Office Hours: The Hectic Housing Market, Funding Scholarships, and Building Your Personal Brand

Scott answers a question about the state of the housing market as investors buy up an increasing share of available homes. He also offers his thoughts on how to smartly fund scholarships, and shares his tips for how to brand yourself as a thought leader. Music: https://www.davidcuttermusic.com / @dcuttermusic 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?

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• 0:48Speaker 01

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• 1:26Scott Galloway?

  Welcome to the Prof G Pod's Office Hours. 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, please visit officehours.profgmedia.com. Again, that's officehours.profgmedia.com. First question.

• 1:42Speaker 02

  Hey Prof G, Joey here from Indianapolis. I'm 24 and I currently work as a Senior Acquisitions Analyst for an operator and property management company. Our investors are mainly private equity firms that are proactive to the current state of inflation and the federal interest rates. According to the John Burns Real Estate Analysis from April, homeownership is now the largest expense in relation to income at any time in the last 32 years, and rent price growth is up 5% year over year. By raising rates, Burns says the Fed hopes to cool demand so supply and demand come back into balance, but this also indicates a strong demand for rental properties. Are investors in the SFR space on the brink of overfilling the cup on high rents?

• 2:27Speaker 02

  Or do you think we're only at the birth of this, where institutional investors will dominate the space and homeownership will become rare air for first-time homebuyers? I work in the industry, so I see the trends we have placed as we acquire. And on one hand, we're thankfully doing well, but for my own personal financial security and future, I hope to own a home sometime before I'm 28 or 29. Thanks for your thoughts. I first heard you on Paul Rabel's Suiting Up Podcast, and I've been following you ever since. I appreciate you being perspicuous in your approach to teaching the public about finances and for your enthusiasm and vulnerability in sharing your stories on your pod and in your books. Cheers to the dog.

• 3:10Scott Galloway?

  Joey from Indianapolis. Thanks, thanks for the kind words. I get the sense Indianapolis would be kind of a fun city to, or an interesting city to make a life in and build a family, but that's just because I applied to the University of Indiana because I saw the movie Breaking Away in like the late 70s, early 80s and was totally fascinated with the idea of going to a big state school and wanted to go to Indiana, and they rejected me. They rejected me, but anyways, still haven't forgiven them. I am pretty long real estate. I find it's just an incredible asset. It has scarcity value, it's tax advantaged, so I think you're in the right industry. I understand your fears about not being able to buy real estate.

• 3:52Scott Galloway?

  Real estate, according to Philip Schiller, Yale economist, Nobel Prize winner, he says, "Look, the investment or the wealth-building attributes..."

• 4:01Scott Galloway?

  Of real estate are overdone from a pure investment standpoint. When you counter in maintenance and everything else that you're just, you know, you, a lot of people are better off renting. Having said that, it's sort of forced savings. It's also tax advantage. So I think almost every home I've owned, with the exception of one, has gone up in value. And so I think it's, I think it's a wonderful way to build security. I would be very hesitant right now to lever up too much to go into the market. This feels very frothy. So typically homeownership kind of, I think, varies between sort of 62 and 68%. And when it gets above kind of 65, that usually signals it's getting a bit frothy.

• 4:45Scott Galloway?

  And right now it's 66%. That's up from 64.7 in 2019. According to Washington Post, nearly one in seven homes sold in America's top metropolitan areas went to investors. So that's what the fear is. I don't know if that's necessarily a bad thing, though. Data from Redfin showed that the share of American homes sold to investors hit a record high 18%. So that's almost one in five. During the last three months of the year alone, investors bought about 80,000 homes worth $50 billion. So that's bad on this part, but if shit gets real, the best place to buy an asset is from a forced seller. So a corporate orphan, an investment fund that needs to get rid of it, or a bank, or the city hall.

• 5:26Scott Galloway?

  So while I think in the short run it might be bad, I wonder if in the long run it creates a lot of opportunity when the market corrects, which it always does. Since 2019, home prices have spiked 30%. Can you imagine that? So again, we flood the market with stimulus. What does that do? It sends asset prices skyrocketing. Who does that benefit? People who already have assets, i.e. old people. Who does that hurt? People who don't have assets yet, like yourself. So I think we need to cut off the fucking heroin here, right? We need to stop the crank. And if the economy goes into recession, so be it. Guys coming into their income earning years, young men and young women such as yourself, they deserve their shot.

• 6:09Scott Galloway?

  They deserve a shot to buy real estate that's been foreclosed. And I'm not saying send the economy into a depression because that has an impact on everybody. But for God's sakes, all of this is nothing but thinly veiled keep me rich. And when I say me, I mean baby boomers. Actually, I'm Gen, what am I, Gen X? I'm Matt Damon, whatever. Yeah, I'm the same age as Matt Damon. Not as talented, not as handsome, but a similar age. Anyways, what have we seen here? Housing inventory has declined to less than 1 million units available for sale. By January 2022, there were fewer units available for any other year on record back to 1999. In April, mortgage rates reached above 5% for the first time. That should stop, I would think, the price increase.

• 6:52Scott Galloway?

  But we're also trying to get our arms around inflation. I just don't see any way around it. I, it depends. It's very market driven. It's situational. But I have friends, young people trying to do everything to stretch to buy a home. I'm like, I don't know, I would probably wait right now. That's not what you asked. Short term, yeah, it sucks. It sucks not to be able to buy a home. But long term, I think the market always corrects. We are going into recession. I believe I've never seen us, an economy be able to raise interest rates. And just more generally, God, this is a long-winded answer. I apologize. I think you're in a great industry. I think you're in a great city and you're absolutely going to get there. Imagine you have a house right now and create a fake mortgage payment and start putting it into ETFs

• 7:36Scott Galloway?

  or a basket of investments and let those run. Cause I worry right now, real estate, and I don't know what it's like in Indianapolis. So it's situational, but you know more about this than I do. But it feels like it's very frothy in the real estate market. Oh my gosh, I need to stop talking. Joey from Indianapolis, thanks for the question and the kind words. Next question.

• 7:59Speaker 03

  Hey, Prof G, I'm Larry, a retired gentleman pixel rancher here in Ventura County, California. Worked in advertising, et cetera, for over 30 years. And being older than you, I get all your jokes. My question is about smartly funding scholarships at universities. I don't mean mega monsters like UCLA or USC either. I graduated from a state university. My late brother got his PhD from UMass Amherst. My focus is on liberal arts, humanities, and design photography. What are your thoughts? Thanks.

• 8:27Scott Galloway?

  Hey, Larry from Ventura County. So, a retired pixel rancher. I heard your question. I thought, what type of crop is pixel? That's literally how much I know about agriculture. But I think what you're saying is you're retired ad man. So, this is a complicated question. In terms of how to fund scholarships, it's unfortunate, but the elite universities are so awash in money that if you get into Princeton, you're kind of, you win the lottery twice because you not only get into a great school, but you can show up to financial aid and say, "I can't afford it." And they're like, "No problem. We have more money than God, and we'll figure out a way to close that gap." I think where America gets better in terms of its universities is the universities that you referenced,

• 9:11Scott Galloway?

  and that is Cal State, our junior colleges, our vocational schools, our nursing schools. I was so moved. My last episode that we filmed before the next day, finding out that the network was being unplugged, was I went back to my high school. I went to University High School Charter in West Los Angeles. And I was expecting, I spent the day there with the principal and the kids. I was expecting some big sob story on all these stats on kids failing, dropping out, being addicted to drugs, and not going anywhere. And what I found was entirely the opposite. Get this. 97% of the kids are going to graduate, and 92% are going to college. And I started thinking about,

• 9:55Scott Galloway?

  I'm going to do some major virtue signaling here. I'm going to give away some money to 10 kids and the career, the college counselor there, a really wonderful woman named Paula Van Dorn, who I was really taken with. I said, "Where do I want this money to go?" And this goes to your question of how I think we should fund scholarships. And she said, "Well, it's up to you." And I said, "Well, I don't want to give money to the kid going to Stanford, or MIT, or UCLA, or even UCSD. He or she's going to be fine. They're killing it. They're going to attract money, or they can afford to borrow money. I want the money to go to some kid who's thinking about going to nursing school for two years and is worried that they don't have the money. I want the money to go to someone that's going to Santa Monica College and maybe hasn't had a remarkable tenure at high school, but thinks,

• 10:39Scott Galloway?

  "Maybe I have remarkable potential." Or the kid going to... You know, name a Cal State X and just doesn't have the money, doesn't have their shit together at 18. Why? Because I was that guy. I was that kid. So how do we fund scholarships? I think what we need to do is sort of like Warren Buffett's approach to kids and inherited money. Give them enough money such that they can do anything they want, but not enough money such that they can do nothing. And I think there's some form of that. And that is, I think, right out of high school, we need to give kids enough money such that they can go to college, but not enough money such that they're not smart consumers. They should absolutely pay for some of it. I go back to when I went to college, anyone could

• 11:21Scott Galloway?

  get to UCLA. I didn't really have much, if any, financial assistance from my parents, but I managed to get through. It involved one summer, literally, living off top ramen and bananas. No joke, I lived for 11 weeks off of top ramen and bananas. I love both of those things. And why did I do that? Because if I didn't save $2,800 by fall, when school started up again, I wasn't going back for my junior year at UCLA. And guess what, over the long term? That was really good for me. I'm fundamentally a lazy person. And I began connecting work and saving with good outcomes. And I didn't take for granted that I just got to go to college and I could borrow money. I did get financial aid. I was

• 12:02Scott Galloway?

  a Pell Grant kid. But I think a certain amount, I would call, I would like to see more scholarships for kids coming out of high school. They then become consumers to figure out which colleges deserve their money. Public college, public high schools are where America gets better. I was really moved by the superintendent, Alberto Carvalho, who was described as the LeBron James of the Miami school system, and then shifted over to LAUSD. And he said that, why wouldn't high schools be a rallying point for the community? And I just love that. We're so infatuated with elite universities. I'm the same way. Public education is my thing, but where have I given my money? I've given it to Berkeley and to UCLA, which are outstanding institutions. But do they really need it?

• 12:47Scott Galloway?

  Do they really need it? Doesn't Santa Monica Community College really need money more? Doesn't University High School really need, really need it more to say to the kid? The questions were so raw. I know I'm going on here. This 17 year old girl stood up, super impressive, super curious. And she just was very honest. And later on, I said, she said, I'm going to nursing school and I don't know if I can afford it. What do I do? What do I do? So I'd like to see more financial aid coming out of high schools. It says to kids, maybe you don't have your shit together. Maybe you're not going to MIT. Maybe you haven't peaked at the age of 17, but we love you and we see potential in you. And your story hasn't been written.

• 13:29Scott Galloway?

  So I'd like to see financial aid move back to the senior year of high school as opposed to the freshman year at a university. Thanks for the question, Larry. We have one quick break before our final question. Stay with us.

• 13:43Scott Galloway?

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• 14:28Scott Galloway?

  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.

• 14:45Scott Galloway?

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• 15:29Scott Galloway?

  Upwork also takes care of contracts, payments, and other administrative tasks, so you can spend less time managing logistics and more time focused on what's next. Visit upwork.com/profg right now and post your job for free. That's upwork.com/profg to connect with top talent ready to help your business grow. That's U.P.W.O.R.K. com/profg. Upwork.com/profg.

• 15:57Scott Galloway?

  Welcome back. Question number three.

• 15:59Speaker 04

  Hi, Scott. This is Fraser from the Rochester, New York area, and I would love some of your thoughts around building a personal brand. While not everyone can be Adam Grant, I believe the rest of us still have an opportunity to make an impact. In my case, for example, I've made some progress in the admittedly niche area of quality manufacturing and management. I've published in the top industry periodical and occasionally speak at global conferences, but I'm not sure what my next best steps are. What is achievable? What will have the greatest ROI in personal brand? Or what might even generate some supplementary income? Given your relative success in many different media formats, television notwithstanding, what can you share about the challenges in generating weekly, consistent weekly content,

• 16:44Speaker 04

  progressing from one platform to another, or targeting audiences while you move from a niche to a modestly broader audience? Thanks in advance and keep up the great work.

• 16:53Scott Galloway?

  Frasier from Rochester, thanks for the thoughtful question. So my last session of my brand strategy class is a session called, and it's the most popular session, The Brand Is You, and that is how do you establish momentum? So many people think about marketing and brand across an inanimate object that they're, you know, the company that work at or the, what's the brand of IBM? But they don't sit down and say, what's my brand? So right off, you want to establish, if you can, do sort of a personal audit. And that is personally and professionally, what attributes do I want to be known for? And I have a natural inclination, I'm an empathetic person. I'm a detail-oriented person. I'm a provocative thinker. I'm strategic. I have an incredible sense of style. What is your visual metaphor, right? I've always said, if you like bow ties, wear them every day.

• 17:36Scott Galloway?

  If you have big, crazy frizzy hair, have out of control crazy frizzy hair. If you have, if you're in good shape, get in great shape. If you're losing your hair, shave your head. Visual metaphors, identifying some core attributes that you want to reinforce every day in terms of your own behavior. You want to find a medium. And that is right off the bat, what am I good at? There's so many mediums. There's texting, there's emailing, there's writing, there's speaking to large groups, speaking to small groups, there's LinkedIn, there's Instagram. Figure out what medium you are best at and then say, I need to be in the top 1% of that medium. I decided in 2008, I was going to be in the top 1% on Twitter. It's taken me 14 years to aggregate a half a million followers, but it pays off. I then decided I was going to be in the top 1% on LinkedIn and I invested in that medium.

• 18:20Scott Galloway?

  And then I found this emerging medium called YouTube and I started doing videos. So think of yourself as a brand, right? I need core attributes that are differentiated. Think about a logo or visual metaphor. What is it about your person aesthetically that stands out? It can be something as weird or as wearing vests all the time. I don't know what it is, but such that people can recognize you in your peripheral vision. Figure out a media strategy or specifically a channel. What are you really good at? Some people are, just give great text. You know those people that are just so good and precise and concise and cogent and funny and know all the memes and know all the symbols? And just like, they can be really boring in person, but they're like really charming and interesting and. You know provocative in terms of texting. I'm good in front of large audiences.

• 19:05Scott Galloway?

  I'm not that good in front of small audiences. I'm also not that good on the phone with people. So I try to calibrate around the things I'm good at. Do you enjoy writing? Writing is powerful in terms of a medium. If you're good at writing, you want to take every opportunity you can to submit articles to different journals. Because the moment you write something and it's well done, people immediately associate two things with your brand, and that is one, this person is smart, and two, they're well educated. Now, we have a tendency to think of it as a clock. There's pre-purchase, your reputation, there's purchase, how you behave in person, and then there's follow-up. We over-invest in, or we spend 99% of our time thinking about the in-person stuff. Over-invest, if you can, in the reputational stuff.

• 19:49Scott Galloway?

  Get in journals, get published somewhere, get a following on a platform. Now, you have checked the box around one key step, and that is go niche, the specific crowds at the general, and try and be the man or the woman on LinkedIn, or in journals, or on Twitter, that just constantly puts out content around quality manufacturing in management circles. Quality manufacturing, I mean, that's, I don't even know what that means, but I should know after a few years that you're one of the top six, or eight, or 10 people. You're gonna write about it, you're gonna speak about it. I'm a quote-unquote "thought leader." I have spent the last 30 years, starting businesses 22 years ago, I started, 20 years

• 20:31Scott Galloway?

  ago, 22 years ago, I started focusing on brand and innovation. I've done a ton of research there. The first class, first time at NYU, I made $12,000 a year. By the way, if there's a community college you could teach that topic at, teaching is a fantastic way to learn about a topic, because at the end of the day, the teacher is just the best student in the class. They're just kind of one week ahead of their students. That's really what you do when you teach. So if you have the opportunity to do seminars, or teach a few things, a few things, once you get to that level. Greatness is in the agency of others. I have eight people working with me at Prof G, people to do my graphics, people to do the videos, people that produce this podcast, people who do research. People who turn the chicken shit that is Scott Galloway into chicken salad,

• 21:15Scott Galloway?

  and I'm being humble there, they turn my chicken salad into fucking chicken fricassee cocaine on top of it. I am talented, but the reason I've managed to get scale and the reason why I was paid $150,000 this morning to speak for an hour in front of a group of fintech professionals is because I figured out early on my point of differentiation. I had insight into how technology disrupts traditional industry. I found these new mediums and I pounded away at them up at night, figuring out interesting things to say on Twitter, interesting things to post on LinkedIn. I taught a shit ton. I tried to think of interesting ways to display data using different mediums on emerging mediums, including YouTube. And then as soon as I could afford to, I started investing in a team

• 22:00Scott Galloway?

  that could make the whole greater than the sum of its parts. So there are a lot of baby steps you can take. Having a brand is not only deciding who you're for, it's deciding who you're not for, and that's okay. I spoke at a iconic, iconic gathering of a bank, and they got pissed off because at the end I had made a joke about Adam Newman walking away with a 10% commission on $13 billion in losses of other people's money. And that offended them because they were involved in that, in that entire fiasco. Okay, so be it. That was probably a bad move. Probably shouldn't insult the people that I'm a guest at. But anyways, processing, I'm literally on processing, Fraser.

• 22:42Scott Galloway?

  Thought leadership is a fantastic way to make a living if you're blessed enough. I would be dead by now in any other society. But because I have figured these things out, brand associations, the right medium, the right visual metaphors, and also, most importantly, most importantly, greatness is in the agency of others. As soon as you have a little bit of money to invest, hire people to do your research, hire people to make your slides sexier, find good editors and make your content really sing. Fraser from Rochester, University of Rochester, Wegmans, Kodak. And there's a third up there. I used to spend time on Lake Canandaigua. I was in love with a woman who was a doctor and her family had a house on a lake.

• 23:27Scott Galloway?

  More information than you wanted. Fraser from Rochester, thanks for the question. That's all for this episode. Again, if you'd like to submit a question, please submit a voice recording by visiting officehours.proptunimedia.com.

• 23:47Scott 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 ProptunPod from the Vox Media Podcast Network. We will catch you on Thursday.

• 24:00Speaker 05

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