Latest / Money And Wealth With John Hope Bryant / Recession-Proof Your Life: Don't Panic - Prepare, Position, and Prosper

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Recession-Proof Your Life: Don't Panic - Prepare, Position, and Prosper · Money And Wealth With John Hope Bryant

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  Speaker 1: Welcome to Money and Wealth with John Hope Bryant, a
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  Speaker 1: production of the Black Effect Podcast Network and iHeartRadio. Hey, hey,
• 0:15
  Speaker 1: this is John Hope Bryant. This is the Money and
• 0:17
  Speaker 1: Wealth Podcast Series on iHeartRadio and the Black Effect Network.
• 0:23
  Speaker 1: And I'm honored to come to you today with a
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  Speaker 1: powerful message. By the way, thank you all for all
• 0:32
  Speaker 1: you've done to make this one of the 75 top
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  Speaker 1: podcasts for entrepreneurship in the world on all continents, I
• 0:39
  Speaker 1: think all but one, and one of the 250 top
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  Speaker 1: business podcasts. Let's keep it going. More and the best
• 0:47
  Speaker 1: is yet to come. Thanks also for making Capitalism for
• 0:50
  Speaker 1: All a bestseller number one in two or three categories
• 0:54
  Speaker 1: on Amazon for the last six months. And please put
• 0:58
  Speaker 1: your reviews up as you read the book. It's a
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  Speaker 1: study book and an underlying book, not just a read
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  Speaker 1: book for this time, this third reconstruction, this civil rights movement,
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  Speaker 1: this time in history. So this podcast today is on
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  Speaker 1: recession-proofing your life. And the first thing I want you
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  Speaker 1: to do is not to panic. I'm not telling you
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  Speaker 1: that a recession is coming. But I am concerned enough
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  Speaker 1: with the signals I see that I want folks who
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  Speaker 1: are most vulnerable in particular to be the most prepared.
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  Speaker 1: When mainstream America has a headache, black and brown folks
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  Speaker 1: often have pneumonia. But yes, we're all sick. It's just
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  Speaker 1: some are more sick than others. So I want you prepared.
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  Speaker 1: It's better to underestimate and overperform in life than to
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  Speaker 1: overestimate and underperform. So I want you, once again, to
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  Speaker 1: be prepared. Don't panic. Prepare. Position yourself for whatever comes next.
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  Speaker 1: That's what I do. And I want you to respond,
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  Speaker 1: not react. Rainbows only follow storms. You cannot have a
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  Speaker 1: rainbow without a storm first. I've said it before. I'll
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  Speaker 1: say it again. It's a scientific fact. that you cannot
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  Speaker 1: have a rainbow without a storm first. The Bible even
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  Speaker 1: suggests that you can't grow except through legitimate suffering. So
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  Speaker 1: I don't want you to suffer, and I don't want
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  Speaker 1: you to struggle, and I don't want you to worry either.
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  Speaker 1: If you're going to pray, why worry? If you're going
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  Speaker 1: to worry, why pray? And if you're worrying, you're going
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  Speaker 1: to miss the whole opportunity that may be sitting in
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  Speaker 1: the midst of this challenge that may or may not come.
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  Speaker 1: But again, I want you prepared. Today, I want to
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  Speaker 1: talk about something nobody really likes talking about, a recession.
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  Speaker 1: And let me first say the obvious. A recession is
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  Speaker 1: to recess or to reset, not to obliterate, not a depression,
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  Speaker 1: not to implode, not to go away forever. It is
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  Speaker 1: to reset. And if you notice with every recession, there
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  Speaker 1: is a upswing and then there is a downswing, the recession,
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  Speaker 1: it recess, the economy recesses, pulls back. And then after
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  Speaker 1: the recession, I'm getting a little bit ahead of myself,
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  Speaker 1: but I want to give you a little bit of
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  Speaker 1: breadcrumbs of hope right on front so that you know
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  Speaker 1: what to focus on, that at some point in that recession,
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  Speaker 1: things change and it resets the economy. And the recession
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  Speaker 1: resets above the line, above the line of the former economy.
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  Speaker 1: So in other words, it goes up. The economy goes up.
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  Speaker 1: It recessions. It recedes. There's a recession. And then it
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  Speaker 1: recovers and recovers every time above the line. There's three
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  Speaker 1: things that have gone up since America's founding, real estate values,
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  Speaker 1: stock market values, and American GDP, gross domestic product, which
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  Speaker 1: is how you measure the wealth of a nation, generally speaking.
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  Speaker 1: So with all our problems, we recovered. And those who
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  Speaker 1: rode that recovery up actually did the best, who didn't
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  Speaker 1: freak out. Or put another way, If you buy Walmart,
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  Speaker 1: I'm picking on Walmart because I like them, and the
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  Speaker 1: world doesn't end, you don't have to worry about it
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  Speaker 1: because the world's ended. But if the world doesn't end,
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  Speaker 1: that if Walmart was trading at $ 100 a share or
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  Speaker 1: $ 200 a share, whatever it is, it doesn't matter what
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  Speaker 1: it is, and it goes down to a fraction of
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  Speaker 1: that temporarily, the company didn't change. It's the same company.
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  Speaker 1: It's just people freaked out. And so when it recovers,
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  Speaker 1: this happened with Delta Airlines, by the way, in COVID,
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  Speaker 1: and the Delta stock went down. But Delta is still Delta.
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  Speaker 1: Still have the same planes, still the same people, still
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  Speaker 1: the same brands, still the same roots, still the same value.
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  Speaker 1: And when the pandemic was over and people started flying again,
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  Speaker 1: they recovered fastest and first. And that stock value just
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  Speaker 1: went all the way up. And guess who benefited most?
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  Speaker 1: Those who stayed put and rode it back up because
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  Speaker 1: they had confidence. So a company that's that's valuable at
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  Speaker 1: $ 200 is, I think, really valuable at 50 bucks, right?
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  Speaker 1: And just buy more of it. Oh, I'm sorry. I'm
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  Speaker 1: going to tell you what to buy. I'm going to
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  Speaker 1: tell you, John Bryan gave you financial advice. That's not
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  Speaker 1: what I'm doing. I'm just saying a company that's good
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  Speaker 1: at a dollar and there's nothing that's changed about the company,
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  Speaker 1: just the environment the company is operating in, and assuming
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  Speaker 1: the world's not coming to an end, it's going to
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  Speaker 1: come back, then why is that company worth doubling down on,
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  Speaker 1: and long as it's a good company. I'm not talking
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  Speaker 1: about cryptocurrency and a bunch of flaky stuff. All cryptos
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  Speaker 1: are not flaky. But you don't want to be doing risky,
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  Speaker 1: speculative stuff in the midst of very sensitive times, in
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  Speaker 1: my opinion. You want to do things that involve yourself
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  Speaker 1: and things are really stable. And you're going to define
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  Speaker 1: and decide, not me, which things are really stable. So
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  Speaker 1: are we going into a recession? I don't know. Nobody
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  Speaker 1: knows for certain. I don't care who the economist is.
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  Speaker 1: If they tell you they don't know for certain, they're lying.
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  Speaker 1: It's like saying they know who the president of the
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  Speaker 1: United States is going to be in the next cycle.
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  Speaker 1: They just don't know. But that's actually not the most
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  Speaker 1: important question. The better question is, if a recession comes,
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  Speaker 1: are you ready? And how do you make yourself recession-proof?
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  Speaker 1: And how do you make your family recession-proof? So I've
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  Speaker 1: been through recessions. I've watched real estate values fall, including
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  Speaker 1: my own real estate. I've watched markets crash, including my
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  Speaker 1: own personal stock portfolio. I remember my mother invested in Enron.
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  Speaker 1: That wasn't a recession. That was just fraud. And she
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  Speaker 1: lost a ton of money on Enron stock. I mean,
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  Speaker 1: a ton of money. It was her biggest portfolio holding.
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  Speaker 1: I mean, she worked at McDonnell Douglas Aircraft when she
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  Speaker 1: bought that. And she worked there for 32 years. And
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  Speaker 1: she invested a lot of her money that she made
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  Speaker 1: there in that stock. And it imploded. And she still
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  Speaker 1: passed away with a million-dollar net worth. working an hourly
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  Speaker 1: job at McDonald's Aircraft, now Boeing Aircraft. And I would
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  Speaker 1: know because I was the executor of her estate. And
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  Speaker 1: you can access my mother and ask her questions, by
• 7:54
  Speaker 1: the way. She's passed on to Gloria physically, but we've
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  Speaker 1: created an AI app, an AI agent at Operation Hope.
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  Speaker 1: And it's free to you. It's called Juanita AI. And
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  Speaker 1: it's modeled after, it's the only AI agent that we
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  Speaker 1: know of in the world, modeled after a single black, female,
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  Speaker 1: head of household, three children, working an hourly job with
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  Speaker 1: a credit score of 850 plus. It doesn't go as
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  Speaker 1: high as her credit score was. It doesn't even go
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  Speaker 1: that high anymore. And making 15 bucks an hour for
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  Speaker 1: 32 years and ending up with a stock portfolio of
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  Speaker 1: will and bought and sold seven homes and a million
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  Speaker 1: dollars net worth and a trustee over her estate. And
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  Speaker 1: if she can do it, you can do it. And
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  Speaker 1: this AI agent was built after her, modeled after her,
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  Speaker 1: and has the power of her story, her personal story.
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  Speaker 1: You can talk to her, ask her questions about how
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  Speaker 1: she handled problems, including downtimes, including that Enron situation I'm
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  Speaker 1: talking about, and how she got through that, how she
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  Speaker 1: got through a divorce, how she got through challenges with
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  Speaker 1: my father, how she got through challenges with me, right?
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  Speaker 1: Juanita AI, you can check her out. She's our first
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  Speaker 1: AI coach at Operation Hope, our first Hope Inside AI coach,
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  Speaker 1: and she's free to you and available 24 hours a day.
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  Speaker 1: So If everybody's been through it and you survived it,
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  Speaker 1: you're on the other side of it, the people who
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  Speaker 1: are adults now. And I've watched hundreds of thousands of
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  Speaker 1: dollars seemingly disappear from my own investment account. But I've
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  Speaker 1: also watched wealth being created on the other side of
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  Speaker 1: a downturn. And that's really a very powerful lesson. Don't
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  Speaker 1: fear the storm. Prepare for it. Because rainbows only come
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  Speaker 1: after storms. So let me tell you a couple of
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  Speaker 1: quick stories. that are personal to me. So I bought
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  Speaker 1: a condo, a townhouse at 7122 La Tijera in Los Angeles.
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  Speaker 1: It's still there to this day. I bought it for
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  Speaker 1: $ 212, 000 as I recall, something like that. And in the 2006-ish, 2004, 2006.
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  Speaker 1: And we had a recession, a very powerful one, tied
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  Speaker 1: to mortgage fraud and mortgage crisis that was huge. It
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  Speaker 1: risked cratering the whole economy. And that was 2008. I
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  Speaker 1: could feel it coming on, 2008, 2009. I wrote about
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  Speaker 1: it with my friend Bob Ganesh, the late Bob Ganesh,
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  Speaker 1: about warning people about that. And it hit like a firestorm.
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  Speaker 1: And my property went down in value to one something.
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  Speaker 1: It was like 161 or whatever it was. And all
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  Speaker 1: my friends, my so-called friends, because they were giving really
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  Speaker 1: bad advice to me, were like, sell, sell, sell. Get
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  Speaker 1: rid of that property. And luckily for me, I realized
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  Speaker 1: they were all broke and didn't own any property themselves.
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  Speaker 1: And luckily, I just ignored them. I figured I had
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  Speaker 1: to live somewhere. Even if the property was less valuable,
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  Speaker 1: if I left that property or sold it, I should
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  Speaker 1: go buy I'd select for a loss and then to
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  Speaker 1: go rent someplace somewhere else and rent from somebody else.
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  Speaker 1: I'm like, well, let me just rent for myself. I'll
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  Speaker 1: just stay here. And then around 2009, in the middle
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  Speaker 1: of that crisis, I moved to Atlanta from Los Angeles,
• 11:02
  Speaker 1: my birth city of Los Angeles, moved to Atlanta at
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  Speaker 1: the recommendation of Ambassador Andrew Young. And I bought a
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  Speaker 1: place in Atlanta, which also, by the way, basically I
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  Speaker 1: sold it for double what I paid for it. A
• 11:16
  Speaker 1: little less than that, but about double. But that's not
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  Speaker 1: the story. The story is the first place. So about,
• 11:22
  Speaker 1: so there's a really violent recession and economic crisis and
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  Speaker 1: mortgage crisis. It's horrible. People are losing everything. And I
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  Speaker 1: rented that condo out, that townhouse out to a police
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  Speaker 1: officer who was always late for rent, a black police officer.
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  Speaker 1: So it was my community. It was a wild police officer,
• 11:37
  Speaker 1: stable income. I was trying to do the right thing,
• 11:40
  Speaker 1: but I didn't shake his credit score. And, but I, I, I,
• 11:42
  Speaker 1: you know, kept bugging him to pay us rent. He
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  Speaker 1: finally did. And I paid the property taxes, make sure
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  Speaker 1: he didn't lose the property. And one day around 2015,
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  Speaker 1: I called a broker, 2016, and a brother, Daniel Lowe,
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  Speaker 1: in Los Angeles, and really smart guy, L-O-E, L-O-W-E if
• 12:01
  Speaker 1: you need a real estate broker. He's really good and honest.
• 12:04
  Speaker 1: And I said, look, what can I get you think
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  Speaker 1: for that property in Los Angeles that I have, where
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  Speaker 1: I lived at? And I just braced myself for like,
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  Speaker 1: for him to say like 250, right? That property, he said, oh,
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  Speaker 1: I can get you $ 750, 000 all day and all night
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  Speaker 1: in 30 days. I'm like, what? So I sold that
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  Speaker 1: property and made basically 3X. And I didn't do any remodels.
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  Speaker 1: I didn't do anything crazy. No, just the market done that.
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  Speaker 1: That's the badge of power compounding interest. All I did
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  Speaker 1: was pay my property taxes and pay my mortgage and
• 12:40
  Speaker 1: make sure the plumbing was fixed. When the plumbing broke,
• 12:42
  Speaker 1: it broke every now and then. This is things that
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  Speaker 1: happen when you own a home. But it was certainly
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  Speaker 1: worth what I got in return. And then I ended
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  Speaker 1: up turning that investment into a five figure investment without
• 12:51
  Speaker 1: getting into a lot of details. I invested in something
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  Speaker 1: in Atlanta that went up significantly in value. That's not
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  Speaker 1: the house, the other house I'm talking about. Those are
• 13:00
  Speaker 1: two separate stories. Okay. So that was, if I had
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  Speaker 1: listened to my dumb ass friends, excuse me, my not
• 13:06
  Speaker 1: so intelligent friends, my broke friends who meant well, I'd
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  Speaker 1: have lost out on all of that. And I mean,
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  Speaker 1: not just the appreciation of that home, I would have
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  Speaker 1: lost out on the ability to make a five-figure investment
• 13:17
  Speaker 1: subsequently in Atlanta. Okay. There was in 2002, no, 2022,
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  Speaker 1: I'm jumping way ahead now, I put some money in
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  Speaker 1: a stock account and interest rates were going up, which
• 13:35
  Speaker 1: means equity values were probably in the inverse. And so
• 13:38
  Speaker 1: equity values, as interest were going up, the equity values
• 13:42
  Speaker 1: were sort of going down because there's a lot of
• 13:45
  Speaker 1: It's less attractive to finance stuff anyway. That's a whole
• 13:48
  Speaker 1: other conversation about finance. But the equity values were going down.
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  Speaker 1: It felt like a recession in my pocket. And I
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  Speaker 1: lost on this deposit I put in this bank. I
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  Speaker 1: lost within five months $ 500, 000. That's the amount I lost.
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  Speaker 1: And I asked my broker, who is one of the
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  Speaker 1: best in the world. This is the best firm, the
• 14:12
  Speaker 1: best broker in the world. He knows his stuff. It
• 14:14
  Speaker 1: has a whole team actually that was on me, that
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  Speaker 1: worked for me. If I stick with this, how much
• 14:19
  Speaker 1: am I going to lose additionally before the bleeding stops?
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  Speaker 1: They're like, well, we're not sure, but at least another $ 250, 000.
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  Speaker 1: So because that was not an account that I was
• 14:29
  Speaker 1: looking to grow, I was just trying to use it as,
• 14:31
  Speaker 1: you know, it was just a protection account. I said,
• 14:34
  Speaker 1: sell it. Sell it and put everything in cash. It
• 14:38
  Speaker 1: just made me feel better. Treasury bills. So I would
• 14:41
  Speaker 1: have lost $ 750, 000. Now hold on to that fact for
• 14:42
  Speaker 1: a minute. About 18 months later, the market corrected, hello,
• 14:53
  Speaker 1: and settled into the new interest rate environment and all
• 14:55
  Speaker 1: that kind of stuff, and the new norm, and companies
• 14:58
  Speaker 1: started to grow and all that kind of stuff, and
• 15:00
  Speaker 1: stock values continued to rise. So I asked my guys,
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  Speaker 1: what would have happened if I had just not done anything,
• 15:06
  Speaker 1: just not freaked out, just settled in, just let you
• 15:09
  Speaker 1: do your job? They said, well, you would have lost
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  Speaker 1: another $ 250, 000 on top of the $ 500, 000, okay? But then
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  Speaker 1: you would have recovered the 750 in total. And you
• 15:21
  Speaker 1: would have made another 750 on top of that if
• 15:25
  Speaker 1: you just did nothing. And that was a lesson because
• 15:30
  Speaker 1: I knew that. But I've already said to you, whenever
• 15:32
  Speaker 1: you're making an emotional decision, it's going to be a
• 15:35
  Speaker 1: bad one. And that was an emotional decision. But it
• 15:36
  Speaker 1: was one I was comfortable with because I was working
• 15:40
  Speaker 1: this to calm my emotions because this was just simply
• 15:43
  Speaker 1: an emergency pull of the strap. shoot account. It wasn't
• 15:47
  Speaker 1: what I was growing, what I was building, what I
• 15:48
  Speaker 1: was doing with my business. It was just an account
• 15:51
  Speaker 1: to have around just in case. And I didn't want
• 15:53
  Speaker 1: the just in case account to be at risk. So
• 15:55
  Speaker 1: I was okay making this less than totally smart business
• 16:00
  Speaker 1: decision then and now. But that's an example from a
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  Speaker 1: recessionary perspective of how things recover as long as the
• 16:09
  Speaker 1: world economy recovers. And if the world economy doesn't recover,
• 16:11
  Speaker 1: because we're the biggest economy in the world, the U.S.,
• 16:14
  Speaker 1: And what are you worried about anyway? It's lights out
• 16:16
  Speaker 1: for everybody, right? I'm joking, but I'm serious. So this
• 16:20
  Speaker 1: is not an episode of predicting a recession. Let me
• 16:24
  Speaker 1: say that. It's about understanding economic cycles and making yourself
• 16:27
  Speaker 1: more resilient. Financial literacy is not predicting what's going to happen.
• 16:34
  Speaker 1: Financial literacy is being prepared for whatever happens. So I
• 16:41
  Speaker 1: want you to Really bake these words in your head.
• 16:46
  Speaker 1: Don't panic, prepare, position, prosper. So what is a recession?
• 16:55
  Speaker 1: People throw this word around like everybody knows what it means,
• 16:58
  Speaker 1: and most people absolutely don't. A recession isn't merely the
• 17:01
  Speaker 1: stock market going down, if it does, or real estate
• 17:04
  Speaker 1: going down, or it isn't high inflation. It isn't simply
• 17:09
  Speaker 1: that things feel or are expensive. And the familiar two
• 17:14
  Speaker 1: consecutive quarters of negative GDP, gross domestic product, is a shorthand,
• 17:20
  Speaker 1: not America's official definition. So that is a shorthand definition
• 17:23
  Speaker 1: of a recession. Two quarters, consecutive quarters, back to back,
• 17:27
  Speaker 1: of negative GDP growth. So the NBER, which is a
• 17:37
  Speaker 1: national bureau that measures economic research and impacts at the
• 17:42
  Speaker 1: federal government, looks for a significant decline in economic activity
• 17:46
  Speaker 1: spread broadly across the economy, including employment, income, producing, production,
• 17:52
  Speaker 1: and spending. An economy is basically millions of people buying
• 17:56
  Speaker 1: things from millions of other people, okay? And 70% of
• 18:00
  Speaker 1: the US economy is consumer spending. So if consumers get nervous,
• 18:06
  Speaker 1: if confidence drops, if spending slows, businesses make less money,
• 18:11
  Speaker 1: They stop hiring people. They start laying people off. Consumers
• 18:16
  Speaker 1: get more nervous. Prices go up, supply and demand, and inflation,
• 18:20
  Speaker 1: other things are impacting everything. Spending falls further. And that
• 18:24
  Speaker 1: happens for six months. That's a recession. But here's the
• 18:31
  Speaker 1: other half people forget. Expansion, peak, contraction, bottom, recovery, expansion.
• 18:41
  Speaker 1: And if you didn't catch that, rewind the podcast and
• 18:44
  Speaker 1: listen to it again. Capitalism moves in cycles. Winter doesn't
• 18:50
  Speaker 1: mean spring has been canceled, people. It means that that's
• 18:54
  Speaker 1: the season you're in at the moment. So a recession
• 18:56
  Speaker 1: isn't necessarily capitalism breaking. Sometimes it's capitalism resetting. And it's also,
• 19:03
  Speaker 1: you know, capitalism is both constructive and destructive. You know,
• 19:08
  Speaker 1: Sears is not around anymore. Kmart's not around anymore, but
• 19:14
  Speaker 1: Amazon and Walmart are. Blockbuster isn't around anymore. Netflix is.
• 19:23
  Speaker 1: Kodak booths aren't around anymore. Your Apple iPhone is, and
• 19:28
  Speaker 1: I can go on and on and on. Circuit City
• 19:30
  Speaker 1: isn't around anymore. Best Buy is, until it isn't. So
• 19:35
  Speaker 1: things change, and I want you to change with it.
• 19:40
  Speaker 1: So what I'm doing here is I'm not forecasting doom, certainly.
• 19:46
  Speaker 1: I'm actually quite optimistic about the future. even with the
• 19:50
  Speaker 1: challenges that I see in the horizon. I'm seeing enough
• 19:53
  Speaker 1: yellow lights, though, that I think financially intelligent people should
• 19:57
  Speaker 1: be paying attention and preparing, as I have. As of
• 20:02
  Speaker 1: September 2026, the national unemployment rate remains about 4.1% people.
• 20:07
  Speaker 1: And the economy is still producing jobs. So that's good.
• 20:10
  Speaker 1: GDP is still growing, gross domestic product, although growth has
• 20:14
  Speaker 1: slowed from 2.1% annualized growth in the first quarter to 1.5%
• 20:19
  Speaker 1: in the second quarter, reason for concern. But this is
• 20:24
  Speaker 1: not 2008 where there was an implosion of the economy
• 20:28
  Speaker 1: and the bones of the economy were not healthy. The
• 20:30
  Speaker 1: bones of this economy is essentially very healthy, actually, the
• 20:34
  Speaker 1: basic bones of the economy, which is why you can
• 20:36
  Speaker 1: throw all this stuff, this bad decisions, bad policies, whatever
• 20:39
  Speaker 1: it is, into the wheels of the economy is grounded
• 20:42
  Speaker 1: up tariffs and all kinds of stuff that I don't
• 20:44
  Speaker 1: necessarily agree with that has not, to my amazement, shuttered
• 20:48
  Speaker 1: the economy or caused it to break or low consumer confidence,
• 20:51
  Speaker 1: low aspirational belief from people, high prices, high gas prices.
• 20:58
  Speaker 1: The American economy is so dang on strong that it's
• 21:00
  Speaker 1: just punched right through this stuff, but it can only
• 21:03
  Speaker 1: punch above its weight for so long before the fighter
• 21:07
  Speaker 1: gets exhausted. It needs a rest. The fighter needs to
• 21:10
  Speaker 1: be rejuvenated, recalibrated, needs some nutrients. The fighter needs a rest.
• 21:15
  Speaker 1: And the fighter needs to know what they're fighting for
• 21:17
  Speaker 1: and has hope for the future so they can go
• 21:19
  Speaker 1: and punch through and win on the other side. And
• 21:22
  Speaker 1: so I'm waiting to see those things on the horizon.
• 21:26
  Speaker 1: So I'm not predicting a recession. I'm going to say
• 21:27
  Speaker 1: that again. I'm predicting that eventually America will have another one.
• 21:32
  Speaker 1: I'm just not sure what it's going to be because
• 21:34
  Speaker 1: economic cycles haven't disappeared, okay? The question is whether your
• 21:38
  Speaker 1: household balance sheet can withstand it. So let's now talk
• 21:43
  Speaker 1: about Black America real quickly, because Black America is essentially
• 21:47
  Speaker 1: the canary in the coal mine on the economy. If
• 21:50
  Speaker 1: you really want to understand what's happening economically in America,
• 21:54
  Speaker 1: I often tell people to pay attention to Black America.
• 21:58
  Speaker 1: When mainstream America has a headache, Black and Brown folks
• 22:01
  Speaker 1: have pneumonia, but all of us are still sick. It's
• 22:04
  Speaker 1: just some of us are sicker than others. because some
• 22:06
  Speaker 1: of us are more vulnerable than others to things going
• 22:10
  Speaker 1: on in the economy. That's why it's really important to
• 22:11
  Speaker 1: understand what's going on in Black America and pay attention
• 22:15
  Speaker 1: to those signals. So Black unemployment has historically tended to
• 22:19
  Speaker 1: run roughly twice White unemployment, although the precise relationship varies
• 22:24
  Speaker 1: over time. So right now, Black unemployment is about 6%,
• 22:27
  Speaker 1: compared to 4.1% nationally and 3.7% for White Americans. So essentially,
• 22:34
  Speaker 1: it's doubled. As I've said, when America catches an economic cold,
• 22:37
  Speaker 1: Black America gets pneumonia. But I'm not saying that because
• 22:41
  Speaker 1: Black people are weak, in fact, I'm not even saying
• 22:43
  Speaker 1: the Black people are weak. Actually, Black people are incredibly resilient.
• 22:46
  Speaker 1: We've been doing so much with so little for so long,
• 22:49
  Speaker 1: we can almost do anything, but nothing. But we have
• 22:51
  Speaker 1: less reserves, cash reserves. We don't have inherited wealth and
• 22:54
  Speaker 1: all that kind of stuff. And that's just an is, people.
• 22:59
  Speaker 1: I'm saying that we're more economically exposed. And so we
• 23:02
  Speaker 1: tend to feel the pain quicker than other folks. I mean,
• 23:06
  Speaker 1: there was half a million black women or something. I
• 23:09
  Speaker 1: know the number was, the visual number was like 300,000,
• 23:10
  Speaker 1: but I'm thinking more like 500,000 black women who lost
• 23:14
  Speaker 1: their jobs in the last two years. Black women helped
• 23:18
  Speaker 1: to drive the entire U.S. economy. They're a big group,
• 23:21
  Speaker 1: and that's a big deal. And I have compassion for it.
• 23:24
  Speaker 1: I talk about it in my book, Capitalism for All,
• 23:26
  Speaker 1: about how strong women are in general, and black women
• 23:29
  Speaker 1: in particular. So we have less inherited wealth. smaller emergency reserves,
• 23:34
  Speaker 1: less access to affordable capital. That's why I want you
• 23:37
  Speaker 1: to get your credit score up. Lower rates of asset ownership,
• 23:39
  Speaker 1: greater vulnerability to unemployment. The Federal Reserve reports only about 38%
• 23:45
  Speaker 1: of black adults have emergency savings sufficient to cover three
• 23:48
  Speaker 1: months of expenses. 38%. A third compared to 61% of
• 23:55
  Speaker 1: white adults. There you go again. There's that double number,
• 23:58
  Speaker 1: just doubling in the wrong direction. So the canary isn't weak.
• 24:03
  Speaker 1: The canary is an early warning system. Hello? Right? We're
• 24:09
  Speaker 1: a town crier. So if stress appears there first in
• 24:14
  Speaker 1: this group and my people, Americans should pay attention. There's
• 24:18
  Speaker 1: a retailer, one of the big retailers, and I don't
• 24:22
  Speaker 1: want to say the name because I'm not sure of them,
• 24:23
  Speaker 1: but one of the major retailers noted that people stop
• 24:26
  Speaker 1: buying beef, you know, high-quality beef and start buying chicken.
• 24:30
  Speaker 1: and then chicken strips and pork. And that was like
• 24:34
  Speaker 1: an indication. It's like they said, it's a bulletproof indication
• 24:36
  Speaker 1: that the buying habits of the American public has changed.
• 24:41
  Speaker 1: People don't have the money that they used to, and
• 24:44
  Speaker 1: they start choosing more affordable options at the cash register
• 24:49
  Speaker 1: and the grocery store. And I agree with that indication,
• 24:52
  Speaker 1: by the way. And that's happening right now. So Black
• 24:57
  Speaker 1: Americans should prepare early also. I don't want black America
• 25:00
  Speaker 1: participating in the recession primarily as sellers and participating in
• 25:04
  Speaker 1: the recovery primarily as consumers. I want us participating in
• 25:08
  Speaker 1: both periods as owners. Or as Warren Buffett would say,
• 25:12
  Speaker 1: when folks are greedy, be afraid. When people are afraid,
• 25:15
  Speaker 1: be a little greedy. So you want to buy assets,
• 25:19
  Speaker 1: good assets, when they're down and hold on to them
• 25:22
  Speaker 1: and ride them back up. And that's how you build
• 25:25
  Speaker 1: sometimes the greatest wealth. You're not rooting for somebody's problems
• 25:28
  Speaker 1: or pain, of course, but if somebody's in a bind,
• 25:32
  Speaker 1: there's nothing you can do about it. You didn't create it.
• 25:34
  Speaker 1: But somebody's going to benefit from the upswing, and I'd
• 25:36
  Speaker 1: like for that to be you. Business is not personal.
• 25:39
  Speaker 1: So protect your human capital. For most people listening to me,
• 25:42
  Speaker 1: your biggest asset isn't your house. It's you. So someone
• 25:46
  Speaker 1: making $ 75, 000 a year for 30 years, that's $ 2. 5 million
• 25:51
  Speaker 1: of gross human capital earnings before raises. Notice I said
• 25:56
  Speaker 1: human capital, capitalism. You're using your human capital, trading your
• 26:02
  Speaker 1: human capital for a paycheck if you're working for somebody else.
• 26:05
  Speaker 1: We're all involved in this free enterprise and capitalist system.
• 26:08
  Speaker 1: I want you to ask yourself, how recession-proof am I?
• 26:12
  Speaker 1: What can I do that somebody else needs if there's
• 26:17
  Speaker 1: a problem? Can I help somebody if I can't help myself,
• 26:19
  Speaker 1: can't help anybody? What can I do that somebody needs
• 26:23
  Speaker 1: as a service? that I can be paid for? What
• 26:27
  Speaker 1: can I do that somebody will pay me for and
• 26:29
  Speaker 1: not just that they like? What's a valuable service even
• 26:33
  Speaker 1: in down times? What new skills can I acquire? I
• 26:37
  Speaker 1: encourage everybody to go get a certificate in AI. No
• 26:40
  Speaker 1: matter what you're doing, get a certificate in AI. It'll
• 26:42
  Speaker 1: make yourself almost bulletproof in the new economy. As I've said,
• 26:49
  Speaker 1: with regard to AI, AI is not going to take
• 26:51
  Speaker 1: your job, in my opinion. But somebody who knows how
• 26:54
  Speaker 1: to use AI just might. I want you to build liquidity.
• 27:00
  Speaker 1: Cash is boring until you need it. I try to
• 27:04
  Speaker 1: keep a lot of cash around. I've got real cash.
• 27:06
  Speaker 1: I've got savings. I've got checking. I mean, I got cash.
• 27:10
  Speaker 1: I got treasury bills. I got bonds. I've got stocks.
• 27:13
  Speaker 1: They're marketable securities, meaning that in all times, uptime and
• 27:17
  Speaker 1: down times, you can sell them. Marketable securities. I know
• 27:19
  Speaker 1: I'm talking about this like it's easy, but I had nothing.
• 27:22
  Speaker 1: You guys know my story. I was homeless and the
• 27:24
  Speaker 1: whole thing. But then there was times where I can
• 27:26
  Speaker 1: remember times I had 200 bucks was a lot of money.
• 27:30
  Speaker 1: But whatever your situation is, relative to your situation, you
• 27:33
  Speaker 1: want to try to have a few bucks in your
• 27:34
  Speaker 1: pocket that doesn't have somebody's name on it. You want
• 27:36
  Speaker 1: to have some credit cards that's got some limit on it.
• 27:38
  Speaker 1: Don't live on the edge right now. This is the
• 27:40
  Speaker 1: wrong time for doing crazy, sketchy stuff. Like I said,
• 27:44
  Speaker 1: buying most cryptocurrencies. This is the wrong time for that.
• 27:47
  Speaker 1: Wrong time for gambling. You want to batten down the hatches,
• 27:51
  Speaker 1: find a nice, safe place to hide for the next
• 27:54
  Speaker 1: year or so, and just watch for deals and opportunities.
• 27:57
  Speaker 1: And get your credit score up so you can take
• 27:58
  Speaker 1: advantage of these deals and opportunities also. So cash in
• 28:04
  Speaker 1: good times looks lazy. Cash in bad times looks brilliant.
• 28:08
  Speaker 1: Get your credit right. That's where Operate Hope fits naturally
• 28:11
  Speaker 1: into the conversation, or my mother wanted an AI. The
• 28:15
  Speaker 1: AI agent is a brilliant access for you. I want
• 28:18
  Speaker 1: you to know your credit score. I want you to
• 28:19
  Speaker 1: pay your bills on time. I want you to lower
• 28:22
  Speaker 1: your utilization on credit cards and lines of credit because
• 28:26
  Speaker 1: in bad times and recession hits, the bank's going to shut,
• 28:29
  Speaker 1: not shut, they're going to cut the limits on all
• 28:32
  Speaker 1: those things. And you don't want to be at the limit.
• 28:34
  Speaker 1: And also the easiest way to boost your credit score
• 28:36
  Speaker 1: is to keep a lower limit on your consumer credit cards.
• 28:40
  Speaker 1: That is the thing that impacts your credit score more
• 28:42
  Speaker 1: than anything else is higher utilization against your limit versus
• 28:46
  Speaker 1: what you've used. I want you to correct errors on
• 28:48
  Speaker 1: your credit report. My team can help you with that
• 28:51
  Speaker 1: and work towards a 700 credit score. My team can
• 28:54
  Speaker 1: help you with that. Don't wait until you desperately need
• 28:57
  Speaker 1: money to become credit worthy. Hello? Right? A good credit
• 29:05
  Speaker 1: score gives you options and gives you, it makes you
• 29:09
  Speaker 1: look like a prince or a princess in bad times
• 29:12
  Speaker 1: because the banks, credit unions, you know, credit providers, they're
• 29:15
  Speaker 1: looking for people who have great credit in bad times
• 29:19
  Speaker 1: because they just have to lend money in order to
• 29:21
  Speaker 1: make any money. So they're going to, where everybody else
• 29:23
  Speaker 1: is getting their credit lines. Slash, you may get yours
• 29:27
  Speaker 1: approved and expanded. I want you to attack stupid debt.
• 29:33
  Speaker 1: Debt isn't automatically evil. Debt you don't understand is dangerous.
• 29:39
  Speaker 1: And high interest credit cards plus job loss can turn
• 29:43
  Speaker 1: a downturn into a household catastrophe. So all those 18%
• 29:47
  Speaker 1: credit cards and 26% department store credit cards have got
• 29:51
  Speaker 1: a nice little shiny cover and everything. But you look
• 29:54
  Speaker 1: at the back of us, it's 26%. I used to
• 29:55
  Speaker 1: have them. I'm not hating on you, but cut them up,
• 29:58
  Speaker 1: pay them off. get rid of them. They're literally eating
• 30:01
  Speaker 1: you alive. For every dollar that you spend, you're spending
• 30:04
  Speaker 1: a quarter of that on interest if it's a 26%
• 30:08
  Speaker 1: credit card. I want you to know your burn rate,
• 30:12
  Speaker 1: what does that mean? It means how much cash you're
• 30:15
  Speaker 1: burning through on a 30-day basis. What does your life cost?
• 30:20
  Speaker 1: This is not your income. It's what does your life cost? Mortgages, rent,
• 30:25
  Speaker 1: car notes, food. You have to eat. Do you know
• 30:29
  Speaker 1: that The world's seven meals from anarchy. If a city
• 30:34
  Speaker 1: or a county or a state doesn't eat seven meals,
• 30:37
  Speaker 1: the whole place, people just lose their mind. It's amazing
• 30:41
  Speaker 1: how reliant we are on two meals a day, three
• 30:45
  Speaker 1: meals a day. We take it for granted, but it's
• 30:47
  Speaker 1: like everything. I want to make sure you have food.
• 30:51
  Speaker 1: We have refrigerators and all that kind of stuff in
• 30:53
  Speaker 1: the United States, but you go to Africa or you
• 30:54
  Speaker 1: go to a third world country in parts of Africa,
• 30:57
  Speaker 1: third world countries and in developing countries even, and you
• 31:00
  Speaker 1: don't see refrigerators. You see people going out and they
• 31:04
  Speaker 1: eat what they kill. They literally go out and they
• 31:06
  Speaker 1: hunt for their meal for the day or whatever, or
• 31:08
  Speaker 1: buy their meal for the day or whatever, and they
• 31:11
  Speaker 1: come home and cook it. There's no refrigeration. And in
• 31:15
  Speaker 1: some ways, by the way, that it's healthier because you
• 31:18
  Speaker 1: don't want a bunch of preservatives. Anyways, holding the conversation
• 31:20
  Speaker 1: on wellness. So how much does your food cost? How
• 31:24
  Speaker 1: much is your insurance? What's your debt level? What's your
• 31:27
  Speaker 1: necessary debt? What's the school cost if you have to
• 31:30
  Speaker 1: pay for that? I mean, everything. What is your life cost?
• 31:34
  Speaker 1: And if your income stops tomorrow, how long before your
• 31:37
  Speaker 1: life starts coming apart can you survive? That's a really
• 31:41
  Speaker 1: important question. Not to scare yourself, to know yourself. And
• 31:45
  Speaker 1: I want you to start knowing yourself right now. Don't
• 31:52
  Speaker 1: dramatically expand your lifestyle during uncertainty. It seems like it's
• 31:56
  Speaker 1: common sense, but maybe common sense is not so common.
• 31:58
  Speaker 1: I'm telling you, your response to depression is not to
• 32:01
  Speaker 1: double down on desperation and craziness, right? If you don't
• 32:05
  Speaker 1: have to stop living your life, you just don't confuse
• 32:09
  Speaker 1: today's prosperity with a guarantee about tomorrow's dream. If things
• 32:17
  Speaker 1: look rainy outside, you probably shouldn't go outside without an umbrella.
• 32:21
  Speaker 1: and just assume the rain's going to stop, it may
• 32:23
  Speaker 1: just get wet. So I just don't want you, if
• 32:25
  Speaker 1: it looks crazy, just tap on the brakes a little bit,
• 32:28
  Speaker 1: like just slow it down. You can be wild later.
• 32:31
  Speaker 1: If this is a false alarm, then you've got more
• 32:33
  Speaker 1: than enough money to still go out and spend. It's not,
• 32:34
  Speaker 1: you know, spending the opportunity to shop or not gone away.
• 32:40
  Speaker 1: So I want you to understand what happens on the
• 32:45
  Speaker 1: other side of a challenge. So I saw homes going
• 32:51
  Speaker 1: to foreclosure in Texas and all over the place. It
• 32:53
  Speaker 1: was every race, every place. In fact, the number one
• 32:56
  Speaker 1: group that went into foreclosure were actually white men, single
• 33:00
  Speaker 1: white men. So this wasn't a racial thing. It was everything,
• 33:02
  Speaker 1: the mortgage crisis. And there was all kinds of crazy
• 33:05
  Speaker 1: stuff going on. People give you a free lunch, it's
• 33:08
  Speaker 1: probably stale. People give you reverse mortgages, negative amortization mortgages. Please,
• 33:13
  Speaker 1: the answer is no. A negative amortization mortgage means that
• 33:16
  Speaker 1: And it was an adjustable negative amortization mortgage. And I
• 33:19
  Speaker 1: want you to get a 30 year mortgage. I want
• 33:20
  Speaker 1: you to get a fixed rate loan, fixed rate, period, period, period.
• 33:24
  Speaker 1: This is an adjustable rate mortgage, which means the home
• 33:26
  Speaker 1: mortgage can go up and down every month. You have
• 33:29
  Speaker 1: no idea what you're paying. And the floor, meaning the
• 33:32
  Speaker 1: bottom number that they can charge you is limited. And
• 33:35
  Speaker 1: the up number might, the above number might be, you know,
• 33:37
  Speaker 1: plus or minus 10 or 15%, which means that it
• 33:40
  Speaker 1: can be nosebleed area on this interest rate in these payments.
• 33:44
  Speaker 1: And a negative amortization mortgage means that every payment you make,
• 33:49
  Speaker 1: you owe more money tomorrow. That's what negative amortization means.
• 33:55
  Speaker 1: You ask the wrong question. You ask, what's the payment,
• 33:58
  Speaker 1: when you should ask, what's the interest rate? And you
• 34:00
  Speaker 1: never ask what the payment is when there's an interest
• 34:01
  Speaker 1: rate attached, and certainly when it's talking about five or
• 34:03
  Speaker 1: six figures. So I realized that there was going to
• 34:08
  Speaker 1: be a national mortgage crisis because people were financially illiterate,
• 34:11
  Speaker 1: and you had postal workers buying many mansions. I knew
• 34:15
  Speaker 1: the jig was up then. And I just waited. And
• 34:21
  Speaker 1: it was all this carnage and all these bad stories.
• 34:23
  Speaker 1: It was very sad. And then the sun came up.
• 34:26
  Speaker 1: And all these homes are being given away in Texas,
• 34:28
  Speaker 1: given away in Detroit, given away in Florida. All of
• 34:33
  Speaker 1: a sudden, their values just came back. So on the
• 34:36
  Speaker 1: way up, as the values were increasing, I noticed that
• 34:40
  Speaker 1: some companies had bought some of these properties and rehabbed them,
• 34:44
  Speaker 1: rehabilitated them. which was a good thing because they were
• 34:46
  Speaker 1: in dilapidated shape after the home was foreclosed. People owned it,
• 34:50
  Speaker 1: didn't take care of it. Then they rented them out.
• 34:53
  Speaker 1: They rented them out for five or seven years. The
• 34:55
  Speaker 1: way Wall Street works, your investors want their money back
• 34:57
  Speaker 1: after about five years. I knew it. Okay, this was 2009, 2010, 2011.
• 35:02
  Speaker 1: By 2015, 2016, all the investors want to sell. I'm sorry,
• 35:06
  Speaker 1: they want their money back. That means that all the
• 35:08
  Speaker 1: Wall Street firms are going to be selling at the
• 35:10
  Speaker 1: same time. I hope this is making sense to you.
• 35:12
  Speaker 1: This is not the lesson. It's I don't need to
• 35:14
  Speaker 1: break this down, but I do want you to understand
• 35:15
  Speaker 1: the opportunity. Make a long story short, when that happens,
• 35:18
  Speaker 1: you have more supply and less demand. Is that right? Yep.
• 35:24
  Speaker 1: The prices go down of that thing in a controlled
• 35:28
  Speaker 1: market versus a false market where the government or somebody
• 35:32
  Speaker 1: fakes the price, fixes the price, which is faking the price.
• 35:35
  Speaker 1: But we're in a free market system in America. So
• 35:38
  Speaker 1: I knew the prices were going to go down because
• 35:40
  Speaker 1: everybody was selling at the same time. Sure enough, they did.
• 35:43
  Speaker 1: And I bought homes for $ 88, 000 on average in Atlanta
• 35:49
  Speaker 1: and in North Florida. And I sold those homes five
• 35:51
  Speaker 1: years later for, let's say, $ 250, 000 or $ 350, 000. The details
• 35:56
  Speaker 1: don't matter. What matters is that you see that a
• 36:00
  Speaker 1: bad situation turned into a good situation if you just
• 36:03
  Speaker 1: believed in America and believed in yourself and believed in
• 36:06
  Speaker 1: real estate in this example and believed in working class people.
• 36:09
  Speaker 1: I knew that the person who was a manager at
• 36:11
  Speaker 1: the local, you know, store or whatever, or the local,
• 36:17
  Speaker 1: you know, the trucker or whatever, I knew they'd pay
• 36:20
  Speaker 1: their bills and I knew I could rent to them
• 36:23
  Speaker 1: and they would always deliver. And certainly they had a
• 36:26
  Speaker 1: good credit score and a good job. And I thought
• 36:29
  Speaker 1: they had good character, which most people do. So this
• 36:34
  Speaker 1: is one of my personal stories. And And I think
• 36:38
  Speaker 1: I sold the company at the right time and all
• 36:40
  Speaker 1: that kind of stuff. The company simply has had a
• 36:42
  Speaker 1: different reality after I sold the company. But you also
• 36:47
  Speaker 1: realize you don't control outcomes. And you have to let
• 36:50
  Speaker 1: things go and start anew. And so there might be
• 36:53
  Speaker 1: your own little personal recession. It may not be a
• 36:55
  Speaker 1: systemic recession. It might be your own little personal reset.
• 36:58
  Speaker 1: And the lessons in that are very valuable if you're
• 37:01
  Speaker 1: willing to learn them. So a recession can create lower valuations.
• 37:07
  Speaker 1: In stocks, real estate, businesses, equipment, commercial leases, talent, people
• 37:14
  Speaker 1: pay less for human capital in recessionary times. Market share
• 37:19
  Speaker 1: of a company or enterprise. But don't distress. I'm not
• 37:24
  Speaker 1: telling you that because something fell 40% it's cheap. Sometimes
• 37:29
  Speaker 1: something falls 40% because it's terrible. But... Sometimes something is
• 37:35
  Speaker 1: really great that's 40% because people are just freaked out.
• 37:39
  Speaker 1: And if you're financially literate and you understand how to
• 37:40
  Speaker 1: read a balance sheet, an income statement, and the news,
• 37:43
  Speaker 1: and tell fake from what's real, you can tell, okay,
• 37:47
  Speaker 1: this is actually a really valuable company or a piece
• 37:50
  Speaker 1: of real estate or whatever it is. It's just people
• 37:53
  Speaker 1: don't see the value that I see right now. And
• 37:55
  Speaker 1: there might be your unique opportunity. Prepare before opportunity arrives
• 38:03
  Speaker 1: is what I'm trying to tell you. Because the wealthy
• 38:05
  Speaker 1: advantage themselves during recessions. They don't do it because they're genius.
• 38:10
  Speaker 1: They get there because they're just prepared for that rainy
• 38:14
  Speaker 1: day to stop raining. It's optionality. Liquidity, cash, creates optionality.
• 38:21
  Speaker 1: Good credit creates optionality. Knowledge creates optionality. Relationship capital. creates optionality.
• 38:29
  Speaker 1: Know your banker, know your accountant. Don't wait to a
• 38:31
  Speaker 1: crisis to call your banker. Go take them to lunch,
• 38:33
  Speaker 1: get coffee, go down to the branch, get to know them,
• 38:37
  Speaker 1: their family, their family story. Get them comfortable with you
• 38:39
  Speaker 1: because banking is a trust business. It's about trust. The
• 38:43
  Speaker 1: word credibility comes from the Latin root word credito, which
• 38:46
  Speaker 1: means credibility. Did you know that? And the word capitalism
• 38:50
  Speaker 1: or capital comes from the Latin root word capitas or knowledge,
• 38:54
  Speaker 1: broadly defined knowledge in the head. So capital, capitalism, Credit, credibility.
• 39:01
  Speaker 1: Banking is a trust business. Do you have the knowledge?
• 39:04
  Speaker 1: Do people believe in you? And do people believe you're smart?
• 39:08
  Speaker 1: And do they trust you? And they won't do any
• 39:11
  Speaker 1: of those things unless you go and build a rapport
• 39:13
  Speaker 1: and a relationship with them so they look you in
• 39:15
  Speaker 1: the eye and make a character decision. Banking was, first
• 39:18
  Speaker 1: and foremost, character lending based on your character. Is this
• 39:21
  Speaker 1: starting to make sense to you? Give me an amen
• 39:24
  Speaker 1: in the comments when you see some of these clips
• 39:25
  Speaker 1: on social if this is making sense to you. And
• 39:31
  Speaker 1: so after you get that relationship capital locked in and
• 39:33
  Speaker 1: you got all these other things locked in and you
• 39:34
  Speaker 1: got the knowledge locked in, courage creates optionality as well.
• 39:38
  Speaker 1: And courage is nothing more than your faith. What book
• 39:41
  Speaker 1: did I write this in? I think I wrote this
• 39:43
  Speaker 1: in my book, Love Leadership. I have seven out now,
• 39:45
  Speaker 1: by the way. Thanks for making most of them bestsellers.
• 39:48
  Speaker 1: Courage is nothing more than your faith reaching through your fear,
• 39:50
  Speaker 1: displaying itself as action in your life. So it's not
• 39:54
  Speaker 1: some heroic thing. It's just punching through the problems with
• 39:59
  Speaker 1: a sense of prosperity and promise for the future. If
• 40:03
  Speaker 1: you're financially drowning when opportunity knocks, you can't answer the door.
• 40:08
  Speaker 1: So that's what I'm asking you to prepare now because
• 40:11
  Speaker 1: I want you to be there for the opportunity that comes.
• 40:14
  Speaker 1: So what's the third reconstruction? I'll do a special podcast
• 40:17
  Speaker 1: just on that. I've touched on it in different places.
• 40:19
  Speaker 1: You can type in the Third Reconstruction. You can look
• 40:21
  Speaker 1: at my book, Capitalism for All, and read it there.
• 40:24
  Speaker 1: Or you can type in Third Reconstruction in my name,
• 40:25
  Speaker 1: and I'll unpack it. But the First Reconstruction was freedom.
• 40:28
  Speaker 1: That's Civil War, post-Civil War. Second Reconstruction, access. That's the
• 40:32
  Speaker 1: Civil Rights Movement and dignity and ability to cash the check.
• 40:38
  Speaker 1: And the Third Reconstruction is ownership, in my opinion, and
• 40:43
  Speaker 1: a personal agency. And it's a move from the streets
• 40:45
  Speaker 1: to the suites. And I believe we're in the third
• 40:47
  Speaker 1: reconstruction right now, in my opinion. And it'll go to 2034, 2035-ish.
• 40:52
  Speaker 1: This is ultimately why I talk so much about ownership,
• 40:57
  Speaker 1: because this is not just a time. This is your time.
• 41:01
  Speaker 1: And downturns can accelerate wealth transfers. And a big wealth transfer,
• 41:06
  Speaker 1: $ 88 to $ 100 trillion, was already underway before any of
• 41:09
  Speaker 1: this happened. That was just tied to baby boomers getting
• 41:11
  Speaker 1: older and retiring all at the same time and giving
• 41:13
  Speaker 1: that money to husbands, wives, children, et cetera. And that's
• 41:16
  Speaker 1: happening right now. It will go on for the next
• 41:18
  Speaker 1: 10 years. But in the midst of all of this stuff,
• 41:21
  Speaker 1: someone becomes distressed. They make bad decisions. They over-leverage themselves.
• 41:26
  Speaker 1: They implode financially. They sell an asset, maybe at below market,
• 41:30
  Speaker 1: below value. Someone with liquidity, cash or credit, buys it,
• 41:36
  Speaker 1: probably under market. The economy eventually recovers. The asset appreciates,
• 41:43
  Speaker 1: goes up in value. Who owns it then? That's the question.
• 41:48
  Speaker 1: Who owns it? I wanted to be you. The recession
• 41:51
  Speaker 1: didn't create the wealth gap by itself. The difference was
• 41:55
  Speaker 1: that who had the financial strength to hold on and
• 41:58
  Speaker 1: who had the liquidity to buy. Now, the wealth gap
• 42:01
  Speaker 1: is a whole other question. And some of this is
• 42:03
  Speaker 1: unfortunately tied to racial inequality and systemic bad actors and
• 42:08
  Speaker 1: all that kind of stuff and bad capitalism and government actions.
• 42:12
  Speaker 1: But the recession can... rifle you from the bottom of
• 42:20
  Speaker 1: a negative wealth gap to somewhere in the middle or
• 42:23
  Speaker 1: the top of the wealthy as part of that gap.
• 42:28
  Speaker 1: I did it. You can do it. I've seen other
• 42:30
  Speaker 1: people do it. So don't panic. Prepare. Position. Prosper. Get
• 42:38
  Speaker 1: your credit score up. Go to one of my financial
• 42:40
  Speaker 1: coaches or one of the AI to get prepared. Build
• 42:44
  Speaker 1: your emergency savings. Reduce stupid debt and stupid spending and
• 42:48
  Speaker 1: stupid decisions and stupid so-called investments. Understand your burn rate.
• 42:53
  Speaker 1: What does your life cost? Protect your human capital and
• 42:59
  Speaker 1: I'll say your spiritual capital. We're not human beings having
• 43:01
  Speaker 1: a spiritual experience. We're spiritual beings having a human experience
• 43:05
  Speaker 1: and energy matters. Learn AI. Invest intelligently. Own something. And
• 43:15
  Speaker 1: don't let fear make permanent decisions for you during temporary
• 43:21
  Speaker 1: circumstances like a downturn or a recession. America has been
• 43:29
  Speaker 1: through recessions before. We've been through depressions before. In fact,
• 43:34
  Speaker 1: you should read my brother Andrew Ross Sorkin's book called 1929.
• 43:36
  Speaker 1: It's a brilliant read. And we got through that, okay?
• 43:41
  Speaker 1: Market crashes we've been through, housing crashes, wars, pandemics. Every
• 43:46
  Speaker 1: generation has experienced a moment when somebody thought the sky
• 43:50
  Speaker 1: was literally falling. And somehow the morning came and the
• 43:54
  Speaker 1: sun came up in the morning. And I think, it's
• 43:57
  Speaker 1: my view, God's is on the throne. You know, throw
• 44:00
  Speaker 1: that in because I believe in it. It's my podcast.
• 44:04
  Speaker 1: So don't spend your life trying to avoid every storm.
• 44:06
  Speaker 1: I actually, I think you just walk right, you walk
• 44:09
  Speaker 1: right through it. And not unintelligently, but don't be afraid
• 44:12
  Speaker 1: of challenges. Stand up to them. Build a life that
• 44:17
  Speaker 1: can withstand a challenge. Because rainbows only follow storms. You
• 44:23
  Speaker 1: cannot have a rainbow without a storm first. You can't
• 44:25
  Speaker 1: grow except through legitimate suffering. And I don't trust anybody
• 44:28
  Speaker 1: who doesn't have wisdom, which is lived experience, and stripes,
• 44:32
  Speaker 1: which comes as a result of scars. I mean, the
• 44:34
  Speaker 1: stripe is a scar from being in battle, from going
• 44:36
  Speaker 1: through something. Intelligence is easy. Learning something is easy. And
• 44:41
  Speaker 1: being smart. But all that falls apart if you get
• 44:43
  Speaker 1: in a battle and you pee in your pants. Right. Right.
• 44:46
  Speaker 1: So I'm looking for somebody who can hold it together
• 44:48
  Speaker 1: when everybody's falling apart around them. Here's what financial literacy
• 44:54
  Speaker 1: taught me. You've got to still be standing when the
• 44:57
  Speaker 1: sun comes back out. And I don't just want you
• 45:01
  Speaker 1: to be standing. I want you well-positioned. I want you owning.
• 45:06
  Speaker 1: I want you participating in the recovery, particularly Black America
• 45:10
  Speaker 1: and underserved America and brown America and women and poor
• 45:14
  Speaker 1: white America. by the way, the largest group of poverty
• 45:17
  Speaker 1: in this country, during the Second Reconstruction, First Reconstruction, and today.
• 45:21
  Speaker 1: Little known fact. We cannot continue participating in recessions primarily
• 45:27
  Speaker 1: as victims, sellers, and employees, and those being exploited. I'm
• 45:34
  Speaker 1: tired of it. And then participate in recoveries primarily as consumers.
• 45:38
  Speaker 1: I'm tired of it. Aren't you sick and tired of
• 45:40
  Speaker 1: being sick and tired? We need to own something, and
• 45:43
  Speaker 1: that starts with owning ourselves, our own personal agency. That's
• 45:47
  Speaker 1: financial literacy. Another podcast from another time, but that's AI literacy.
• 45:51
  Speaker 1: That's another one way, a huge way you can come
• 45:55
  Speaker 1: up from nothing for almost no capital spend. Doesn't cost
• 45:59
  Speaker 1: anything right now to take advantage of the power of AI.
• 46:03
  Speaker 1: I think there will be a cost to it in
• 46:05
  Speaker 1: a few years. Right now you can download all these
• 46:07
  Speaker 1: apps for free is another podcast I'll do. So that's
• 46:11
  Speaker 1: financial literacy. That's entrepreneurship. That's the third reconstruction. That's capitalism
• 46:16
  Speaker 1: for all, which is good capitalism, not bad capitalism. And
• 46:19
  Speaker 1: good capitalism is where I benefit and you benefit more.
• 46:22
  Speaker 1: Bad capitalism is where I benefit and you pay a
• 46:23
  Speaker 1: price for it. It's really simple. Good debt is something
• 46:27
  Speaker 1: that's tied to something it might appreciate. Bad debt is
• 46:29
  Speaker 1: tied to something it will depreciate. So don't panic. Prepare
• 46:34
  Speaker 1: a position. And when the rainbow comes, make sure you
• 46:38
  Speaker 1: own a piece of it. This is John O'Brien. This
• 46:42
  Speaker 1: is Money and Wealth podcast series on iHeartRadio and Black
• 46:45
  Speaker 1: Effect Network And this has been a special episode from
• 46:49
  Speaker 1: me that is not predicting anything, but once you prepare
• 46:52
  Speaker 1: for everything, it's recession-proof your life. Go get my book,
• 46:56
  Speaker 1: Capitalism for All, and put a review out there. And
• 47:00
  Speaker 1: when I see you at an airport or down the street,
• 47:02
  Speaker 1: stop and let me know how this has changed your life.
• 47:05
  Speaker 1: And let me know what topics you like. I might
• 47:07
  Speaker 1: take one up just and dedicate it to you about
• 47:12
  Speaker 1: John O'Brien. Money and Wealth with John O'Brien is a
• 47:16
  Speaker 1: production of the Black Effect Podcast Network. For more podcasts
• 47:20
  Speaker 1: from the Black Effect Podcast Network, visit the iHeartRadio app,
• 47:24
  Speaker 1: Apple Podcasts, or wherever you listen to your favorite shows.