs a large division, about 700 people, at a bulge bracket investment bank, makes between $3 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, his net jets 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 trajectory of making more money each year, which most young people manage to do, is gonna, is gonna

• 35:50Scott Galloway?

  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 and it's gonna keep raining money. And I found myself at the age of 40, uh, 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 and it was incredibly shaming. I wasn't broke, but I had a lot less money than I thought I was gonna 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

• 36:33Scott Galloway?

  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.

• 37:18Scott Galloway?

  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 our 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.

• 38:03Scott Galloway?

  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 five, 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.

• 38:35Scott Galloway?

  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 Goodey's role in the pilot of an incredible show called Eat Is Enough? Remember that show? Remember that Hallmark Channel Bag of Donuts show? He was also in, he had guest appearance in Three's Company, The Partridge Family, The Brady Bunch. So Mark Hamill is, is who I am. He is who I am. Anyways, episode eight in the can. Catch you next week for another episode of The Prof G Show, produced by Caroline Shae Grin and Drew Barrows from Section Four and the Westwood One Podcast Network.