Pod Insights The Prof G Pod with Scott Galloway Office Hours: The Investing Episode About this episode Scott answers a question about whether buying a house is a good long-term investment. He also discusses how to take advantage of compound interest, how to hedge against inflation, and offers advice on what to do with inherited wealth.
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Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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1:27 Scott Galloway? Welcome to the Prop 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 email a voice recording to [email protected] . Again, that's [email protected] . First question.
1:44 Speaker 03 Hey, Ross G. My name is Chris. I'm from Long Island, New York. And my question is, is buying a house still a good long-term investment?
1:53 Scott Galloway? Where would you buy, Chris? And is this pure investment or would it be consumption? Would you live there? Is your family growing? What role would buying a real estate play in your life right now?
2:04 Speaker 03 So here on Long Island, where the cost of renting is comparable to paying on a mortgage, we live in it. We also have a previous house from the time that we spent living in Texas.
2:18 Scott Galloway? Yeah.
2:18 Speaker 03 We retained that property when we came back and rent it out now. So, yes and yes.
2:24 Scott Galloway? There's sort of the perfect storm of bad things for buyers right now. And that is, housing stock is way down because just as nine women can't have a baby in a month, there's just this absolute, there's a, there's a shortage of new housing stock relative to the number of people that want to buy them. Interest rates are low. Because of COVID, people aren't, A, don't want to move and B, don't even want to show their house. So for the first time, we've seen double-digit year-on-year increases in housing in a low interest rate environment. We've just never seen that. So it's, let me put it this way, it's a great time to sell. What you're talking about is it sounds like some of it is consumption, that you want a, a place to live. If you, you clearly have a finance mind, you want to look at cap rates.
3:08 Scott Galloway? So if you can buy a home for about the same price it's costing you to rent, and you believe that you're getting it at a decent price, and then you can borrow, borrow at a low interest rate, which you, and you have income which you need a tax deduction for, and most importantly, you have a long-term time horizon such that if we do hit a recession and housing prices take a dip, you can ride out the cycle, then owning, and you, it sounds like you already have a rental property in Texas, but slowly but surely, if you have the income to support it, buying real estate thoughtfully in a measured way is a fantastic way to build wealth. If you can take advantage of the fact that you're in a position, you have the credit
3:50 Scott Galloway? quality and the down payment to buy a home, and you have a long-term time horizon, and you model out, hope it doesn't happen, but you model out that this thing could go down 20, 30% in value, but you have a long enough horizon to endure that dip, then yeah, I think buying a home makes a lot of sense for you. Chris, thank you for the question. Best of luck to you, emerging real estate mogul.
4:13 Speaker 03 Thanks, Prof. Appreciate it.
4:14 Scott Galloway? Next question.
4:15 Speaker 04 Hi, Prof G. My name is Christina and I'm a Bulgarian that currently lives in Miami, like half the town. I just moved here from New York. And I got to know you there through your L2 videos back in the day, which I loved. So I've been following you ever since. My question is, what's the best place to invest your money? Let's say five to 10K. In order to get that ever so elusive compound interest, but at the same time be as recession proof as possible? What industries and companies should we kind of be looking at? And how can we best take advantage of the opportunities that a market crash can present?
4:49 Scott Galloway? The first thing I would do is think, do you work for a company that has some sort of matching program? And use that 5,000 or 10,000, or you don't? I'm a big fan of ETFs that are low cost. You don't, you want to be in something where there's a lot of fees. I don't believe in stock picking at your age unless you're super excited about, say, two or three companies and you wanted to do that. If you decided you were really passionate about European tech, or you thought China was an interesting place to invest, or you're interested in technology, then fine, at your age, you can recover from some dents. So if you go sector specific, that's fine. I probably wouldn't go company specific at this point. But the most important thing about that five or 10K
5:31 Scott Galloway? is that when you invest it, that you make a commitment to try and match it every year. The markets seem really frothy right now, but I would still dip your toe in, find some low cost ETFs spread across several sectors or spread across several stocks in one sector. But more than anything, commit to leaving it alone. Don't check it every day. One cost of investing is not only the fees, but how much time? I think the most damaging thing about investing in crypto is it lends itself to checking your phone 20 or 30 times a day. That's an investment. You don't want to make that kind of investment. You want to be focused on what you're good at. You're going to be my age before you know it. And as long as you put that money away, you don't need to be a hero.
6:15 Scott Galloway? It can just do okay and you're going to end up with a decent amount of money.
6:19 Speaker 04 You know, I'm like 50, right?
6:21 Scott Galloway? There's no way. There is no way.
6:24 Speaker 04 But 33, so I am not, you know, my 20s.
6:27 Scott Galloway? 33 is pretty fucking far from 50. Take it from a 46 year old. 56, 56. 33 as a kid. Start now, diversify. You're going to be fine when, when, again, when you're my age. You don't need to be a hero. Christina from downtown Miami. Good for you, you're thinking this way. Best of luck to you.
6:47 Speaker 04 Thank you.
6:48 Scott Galloway? We have one quick break before our final two questions. Stay with us.
6:56 Scott Galloway? Support for the show comes from Built. Most of us work hard to earn our keep, but usually there's no one around to hand you a cookie when you successfully pay your monthly housing bill. No one except Built, that is. Built has expanded from their original renter rewards program, and they have a lot more going on for members now. For example, members can earn points on mortgage payments, too. Every housing payment gets you points that get you a lot more than baked goods, such as flights with top travel partners, including United and Hyatt, Lyft rides, Amazon.com purchases, and much, much more. Here's another benefit of Built membership. You also get access to what they call a neighborhood concierge. You can make restaurant reservations, book fitness classes, and find new local spots, all while rewarding you at more than 45,000 merchant partners. It's simple. Being a renter and now owning a home feels a lot better with Built.
7:41 Scott Galloway? You can download the Built app and join the membership for where you live at joinbuilt.com/profg. That's J-O-I-N-B-I-L-T.com/profg. Use our link so they know we sent you. 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 Regent Trust platform is built to scale with you, not slow you down.
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9:03 Scott Galloway? Welcome back. Next question.
9:05 Speaker 05 Hi, Prashy. My name is Steve. I'm calling from Scarsdale, New York. And my question for you is, how seriously do you take the risk of inflation? And what should investors do to protect themselves from it?
9:20 Scott Galloway? You always got to be a little skeptical of the narrative. And right now, the narrative around inflation is that once the supply chain kinks get worked out, there will be, again, more goods. And even though there's massively more dollars chasing fewer goods, the goods will catch up to demand. Once we get the kinks out of the supply chain. I mean, try and buy a refrigerator right now. It's nearly impossible, right? I don't buy it. I think inflation is here. I see prices up 10, 20, 30% across everything. Everything's nuts. Everything's sold out. Not enough products. I think it's here for a while. So what do you do? The general viewpoint is you buy hard assets and try and that way you hold on, right?
10:02 Scott Galloway? So gold, real estate, cyclical stocks, consumer products, goods companies. There's even some inflation-adjusted debt instruments that readjust based on inflation. But what they're basically saying was inflation, you don't want to be caught with a fiat currency or you don't want to be caught with cash, right? And I hate to say it, but crypto's basic mantra is this is an inflation hedge against currency devaluation or inflation. Some people would argue it's a better hedge versus gold. As people, if you look at Bitcoin's ascent, it is correlated to the withdrawal or decline in gold funds. But in sum, how do you hedge against inflation?
10:45 Scott Galloway? You have hard assets. Real estate's up double digits for the first time in a low-interest-rate environment. So you didn't want to be with cash on the sidelines, waiting to buy real estate. You wanted to own real estate. What do you do, Stephen?
10:57 Speaker 05 I'm an investment advisor.
11:01 Scott Galloway? Oh, so dude, let me ask you then, what do we do in an inflationary environment?
11:06 Speaker 05 I've been kind of struggling with that. I think you're right. Real assets. I don't have any other answer than that. But I think that, for example, real estate is driven by low interest rates. So if you're buying now, you better lock into 30-year mortgage because if rates back up, your house is going down. Stocks are going down.
11:25 Scott Galloway? When I tell people about mortgages, or I talk about mortgages, I tell them to look at 15-year money because I hate to pay for something I don't use. The majority of people don't stay in their home longer than 15 years. But, look, there's no free lunch. I'm kind of wigged out by inflation because, you know, the other side of buying new stocks is inflation comes back in, interest rates go up, you know, the asset, you're going to see the stock market puke, right? The answer is sure, hard assets, but the only kevlar any of us have in a tumultuous market is diversification. Steven from Scarsdale, who's the financial advisor. All right, my brother, keep advising. Thank you, Scott. Take care. Next question.
12:05 Speaker 06 Hey, Prof G, my name is Mystika Nakoo, and I am here in Atlanta, Georgia. And my question for you is, what advice can you give me on inheritance money, cash and property, when you really don't have any experience with this sort of untimely and uncomfortable conversation?
12:28 Scott Galloway? If I had inherited money, the only two things I know would have been in my life are a Range Rover and a cocaine habit. And so my, my advice to anyone who inherits money is until you're kind of 30 or even 40, to not touch it and not pretend it's yours. And so wealth that's been passed on is an achievement by previous generations to not only make money, but to save it. And I would suggest that you do treat that capital differently. And that is you use it for investments and even some consumption that not only enhance the quality of your life, but perhaps give you the opportunity to pay that generosity forward to your children. So things like maybe tapping into it for education, tapping
13:13 Scott Galloway? into it to buy a home, tapping into it to buy or diversify across long-term investments. You know, talk to somebody who understands the ins and outs of trusts and inherited money to see what kind of tax advantages you want to preserve. What you don't want, and I've seen this happen a lot, is kids inherit money, they create a lifestyle that is Above their weight class and then money goes fast and then they wake up with appetites and expectations beyond their own income earning ability and skills and all of that inherited money is or a lot of it is gone. Uh, Masika, that I would, until you're kind of well into your 30s or even 40s, treat it as if it's not your money, that you have an obligation to be a steward for it.
13:58 Speaker 06 Um, shout out to Shea Butter, cause your girl here, it will be 47 in October and I'm a trust fun not.
14:10 Scott Galloway? Yeah.
14:11 Speaker 06 My folks are from a small town in Alabama, so I don't come from wealth, you know, a lot of us in my community, you know, there's no money left a lot of times and that's what inspired me to ask that. I want to lay out the best foundation for, for our daughter.
14:32 Scott Galloway? I can already tell you, you have your eyes on the prize and that is, you know, creating a safe and loving environment for your daughter and any of us who run across money in a form of inheritance, I think that at the end of the day, that's our responsibility is to make that investment in ensuring that our kids get somewhat of a decent start. Anyways, Masika, best of luck to you. Thanks for the nice call.
14:55 Speaker 06 Thank you. Thank you, Prof G. I appreciate it.
14:58 Scott Galloway? That's all for this episode. Again, if you'd like to submit a question, please email a voice recording to [email protected] . Our producers are Caroline Shager and Drew Burrows. Claire Miller is our assistant producer. If you like what you heard, please follow, download and subscribe. Thank you for listening to the Prop G Show from the Vox Media Podcast Network. We will catch you on Thursday.
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