Economic Cycles, Investing in Education, and Working Through Grief — with Ray Dalio

Ray Dalio, founder and co-chief investment officer of Bridgewater Associates, joins Scott to discuss his latest book, “Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail.” Ray also shares his thoughts on where political leaders should focus their attention, as well as how he has dealt with profound loss. Scott opens with his thoughts on how universities need to drastically change the way they expand enrollment seats. Algebra of Happiness: embrace your feelings. 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.

• 0:01Scott Galloway?

  Support for the show comes from Northwest Registered Agent. Your business identity is everything that makes your business legitimate and professional. With Northwest Registered Agent, you don't just form a business, you start a complete foundation built for privacy, credibility, and growth. That includes registered agent service, a business address, operating agreement, domain, website, professional email, phone number, and built-in privacy. In other words, your home address, personal email, and phone number stay private. Don't pay hundreds or thousands of dollars for what you can get from Northwest for free. Visit northwestregisteredagent.com/profgfree and start using free resources to build something amazing. Get more with Northwest Registered Agent at northwestregisteredagent.com/profgfree.

• 0:48Speaker 01

  The new LinkedIn Hiring Pro can't undo your last hire, the no-show. Who set you back because they didn't show up on day one, or day two, or ever again? And now your product launch is delayed because you're talking to alien abduction podcasters to track them down. But LinkedIn Hiring Pro can help make sure your next hire sticks. In fact, businesses who use LinkedIn are 24% less likely to reopen a role in the next 12 months. Hire right the first time with LinkedIn Hiring Pro. Post a free job today at LinkedIn.com/quality.

• 1:18Scott Galloway?

  Episode 144. George Lucas was born in 1944. My son Luke loves that I named him after a Star Wars character. My daughter Chewbacca, not so much. Go, go, go!

• 1:39Scott Galloway?

  Welcome to the 144th episode of the Prof G Pod. In today's episode, we speak with Ray Dalio, the founder and co-chief investment officer of Bridgewater Associates. As you know, Ray is one of the original gangsters in the investment or alternative investment space. He's been a global macroeconomic investor for more than 50 years. He's on the pod today to discuss his latest book, Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail, which takes us through how the world experiences big cycles around economics, internal conflict, and external conflict. We also hear his thoughts on education. And I've been following Ray's work for a while. I appreciate that he's putting himself out there. I think it's tempting to just be very rich and anonymous, and he's tried to get involved in public policy. He's very philanthropic around Connecticut schools.

• 2:25Scott Galloway?

  The thing here that we just did in the interview that really kind of shook everybody was him talking about personal loss and specifically the loss of his son. But I came away from this with a lot of affection and/or respect for Ray. Anyways, okay, what's happening? The University of California, Berkeley, has been making a lot of headlines for the past several weeks in regards to enrollment seats, the Supreme Court, and some very angry Berkeley residents. So let's rewind. There's been some ongoing litigation between Cal, UC Berkeley, and California. The Bears, go Bears.

• 3:09Scott Galloway?

  They're most distinguished, or at least in the top million distinguished alum, yours truly, the hot school of business. But Cal wants to expand enrollment by a few thousand seats. Makes sense, as they should. And the residents behind the organization, Save Berkeley's Neighborhoods, on the other hand, do not want the university to increase its student body in the town of Berkeley. The Save Berkeley's Neighborhoods sued the university a few years ago, stating that increasing the number of students at the school violated the California Environmental Quality Act, also known as CEQA. KICA? Anyways, hopefully it'll fail, as it has a shitty acronym. Anyway, CEQA essentially means that public agencies need to prove that new developments

• 3:53Scott Galloway?

  in the state won't cause significant harm to the environment. The complaints coming from Save Berkeley's Neighborhoods largely claim that the university has done nothing to plan for its growing student body, which is, in my view, just Latin for these folks don't want loud college students crowding their streets, or they have very nice, expensive homes, and they would rather the university not infringe on their quality of life, which, by the way, a big part of the quality of their life, as is evidenced by the fact that university towns almost always turn into really nice towns where the people who buy homes Enjoy greater appreciation on those assets than other real estate, i.e. the university. By the way, nobody, nobody moved into a house at Berkeley before it was a college town. You kind of knew what you were getting into. I remember these graduate

• 4:38Scott Galloway?

  students, when I lived in a fraternity in college, would consistently come over and ask us to turn the music down. I'd be like, "Boss, did you have a hint when you moved into this big building with Greek letters on the front that it might be kind of loud around here? I mean, did you, what was your first hint that we might not be great neighbors?" Anyway, despite how ridiculous this all sounds, just this past week, the courts upheld their decision that the university did in fact violate CEQA when it increased enrollment by 34% between 2005 and 2020. By the way, increasing enrollment 34% over 15 years, I think is increasing enrollment about 2% a year. It's not as if Berkeley's saying,

• 5:18Scott Galloway?

  "Oh, we need to dramatically increase our roles." So essentially UC Berkeley must cap its enrollment at 2021 levels, which is around 42,000 seats. In response to this ruling, which took administrators and university leadership, kind of caught them flat-footed, the university initially said it would need to eliminate or check back on additional freshman seats. It has since backtrack on that statement, so there's some confusion here. So instead, it's requiring roughly 1,100 undergrad students to attend the fall 22 semesters entirely online with the option to attend in person during the spring 23 semester. Another 650 or so undergrads will begin their school year in the spring instead

• 6:00Scott Galloway?

  of the fall. So what's our view on this? For starters, I believe that this fight between older neighborhood residents and the university is another example of what happens or has been happening across America for the last 30 years, and that's everything we do, everything we do, is simply trying to affect one major transfer, and that is the transfer of wealth from the young, who in this case are students getting in, getting a fantastic on-ramp to a better life, to the old, who are homeowners, who want a limited supply and are only focused on their needs. We have a terrible complexion in our economy, mostly fueled by the baby boomers who have weaponized government to embrace a scarcity economy.

• 6:45Scott Galloway?

  Fewer degrees. My degree will become worth more if we limit the number of degrees. My stock will be worth more if we limit the amount of competition for Google and Amazon. And, and if we limit the amount of housing, while it may get more expensive for a first time home buyer, while it may raise costs across the board for everybody, my house will become worth more. We have embraced this bullshit luxury rejectionist culture and the scarcity culture that is attacking the prosperity of people who don't already have assets. Growth, change, and churn benefit the young, while ossification, pulling up the bridge behind us and enforcing scarcity benefits the old and the already wealthy.

• 7:29Scott Galloway?

  Where did we see this to the tune of $7 trillion? The COVID-19 relief packages. What did we do? We ensured that people who are already rich stayed rich. Well, guess what? Unless you let the gale forces of change howl, you never give opportunity to young people. The reason I'm here and financially secure was because we let stocks crash in 2009 and I got to buy Amazon and Apple at about 1/20 of the price they are now. But we didn't want to let that happen, right? We didn't want really rich people to just get rich, or just decline to rich, and then give young people opportunity. We wanted to make sure that the existing wealthy who have weaponized government, who give the majority of money, who have the majority

• 8:10Scott Galloway?

  of assets, who everyone is pulling out all stops and, and rubbing the back of specifically an older white voter in Iowa or Maine that kind of dictate who's going to be our next president. So everybody starts talking about what we can do to maintain the wealth and prosperity of older people. When you bail out a restaurant owned by a baby boomer, all you're doing is taking opportunity from the younger graduate of the Brooklyn Culinary Academy who would like to buy their own restaurants in the midst of a downturn, from that baby boomer who granted is struggling, but that's the point of capitalism. That's the point. There needs to be churn. There needs to be opportunity. And what happens when there's not opportunity? Younger people get angry. They create their own asset classes.

• 8:53Scott Galloway?

  They create their own volatility. And we have a breakdown in the central compact in our society. And that is that we will afford young people the same opportunities or more than we had. For the first time in our nation's history, a 30-year-old man or woman is not doing as well as his or her parents were at the age of 30. Why? Because we've implemented a scarcity mindset. That directly transfers wealth from the young to the old. And this is another example of that. Sure, you'd like your leafy Cedar Ranch-style house in the Berkeley Hills to be one of a kind, and you don't want noise, and you don't want more traffic. Good for fucking you. Guess what? You're in the Berkeley Hills. Berkeley. And we absolutely need more graduates.

• 9:38Scott Galloway?

  If we had this incredible pharmaceutical that reduced the likelihood you would have high blood pressure, increased your lifespan, doubled your income, made you more likely to get married, and less likely to get divorced. Wouldn't we want to give that drug to more people? We have that drug. It's called the University of California. We have eminent domain where we decide that this train, this infrastructure, this bridge, this dam would be so beneficial to the Commonwealth that we are going to show up, bang on doors, and say, hey, guess what? Your house is worth $100,000. The government now owns your house. We'll pay you a fair price for it, but you're getting the hell out of Dodge because we think that the cost to you are much less than the overall benefit to society.

• 10:22Scott Galloway?

  There has never been an example of where eminent domain would be more justified than our great public universities. How do we level up a younger generation? More vocational schools, greater investment in K through 12, opportunities especially for younger men who are failing, but also investing in these incredible assets called our great public universities. We have the best in the world. America is great at a number of things. We're great at making weapons. We make great software. We make great movies with men in tights and capes. And we're also fantastic at elite universities. And some of our best elite universities are a function of the government. Now, to be fair, universities, their leadership, need to be more creative about coming up with new ways to scale the university.

• 11:06Scott Galloway?

  I spoke to the president of Wesleyan today, incredibly impressive guy. A guy named Michael Roth wants to do the right thing, wants to expand his university, wants to lower costs, but we need to think out of the box. Why do we always cram everything through the traditional four-year bachelor's degree? Why wouldn't we have two-year vocational programs? What if MIT offered a 19-month specialty in cybersecurity? 60 grand. And by the way, transfer the costs onto the corporation. You don't think corporations would pay that for first dibs on that person? Why wouldn't we have a GI program? Why wouldn't we transfer the cost of education? Two, corporations. Student debt at an all-time high. Corporate profits at an all-time high.

• 11:47Scott Galloway?

  Seems like we should be transferring the cost of education from students to corporations, especially low-income and middle-income students. We need to be more thoughtful about how we leverage these assets. There's 20 weeks a year where no one's on campus, specifically the summer and during the breaks. Do what Dartmouth is doing. Start the semester, stagger the semesters, and ask students to show up during the summer. Think about remote. Think about digital. I'm not talking about all or nothing. Everybody calls me and says, "How do we take, how do we offer a BA digitally or remotely?" Now, that's not the question. The question is, how do you increase your student population by 30% to 50%? By taking a third or half of your classes or lectures online. Students scale the social and the leadership really well on their own, off-campus.

• 12:30Scott Galloway?

  The bullshit notion, the primary objections that schools put up when they say they don't want to expand their student body or have their, even their freshman seats expand at nearly the rate of their endowment, much less population, is, "It would be bad for our brand." Well, guess what? When UCLA was letting in the children of single immigrant mothers who lived and died secretaries, and acceptance rate was 76%, it wasn't exactly a Joey Bagadonuts brand. It was good enough to get me into Morgan Stanley and the graduate school at Berkeley. So, this notion that somehow they're going to lose their brand equity if they don't reject 90% of the applicants, again, is see-above bullshit. And two, two, they talk about that their space constraint. Well, get more thoughtful about how you utilize space and also maybe think about opening satellite campuses in areas that are, that are less space constrained. You want to do something for America, Stanford?

• 13:14Scott Galloway?

  You want to invest in the Commonwealth, MIT? Open campuses in Mississippi. Think about the change you could bring about for today's youth and tomorrow's America if you opened a tech campus in the deep south. You would get faculty there. You'd get huge donations. I think governments would rally behind you. But no, we want to, we want to hang out near the water and think big thoughts and pretend that we're all fucking woke as we become the cultural elite, create resentment in our society, which will always be self-corrected by one of three mechanisms: war, famine, or revolution. Well, guess what? We had the famine, we had pestilence, we have different forms of mini-revolution, and it looks like, it looks like we might be on the precipice of war. Well done! Well done! I am really on my soapbox right now.

• 13:58Scott Galloway?

  Higher ed has morphed from being the greatest upward lubricant of unremarkable kids to being an enforcer of the caste system, and it's all at the hands again. Of this reductive, shortsighted bullshit rejectionist culture. America's not a fucking Chanel bag. America's about opportunity. Let's start thinking about how we take some of the incredible riches that we, my generation, have been afforded, and sprinkle a little of it back in the form of opportunity and much broader, much broader opportunities to great higher education. Schools need to expand their offerings. They need to expand their seats. And these bullshit local community boards. By the way, the head of this Housing Board Association spends half his year in New Zealand. Well, boss, a few of those kids would like to someday be able to afford

• 14:42Scott Galloway?

  their post-apocalypse compound in New Zealand as well. We need to absolutely enforce some sort of eminent domain as it comes to our great public institutions. There are so many things that need to be done, but the most obvious one, the most obvious one, is a massive investment, massive embrace of our great public institutions.

• 15:04Scott Galloway?

  Stay with us. We'll be right back for our conversation with Ray Dalio.

• 15:09Scott Galloway?

  Support for the show comes from Superhuman. The pace of modern work can be relentless. You're getting a constant influx of messages from a ton of different apps. You haven't closed all your browser tabs in a year. Everything seems urgent, and staying on top of it all feels like an impossible task. Superhuman Go is an AI chat that's always there when you need it, already aware of what you're doing and doesn't ask you to start from zero. Superhuman Go, from the makers of Grammarly, help you be the best version of yourself at work. It handles the repetitive stuff so you can focus on the work that only you can do. Whether you need to summarize an endless email thread or prep for a meeting that's happening in five minutes, Superhuman Go works inside the tools and sites you already use, your browser, inbox, docs, and your project tools. And its AI chat is available on the side of your browser,

• 15:54Scott Galloway?

  and it's always ready. No new tabs, no switching apps, no losing your place. This is AI that works with you, not on top of you, so that you have the time and brain space to solve the problems that matter. Check it out. Find out more at superhuman.com.

• 16:12Scott Galloway?

  Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. Their Agentic Trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?

• 16:57Scott Galloway?

  Over 16,000 fast-growing companies like Ramp, Ryder, and Harvey save time and resources while scaling fast with Vanta. Learn more at vanta.com/profg and get $1,000 off. That's spelled V-A-N-T-A dot com slash prof G for $1,000 off.

• 17:29Scott Galloway?

  Welcome back. Here's our conversation with Ray Dalio, the founder and co-chief investment officer of Bridgewater Associates.

• 17:37Scott Galloway?

  Ray, where does this podcast find you?

• 17:39Speaker 02

  I'm in my house in Greenwich, Connecticut.

• 17:42Scott Galloway?

  Greenwich. All right, well, let's bust right into it. So in your book, Principles for Dealing with the Changing World Order, you argue that we can prepare for the future by studying the past. And you talk about that the world experiences these big cycles. Where are we in this, one of these cycles, if you will? And you also talk about three major underpinnings. Can you outline those three for us?

• 18:06Speaker 02

  Yeah, studying history. What I learned was that many of the times that I was surprised by events, it's because they didn't happen in my lifetime, but they happened many times before that. And so that I needed to study history in order to deal with what's going on. And there were three things that are going on now that didn't happen in any of our lifetimes, but happened many times before, that I needed to study. And those were the amount of debt creation and debt monetization. In other words, the printing of money by central banks to buy that debt. The second is the amount of internal conflict, particularly

• 18:48Speaker 02

  by populace of the left and populace of the right. That amount of conflict, together with the size of the wealth gaps, size of the opportunity gaps, measured by statistics that you'd have to go back to between 1900 and the 1930s to see that. And the third is the rise of a great power to challenging an existing great power. Particularly now, of course, there's China rising to be a comparable power of the, as the United States, and to challenge the existing world order. And so these three things, together happening together, never happened in my lifetime before, and also individually. So I needed to see

• 19:31Speaker 02

  cycles. And particularly, I wondered, you know, what caused the rises and declines of reserve currencies? And then the empire. So I needed to go back 500 years. That sounds like a long time. It's not really. The cycles go on for, you know, something like 125 years kind of thing. And so that's what led me to look at those three things, which I think are three of the five biggest things that are now happening that will change the world order in ways that will have effects on us all.

• 20:07Scott Galloway?

  So what cycle is this cycle rhyming most like? If you were to, if we were to try and look for a benchmark period in American history or other economic history, which, what would be the right analogy?

• 20:18Speaker 02

  Well, it's, it's, it's actually, it's interesting. It's the same pattern as almost all of them. And I also studied the dynasties in China since the Tang Dynasty, which was 600. And there's a cycle and the way that the cycle works is, you know, it's, it's a battle over wealth and power. The United States, there are different kinds of power. Military power, economic power, power of one's reserve currency, all of those things. And they're measured there. I put those power to create a power index. The United States is still marginally the most powerful country. China has become in many ways very close to that and has increased its power at a faster

• 21:03Speaker 02

  pace and is increasing its power at a faster pace. And so if we look where even we are in, in that cycle, it's, there's a competition there's that we could see that could be a war. If we look at where we are in the financial cycle, we're late in that financial cycle. A lot of debt and traditionally the coffers are bare. And so when there's not, the government doesn't have enough money, it prints money. Or in the case of when there were gold coins, they put less gold in the coins and they try to print it and then that brings about the inflation. Usually have the inflation problems or the, the financial cycle before you have the big war cycle.

• 21:46Speaker 02

  And then of course, there's the internal conflict and the internal conflicts mostly about wealth and values, wealth differences and values differences. And so that's a particular side. So we're late in the cycle. And I don't mean to say that the cycle is predestined, but you can look at measures of health such as are you financially healthy? Are you working well together in a harmonious and productive way? And are you internationally comparable or strong power?

• 22:21Scott Galloway?

  You say we're late in the cycle. What resets the cycle? War, or a failure, a crash in the currency, or a resetting of geopolitical power? What resets the cycle if we're late in it?

• 22:31Speaker 02

  Well, traditionally, these three things don't line up. So you don't have enough real money, hard money, and you have a lot of debt. So you print money, but you have the financial. When you have the financial problems, at the same time as you have the internal conflict, you either have a civil war or you have an external war. Traditionally, the civil wars come from the economic... Like, the Great Depression causes around the world, the Great Depression, debt crisis, ended up printing money, and it then leads to, around the world,

• 23:16Speaker 02

  populism of the left and the right. So that was communism and fascism, and that led to war. And then, because of the internal conflict over those things, you then have the internal war. So four democracies in the 30s chose to be autocracies to try to get control of this. And then you have the external war. So normally, that's the pattern. That's... I'm not saying it has to be that way. There are some exceptions, but basically, that's what changes the order. Because the order is determined by the rulers, and so, and those who are powerful rule.

• 23:56Scott Galloway?

  So it's always dangerous to know a little bit about macroeconomics. I was a graduate student instructor in micro-macroeconomics, so I understand the terms, but I can't wrap my head around the following. Tell me, when have we seen this before? We have US debt at an all-time high, interest rates are at an all-time low, and inflation is at a four-year high. I can't think of another... That, just based on my pedestrian understanding of macroeconomics, does not make any sense and is not sustainable.

• 24:25Speaker 02

  We... The period that is the most recent period that's most analogous is the 70s. But it's not, it didn't have the internal conflict of the same amount. There was quite a bit, but not the same amount. And it didn't have the external power of issue that we're talking about. But the period that we're most like is the 1930s.

• 24:49Scott Galloway?

  Hmm.

• 24:50Speaker 02

  Um, so.

• 24:51Scott Galloway?

  The beginning or the end of the 30s?

• 24:53Speaker 02

  A 1930 to 45 period.

• 24:55Scott Galloway?

  All right.

• 24:56Speaker 02

  Um, in other words, the 1930, 40, so you had a bubble with large wealth gaps and internal conflicts and you had the debt problem. So in March 5th, 1933, Roosevelt gets on the radio and announces that money as we know it will cease to exist. It was gold and that gold will be outlawed and that they will then print money. And that was the exact, uh, then bottom in, in the markets. It didn't, uh, resolve the, the depression issue, but that was the exact bottom in the markets.

• 25:39Speaker 02

  And then you had the, the sequence of that set of economic problems all around the world causing problems. Japan, because of the depression, um, used to export a lot. They couldn't export a lot. They needed, uh, resources. They go into, uh, China, into Manchuria and so on. Uh, so that period, um, was also very analogous. By the way, the, what, what Roosevelt did on March 5th, 1933 was the exact same thing that, uh, Richard Nixon did on August 15th, 1971. I was clerking on the floor of the stock exchange and I, on Sunday night, I listened

• 26:20Speaker 02

  to him, um, get on the television, it was then television, and he did the exact same thing. He, um, but he severed the relationship with gold because they were running out of gold because people, there was too much money and they were turning it in. So he told the, that no longer would we stick to the promise of paying with gold and we will create the devaluation essentially of the dollar. And that ushered into the 1970s. That exact same, um, thing happened on, um, on, I think it was April 7th.

• 26:54Speaker 02

  2020, we had the financial crisis and very promptly the federal government came out and said that we're going to send out all of those checks. And what the Federal Reserve did was to say that we're going to provide the money. Because where is the government going to get the money from that it's going to send the checks? The only way they can get the money is if they tax people, but if they tax people, it takes away from some and they'd want to, they want to tax people. So what they did was the Federal Reserve buys the debt of the government and by printing the money buys the debt of the government.

• 27:35Speaker 02

  And so low and behold, we're in this era of the inflation because it seems like it's surprising to people. Everybody's happy, they get a bunch of checks and nobody wonders where the checks came from. So that financial component has happened repeatedly over and over through time.

• 27:53Scott Galloway?

  So you're in the business of looking at macroeconomic factors, doing some scenario planning and then trying to figure out an investment strategy that fits best to a variety of different scenarios, given that nobody knows the future, nobody has a crystal ball. When you look at economic history and where you believe we're in a cycle right now, what predictions or likelihoods are you comfortable putting forward around the markets, interest rates and simply put, how people create and protect their wealth?

• 28:24Speaker 02

  Well, I think there's just also some obvious things like what return are you getting on cash and bonds relative to your buying power? So I would convey a message. Most investors think that cash is a safe investment.

• 28:45Speaker 02

  Cash is trash. I mean, what it means, what I mean by that is, last year, you earned nothing on your cash, and there's a 7% inflation rate. Then there's, probably next year, we'll have a 5% inflation rate. And so, the first thing I would say to all investors is to, don't think in the number of dollars you're getting, think in the buying power that you're getting, because what you're trying to store is buying power. The second thing is diversify well. I'm so with you, and I think you said it so well. What we don't know is greater than what we do know. And so, you can diversify without reducing returns, because diversification reduces risk,

• 29:30Speaker 02

  and if you diversify among good things, good investments, you don't reduce your returns. And so, that type of diversification includes not just asset classes, but countries and currencies, and other things. So, those would be the two things. Look at your returns in real return space, and be aware of cash and debt, be very wary of that, and diversify your portfolio into other things, because that will probably be better.

• 30:02Scott Galloway?

  And when you think about, when you look at different asset classes and different geographies, what are, do you think there's asymmetric upside, or some sort of dislocation around?

• 30:12Speaker 02

  All asset classes, every investment has a time, and has a bad time and a good time. And there's a cycle about that, because investors tend to think that the asset classes that did well are better investments. And because of that, they bid them up. They don't realize that they may be just more expensive investments. So, when I think about all the diversification and the movement, I want to keep moving.

• 30:50Speaker 02

  For example, let's say a lot of tech stocks. Innovation over a period of time is the greatest force. And at the same time, there's a price. And with that price, there's also a mechanics that comes to this. For example, the most innovative stocks sometimes essentially are the most longest duration assets. Because that means that the payoffs will come more years in the future. So when you change the discount rate and so on, those things can fall down. And what was the crummiest investments over a period of time that nobody wants to own like commodities

• 31:34Speaker 02

  becomes then underpriced and there's that cycle. So you have to have diversification or you have to understand the cycle.

• 31:44Scott Galloway?

  So what about, I'm curious what you think about real estate?

• 31:47Speaker 02

  Real estate's an interesting investment, but in terms of pros and cons. It has the real component that you're talking about. But there are two components of real estate that become problematic at such times. Those two components are the rise in interest rates. So interest, real estate is actually more interest rate sensitive than it is inflation sensitive. So there's not a good correlation of how it does in inflation because the interest rate component of it. And the second thing about it is it's nailed to the ground at where it can be taxable. It's the easiest asset to tax.

• 32:27Scott Galloway?

  Isn't it the most tax advantaged asset class?

• 32:30Speaker 02

  Well, no, it depends. The tax advantages are now, you know, the quest, it's, that's, that's a questionable way in terms of.

• 32:39Scott Galloway?

  Because of salt, because the upside's been capped in terms of tax deduction.

• 32:43Speaker 02

  Because the upside been capped in terms of tax deduction, right? So property taxes, like if you take, it depends on also location. Location is a very important consideration in watching this. I believe that we're in an environment in which there's a migration. When you have this polarity, some place people go to some areas and they stay out for the, you know, partially because of taxes, partially because of different values. So now you go to a place like Florida. I'm living in Connecticut. They need money. So when you need money and property taxes are a very easy way to to get money.

• 33:27Speaker 02

  So all I'm saying is real estate has those pros and cons, those cross currents that are operating that way. It depends on where and so on. I like assets that also can move and that I could change my opinion on, you know? So I would like, for example, I'd rather have a leveraged inflation index bonds than real estate.

• 33:51Scott Galloway?

  We'll be right back.

• 33:58Scott Galloway?

  Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work by hand, chasing screenshots, validating controls, and playing catch up when audit season comes around again. Vanta works differently. The Regentic Trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?

• 34:43Scott Galloway?

  Over 16,000 fast-growing companies like Ramp, Ryder, and Harvey save time and resources while scaling fast with Vanta. Learn more at vanta.com/profg and get $1,000 off. That's spelled V-A-N-T-A dot com slash prof G for $1,000 off.

• 35:04Speaker 03

  Are your ad campaigns lighting up the dashboard? But not the pipeline? That's bull spend, and marketers are calling it out in. Dashboard Confessions.

• 35:13Speaker 04

  My boss asked for results, so I opened my dashboard for the only positive sounding metric I had: impressions.

• 35:21Speaker 03

  Cut the bull spend. See revenue, not just reach. LinkedIn delivers the highest return on ad spend of major ad networks. Advertise on LinkedIn. Spend $250 on your first campaign and get a $250 credit. Go to LinkedIn.com/campaign. Terms and conditions apply.

• 35:35Scott Galloway?

  So Ray, I know you speak to a lot of our elected leaders and a lot of people look to you for advice beyond, you know, basic macroeconomics. What are two or three things you're telling our elected leaders in terms of social policy as it relates to the macroeconomic environment? What do you think needs to be, what two or three things would you like to see happen at a public policy level?

• 35:55Speaker 02

  Well, it's overwhelmingly one thing. Bipartisanship and productivity. I believe that the polarity, if we just look at the population, 30% of the population's relatively extreme right. Somewhere in the vicinity of 15% to 20% is rather extreme left. And there's a movement to those greater extremes. So if I take the Republican Party, it's more controlled by those that might be more extreme right because 30% of the population's more than half of the Republican Party. And then you have the others.

• 36:40Speaker 02

  And it's moving to the extreme. By the way, this has happened through history. You lose your middle. And the reason you lose the middle is because people want people who will fight for them. That's what a populist is. So it's either of the left or the right and they will fight. They will not compromise and they won't accept losing. So as we move politically, the way that we're moving, you're seeing a lot of people in government choosing not to remain in office because they don't want that middle and it's becoming more extreme. And then to have increased productivity, so you increase the size of the pie and divide

• 37:25Speaker 02

  it well. And I like if I was give you an indication, let's say if I was president of the United States, I'd probably have a bipartisan cabinet and I'd probably have the equivalent of a Manhattan Project, go away for six months and make a make a economic plan in which there's productivity, you have to do productivity and then and divides the pie well and invest in things like the high payoff economic and social things like education, you know, education is when done, when done well, is a highly productive enterprise, it'll raise

• 38:10Speaker 02

  living standards and so on, but it also creates closer to equal opportunity and you don't know where the popular, where the great talent's going to come from, they can come from the poorest or they come from the richest, whoever, and quite often the poorest. And so it's got to be that environment of of equal opportunity. And then there are some in the society who need help to establish a floor below which you won't let things get like my wife and I work and particularly she does in education to try to help the poorest performing, the poorest students in the poorest school districts in Connecticut. I'll give you a quick statistic.

• 38:51Speaker 02

  Connecticut is one of the richest states in the country if you judge per capita income, but it has a large wealth gap. 22% of the high school students in Connecticut are either disengaged or disconnected. Disengaged means that they have an absentee rate which is greater than 25% and they're failing classes or disconnected means they're they don't know where they are, they're dropped out of school. So one in five, more than one in five is has no future. And then you look at the incarceration cost. And so it's not it, there's levels of the poverty, the lack of connectivity to invest in such things

• 39:33Speaker 02

  would would raise productivity and would also have a make a society which is fair. So I would want to do that kind of thing, hopefully on a bipartisan basis.

• 39:47Scott Galloway?

  So I want to talk a little bit about, I want to move to, a lot of young people listen to this podcast. We spend a lot of time talking about how to not only develop economic security, but how to be a better, a better person, specifically a better man. And one of the things that we think a lot about here is that relative to other cohorts, young men are failing. They're not attaching to work, they're not attaching to school, they're not attaching to relationships. I would love to just get your advice to your younger self, and also any advice you might have. I know you've been married for 45 years.

• 40:15Speaker 02

  Yeah.

• 40:16Scott Galloway?

  Is that right?

• 40:16Speaker 02

  Mm-hmm.

• 40:17Scott Galloway?

  Advice on being a good husband and a good father, and also mistakes that you've learned from.

• 40:23Speaker 02

  Well, the advice to your 20, I think that life exists in three phases. The first phase is you're in school, you're learning, and you're learning from others, and you're dependent on others. And you come out, and you don't know nothing, really, hardly anything. And you're arrogant. And you're about to enter the second phase of your life. And that second phase is going to be totally different than anything that you've experienced before. Be humble, and then explore, and learn, because it's a smorgasbord of all different things.

• 41:02Speaker 02

  And know yourself. I put out a personality profile test. It's called Principles You. It's free for everybody. It's a good way to start to learn what your nature is. Once you know your nature, you want to find your path. And so that's the most important thing. Be open-minded, learn, and find your path. And also, learn for those who, from those who are ahead of you on your path, so that if you think that something's a great career, you could ask people who've been in it, what are the pros and cons for that? So that would be what I would recommend. And I think, make your work and your passion the same thing, and don't forget about the money part.

• 41:45Scott Galloway?

  When you say knowing your nature, what do you mean?

• 41:47Speaker 02

  I think everybody, people think differently. They have different preferences. Somebody's a big picture creator thinker, somebody's more a detail thinker. Somebody's more, there are different dimensions to each person. Their nature is their kind of where they're naturally inclined to go and their pull. What do you like? Okay. What are you like and what do you like to find out your pull? It also particularly appreciating the differences in others because you don't have it all. To have pros means you're going to have cons. So if you're a big picture thinker, I watched this in my company.

• 42:28Speaker 02

  The big picture thinker drives the detail thinker crazy and the detail thinker drives the big picture crazy. But they need each other. If they work together and understand what their nature is and probably their nature. Some people are adventurous. Some people are extroverted. Some people are introverted. So there are all those tests. Myers-Briggs would say, say some of those. Each test says something about that nature, where your pull is.

• 42:54Scott Galloway?

  And thoughts on being a good father and a good husband?

• 42:58Speaker 02

  Well, on a, on a, on a good husband, you're going to go on a long journey together and it's going to happen. And you're going to have ups and downs. And it's like any great relationship, but it's even the most important relationship. If at the end of that, you can have a lifelong terrific relationships. And that's whether it's your wife or your best friends or your business partner. You will have gotten the most valuable, most enjoyable thing in life. Okay. That relationship, that is a great relationship that's been a lifelong or a long relationship. And in that journey, there's going to be a challenges. You're going to raise kids, you're going to, and, and there are going to be things to disagree with.

• 43:41Speaker 02

  And if you make that your beacon, that you need to have that. And when you encounter the difficulties that you're having along the way, that you realize that that's the greater picture, that that's the greater goal. And so you have to get over those challenges because you won't have that kind of a relationship. Of course, then it doesn't, when you have a relationship, doesn't mean that you're going to know that you do have a lifelong companion. Maybe you have irreconcilable differences and you're learning, but you have to give it enough try to make sure that you're not letting the short-term stuff stand in the way of getting to that long-term great reward.

• 44:21Scott Galloway?

  Do you have any best practices around trying to maintain good relationships with your spouse and your friends?

• 44:27Speaker 02

  Yeah, quality time together, and which is enjoyable time. And also, the most valuable times are sometimes the worst times, when they're going through a very difficult time. You know, a death of a loved one. And there's, love is a very powerful thing. So quality time of being there.

• 44:54Scott Galloway?

  To the extent you're comfortable, I'd love to get your thoughts on personal loss. You've experienced tremendous personal loss.

• 45:00Speaker 02

  Yes, I lost my son. The worst thing that has ever happened, could and imaginable, I'd rather, I would have rather died or had everything I have taken away. He, I have four sons, and he was 42 and he was killed in a car crash. And that happened December, year before last. So I think you're asking me how I approached it and what I think about it.

• 45:34Scott Galloway?

  Well, how, what would you, what could you say to other people in terms of, well, one, how has it changed your perspective on things? And what advice would you have for other people in terms of dealing with that sort of devastating loss?

• 45:48Speaker 02

  I think everybody has to do it the way that comes naturally to them. It happened on about a week before Christmas, December 17th. And then we, I took, I only wanted, and each of our family members only wanted to be among family members, and we went, we have a house in Vermont, we all went up to there, and we did whatever came naturally, whether that's cry, tell stories, and reflect on him, and reflect. I have a principle, pain plus reflection equals progress.

• 46:31Speaker 02

  And so we reflect, we talk about it, we help each other, we give others love, and the love that others gave us made a huge difference. It really helped me to know how to help others better. And then I chose, we chose, my wife and I, and this, to keep him with us in our ways. My wife and I, each morning, we sit down and before we get going, we have a cup of tea together. And so what we did was we had a picture of him, we had some flowers and some, and a candle, but we also then journaled memories of him.

• 47:08Speaker 02

  In other words, we, it's a bittersweet experience, the pain of losing him, and at the same time, the being with him in that way. We didn't want to take him, we didn't want to lose him, we didn't want to not think about him. We wanted to think about him, and we wanted to, so what? So we feel the discomfort and we feel the pain. And so we found ways of keeping him close to us and to his family, we do. And that, over a period of time, helped us. Somebody sent me, sent us a book on how to grieve, and it has a page every day that

• 47:51Speaker 02

  you would read, that we would read every day, and it had a lot of good advice in it. So we kind of went into it, and we did what was natural, and, yeah, and the lessons it provides, first of all, it puts in perspective what matters.

• 48:06Speaker 05

  Mm-hmm.

• 48:07Speaker 02

  You know, you can get tripped up on... On something, you know, we all every day, there might be a scrape your knee, or you lose some money, or you do this and the other thing. Wow, did it put in the relationships that mattered of what we lost and mattered for what we have, to the ability to savor what we have. And very much, it's like the serenity prayer, you know, God give me the serenity to accept what I can't control. There's life, and it happens to you, and you go through it. So I think that that's very much the case. And then that appreciation, that lesson that I

• 48:50Speaker 02

  learned about really what matters and what's most important, and how to savor that. And again, relationships, such as savoring my grandchildren and all of that. And so that's how we, you know, have been going through it. And that, you know, that's, that's where, that's where we are. There are many elements of life which are joyous, exciting, and so on, and you can feel those at the same time. Don't worry so much about the displeasure of the pain, you know, you just go into it. And over a period of time, it becomes more sweet than bitter.

• 49:27Scott Galloway?

  Ray Dalio is the founder and co-chief investment officer of Bridgewater Associates and a director on its operating board of directors. Ray has been a global macroeconomic investor for more than 50 years. He is also the author of several New York Times bestselling books, including Principles for Dealing with the Changing World Order, Why Nations Succeed and Fail, which is out now. He joined us from his home in Greenwich, Connecticut. Ray, thanks so much for your time and best to you on yours.

• 49:53Speaker 02

  Thank you. Same to you.

• 50:04Scott Galloway?

  So Algebra of Happiness, we were really moved, the entire team here, by Ray's comments about the loss of his son. And something that stuck with me is the process of mourning, and not being afraid to embrace the mourning, or embrace is the wrong word, but accept it. And just the notion of him and his wife, you know, having sort of a ceremony to honor their son each morning, as if he was with them and reading a page from a book and talking about him. I think the natural tendency for a lot of us is to compartmentalize it and try and move on. And there's something to, there's something to embracing not only mourning, but I would argue the sloppy part of yourself. And a piece of advice I would have for young

• 50:48Scott Galloway?

  men is, you know, I totally forgot how to cry. I just lost the capacity to cry. From years of 25 to 40, I didn't cry when my mom died, I didn't cry when I got divorced, I didn't cry when I had businesses fail. I just kind of forgot how. And because you're in the midst of it, you're trying to get through stuff, and you incorrectly conflate strength and manliness with a lack of emotion. And what you find is, not only is it cathartic and healthy and emotionally intelligent to embrace those types of emotions, even mourning, but it helps you live a better life in the sense that it helps you get in touch with your emotions around what is really important to you. Being moved by art, letting yourself feel things, letting yourself be emotional. You know, I tear up at everything now, and

• 51:33Scott Galloway?

  I find that it's, it's so rewarding because it helps me understand what is really important to me. What do I value? What are my fears? What, what inspires me? So embrace the mourning, embrace the grief. I love that statement from Wandavision, "What is grief if not love persevering?" But also embrace the sloppy side of yourself. And being strong and knowing when to have a stiff upper lip, yeah, that's important. But this is all a means to the ends. And the ends is deep, meaningful relationships. And what makes relationships deep and meaningful is that you have an appreciation for why they're important to

• 52:12Scott Galloway?

  you. You have an appreciation of how devastated you are, or would be, or were, when you lost somebody. That is what it means to establish the depth of those relationships. That is, that is how we understand what is important to us, what is really meaningful. I can't think of a, a worse thing than going through life and never having the opportunity to really understand, because you compartmentalize your emotions, what is really important to you. What's the point?

• 52:44Scott Galloway?

  As you get older, what you want is, or what I find I want, is I want to feel things. I want to register those emotions. I want to appreciate those friendships. I want to feel that sadness that my son is going to boarding school. I'm not going to have him back because it shows me how important and how wonderful that relationship with my son, you know, living in a household with my son has been. So embrace the sloppy part of yourself. It feels good and it makes you a better man.

• 53:13Scott Galloway?

  Our producers are Caroline Shager and Drew Burrows. Claire Miller is our associate producer. If you like what you heard, please follow, download and subscribe. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you next week on Monday and Thursday. And one quick reminder before we go, we answer your questions about business trends, big tech, entrepreneurship, and whatever else is on your mind on the pod every Monday. Please visit officehours.prophgmedia.com to submit a question. Again, that's officehours.prophgmedia.com to submit a question.

• 53:49Scott Galloway?

  Everything we do, everything we do around fiscal and social policy in this country basically is a baby boomer looking at a teenager, looking at a young man and saying, fuck you. I got yours. Fuck you. I got mine. You get yours. It needs to stop.

• 54:05Speaker 06

  Now at Kroger, your points add up to more ways to save every trip. Use them your way to take dollars off groceries at checkout or save at the pump. You can even save up to $35 on your next fill-up. Same points, more choices. And with low prices on fresh, quality food, plus digital and personalized offers tailored to how you shop, your dollar goes further. Redeem your points online or in the app. Kroger, fresh for everyone. Restrictions apply. See site or store for details.

• 54:35Speaker 05

  They're running a cover two defense, but you're running to get game day deals on Uber Eats. Keep everyone at tonight's watch party fed with deals from your go-to restaurants or stock up with deals on your favorite snacks and groceries. Whatever the occasion, get game day deals on Uber Eats all season long. It's not football without food. Uber Eats. Order now. Terms apply. Product availability varies by region. See app for details.