← Financial Tea with Mrs. Dow Jones
Financial Tea with Mrs. Dow Jones
From Public Housing to Goldman Sachs CEO ft. Lloyd Blankfein
00:49:39
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- [00:00]
A
Okay, quick money tip. Because this is actually smart banking, I want to talk to you about Chime because it is changing the way that people bank. It's fee free smarter banking built for you. It's not like those old school banks that still hit you with overdraft fees and monthly fees and minimum balance requirements. What makes Chime different is that it's actually designed for everyday people so you can get paid up to two days early with direct deposit and with my pay you can Access up to $500 of your paycheck when you need it. So some traditional banks still don't offer anything close to that. And let's talk fees or the lack of them. There are no overdraft fees, no monthly fees, no random charges that make you afraid to check your balance. Honestly, younger Hailey would have really benefited from something like this. Chime isn't just smarter banking. It's the most rewarding way to bank. Join the millions who are already banking fee free today. It just takes a few minutes to sign up. Head to chime.com financialtea that is chime.com financialtea Chime is a financial technology company, not a bank. Banking services a secured Chime Visa credit card and MyPaid line of credit provided by the Bancor Bank NA or Stride Bank NA. MyPay eligibility requirements apply and credit limit ranges $20 to $500. Optional services and products may have fees or charges. See chime.com feesinfo advertised annual percentage yield with Chime+status only. Otherwise 1.00% APY applies. No min balance required. Chime card on time payment history may have a positive impact on your credit score. Results may vary. See chime.com for details and applicable terms. This episode of Financial Tea is brought to you by Ancient and Brave. They have been an iconic and trusted well UK for years and now that they've launched in the us across the pond I have been integrating two of their HERO products into my daily routine. I like their True Creatine plus and their True Collagen. And let's start with the True Creatine plus baby, because suddenly everyone is taking creatine. But what's interesting is that women naturally store 70 to 80% less creatine than men, which means we can actually experience more noticeable benefits from supplementation and Ancient and Braves. True Creatine plus not only helps enhance physical performance, but it has added taurine, vitamin D and magnesium. So it also helps support energy, improve cognitive function and just overall well being. It's neutral tasting and I take it daily even on my non workout days, I've been stacking that with their best selling clinically studied true Collagen, which is a hero product for positive aging, active lifestyles and just like that, beauty from within. Go to ancientandbrave.com planet and use code T for $10 off any purchase. That's ancientandbrave.com planet code T for $10 off.
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And at a young age, you should be putting your money into equities and riskier assets and put it in an equity position that's not expensive to manage.
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A
That's my favorite advice that you could have given me. What's up rich people? It's me, Haley, aka Mrs. Dow Jones. This is Financial Tea. What's up sippers? Welcome back to Financial Tea. This is a podcast where I teach you how to build wealth with a side of market drama, money scandals, and of course, financial pop culture. And today is a very exciting day for us here at Mrs. Dow Jones headquarters because we have one of the most influential figures in finance over the past 50 years in the studio, former CEO of Goldman Sachs and author of the new memoir Streetwise. Getting to and Through Goldman Sachs. Lloyd Blankfein is here to spill the financial tea. I have to say, in preparing for this interview, I listened to the audiobook of this memoir and it is so good, I listened to it in two days. So I highly recommend it if you're looking for a new audiobook or actual book. So good. But yeah, Lloyd literally needs no introduction. I was so excited to talk to him and he was so open. He spilled the tea on generational wealth, on leading Goldman through the financial crisis, on the money advice he'd give us, how AI is going to affect everything and so much more. But first, let's get into the MDJ Market Report, Fresh Weekly. Hey guys, welcome back to the Market Report. I have four stories that you need to know, the first of which is about Disney, which, yes, is a great brand but unfortunately is a very bad stock. Like if you had invested a hundred dollars in Disney 10 years ago, you would currently have $100. And just for reference, the S&P 500 has returned 180% in that same window. And, you know, the park business is definitely booming. That is, you know, driving 76% of profits and hitting record revenue. Disney adults will not be held back. Like, you guys are really just, you know, you're a vibe. And streaming finally has made money too, after losing $10 billion. But the rest of the business is bleeding. Linear TV is down 16% year over year and the stock is down around 50% in five years, which I just think is interesting because, like, if you hear the name Disney definitely think, oh, like that's a good company. Like, I like em bullish on Disney, but, you know, numbers don't lie. Check the scoreboard. Um, I will say they do have a new CEO though, so maybe he can make this magical experience into something for your money. Next story is obviously about the Bachelorette. I'm sure that you know this by now, but Taylor, Frankie Paul season was canceled three days before it was supposed to air. And this is going to cost ABC around 50 to 60, $60 million. But I just want to be real that, like, ABC cost themselves that money because the writing was on the wall that this woman was a liability to work with. And they did it anyways. Like, they knew about her 2023 arrest. They knew about the headlines, and then the video leaked. It was horrific. And obviously advertisers like Cinnabon then pull down immediately. They don't avoid losses. They just know how to cut them fast. And by the way, this is a perfect example. Sunk cost fallacy. ABC didn't pull the plug sooner because they had already spent millions on casting locations, crew. And I think they told themselves, like, we've already come this far. We have to make it work. But I just want to remind you that the most expensive thing that you will ever own is something that you refuse to cut loose. Like whether it is a $50 million TV show or maybe a broken stock you're waiting to come back or a job you've been at for 10 years but won't give you a raise or a relationship with a gu who still has a roommate and will never propose. Like, if the fundamentals are broken on something, do not average down, sell. Don't wait for a comeback. Make a move. The smartest investors don't avoid losses. They just know when to cut them fast. Okay, next we need to talk about the economic phenomenon called stagflation. Because, guys, there is a 35% chance that we are about to fall victim to this. The war. Obviously, we all know about the war. The war in Iran is about to make life more expensive, if it hasn't already. I talked to my sister who lives in Boston. She told me that it was $130 to fill up her gas tank. So we're already filling it at the pump for sure. But what's crazy is that we went into this war in an economy where inflation was already rising. Like, gas is up nearly 27% in a month oil has jump 50% in two weeks. And like shipping, food, travel, your entire life is about to get more expensive because of this. Not to mention the US economy is taking on way more debt because we're paying an extra $500 million a day to be overseas in Iran invading them. So the Federal Reserve, which is supposed to be like our balancing scale, who makes sure that the economy is perfectly in order, nothing goes like too far to one side or the other side is stuck because if they cut rates then inflation is gonna get worse, but if they raise rates then the economy is going to slow down more. So they're just sort of sitting there. And that is why stagflation odds are going up, because life is getting more expensive but incomes are not keeping up. So I never want to give you guys economic news without some sort of action step because there's so much in the media already that scares the shit out of all of us. And that's not why I'm here. I think that there's always a way to take action and to protect yourself and like moves to be made that are going to put you in a better position. And that's the most important thing is just being proactive. So I will say like if you're really worried about this, lock in prices where you can lock in your rent, your fixed rate debt, pre book things that are expensive. I've booked a bunch of flights. Took me a few hours this weekend to play like the whole points game, but I just wanted to make sure that I was covered and also cut the random spending. It seems crazy because right now my Instagram feed is like half people buying the new collection from Chanel and half like economic distress about the war. But don't buy the new Chanel. Those bags are like $8,000. You don't need it. Buy a vintage bag and build your cushion because just by having an emergency fund you're going to buy yourself so much peace of mind. So I'd really recommend like six months. And I'm also going to be putting up content about how to negotiate with your boss salaries during this time because obviously wages haven't moved but prices have gone up and so can you get a cost of living adjustment? That's really the question that I'm hearing a lot. So just look out on my page because that will be coming out this week. Um, okay, now let's go into my conversation with a guy who knows a lot about the economy. None other than Lloyd Blank Fine is on the financial T. He is the former CEO CEO, Goldman Sachs. He was the head of that company during the financial crisis. But this was such a great conversation. I'm really excited for you guys to hear it. Yeah. So let's go talk to my friend Lloyd. Okay. Marches. Sleep Awareness month, you guys. And I'm just gonna say it. You need a good mattress. Not a like, this was fine in college mattress. Not a I'll deal with it later mattress, a real one. Because if you're waking up tired, uncomfortable, overheating, your entire day is already off. So instead of endlessly optimizing your routine, just start with the most obvious upgrade, which is your bed. I have been looking into Birch and this is what I like. It is made with organic cotton, natural latex, and wool, so it actually feels high quality. And it lasts. It's breathable so you don't wake up sweating. And they make everything in their own factory with a limited lifetime warranty. Translation, they are not cutting corners. So if your mattress is old, it's lumpy, it's just not giving what it's supposed to give. This is your sign to upgrade. I want all my listeners to enjoy a deep, restful night's slee with a new mattress from birch. Go to birchliving.com financial tea for 27% off site wide exclusive for listeners of Financial tea. That's birch living.com financial tea. And get 27% off site wide. Birch living.com financial tea okay, real talk. Rent is expensive. It's annoying. And for a long time, it just sort of felt like that money was disappearing into a void every single month. There was no reward, no return. It was just gone. But Bild actually makes paying rent feel a little better. It is the loyalty program for renters that rewards you for your biggest monthly expense, which is rent. Here's how it works. Every rent payment earns you bill points that you can redeem towards flights, hotels, Lyft rides, Amazon purchases, and so much more. Build members can now earn points on mortgage payments too, for the first time ever. Plus, you can unlock exclusive benefits from over 45,000 restaurants, fitness studios, pharmacies, and neighborhood partners. Personally, I would 100% be redeeming my points through flights and hotels. Because if rent money is going somewhere, I want it to eventually take me somewhere too. Paying rent is just better with Bilt. I've been using them forever, and now owning a home can be better with Bilt too. Earn rewards. Get something back wherever you live. Join the loyalty program for renters at joinbuilt.com tv. That's J-O-I-N B I L T.com T make sure to use our URL so they know we sent you. Okay. Lloyd Blankfein is on the financial T. Former CEO of Goldman Sachs. Future New York Times bestseller for Streetwise just came out. I have a signed copy. Thank you for being here. I have to admit, last time I saw you, you were on the walking path in Miami listening to a podcast about the English language.
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B
The preparation for Mrs. Dow. Oh, Mrs. Dow Jones. May I call you Mrs. Or Dow or Hayley?
- [12:53]
A
You know what? It all works. So there are so many amazing stories in this book. I told you before we started that I listened to it in two days. The audiobook is amazing. You read it. So were there any. There are a lot of great stories, but were there any darlings that you have to kill that you want to share? Any stories that.
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B
No, I like. Part of this is, you know, it's kind of a personal story. It's a history of kind of Goldman Sachs of which there's always a lot of curiosity because of Goldman Sachs. There's no crisis in the world that doesn't wildly affect Goldman Sachs. And about three quarters of the time Goldman gets accused of causing it, whatever it was. So there's always a lot of interest in Goldman financial history of the financial history of the period. And it's a bit of a. You could decide for yourself. But accumulated wisdom of dealing with very, very capable, fanatically ambitious people who generally are oriented towards making a positive contribution to the world. But having to get everybody to kind of sacrifice their personal interests in the short term to support the platform of the firm, which they then can use for their own interest. Because once you become senior person at Goldman Sachs, you become to other people in known quantity and have a lot of influence. But you have to get people to work together and make the kind of sacrifices of individual. You know what people would want as an individual to just throw in with the hole, become a good team player. Not everybody can do that.
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A
I liked reading about your management style and I feel like I've been using it with my own team a little bit. And so do you have any tips for people who are managing because you obviously you're running a huge company with a lot of really smart people, ambitious people.
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B
In my tenure at the firm, we were. Half of my tenure it was a private partnership and half it was a public company. And I would say, and again, this may be subtle, but I'll explain. I tended to operate because that's my history and my Roots were in the partnership, I tended to behave like a senior partner as opposed to you behave like a CEO.
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A
Yeah.
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B
And the difference is in a normal corporation, which is hierarchical, there's the person on the top, lightning bolts come from his or her fingernails and do this. And there's not a lot of dissension. And the people who work, work there, working their job, they do their job well, but they don't have any particular curiosity about what may happen in the rest of the company and certainly don't feel they necessarily have any influence or entitled to know a lot about it. Whereas in a partnership, the people who work there are all owners and they behave like owners and they feel entitled to know what goes on and they feel accountable for the whole firm. And the firm only has one reputation, and it's yours. So something goes wrong in somebody who's working in London, it affects your reputation in New York, and so you care about it. And you feel an entitlement to hear about what's going on in the rest of the firm. You feel an entitlement to complain if the firm is going in the wrong direction or if the person who's the senior most person in the firm wants to do something. You disagree. And guess what? The senior person kind of slows down and takes account of what your fellow owners want to do, even if they're subordinate to you on the organizational chart. And it's a very different organization, but you get a very different outcome. It may slow down somewhat decision making, but it's a better decision making process. And because people are owners, they're more committed. And that's how I always tried to do my management style. I learned it, you know, the normal way because we were a partnership and just because we changed our form, we didn't really adapt. The senior people in the firm feel like owners and they feel, and they expect to be treated like owners 100%. And I did that. And the reward for that is when you have to call on them. They're not merely employees who think of themselves as coming or going before their next job. They behave like owners, which is a good thing for me.
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A
That's a great transition into the pay structure of being the CEO of a big bank like Goldman, because you get a base salary and then you're getting paid bonuses from the profits of the firm.
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B
Right. And nobody really in the firm is paid out of his individual performance. It's really obviously if somebody does better, they'll do better. Somebody more senior will do a little bit better. But the better or worse is within a narrow band. The most important thing for everybody is how did the firm do as a whole. So everybody is a partner in the whole firm. And that makes everybody much more helpful to their colleagues because everybody is. I, as a, as a, as a partner, as an owner, I share in everybody's good performance or unfortunately, I share in their bad performance. So I really care.
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A
What's the salary of a CEO at a bank like Goldman on a good year? Well, and, or not a salary, sorry, what's the pay package part of my case?
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B
Well, the pay package is generally just like, just like everybody else. There is a fixed. There's mostly a fixed salary, which is not expected to be the bulk of your pay. And then there's a discretionary bonus. And the discretionary bonus, the discretion is largely shaped by how well the overall performance of the firm is and then your performance within it. But I'd say the most important part of that is the overall performance of the firm. And it's getting, generally it would be called a pay for performance. And by the way, that's also helpful in running the firm. There are places where people have a contract, you know, contractually committed to receive a certain amount of money whether the firm performs well or not. That could force the firm into big losses. If the firm underperforms, well, guess what? The overhead goes down because people get paid less 100% and they get judged in arrears. It's not like somebody will know this is what I'm going to make next year. At the end of the year, you get told what you made the prior year.
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A
You eat what you kill.
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B
You eat what everyone.
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A
But everyone kills. Yes. So, I mean, this is the financial tea. We do like to get the juicy scoop. So can you tell us how much did you make fully, like one, say, 2007.
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B
Oh, 2007. Zillions.
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A
Yes, yes. Or I read somewhere that it was 70 million.
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B
You know, it was. Yeah, you're kind of in the ballpark.
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A
That's a lot of money for someone who grew up. What I loved in the book is so much about your upbringing. You grew up in public housing in Brooklyn and you rose to being the CEO of Goldman Sachs. And what I think is really interesting is like psychologists say that your relationship to money is formed by the time that you are seven years old.
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B
Right.
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A
And so how have you adapted to this, this crazy, abundant financial situation now? Like, does that kid from the project still show up in your spending?
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B
Yeah, well, there are a lot of adjustments. There's some adjustments I can't make. So I run around the house turning off lights.
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A
Yeah.
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B
If anybody's going to be outside of a room for more than 45 seconds, I point out to them, you could turn off the light and turn it on again.
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A
So you're turning off the lights. What are other, like, sort of habits and things that.
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B
No, no, but more. More realistically, with my own kids, I spend half my time giving them stuff and the other half of my time resenting them. Kind of resenting them for having the stuff that I just forced on them.
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A
Yes.
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And they're very good kids and they work very hard and they're highly productive. And I sometimes I wonder, you know, God, you know, I must. I must make them absolutely crazy because I'm really like that. I'll say, oh, you chase, I want you to have this. You should live really well, and blah, blah, blah. And I'll go in and go, whoa, la de da. And I said, you're living really well. And they must look at me like I'm nuts, because I am. Here's another form that it takes. I was used to in my early life because again, we grew up in the public housing and the projects. I got a lot of things for free and on scholarship when I applied to Harvard.
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A
Gave you $5,000 one day?
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B
Yes. When I took my SATs, I didn't have to pay for them. We were a Title one school, whatever it was called, I just signed my name. I lived my whole life on scholars scholarship. When I went to college, it was always on scholarship. When I ran out of money and, you know, I went back and they gave me $500 on the spot to do it, then I go to, you know, these fancy school and fancy law school and job and, you know, at some point, I'm looking back and by the way, I'm writing out as if I, you know, my big achievement in life was overcoming all these disadvantages. But then, you know, at some point there's a crossover and I have to stop and say, you know, at this point, I've had pretty much more advantages than disadvantages because I did go to all these fancy schools after it. And I said, I have to readjust my thinking. And one of the ways on the money side is I had to go where I expected to be the recipient of financial aid and other people's philanthropy. I had to start thinking of myself as the giver. The giver?
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A
Yes.
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B
And that was something that one day I kind of woke up and I said, you know, because I never thought I was always the One who was applying for grants, now you're giving them. And then I thought to myself, well, that would be real. That's gonna be really look really bad if I'm taking, you know.
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A
Yeah.
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B
At this point, but it was almost instantaneous. Like, there was never a period of neutrality.
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A
Yeah.
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B
I went from my attitude of I'm a taker to whoa, whoa, whoa, whoa. You know, a new day has dawned here. I'm a. I, I really have to be a giver. And, And I did that. And the oddity of it is that people only know me this way.
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A
Yeah.
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B
And don't know, because the point that you made earlier, you know, you get a certain kind of imprint when you're young.
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A
100 stays with you.
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B
And you never shake it.
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A
No way. My audience is obsessed with growing generational wealth, though. Like, everyone is sort of in that, like, baby having phase. And they're like, we need to make our kids rich. How do we do it? So how did you handle your kids accounts? Like, what accounts did you open? Do you have financial advice you could give to listeners who are trying to grow wealth for their children?
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B
You know, there's that old saw from Warren Buffett that he wanted. He wanted to make his kids just wealthy enough so they, so they could do whatever they wanted to do, but not. But not wealthy enough so they could do nothing.
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A
Yeah.
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B
And I think that that's a way to look at it. But, you know, I think with my kids, you'd have to ask them also. I don't think money and that was ever really the incentive for them or the cudgel that I use. What they want is they want to be perceived as do. Well, this is like what I said. I don't underestimate the important draw of being financially secure. That's the most important thing. But once you get there. Yeah, it's much less important because you're already there. And I understand the irony if you're not there. It's the only thing that matters to people is subsistence. But once you get there, there's a million contests that you try to succeed at and, you know, getting self respect, performing, having a doing well in your job, the approval of your peers, good rel. And they're all compatible. You know, they're all strivers in that respect. So they don't have to strive for subsistence.
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A
But there's other things.
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B
But there's other things. And those things turn out to be much more powerful. I say I'll take it from the other way. One of the advantages I had is That I didn't have to source my motivation. Yes, I needed to make money. And in my first job out of law school, there was a firm that was, you know, paying like literally $100 a week more, which, you know, which wasn't that much money in the scheme of things at that point. But for $100 more, I didn't bother researching which was the better firm where my career. Better. $100 I went to.
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A
That's where I'm going today.
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B
If you are financially well off.
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A
Yeah. You have choice.
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B
You're like Hamlet. To be or not to be. What should I do? What's the meaning of life? What's going to be fulfilling? I wasn't burdened by all those extraneous. Nope.
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A
It was just show me the money.
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B
And by the way, it sounds funny to hear it say. And it sounds bad, but it also simplifies things in a way. Life is much more complex to. Because, you know, there's something that. There's always a thought that always came up to me through the various crises that I had to manage through. And what I would say to myself at times, no choice, no problem. If you don't have a choice, you don't have a problem.
- [25:29]
A
I love that.
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B
So when you don't have money or you need to do this or the baby, you're about to have another baby or something like that, and you know you love your job, but it doesn't pay you enough, you know, no choice, no problem.
- [25:41]
A
So I've gotta be honest. You're being very candid and I'm. You know, this is so fun to talk to you, but I've listened to a lot of your interviews and I gotta be real. Like, you do need Rosetta Stone for some of it. Like, it is very inside baseball. And I think that is the central problem for most people trying to build wealth is that finance does feel like this foreign language.
- [26:03]
B
Everything is simple. If people are using jargon, you should be able to explain anything to a very, you know, to an attentive, reasonably bright eighth grader.
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A
Oh, 100%. Which is sort of like the level that I consider myself.
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B
So it's perfect. Yes.
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A
But I want to try something. Pretend that I am a 25 year old with a normal job and maybe I have like $5,000 saved. What do I actually do? Like, walk me through. What are my next financial steps? Like, you know, I don't know any of the words.
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B
Well, the first thing I did was I bought an insurance policy.
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A
Smart.
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B
Because I'm life. Because I were yes. The first purchase I made.
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A
Smart to do it so young and
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B
there were a lot of people who I work with and they bought, you know, an uptick in cars and I, I, I bought an, I bought an insurance policy because I thought that was the right thing. But it was the right thing to do.
- [26:49]
A
It was. And the amount of people that I talk to who are financial planners who have done the same exact thing, they're like, oh yeah, I got it when I was 23, 25 by the way.
- [26:57]
B
Obviously a lot cheaper when you start to buy it and the whole life. And I just didn't. It was a form of. It's also as you've, I'm sure you've told your, your audience, it's a form of savings because you accumulate, you know, value in the insurance company that you could tap if you need it. So it, and by the, it's tax advantage and it grows tax. Of course we do because we don't like taxes.
- [27:19]
A
You didn't domicile though.
- [27:20]
B
God, hate, hate, hate, hate, hate.
- [27:22]
A
No, none of those.
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B
And also in back of your mind, if you have obligations, you have a, you know, young family and a growing family, you kind of owe it to them to think about them and protect them. So, so insurance and by the way, after that, obviously you want to have some fun in your life. So you know, you could buy that, you know, 14 year old used car, I'll give you that. But then, then, then you know, you should invest it and at a young age you should be putting your money into equities and riskier assets and then the rest of the, the excess put in equities because that's likely to grow faster and put it in an equity position that's not expensive to manage.
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A
Oh, that's my favorite advice that you could have given me.
- [28:00]
B
I think now I've been a financial professional myself but, and advice, you know, advice is important but things that have high fees. Oh are just.
- [28:11]
A
We're coming as this CEO of Goldman Sachs. You're telling us to avoid fees.
- [28:15]
B
Well, before it high fees and ridiculous. You know, you know, Goldman Sachs has no problem justifying an earning and you know our business and people say thank you after it and we're in a different kind of business. We're not.
- [28:27]
A
Yeah, you're 100. Yeah. Except with Marcus. But you know, we all know how that went.
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B
Yeah. Well that's a savings account. And by the way, it's a, it's a relatively high. Oh yeah, it's great yielding savings account 100 government insured like everyone else. I put every. In fact, I have my excess cash that liquidity in Marcus because since it doesn't have branch offices and doesn't have to pay for a lot of people.
- [28:47]
A
No pens to give out.
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B
No pens to give out. No TVs.
- [28:52]
A
And so I do like a pen, though.
- [28:53]
B
That's a high. You don't want to pay a lot of money.
- [28:56]
A
You don't. No, no, of course not.
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B
So that's a good. That's a good thing for liquidity. But other than that, your other stuff put it in a low cost etf.
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A
Love it. So I do want to, at that this point, pause the podcast because I know you are still an active, aggressive day trader. So I just want to give you the space here to sort of do what you need to do. I'm sure it's been hard not to like, check the prices as we've been in here.
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B
You're seeing my hands shake.
- [29:27]
A
Yes, exactly.
- [29:28]
B
As I go through withdrawal. Just a second. Let me, let me look at my phone a bit and see, you know, but I'm cool. I'm cool. It could be, you know, it could be up 30%. Down 30%. You won't see a reaction from me. Oh, my God, no. You won't see a reaction for me most times, but it is an occupational hazard. I've known the price of everything all the time for just about 40 something years and so can't turn that off. I always thought like, if I'm, you know, again, not to, you know, to put a smile on something dark. If they, when they bury me, they put a. Put. They put. They better put in a market screen and extra batteries.
- [30:06]
A
They're going to create like a new kind of casket that has, or either
- [30:09]
B
have a wire that just goes down with a permanent power source. So I could just keep checking the market, but I think we can make that happen. By the way, in my line of work, it's not considered rude to be having conversation with somebody while you're staring at your.
- [30:22]
A
That's why I wanted to give you the space. Like, this is a safe space for you if you need to do your day trading.
- [30:26]
B
No, no, but I can, you know, I could put it off for a while.
- [30:28]
A
Okay, well, you let us know what you're in on because we want to
- [30:31]
B
call in my breath for six minutes and I cannot look at the market for about 12. So it, it works. It works. Okay.
- [30:36]
A
You're like me with celebrity gossip. That's how I am. Okay. I was on Threads yesterday Which low key is my favorite social media. And I saw someone write that they like all the financial advice books out there are so outdated because like the economy and the world has changed so much since they were written. And so I just wanted to give a general PSA that they are. But there is a new one coming out May 12th. I wrote it and it's called Future Rich Person the new rules for building wealth. Even if you're stuck, broke and that billionaire won't text you back. If you want to work for yourself or you want to buy a house with your best friend or. Or you want to have a kid when you're 45 or you want to learn how to optimize credit card points to fund your lifestyle even though your parents always said that they were dangerous or you want to grow generational wealth. Like all of these new things, these new opportunities that we have in 2026, it explains how to leverage and utilize to really get your financial freedom on. So right now I'm doing all of these insane promos around the pre order like. Like if you pre order, you unlock all of these amazing resources that are usually behind paywalls. So go to Mrs. Dow Jones.combook to pre order Future Rich Person. It is out May 12th. But if you pre order, you're going to unlock access to the Future Rich club, which will give you lots of freebies that will help you get rich. Thanks for the support. I want to ask you specifically though, because you watch the trading floor go from pure human chaos to almost total automation.
- [32:09]
B
Like you talk about another thing, right? Yeah.
- [32:11]
A
In the book, like you when you started out, everyone's screaming on the phone and buy, sell.
- [32:15]
B
Which is like there's a movie that people. That's an old movie and nobody likes to watch, you know, old movies. But there's an old movie called Trading Places. But you know, people are waving their arms on a trading room. Yeah, that's the way it was. You could hear, you know, it's very funny. People be screaming at each other, be sitting there. Everyone's sitting next to each other by
- [32:31]
A
way smoking cigarettes, take out containers on
- [32:34]
B
the floor and screens that weren't, you know, they didn't have windows in those days. You stacked one screen at top another. People were risking their lives sitting at a desk because it could topple on your head and people shouting across the room. But if somebody said something wrong, then all noise would stop and you could hear a pin drop. I mean people are fighting with their husbands and their wives while they're sitting on the floor. And now you go into a trading floor today and people are communicating digitally to the person sitting next to them. You could hear a pin drop. And I go, wow, this is sure difference. When I first started out, mistakes are expensive. You know, you say the wrong commodity, you think you bought something, but you sold it. And it turns out that was wrong, you have to undo and you lose. How much could you lose? You could lose millions today on a trading room floor. If there's a wrong piece of software, you're not listening to it, you're not seeing it, it's invisible. You can have something go wrong and in one second, thousands of transactions could happen. You could lose tens of. I mean, it's more. The world is more dangerous.
- [33:40]
A
Yes. My dad works at Goldman and there was like something during the pandemic where someone was trading from their house for a client and it was a disaster.
- [33:47]
B
Or they put in a piece of. They put in a piece of errant software and it somehow it sold every security for a dollar for like 30 seconds. But it was like half a billion dollars worth of stuff.
- [33:59]
A
So I have something to show you. Producer Emma, Will you please bring me.
- [34:05]
B
This is such. You are so well staffed.
- [34:07]
A
Thank you so much. It's so crazy. So what I have here is. There is. This is the new edition of Interview magazine, and there is an article in it about the finest men in finance.
- [34:19]
B
Oh, my goodness. Oh, I'm so. I'm so honored. Well, first I was gonna say, are you.
- [34:23]
A
Are you upset that you're not in it? Would you have done this at their age? Like, these are. I think two of these people work at Goldman.
- [34:32]
B
Oh, I see. So what they are doing is they are. They are asking to be killed. Is that it?
- [34:36]
A
Exactly. Exactly.
- [34:38]
B
Yeah. No, I wouldn't. I.
- [34:42]
A
You know, we hear they're on the chopping.
- [34:44]
B
I don't know. I don't know them from Adam. And so I don't know them, and I don't know what they do with the rest of their lives. They may be the, you know, they may be the wardens of their churches. And.
- [34:53]
A
Yeah, they're done.
- [34:54]
B
You know, they may be going to heaven, I would say, and they may. And they may be up for the Nobel Peace Prize in the other part of their lives, but I would say
- [35:04]
A
this one says new money.
- [35:06]
B
That would not have been.
- [35:08]
A
Would you have done this now?
- [35:09]
B
That would not have been the direction in which I would have exercised my judgment. But again, I don't know who they are. And by the way, if they're the kids of my friends. I think it was perfectly appropriate and fine that they did that.
- [35:21]
A
Oh, gosh. Okay. Yeah, this one is a market associate. Yeah, we've got some good. These could have been your colleagues, I hear. I don't think that they will last very long though. But okay. So I'm sure you're upset that you weren't in, that they missed you.
- [35:33]
B
Yes, it could have been. Yes. And it's funny, I didn't. You know, again, this was a while ago. I'm not sure all your listeners were sentient, you know, grownups at that point. But I'm talking about the financial crisis, the big one, as opposed to all the other financial crisis I had was a little over 15 years ago at this point.
- [35:51]
A
Oh, wait, but you remember.
- [35:53]
B
Oh yes, I remember. Ever occasional PTSD from it. I'm sure you do, but that was my predicate for saying that. I have been in almost every magazine, usually in very usually often in very unflattering with unflattering text surrounding it.
- [36:09]
A
Yeah, you called them the Tab Lloyds.
- [36:11]
B
I was in the again, the paper of record, the New York Post, like every day with a caricature of me to the point where I had a friend who gave me a big set of coffee mugs, each of which had a character from the New York Post and. And a big. And a big false newspaper that was labeled the daily tabloid.
- [36:31]
A
I think that you should release that merch line. So I mean your words, not mine. If you want to talk about a weight, we can talk about. Oh wait, we could talk about a little bit of a way. So you know something that I see a lot is people are obviously like, you know, I'm telling everyone, invest because that's how you can grow money. You can't save your weight a while. No, you have to do that 100 and you know. But then the moment that the market goes down, people flip out. There's some like, let's buy the dip. But then there's others who are like, oh my God, should I sell everything? Is this the end of the world? And you were in, I would say the most magnified, intense version of kidding.
- [37:07]
B
We had the crisis of the century. Like every four or five years I can name them for you. They won't necessarily mean everything, but you know, the dot com bubble and the long term capital bubble. Russia, the Russian default and the Asian currency crisis right now, the Iran, the Iran war. Oh, yes. A little.
- [37:22]
A
A little bit a blip. Yeah.
- [37:23]
B
You know, 5% knows. And the thing is the Current crisis always seems much worse because it's not resolved.
- [37:31]
A
Yes.
- [37:32]
B
Any other crisis in the past, you know, is, is resolved. So you can never, you know, you can never equate what happened in the past with the intensity of what happens today because today always feels more intense because it's not sorted out, whereas the past is always sorted out, so it can't get worse.
- [37:47]
A
You talk in the book about, you know, there was a day that was so intense and always that you like hadn't eaten anything. And finally.
- [37:54]
B
Lots of days.
- [37:55]
A
Lots of days. Great for the waistline. Pre ozempic. And you were in the car with your driver and you ate an old hot dog and he was like, oh
- [38:03]
B
no, I was coming down. I'm not kidding. This is literally true. Read the story. But at one point I had to testify in front of a pretty hostile Senate committee in the financial crisis and they decided that we should be the object of. For mortgages. Go get a mortgage from Goldman Sachs. We're not a consumer bank.
- [38:22]
A
Yeah, that's tough.
- [38:23]
B
We bought other people's secondary mortgages. So we were certainly a participant in the mortgage business. But we were hardly ground zero for the crisis. But we got through the crisis hole. We didn't lose any money. We certainly didn't go under. And so that made us more of a target. It wasn't, it wasn't particularly fun to make a target of company that went under. No, they went bankrupt or lost a fortune because they were already punished enough. So we're out there and then one day I had a testimony that started in the afternoon and went, went till way late in the night after which, and this was in, you know, in the Senate, I gave interviews. There were at least a dozen set up in the rotunda of the Capitol building. And they were, you know, CNN and all these. I didn't even know there were so many networks. And I literally gave like a 10 or 15 minute interview to each of them. And I don't think I got out till 2 in the morning.
- [39:10]
A
Oh my gosh.
- [39:11]
B
And at that point I had a driver who, you know, waited and we drove from Washington to New York. And I realized, you know, I hadn't eaten all day and I was like, you know, really, really hungry. And we stopped, you know, we stopped in Maryland on the side of the road at one of these. I don't know what, it wasn't a 7 11. It was something like that. And we go in and I'm looking for something to eat and there was one hot dog that was rotating on
- [39:37]
A
this thing, had your name on it.
- [39:39]
B
And I'm telling you, it must have been. Been. It must have been there for six months. And I said, I'll take it. And my driver had come in with me and he said, don't eat that. If you eat that, you'll die. And I said, you know, it's really possible, but at this point, I don't really care.
- [39:54]
A
Yeah, that's not the worst case scenario.
- [39:56]
B
You know, the crisis, the big crisis that again, people are only reading about now, you know, came in two forms. It was the existential part where you didn't know who was solving and who was. And we actually were quite okay. But you couldn't. If you got on a. If you got on a chair, stood up and told everybody you're fine, then people thought you were really in trouble. Oh, yeah, because you're protesting too much. It was very hard to work your way through that. And we got through that. And then there was the reputational part where they were trying to unscramble and say, you know, who's accountable? Who caused this? Who is this? Who is a bad. Who is a bad actor in this? And that was kind of the reputational part. And that went on for a long time. And it was. Was not quick. The existential part was what I was trained for as a risk manager and to, you know, rapid decision making. And the other part was just like kind of a painful, slow, twisting fall. And that took a long time. And it worked its way through, eventually worked our way through it. Then I had some, you know, personal trials and tribulations.
- [40:53]
A
Yeah.
- [40:53]
B
You know, little lymphoma, a little lymphoma, a little.
- [40:57]
A
A little cancer. Yeah.
- [40:59]
B
A little this.
- [41:00]
A
Sometimes it'd be like a little bit
- [41:02]
B
like this and a little bit like that. And then there was this moment where the clouds broke and you said, I
- [41:08]
A
want to be an author.
- [41:09]
B
And the sun was shining through and the violins welled up in the background. And I said, you know, when things are going badly, you can't leave. You can't leave. You can't run out on. You can't abandon your post when things are going badly and then things are going well, you don't want to leave, but that's when you have to go
- [41:29]
A
up because always leave them wanting a little more. Okay, I want to tell you guys about a beauty product I have been completely obsessed with lately. I am not that good at doing my makeup, despite the fact that I've done it basically every day for tens of years. It's just never clicked. And that's why I have been loving Jones Road Beauty. It is founded by the legendary makeup artist herself, Bobbi Brown. The person, not the Bobbi Brown cosmetics brand. And the product that I have been really loving is their miracle bomb. It gives you what I call a miracle glow. Like I use my skincare and then I tap it on my fingers like where you would put blush and suddenly I look alive. I looked a little snatched because it adds that little bit of contour and it just enhances my skin instead of covering it up. For a limited time, our listeners are getting a free shimmer face oil with their first purchase. When you use code Financial Tea at checkout. So all you have to do is go to Jones road beauty.com and use code Financial Tea and then after your purchase they're going to ask you where you heard about. Please support the damn show and tell them Financial T sent you. Stay rich. Score more with the college branded Venmo debit card and earn up to 5% cash back with Venmo stash Got paid back with the Venmo debit card you can instantly access your balance and spend on what you want like game day, snacks, gear, tickets and more. The more you do, the more cash back you can earn. Plus there's no monthly fee or minimum balance. Sign up now@venmo.com college card. The Venmo MasterCard is issued by the Bancorp Bank N.A. select schools available. Venmo Stash terms and exclusions apply at Venmo me stash terms max 100 cash back per month for people who are not in finance for 08 it really did villainize Wall street against the like everyday person because of the government bailouts of banks versus of the everyday person who was hurting. And obviously you were like at the forefront of that. So can we just discuss that a little bit? Explain why it was so important to bail out the banks in terms of like our capitalist.
- [43:30]
B
I know that those are the words that are used. You know, certainly the ones that went under, lost all their wealth or the stock went to zero. People, you know, lost money. But the government did take action to support the banking system. Not because they were trying to help banks, but they needed to get the banks up and going in order to help everybody else. You know, in our economic system, the government doesn't lend money to people. No, banks lend money to people. The central bank doesn't lend money. It lends money to banks that lend money to people.
- [44:00]
A
Exactly.
- [44:01]
B
If the banks are in distress and they have huge losses and they don't have enough capital. They have to go out and accumulate capital before they can start lending money out. And it was going to take forever. And what you needed to do is you needed to get money out into the, into the world, into real people's hands. And so you had to invest money into the bank so that they could do their jobs. It had the, you know, the banks that went under, went under, but the other banks, and they were, they were held. So in other words, they weren't, they may have been on the precipice and they may have been accumulating their capital instead of lending it out. And once the government gave them a little capital and maybe guaranteed some of their exposure, they didn't have to hold onto their capital. They were kind of secure. And that was a bad thing. But it was necessary to get them so that the capital they received from the government then got multiplied and lent out into the streets.
- [44:56]
A
We had to grease the wheel a little.
- [44:57]
B
They had to do that. And that created, you know, the kind of resentment and polarization that we have in the world today.
- [45:04]
A
Exactly.
- [45:05]
B
Totally comprehensible because, you know, the blue collar workers that maybe put a down payment on a second home and, you know, we're hoping to, you know, make money by, you know, doing a fixer upper American dream.
- [45:20]
A
And now I'm a real estate guru
- [45:21]
B
and they, you know, and they didn't get, you know, you know, in that immediacy, in that immediate moment from the government. And so, you know, it was a perfectly, you know, understandable, you know, appropriate outcome. And you know, and then of course, the machinery of government went and, you know, and you know, you had a kind of, you know, an assessment and it, and it resulted in tremendous amount of regulation and government intervention over the next few years, which, you know, at the end of the day was a normal reaction, but counterproductive. And over the last 10 years, kind of a steady relaxation, more turned to normal. But there's a cycle and then maybe it'll get too liberal again.
- [46:01]
A
Yes, well, hopefully the pendulum will swing, but not all of them.
- [46:04]
B
But in this country, we are the largest economy and yet the fastest growing of the big economies and the most resilient and the most flexible.
- [46:11]
A
Yeah. Europe's still not like all the way back, Right.
- [46:13]
B
How is that? Why is that? And you know, in our system, we let people get risk takers. Once upon a time, if you speculated on something, you started a business and it failed and you couldn't pay back your loans, you went to debtor's prison now your debts get expunged, you declare bankruptcy and you could start over. And you know something, and you don't get shunned for it. You don't get canceled for it.
- [46:36]
A
No, it's part of your story.
- [46:37]
B
Resilience, it's part of the risk taking. And that's why the US is the best economic system. Because we prize resilience and we pry other starts and we look forward. We identify problems and solve them ruthlessly and efficiently. In Europe, they have a different social contract. If industry changes, new technologies come along, you can't fire people. Maybe that's a good thing. That's their social contract. You don't fire people. Takes a long time for them to deploy and them to fix things because you can't make those sudden adjustments. Here we do that, you get a very dislocation. Maybe that's a bad thing. But one thing for sure is things,
- [47:19]
A
it moves things faster.
- [47:20]
B
Moves things faster.
- [47:21]
A
Yeah. A lot of people are interested in investing outside of America right now though, because there's like all this anti America sentiment. Like how do you you think about that?
- [47:29]
B
I think some of it, I tend to focus, you know, I, you know, I'm one person, so I focus on what I do. I have again, the ETFs and the very inexpensive exchange traded VXUs I have, or FEZ or European stuff I have, I have some of that too. Again, I'm not, I'm not picking individual stocks overseas because.
- [47:51]
A
Overseas, but you know, because it's not my interest.
- [47:54]
B
Yeah, I mean they're just as good, just as valid. If I live there and I grew up there and I was, and I was, you know, using those goods and services every day I'd be more focused on it. But I do have some, again, low cost ETFs in that space also. So in other words, diversification is, you know, The S&P 500 ETFs, those are highly diversified. 500, but they don't have foreign stocks. So you can have an S P 500 and you can have, you know, FTSE, European stocks.
- [48:23]
A
Yeah.
- [48:24]
B
But I tend to be more focused on America because. Why? Another reason. Which economy over time grows the fastest.
- [48:30]
A
Yeah, I did get a lot of questions of people being like, lloyd, is the market going to crash? Like, when's the next crisis?
- [48:36]
B
First of all, I'd say don't necessarily get out.
- [48:38]
A
Okay.
- [48:39]
B
So in other words, another thing is, you know, should I get out when I, you know, when I'm, you know, worried, you know, you just don't know.
- [48:45]
A
Yeah.
- [48:45]
B
It's very hard to time and statistically people can look at it. You know, if you miss the best five days of a year there, you know, your, Your performance is so much worse.
- [48:53]
A
Yeah.
- [48:54]
B
Than you know. So I wouldn't. Most people shouldn't be trying to game this in time. This. I. They just say what you should do. The way you handle it is just don't put into risky assets stuff where you're so nervous and biting your fingernails to the nubs because you need the money tomorrow 100. Just invest in a long time and just. And you don't have to look at it love. If. If you're tortured by it.
- [49:13]
A
Okay. So wrapping up. But you're just to go back to your book. I will say, you know, it's a book about very serious things. We're talking about 08. We're talking about your cancer. We're talking about growing up in the, you know, public housing. But you're also really funny. Like, there were a few parts that like, I was like, lol. Like, first of all, when you didn't know that you had lymphoma and you started to lose weight and you were like giving people advice about losing weight.
- [49:38]
B
Oh my God, I was always trying to lose weight. I just thought I had gotten good at it.
- [49:42]
A
That made me laugh. And then also when your wife was asking about your support of same sex marriage and you were like, I'm the support of some. In support of some sex marriage.
- [49:51]
B
I was a. I was a chairman of the New York City Partnership and the marriage equality. And there was a headline in the paper, you know, blank, fine supports same sex marriage. And, you know, I was in the paper every day. You know, it was a paper. I came home and I said, you know, I'm getting all this attention and I'm proud of it, but it's. It's all based on a lie. It's. It's a typo. I was an advocate for some sex marriage.
- [50:11]
A
No, it's like, actually, the book is so good. It's so funny. But I also know that you're sensing if Huber Lloyd has gotten you in a little bit of trouble. So. Is there.
- [50:20]
B
No one's perfect.
- [50:21]
A
No, it's perfect. But what would you say is the most expensive joke you've ever told?
- [50:26]
B
Not expensive, but I brushed off a reporter in the UK once. Somebody was, you know, you know, harangue. I gave a full interview and the guy. It was an article about Goldman Sachs and they were interviewing other executives the next day. And I'm walking out of the anteroom toward the elevator, and the reporter comes at me again, you know, with another question. And I said, you know, I can't talk to you now. I'm off to do God's work. Duh. It was a brush off, you know, comment. And he. It got written up as if I was making an ecclesiastical, you know, religious.
- [50:57]
A
You're being like, very serious.
- [50:59]
B
Oh, yes, I'm off to do God. I'm about to consult with God. And yeah, imagine this banker talk. Thinks he talks. And so that was kind of a nutty thing.
- [51:07]
A
But.
- [51:07]
B
And at the time, was it expensive? I mean, it was kind of, you know, kind of funny. And, you know, some people say it's still funny. Press is good press.
- [51:14]
A
Yes.
- [51:15]
B
I think. I think it made. It's now a funny story about that.
- [51:19]
A
Yes. You know, but in the midst of all the tabloids, I'm sure that was a.
- [51:24]
B
You know, it got, you know, it's like, you know, when you're testifying in front of, you know, Congress and, you know, if anybody's watched anybody testify, there's like, there's a. Well, between you and the senators or the congressmen that are grilling you, there's like this. Well, and there's a million photographers in trying to take your picture. And what they're really trying to take your picture while you're there is that. No, they want you to, like, be scratching your nose or something and take that exact picture, like at the right moment, doing cocaine. Yeah. Or something like that. And so I would always, like, you know, game it. I'd be sitting there listening and I'd see somebody staring at me and I'd go like this, and I'd see them raise the camera. And then I do that. So funny because you have to, you know, in those moments, you have to entertain yourself.
- [52:03]
A
Yeah, I'm sure a little bored. Well, thank you so much, Lloyd, for coming on the Financial Tea. I know you are a busy man. You have a lot of press stops on this one.
- [52:11]
B
Miles to go before I sleep.
- [52:12]
A
Miles to go before you sleep. But we definitely got a bestseller on our hands. And you guys listen. I would listen to the audiobook. Lloyd is really funny.
- [52:19]
B
You'll laugh, you'll cry, you'll learn a lot.
- [52:21]
A
You'll laugh, you'll cry, you'll learn, you'll invest. Whatever happens happens. But it's a journey to be on. So thank you for being here.
- [52:28]
B
Well, thank you very much for having me.
- [52:30]
A
And I'll see you when you are in Florida. Hopefully by that point. You're listening to your podcast about the
- [52:33]
B
letter Z or volume two.
- [52:35]
A
Volume two? Oh, yeah, Volume two of the book. Fingers crossed. We're all waiting to know what's the next chapter.
- [52:40]
B
Good, good, good.
- [52:41]
A
Thank you.
- [52:48]
B
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