Do Ivy League Degrees Actually Matter? Plus, When to Rent vs. Buy

Scott Galloway explains why small firms shouldn't chase elite-school résumés, whether renting really beats buying, and how to make decisions before you feel qualified. Want to be featured in a future episode? Send a voice recording to [email protected], or drop your question in the r/ScottGalloway subreddit. Plus, you can now call or text Scott a question at our new Office Hours hotline: ‪(201) 472-3656‬. 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.

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• 1:36Scott Galloway?

  Welcome to Office Hours of Prop G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to officehoursofpropgmedia.com. Again, that's officehoursofpropgmedia.com. Or post your question on the Scott Galloway subreddit, and we just might feature it in our next episode. Question number one.

• 1:58Speaker 05

  Hi, my name is Ty. I live in the Boston area. Longtime listener, first time caller here. Your career advice video actually led me to move to Boston. Four years later, I have a great relationship and a financially rewarding start to my career. So I feel like I owe Prop G a significant debt. Thank you. My question focuses on finding top-tier talent. I currently work at a business and on a team that sources almost exclusively Ivy League talent. I'm the lone exception, but I did have to get an engineering degree and go to grad school to break through. I'm trying to think about how we can build a richer set of perspectives on our strategic planning team, because I've noticed that there are some common ways we look at business challenges and consumers

• 2:41Speaker 05

  as a group of people from only Ivy League backgrounds. I think we're losing sight of what the true consumer may actually be experiencing in some ways, especially as we're trying to target premium price tiers with our business and a younger consumer demographic that can't realistically support that spending. How have you gone about finding top talent outside of Ivy Leagues when there's no brand name to give you a heuristic?

• 3:07Scott Galloway?

  Thanks for the question. So I started a strategy for my second year of business school, and it grew fast, and we needed to hire people fast. And I was very fond of big brand names, specifically branded elite universities, right? I was really excited to hire someone from Stanford or MIT or Harvard or Berkeley, or what have you. And generally speaking, what you find with small firms is that, and this has probably changed a little bit, but the best people at Harvard, MIT, and Stanford are going to work for hedge funds, tech companies that are scaling. They weren't going to work for small companies like mine. And the ones I was able to attract, generally speaking, were the B players from those schools.

• 3:52Scott Galloway?

  And the B player from Harvard is just a B player. And we have a tendency to fetishize these universities and think that everybody there is amazing. The Ivy League generally attracts two cohorts: freakishly remarkable kids and the children of rich people. And disproportionately, increasingly more the latter than the former. The former is used as Vaseline to smear over the lens of income inequality and the fact that we're letting in, you know, that kids from the top 1% income-earning households are 77 times more likely to get into an elite university. This is what you do as a small firm. One, there's a recognition in their studies that the top 10% at any university are pretty similar.

• 4:35Scott Galloway?

  So your job is to find a local university where you have connections and identify the top 10%. The top 10% at CUNY Buffalo are as good as the top 10% at, you know, at an MIT or a Boston College or what have you. Now, having said that, the elite schools, generally speaking, the median is a little bit better. There is a value, there is a selection process where they get to populate their student body with just incredibly impressive kids in addition to the rich kids. And to be fair, most of the rich kids are at a certain level to get into most universities unless you're really, really rich. But your job is to identify the top 10% at a local university as a small firm.

• 5:18Scott Galloway?

  And then the secret weapon in hiring is the following: reference hiring. The first thing I do when someone is good is I sit them down and I offer them a bonus and really incent them and ask them to identify amongst their friends and their classmates a group of really smart-together people. You can identify two or three really solid men and women that you know who are just incredibly smart, incredibly good at what they do. I almost am entirely now reference hiring. And that is, if someone, I was using the example of Ed Elson, who's my co-host on Prop G Markets. A woman named Joanna Coles called me and said, "I have someone you have to hire." And I said, "For what role?" And she said, "It doesn't matter." That's my British accent.

• 6:01Scott Galloway?

  And so I will hire someone on the spot that someone I trust says I must hire. Because I get fooled in interviewing. I think recruiting is a difficult process to try and find the smartest people. I get fooled all the time. So in terms of finding top talent, don't fetishize the Ivy League. Find the, try to find the top 10% at a local college that has some connection to your company or to staying in the region. But more than anything, good people can help you find other good people. Reference hiring. Question number two comes from Reddit. ZestyPOV2 says, "Hey Scott, recently heard a compounders podcast claiming that young people who can't afford a home will actually be better off in the long run

• 6:44Scott Galloway?

  because they're buying stocks instead of paying off a 30-year mortgage. Does this make sense to you? Would love to hear your take on the theory." So just some data. According to Zillow, the median US home sale price has risen 53% over the last six years, while borrowing costs have more than doubled over the same period. More than half of US homes lost value last year, the highest share since 2012. JP Morgan Global Research projects US home prices remaining flat in 2026 with slight improvement in demand likely offsetting any increased supply. Fixed mortgage rates are projected to remain above 6% and the Fed, or if the Fed begins easing, which I don't see, adjustable rate mortgages could fall, but I don't think it's going to happen anyways, based on the latest inflation report. So what's the case against homeownership?

• 7:27Scott Galloway?

  According to a January lending triennial, renting is now cheaper than owning in every large metro area in the US. And again, it's situational, but most US cities, when you do the math, and that is what you could buy the place for versus what it costs to rent, you're better off renting. And essentially, you look at the yield. If something costs $100,000 to buy, or $200,000 is more realistic, that's not even realistic, and it costs $1,000 a month, that's 12,000 into 200, what is that, about a 6% yield? There's a number where if it's above or below, you want to rent versus buy, and I would look at that. Homeownership forces households to concentrate their wealth in a single, illiquid-leveraged asset in one geographic market, leaving them with less capital for diversified financial assets, including equities, which have historically produced higher risk-adjusted returns

• 8:12Scott Galloway?

  in housing over long periods. Now, why might homeownership be worth it over the long time? Paying a mortgage is non-negotiable, and equity accumulates over time. And research from the Journal of Economic Perspectives found that over the long haul, owning has been financially superior to renting for most households. According to the Fed's 2022 Survey of Consumer Finance among households aged 55 to 64, homeowners have significantly higher net worth than non-homeowners in the same age range, a product of decades of forced savings and leverage. So, okay, what to do? I think you look at the ratios of that yield, of the cost of rent to buy in your area. And if it seems, I just think it makes, unless you have a lot of money, I don't think it makes sense to buy right now in New York

• 8:57Scott Galloway?

  or LA or San Francisco. I just think you're better off renting, and that's probably true of most metros. Having said that, if you can get in at what isn't an outrageous multiple or ideally an attractive, I bet the ratio in St. Louis or El Paso is pretty good right now. Or Las Vegas, I think they're struggling right now. Is that true? Anyways, I would buy. And I would err on the side of buying. Why? It's forced savings. One of the keys to building wealth is that money isn't in your hands. And it's almost like forced savings, automatic deposit into ETFs or your company's equity, whatever it might be. And the thing about, once you commit to a home, is that you make that payment. Now, granted, you don't want to be house poor and get over-levered and not be able to enjoy your life because you're making a housing payment.

• 9:42Scott Galloway?

  But a bunch of the ancillary benefits of housing help you accrete wealth. One, it's a forced savings plan. Two, it lends itself towards mating and pairing and marrying. And those things tend to be good for building economic power. So generally speaking, I'm in favor of homeownership. I think the psychic benefits are real. It's more fun to fix up a home you own. But you absolutely want to do the math initially. And if you're struggling to make that mortgage payment, and you're going to put everything you have into it, and you're in a market that's frothy, and it's a yield of 2%,

• 10:23Scott Galloway?

  in other words, it's 50 times the annual rent to buy the place, then I would think about renting for a while. And so I think, one, okay, one, do the math. Find out if it's at a cyclical high or if the yield, if just renting just makes a lot more choice, a lot more sense. But when you get close to it making some sort of financial sense, opt on the side of buying. It's good psychic return, it's forced savings, it builds equity quietly, and it has the ancillary benefit of establishing what I think are good relationships. It ends up that an increase in housing prices is a form of birth control,

• 11:07Scott Galloway?

  that for every 10%, housing prices have gone up, birth rates have gone down 1%. I find it tremendously rewarding to own a home. So there is some psychic benefit there. Anyways, thanks for the question. We'll be right back after a quick break.

• 11:27Scott Galloway?

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• 12:11Scott Galloway?

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• 12:44Scott Galloway?

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• 13:29Scott Galloway?

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• 13:55Scott Galloway?

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• 14:40Scott Galloway?

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• 15:03Scott Galloway?

  Welcome back. Question number three comes from Jamie, who emailed us. "Hey, ProfG, I'm about to start my PhD at Stanford in a STEM field. I love the idea of running a small to mid-sized firm that conducts its own research and builds great products from it. I got into research because I love learning, but there are times when I need to make decisions from highly incomplete information. This worries me a lot, especially when I'm working under the watch of experts. How do you learn to act decisively before you feel fully qualified, especially when surrounded by people who know more than you do?" Well, I think you answered your own question. I don't think you need to. I think you provide your opinion. The wisdom of crowds is staggering. A huge mistake I made at your age was believing that leadership and masculinity was to do a quick assessment of the landscape and then make a decision,

• 15:47Scott Galloway?

  and that the right thing was to talk everyone into my decision as opposed to the right thing being to get to the right conclusion or decision, even if it meant acknowledging I was wrong. So if you're blessed in academia, the whole basis of a peer-reviewed research, which is incredibly powerful, is that a bunch of other smart people start poking holes in it. But I don't think... I think what you want to do is show up with data-driven research and opinions, not be emotional about it, be willing to accept feedback, be willing to say when you're wrong. But if you're surrounded by super smart people, as you will be pursuing a PhD at Stanford, Jesus Christ, you should be giving me advice. I think you take advantage of that peer network. And even if you're thinking about starting a business, roll over to the business school or talk to some alumni and get their advice.

• 16:32Scott Galloway?

  I have totally gone 180 on this. Whereas I used to think leadership was making decisions in absence of information, I now don't make any decision without calling several people and asking their advice. And if you're blessed with the incredible brain power and judgment and research of being... of your colleagues at Stanford pursuing a similar field and access to people from different fields at Stanford, I think the problem isn't knowing when to decide. The problem is deciding too quickly. At some point, you have to provide your view and make a decision. Okay, I get it. But you would be cheating yourself if you didn't take advantage of the environment you're in and your colleagues, and ask them just a lot of questions

• 17:16Scott Galloway?

  and listen, and then make your own decisions. But in terms of decisions around research, obviously, you have to put forward your opinion and then maybe defer to the experts. But gosh, brother, it's good to be you, pursuing your PhD at Stanford. Jesus Christ, well done.

• 17:34Scott Galloway?

  That's all for this episode. If you'd like to submit a question, please email a voice recording to [email protected]. Again, that's [email protected]. Or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit, and we might feature it in an upcoming episode.

• 17:50Scott Galloway?

  This episode was produced by Jennifer Sanchez and Laura Janer. Kami Rique is our social producer. Brad Williams is our editor. And Drew Burrows is our technical director. Thank you for listening to the PropG Pod from PropG Media.