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'Ugly' Midterms, Increasing Your Nest Egg, Everywhere Millionaires · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios. Podcasts.
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  Speaker 2: Radio.
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  Speaker 3: News.
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  Speaker 4: Bloomberg Money.
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  Speaker 3: This is the Bloomberg Money Podcast. I'm Tom Keen with
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  Speaker 3: Scarlett Fu. Join us each week for a smart look
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  Speaker 3: at the forces shaping your financial life on personal finance,
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  Speaker 3: are earning, investing, and building wealth. We are live Fridays
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  Speaker 5: Good noon, everyone.
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  Speaker 3: A special edition of Bloomberg Money on our political economy,
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  Speaker 3: on personal finance, on retirement, on wealth management.
• 1:03
  Speaker 5: Strange and different guests today. We can't ignore the election.
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  Speaker 1: No, it's coming up T-minus over many days to Tuesday.
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  Speaker 1: I can't do the math anymore because we've been gearing
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  Speaker 1: up for this for so long. Four days. Thank you, Luigi.
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  Speaker 1: And of course, you see the markets kind of in
• 1:17
  Speaker 1: convulsion mode, especially if you were long tech stocks.
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  Speaker 5: I don't think it plays into the election. I think
• 1:21
  Speaker 5: it's like two discrete things here.
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  Speaker 1: I think it definitely plays into the election, how people
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  Speaker 1: feel about their finances.
• 1:27
  Speaker 5: And we begin Bloomberg Money by disagreeing with each other.
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  Speaker 5: What a marriage it is. It's going to be interesting today,
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  Speaker 5: to say the least.
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  Speaker 3: Coming up today, Henrietta Trez, all of her abilities at
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  Speaker 3: Veda Partners. Loved what she's been doing the last two weeks.
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  Speaker 3: Henrietta Trez on the House, and particularly on that Senate election.
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  Speaker 1: Plus, we welcome Michael Conrath. He's chief retirement strategist at
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  Speaker 1: JPMorgan Asset Management on how two out of five Americans
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  Speaker 1: are heading toward retirement with no real plan. They're flying blind.
• 1:55
  Speaker 5: They're flying by.
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  Speaker 3: This is the theme for us for into 2027, particularly
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  Speaker 3: coming up after this election, particularly after the presidential election.
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  Speaker 5: This debate over Social Security.
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  Speaker 4: Oh, yeah.
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  Speaker 3: Let's have a debate over the market check. The Dow,
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  Speaker 3: our best performer today, under $ 52, 000, no big deal.
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  Speaker 5: But the NASDAQ, it's called.
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  Speaker 3: A repricing is what we call this.
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  Speaker 5: Over the last two days.
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  Speaker 1: Yeah, to be polite.
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  Speaker 2: It's ugly.
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  Speaker 5: It's a special edition of Bloomberg Surveillance.
• 2:20
  Speaker 1: Well, let's just dig into how ugly it is, right?
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  Speaker 1: Intel losing at least a quarter of its value today,
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  Speaker 1: down 29%. One analyst called its outlook pretty horrible. Sluggishness
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  Speaker 1: in PCs.
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  Speaker 5: Do we all own Intel through the United States?
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  Speaker 1: Yes, taxpayers do. Yeah, we do. Amazon reported more CapEx
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  Speaker 1: than expected. That's down 2%. NVIDIA didn't even report. That's
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  Speaker 1: not for another couple of weeks, but it's also being
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  Speaker 1: dragged lower. And Bitcoin, I wanted to include because there's
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  Speaker 1: a big, big hack, $ 6. 3 billion stolen from Binance. That
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  Speaker 1: is crypto's biggest hack ever.
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  Speaker 5: And we'll have to see on that.
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  Speaker 3: But huge news flow on this Friday as we welcome
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  Speaker 3: you as you watch us on digital throughout the weekend
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  Speaker 3: as well. An important special edition conversation, the leadership of
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  Speaker 3: Tyler Kendall really covering the grind of this election.
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  Speaker 5: She could be with us. Even more special, Sarah Fryer.
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  Speaker 3: Parachutes in from the West Coast, now driving all of
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  Speaker 3: our East Coast Bloomberg Tech coverage. And on short edition,
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  Speaker 3: he's been work from home the last.
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  Speaker 1: 60 weeks in a row.
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  Speaker 3: We dragged them in. Miles Miller. And we'll get to
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  Speaker 3: that in a moment. Tyler, an immediate update here on
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  Speaker 3: where we stand.
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  Speaker 4: At the moment, as we go into election day.
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  Speaker 5: The president's out to Kansas. You and I talked two
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  Speaker 5: hours ago.
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  Speaker 4: No. Yeah, a new reporting out from the Associated Press
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  Speaker 4: saying that President Trump indeed is going to resume these
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  Speaker 4: campaign stops that the White House said that he wasn't
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  Speaker 4: going to make to reliably red states in Iowa and Kansas.
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  Speaker 4: Those states that really highlight the economic headwinds, like higher
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  Speaker 4: diesel costs in the middle of harvest season. But pair that, Tom,
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  Speaker 4: with now 20 additional tele-rallies that the White House says.
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  Speaker 5: A tele-rally.
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  Speaker 4: It's a bid to have President Trump's outreach go further,
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  Speaker 4: according to the White House.
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  Speaker 1: But what is the content of these rallies? What is
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  Speaker 1: he talking about? He's talked about Nicki Minaj and Senator
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  Speaker 1: John Husted's backside. He was upset about the cheese factory.
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  Speaker 1: But is he talking about inflation, about the economy?
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  Speaker 4: So it depends where he is in some of these states.
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  Speaker 4: Like yesterday, he was in South Carolina, a state he
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  Speaker 4: won by 18 percentage points. But we're seeing a closer
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  Speaker 4: than expected Senate race there for Darlene Graham. He had
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  Speaker 4: a lot of rhetoric to try to rally his base,
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  Speaker 4: because those are the states that Republicans are going to
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  Speaker 4: try to turn out the vote. And it's going to
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  Speaker 4: come down to really making sure that those voters that
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  Speaker 4: voted for President Trump last time will remain committed to
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  Speaker 4: the Republican Party. In other areas, like these rural states,
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  Speaker 4: he's touting things that he attempted to do to bring
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  Speaker 4: down gas prices, easing restrictions on red-dyed diesel, for example.
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  Speaker 4: But I'm looking at AAA today, the national average for
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  Speaker 4: a gallon of gas, $ 4. 20 above that $ 4 threshold.
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  Speaker 3: Still beneath that at the Wawa in New Jersey. Thank you,
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  Speaker 3: John Tucker, for that New Jersey gas quote. This is
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  Speaker 3: a pleasure for us. Sarah Fryer changed the debate on
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  Speaker 3: technology a few years ago. A small book on Instagram
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  Speaker 3: that did better than good. She drives all of our
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  Speaker 3: technology coverage.
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  Speaker 5: I got eight ways to go here.
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  Speaker 3: Scarlett's overwhelmed by how Amazon's down, Intel's down.
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  Speaker 5: I don't care.
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  Speaker 3: You are viscerally attached to Silicon Valley. How many billionaires
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  Speaker 3: are going to leave California?
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  Speaker 6: Well, I mean, as long as Mark Zuckerberg gets his
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  Speaker 6: share split.
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  Speaker 5: His C-class shares.
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  Speaker 6: Yeah, his C-class shares, he's planning to stay. I mean,
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  Speaker 6: I think that that is a little... That is certainly a.
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  Speaker 6: Problem that they've raised, like, you got to keep us here.
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  Speaker 6: But I've seen this movie before. I've seen billionaires move
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  Speaker 6: to Austin, Texas. I've seen them move to Miami. They
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  Speaker 6: always come back to the Bay Area when it's time
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  Speaker 6: to build, right? When they need the engineers, when they
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  Speaker 6: need the money, that's where it is. And so California
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  Speaker 6: does have some leverage over them because that is where
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  Speaker 6: If you want to build an important technology company, you
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  Speaker 6: build it there, and that's where their employees are.
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  Speaker 1: Well, speaking of California, Miles Miller, you've been keeping an
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  Speaker 1: eye on the security, the stepped-up security at voting sites
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  Speaker 1: across the nation. And California is really under focus. The
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  Speaker 1: Trump administration has really put its eye on that state.
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  Speaker 7: They want to be able to set aside as many
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  Speaker 7: as 20,000 mail-in ballots. That's been an issue that has
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  Speaker 7: been going back and forth, obviously went to the Supreme Court,
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  Speaker 7: and is something that will continue to be an issue for,
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  Speaker 7: that this administration wants to make an issue. Whether it's California,
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  Speaker 7: whether it's some of these other states that they see
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  Speaker 7: as key to their map, the Department of Justice for
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  Speaker 7: What they say is not the first time. They said
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  Speaker 7: this has been happening for many years. The Department of
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  Speaker 7: Justice wants there to be election monitors there to make
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  Speaker 7: sure that everything goes smoothly. But, of course, Democrats see
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  Speaker 7: that as a way to do voter disenfranchisement. And we'll
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  Speaker 7: see what actually happens on Election Day, what they actually
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  Speaker 7: will do at these poll sites.
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  Speaker 3: Real treat later in the program, Scarlett made this happen.
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  Speaker 3: Professor Zidar will join us on the everywhere millionaire. Miles,
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  Speaker 3: this election and all of Bloomberg money is about the
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  Speaker 3: fancy people. What is Hakeem Jeffries, who you spoke to recently,
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  Speaker 3: what's he going to do about people crushed by affordability?
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  Speaker 7: Well, Hakeem Jeffries was, of course, born and built in Brooklyn.
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  Speaker 7: I happen to live in Brooklyn, so I was driving
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  Speaker 7: to pick up my son, and I see a couple
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  Speaker 7: of SUVs outside.
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  Speaker 5: You stalked him for three miles.
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  Speaker 7: I said, I got to go in there and see
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  Speaker 7: who's there. And I see that's my video. I'm pretty good,
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  Speaker 7: steady on the camera. But the one thing that he knows,
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  Speaker 7: being first in the Assembly and then being in Congress now,
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  Speaker 7: is that this is going to be all about affordability
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  Speaker 7: and a way to make money. Americans whole again. And
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  Speaker 7: so that's going to be the case that he puts
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  Speaker 7: forth if he becomes Speaker of the House, if Democrats
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  Speaker 7: do wind up taking the majority in the House. And
• 7:50
  Speaker 7: what's that going to look like? It's going to look
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  Speaker 7: like actually prosecuting the case against what has happened in
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  Speaker 7: the Trump administration thus far. You look at the agency
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  Speaker 7: I cover, DHS, and some of the issues that they've
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  Speaker 7: had with some of these planes they bought and all
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  Speaker 7: that kind of stuff. It'll be many months of oversight.
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  Speaker 7: And my poor child will see me only on the
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  Speaker 7: days that I'll be not in Washington.
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  Speaker 1: The sacrifices you make, Miles, for your career. I want
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  Speaker 1: to bring back Sarah because we talk about Democrats and
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  Speaker 1: we're hearing that big tech firms are quietly hiring people
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  Speaker 1: in the event that the Democrats do sweep Congress and
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  Speaker 1: will perhaps turn their eye to those companies and start
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  Speaker 1: investigations into them.
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  Speaker 6: Well, it has been a dramatic buddy-buddy relationship that has
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  Speaker 6: bloomed over the last couple of years between big tech
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  Speaker 6: executives and Trump. They've gone on trips with him. They've
• 8:38
  Speaker 6: done dinners. They've had summits. They've been his entourage when
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  Speaker 6: he's meeting Xi Jinping. This has been beneficial for them.
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  Speaker 8: As AI requires.
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  Speaker 6: government to be on board with the companies.
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  Speaker 2: They need energy.
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  Speaker 8: They need infrastructure.
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  Speaker 2: They need all of that.
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  Speaker 6: But it's also risky because if the leadership changes in Congress,
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  Speaker 6: then they could be tied in with some of what
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  Speaker 6: you're referring to. And they do have to build their
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  Speaker 6: rosters for that.
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  Speaker 1: We are seeing that.
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  Speaker 3: I want to combine the two worlds here of Friar
• 9:15
  Speaker 3: and Kendall. I'm looking here at S Street Northwest, the
• 9:20
  Speaker 3: old Woodhouse and Pope House mansions, and a guy named
• 9:24
  Speaker 3: Bezos loaded the boat and bought them a number of
• 9:27
  Speaker 3: years ago. What's going to be the relationship of Bezos
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  Speaker 3: and tech in this new post-midterm Washington?
• 9:34
  Speaker 4: Well, of course, we'll have to see ultimately how Congress goes.
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  Speaker 4: But we can say that there was actually a flurry
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  Speaker 4: of legislation from both sides of the aisle particularly not
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  Speaker 4: around curbing the technology, but curbing data centers that serve
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  Speaker 4: as the backbone.
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  Speaker 5: That's embedded now in the conversation.
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  Speaker 8: That is on both sides of the aisle.
• 9:50
  Speaker 4: I don't know if we've seen another issue bridge the
• 9:53
  Speaker 4: partisan divide quite as much as opposition to data centers.
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  Speaker 4: 300 construction moratoriums currently in place. A slate of states
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  Speaker 4: are going to have individual localized statutes on the ballot
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  Speaker 4: when we get closer.
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  Speaker 2: But we saw already....
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  Speaker 4: A flurry of bills to impose new taxes to prevent
• 10:12
  Speaker 4: them from having tax breaks to curb data center development.
• 10:16
  Speaker 3: Should we cancel Henrietta Trace and just keep this conversation going?
• 10:19
  Speaker 1: We should continue this conversation, but we can't cancel Henrietta Trace.
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  Speaker 1: No way. Before we go, very quickly, is social media
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  Speaker 1: playing a role in this midterm election?
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  Speaker 8: Oh, always.
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  Speaker 6: I mean, I think the main problem now and always
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  Speaker 6: with elections is whether people get wrong information on methods
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  Speaker 6: or times for voting.
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  Speaker 4: Right.
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  Speaker 6: That is the most harmful type of misinformation you can
• 10:42
  Speaker 6: find on social media. Whether there's misinformation about candidates, you know,
• 10:47
  Speaker 6: people are sort of used to that now. But if
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  Speaker 6: they're misled in where and how to vote, that's a
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  Speaker 6: big problem.
• 10:52
  Speaker 5: 20 seconds.
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  Speaker 3: Is the Instagram now what you envisioned when you sat
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  Speaker 3: down to write your book?
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  Speaker 4: Oh, no.
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  Speaker 6: It has become, you know, very aligned with what TikTok is.
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  Speaker 6: They're yet again met a company chasing the competition, copying it.
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  Speaker 1: All right, Sarah Fryer, Bloomberg Tech reporter. She covers all
• 11:10
  Speaker 1: things big tech for us here. Miles Miller, our senior
• 11:12
  Speaker 1: reporter covering security. And Tyler Kendall, our Washington correspondent here
• 11:16
  Speaker 1: in New York through the midterm elections. And, of course,
• 11:18
  Speaker 1: see her live on Election Night on Bloomberg Television for
• 11:21
  Speaker 1: our special coverage.
• 11:22
  Speaker 9: Tom.
• 11:23
  Speaker 5: Coming up, Henrietta Trace. We need an update on this election.
• 11:28
  Speaker 3: We drive to it here through the weekend, Monday, to
• 11:31
  Speaker 3: all of our coverage on Tuesday and Wednesday.
• 11:34
  Speaker 1: T-minus four days.
• 11:38
  Speaker 3: You're listening to Bloomberg Money. Stay with us with more
• 11:41
  Speaker 3: to come after this. Scarlett Fu and Tom Keen, let's
• 11:50
  Speaker 3: dive right into it. A special edition today, of course,
• 11:53
  Speaker 3: Election Central, I would say, with Henrietta Trey's Avaida Partners.
• 11:58
  Speaker 3: I was trying to find a single sentence that I'm
• 12:01
  Speaker 3: most curious about. This is from a number of years ago.
• 12:05
  Speaker 3: This is the woman out of Colgate, Monica Crowley, of course,
• 12:08
  Speaker 3: associated with Fox TV and her service to the Trump administration.
• 12:13
  Speaker 3: And I just love the simplicity. Voting is as much
• 12:17
  Speaker 3: an emotional act as it is an intellectual one. You
• 12:21
  Speaker 3: have captured that with your service in the marble halls
• 12:24
  Speaker 3: of Capitol. What's the sweat, the emotion right now on
• 12:28
  Speaker 3: Capitol Hill?
• 12:29
  Speaker 8: It's honestly a difference between earned, learned experience and wisdom
• 12:35
  Speaker 8: from your own life having gone through these elections all
• 12:37
  Speaker 8: the way back to 2008. And then looking at the
• 12:40
  Speaker 8: polls and seeing that this is going to be a
• 12:42
  Speaker 8: big blue tidal wave. Certainly leadership is preparing for that outcome,
• 12:46
  Speaker 8: preparing for the fourth quarter and a reconciliation bill. But
• 12:49
  Speaker 8: amongst prognosticators, you either are trusting your earned wisdom or
• 12:53
  Speaker 8: you're just following the numbers. It's a very hard time.
• 12:56
  Speaker 1: Do we trust the numbers? The polls have been wrong
• 12:59
  Speaker 1: so many times. You just look at what happened in
• 13:01
  Speaker 1: Brazil and how people were completely shocked by Lula pulling
• 13:04
  Speaker 1: out an upset victory.
• 13:05
  Speaker 8: I have a hard time with predictive markets and with
• 13:09
  Speaker 8: just a blanket numbers game because they're so closely correlated.
• 13:13
  Speaker 8: It's not a deep sample set. And you really need
• 13:16
  Speaker 8: to get out into the heart of the country and
• 13:18
  Speaker 8: see what voters are talking about. One of the benefits,
• 13:20
  Speaker 8: I think, of living in Louisiana is all my neighbors
• 13:22
  Speaker 8: have an F-150. Many of them voted for Trump. Up here,
• 13:26
  Speaker 8: it's much more Dems are going to win 56 Senate seats.
• 13:29
  Speaker 8: I mean, I hear that live in real time from investors.
• 13:32
  Speaker 8: It's extraordinarily emotional, as Tom just suggested.
• 13:36
  Speaker 3: I look at this and, you know, I guess I
• 13:39
  Speaker 3: just want to go back to the basic principles. What
• 13:41
  Speaker 3: has changed for you and your wonderful work from the
• 13:44
  Speaker 3: cliche of kissing babies? Nobody's kissing babies anymore, are they?
• 13:48
  Speaker 8: Nobody's out here kissing babies. Gosh, I hadn't even really
• 13:51
  Speaker 8: put it into that kind of context. But it's absolutely
• 13:53
  Speaker 8: an anti-Republican, anti-Democrat fervor. And both parties are deeply unpopular.
• 13:59
  Speaker 8: You know, we're out here just slamming folks, talking about
• 14:02
  Speaker 8: things like sexual abuse of minors and having these crazy
• 14:07
  Speaker 8: already impeached candidates. I mean, it's just ugly out there.
• 14:11
  Speaker 8: So I think a large question is, who's more angry?
• 14:14
  Speaker 8: Anger turns out voters. It gets them galvanized. So who's angrier,
• 14:17
  Speaker 8: the Democrats or the Republicans right now? especially the independents.
• 14:20
  Speaker 10: Right.
• 14:20
  Speaker 1: And there are intractable problems that need to be solved,
• 14:23
  Speaker 1: but no one's really addressing it. I think about, for instance,
• 14:26
  Speaker 1: the higher rates and Social Security. Let's get a money
• 14:29
  Speaker 1: must read here from Alison Schrager. She's one of our
• 14:31
  Speaker 1: Bloomberg Opinion contributors. And she wrote that in this new reality,
• 14:35
  Speaker 1: neither party got the memo on our new rate situation.
• 14:37
  Speaker 1: Both continue to promise an even bigger state, universal generous
• 14:41
  Speaker 1: health care, child tax credits, etc., The saving grace in
• 14:43
  Speaker 1: America has been higher economic growth. That is our advantage
• 14:47
  Speaker 1: right now. But we also know, Henrietta, that AI investment
• 14:50
  Speaker 1: was a big driver of growth in the third quarter.
• 14:52
  Speaker 1: So our growth is very much dependent on continued investment
• 14:56
  Speaker 1: in AI, which a lot of people are voting against
• 14:59
  Speaker 1: this election day.
• 15:00
  Speaker 8: It's all about AI. That's boosted the stock market. You
• 15:03
  Speaker 8: could argue there'd be a recession without it. And yet
• 15:05
  Speaker 8: we all hate AI. You hate a data center. You're
• 15:08
  Speaker 8: unclear about what it's going to do for your college
• 15:10
  Speaker 8: kids that are graduating and can't get a job or
• 15:13
  Speaker 8: anybody that's stuck in a job that they don't feel
• 15:16
  Speaker 8: comfortable leaving because they don't know if AI is going
• 15:19
  Speaker 8: to replace that job. I mean, it is a extraordinarily fraught,
• 15:22
  Speaker 8: tumultuous time. And I think it's going to shape the
• 15:25
  Speaker 8: 2028 race as soon as we get over this midterm.
• 15:27
  Speaker 8: We're going to be talking about how to regulate and
• 15:29
  Speaker 8: tax AI.
• 15:30
  Speaker 3: I want to pick on someone who's been a great supporter,
• 15:32
  Speaker 3: even though he supports Arkansas football. French Hill is a
• 15:35
  Speaker 3: ranking Republican. How angry is Chairman Hill right now with
• 15:40
  Speaker 3: President Trump?
• 15:41
  Speaker 8: Well, I mean, I think there's a lot of folks
• 15:42
  Speaker 8: who are angry with President Trump.
• 15:44
  Speaker 5: They're talking to you, but they're not talking to the
• 15:45
  Speaker 5: visible media, are they?
• 15:47
  Speaker 8: No, it's quiet. It's very quiet. And one of the
• 15:49
  Speaker 8: things that I'm running around the street talking about is
• 15:51
  Speaker 8: the fourth quarter reconciliation bill. Now, why are we not
• 15:53
  Speaker 8: hearing about it?
• 15:54
  Speaker 5: Translate that, please. It's Bloomberg money.
• 15:56
  Speaker 8: OK, this is the most important thing, in my opinion.
• 15:59
  Speaker 8: So the House is lost. This is why French Hill
• 16:01
  Speaker 8: is mad. They're going to have to change the chamber.
• 16:03
  Speaker 8: It's no fun to go to the minority chambers. You're
• 16:05
  Speaker 8: going to want to be in the majority. OK, so
• 16:07
  Speaker 8: the House is lost. I think that's pretty clear. What
• 16:10
  Speaker 8: happens next doesn't matter what happens in the United States Senate.
• 16:13
  Speaker 8: This means that President Trump needs to negotiate with Democrats
• 16:16
  Speaker 8: next year to fund the war in Iran, which is
• 16:18
  Speaker 8: on month eight and still hasn't gotten an emergency supplemental.
• 16:21
  Speaker 8: and to hike the debt ceiling. The debt ceiling is
• 16:23
  Speaker 8: the kind of existential fight that you could have next
• 16:25
  Speaker 8: August with the credit ratings agencies downgrading the United States,
• 16:29
  Speaker 8: Dem saying you need to repeal the tariffs or we
• 16:31
  Speaker 8: won't budge, and Trump saying, well, let's see what happens
• 16:34
  Speaker 8: if you do flip the switch on the debt ceiling
• 16:35
  Speaker 8: and don't hike it. Let's see what happens. So they're
• 16:38
  Speaker 8: going to have to act in the fourth quarter of
• 16:39
  Speaker 8: this year on a reconciliation bill that they don't want
• 16:42
  Speaker 8: to come back and vote for. They don't want to
• 16:44
  Speaker 8: be the only ones carrying $ 100 billion for defense, a
• 16:47
  Speaker 8: third farmer's bailout, a $ 5 trillion debt ceiling hike. Maybe
• 16:51
  Speaker 8: they throw in some stuff on crypto or even the
• 16:53
  Speaker 8: hemp ban. But that's not a fun bill to write.
• 16:55
  Speaker 8: And my odds are 30% that we get that must-pass
• 16:59
  Speaker 8: reconciliation bill because, like you mentioned, so many of these
• 17:02
  Speaker 8: members just don't want to come back.
• 17:04
  Speaker 1: None of these are fun bills to pass or to write.
• 17:06
  Speaker 1: And that's kind of the problem. I mean, I think
• 17:07
  Speaker 1: about how states are required to balance their operating budgets.
• 17:10
  Speaker 8: Right.
• 17:11
  Speaker 1: But we know plenty of capable state governors end up
• 17:14
  Speaker 1: getting elected to higher office. What happens to these guys
• 17:17
  Speaker 1: once they get to Washington, where the idea of spending
• 17:20
  Speaker 1: within your means goes out the window completely?
• 17:21
  Speaker 8: No, runs straight into a wood chipper. One of my
• 17:25
  Speaker 8: favorite data sets is that members of Congress who are
• 17:29
  Speaker 8: in and new now, there's I think 83 percent of
• 17:32
  Speaker 8: the Republican conference was not there when we did TARP,
• 17:35
  Speaker 8: when we did the auto bailout, when we dealt with
• 17:37
  Speaker 8: all that spending we did to come out of the recession.
• 17:39
  Speaker 8: So they don't they don't think it's their problem. Why
• 17:41
  Speaker 8: should I have to take those votes to backfill that
• 17:44
  Speaker 8: deficit that y'all created? I didn't do this.
• 17:46
  Speaker 5: She said y'all. It's New Orleans.
• 17:48
  Speaker 1: Yeah, I get it.
• 17:49
  Speaker 5: Translate that, folks. Quickly here. We're out of time.
• 17:52
  Speaker 3: $ 118 barrel oil. I got a secretary of defense or
• 17:57
  Speaker 3: whatever he's called unloading on the latest general on planning.
• 18:01
  Speaker 3: At Fort Bragg, then to Fort Liberty, back to Fort
• 18:04
  Speaker 3: Bragg and Fayetteville. Is the military normally conservative, maybe Republican?
• 18:11
  Speaker 3: Are they behind this election? Are they walking away from
• 18:13
  Speaker 3: the administration?
• 18:15
  Speaker 8: I'm friends with a lot of Marines and military guys
• 18:17
  Speaker 8: down in Louisiana, and I will tell you that they
• 18:19
  Speaker 8: don't like any of this. And I would say that
• 18:22
  Speaker 8: many of them don't vote. There is support for President Trump,
• 18:25
  Speaker 8: but not necessarily support for down-ballot Republicans. I mean, that's
• 18:29
  Speaker 8: the benefit of President Trump, and he very much is
• 18:31
  Speaker 8: on the ticket. One final point I would make here
• 18:34
  Speaker 8: is that he handpicked the senators running in Texas, North Carolina,
• 18:39
  Speaker 8: South Carolina now with Darlene Graham, and Louisiana. And so
• 18:42
  Speaker 8: you're getting this turnout, especially among black military voters. I
• 18:45
  Speaker 8: was just at a Jamie Davis rally at the World
• 18:48
  Speaker 8: War II Museum. They're going to turn out. It's a
• 18:50
  Speaker 8: question of whether the Republicans show.
• 18:51
  Speaker 2: Up for Trump.
• 18:52
  Speaker 8: All right.
• 18:52
  Speaker 1: Henrietta Trace, she's going to be sticking with us to
• 18:54
  Speaker 1: discuss her personal strategy for personal finance. And later on,
• 18:58
  Speaker 1: we're going to speak with the author of The Everywhere Millionaire,
• 19:01
  Speaker 1: Owen Zidar of Princeton University. All that coming up. This
• 19:04
  Speaker 1: is Bloomberg Money.
• 19:07
  Speaker 3: You're listening to Bloomberg Money. Stay with us with more
• 19:10
  Speaker 3: to come after this. Bloomberg Money, the work of Henrietta Trace,
• 19:23
  Speaker 3: her personal finance, her retirement, her wealth.
• 19:25
  Speaker 5: Management, it's all voodoo.
• 19:28
  Speaker 1: That's your Halloween treat, isn't it?
• 19:29
  Speaker 5: She brought me my New Orleans NOLA voodoo thingy.
• 19:33
  Speaker 2: Well, we're really.
• 19:34
  Speaker 1: Pleased that she's here from New Orleans. Henrietta, knowing what
• 19:37
  Speaker 1: you know about how the sausage is made in Washington,
• 19:40
  Speaker 1: how things get passed or don't or get addressed or don't,
• 19:43
  Speaker 1: how do you plan your own personal finances, your own retirement?
• 19:46
  Speaker 1: I mean, do you assume that Social Security will be
• 19:48
  Speaker 1: there or not by the time you retire? retire?
• 19:51
  Speaker 8: I do not assume that Social Security will be there.
• 19:53
  Speaker 8: I see how many deficit reduction commissions we've done, Simpson-Bowles,
• 19:58
  Speaker 8: trying to pass legislation that is painful, like raising the
• 20:02
  Speaker 8: retirement age, raising the tax rates on the wealthy, creating
• 20:05
  Speaker 8: a new income tax bracket. They know they need to
• 20:07
  Speaker 8: do this. It's not confusing. It's very clear. And they
• 20:10
  Speaker 8: don't have the votes for it. And they don't want to.
• 20:12
  Speaker 8: And I would imagine with AI emerging, they're not going
• 20:15
  Speaker 8: to run a campaign in 2028 on saving Social Security.
• 20:18
  Speaker 8: They're going to talk about what we see out of
• 20:20
  Speaker 8: the Trump administration, which is growth is going to get
• 20:22
  Speaker 8: us back to solid GDP. It's going to fix Medicare.
• 20:25
  Speaker 8: It's going to fix Social Security. I don't have that
• 20:28
  Speaker 8: kind of faith and I don't assume so.
• 20:30
  Speaker 1: Do we have any lawmakers in Washington who have the
• 20:32
  Speaker 1: soul of a technocrat who can go in there and
• 20:34
  Speaker 1: like look at this very clinically and just say we
• 20:37
  Speaker 1: need to do this and this?
• 20:39
  Speaker 8: There's not a lot of senior elder statesmen left, to
• 20:42
  Speaker 8: be honest. And the budget committees, which is where you'd
• 20:45
  Speaker 8: start a lot of this stuff, have turned over in
• 20:48
  Speaker 8: the last many years, 10 years. And one of the
• 20:51
  Speaker 8: other things that's true about this election, no matter who wins,
• 20:53
  Speaker 8: Dems or Republicans, we're going to get at least 63
• 20:56
  Speaker 8: new congressmen next year.
• 20:58
  Speaker 1: Those are freshmen.
• 20:59
  Speaker 8: I have something very unpopular that I will say, but
• 21:01
  Speaker 8: I don't love a term limit because I want the
• 21:03
  Speaker 8: old guys there who've done this for a long time
• 21:06
  Speaker 8: to know how to get a bill through.
• 21:07
  Speaker 11: Yes.
• 21:07
  Speaker 4: Yes.
• 21:09
  Speaker 8: I mean, that's what I want. I think that's what works.
• 21:11
  Speaker 5: Yes, you can come back.
• 21:13
  Speaker 1: You want the institutional knowledge to be put to work.
• 21:16
  Speaker 4: Yes.
• 21:16
  Speaker 1: Henrietta Trace, thank you so much for sharing your institutional knowledge.
• 21:20
  Speaker 1: She is, of course, with Veta Partners.
• 21:21
  Speaker 2: Thank you.
• 21:26
  Speaker 3: Tom Keenan, Scarlett Fu, it's a great day to be
• 21:29
  Speaker 3: in the triple leverage.
• 21:29
  Speaker 5: It's all cash fun.
• 21:30
  Speaker 1: Yeah, it certainly is. You look at what's happening in stocks.
• 21:33
  Speaker 1: We're going to end the week on a down note.
• 21:35
  Speaker 1: Third straight week of losses for the S & P 500.
• 21:37
  Speaker 1: But the real pain is in the Nasdaq Composite Index.
• 21:40
  Speaker 1: It is down. It is just off session lows right now.
• 21:43
  Speaker 5: Let's expand our data check today.
• 21:44
  Speaker 1: Yes, let's do that. Let's get to some individual names.
• 21:47
  Speaker 1: Intel down about 28%, 29% on its own. Amazon down.
• 21:52
  Speaker 1: Reported more CapEx than expected, so investors are punishing that name.
• 21:56
  Speaker 5: VIX out to 20 again.
• 21:58
  Speaker 1: Yeah, VIX out to 20. NVIDIA didn't do anything, didn't report,
• 22:02
  Speaker 1: but it's down 4%, poster child for the AI play.
• 22:05
  Speaker 1: And Bitcoin also lower because there's a big hack, the
• 22:08
  Speaker 1: biggest hack in the crypto industry.
• 22:09
  Speaker 3: This is where I would say in the middle of
• 22:11
  Speaker 3: this data check, you really fall back on having a
• 22:14
  Speaker 3: plan B.
• 22:15
  Speaker 5: I mean, Bloomberg money, wealth management.
• 22:17
  Speaker 1: They're always planning.
• 22:18
  Speaker 5: No, but a lot of people don't have a plan.
• 22:20
  Speaker 1: Oh, I see where you're getting at.
• 22:21
  Speaker 3: They watch Bloomberg surveillance on television or radio, and they go,
• 22:24
  Speaker 3: go to cash.
• 22:25
  Speaker 5: They're on the phone.
• 22:27
  Speaker 3: Brammo's talking. They're like, go to cash or that. Let's
• 22:29
  Speaker 3: do cross-asset here quickly if we have time.
• 22:32
  Speaker 5: Let's get it up here. And of course, there are some.
• 22:34
  Speaker 3: interdependencies here within equities, bonds, currencies, commodities. The VIX out
• 22:40
  Speaker 3: of 20 gets my attention. It feels like a 24
• 22:42
  Speaker 3: or 27 VIX.
• 22:44
  Speaker 5: Market, but it's really not that bad.
• 22:47
  Speaker 3: Right now, in this special edition, with all of our
• 22:50
  Speaker 3: election coverage and the emotion of the nation, we need
• 22:53
  Speaker 3: to get back to what we do. Michael Conrath is
• 22:55
  Speaker 3: an adult in the room on retirement with JPMorgan Asset Management,
• 22:59
  Speaker 3: and he usually shows up with a PowerPoint And I
• 23:02
  Speaker 3: got a chart I made. Of course, his chart's better.
• 23:05
  Speaker 3: But what's important, page 60, 60 pages and page four
• 23:10
  Speaker 3: is the money chart.
• 23:11
  Speaker 5: This is the one that matters. Luigi, bring up the
• 23:13
  Speaker 5: chart here. Have the interns bring up.
• 23:15
  Speaker 3: The chart, Luigi. I know you're voting right now. And
• 23:19
  Speaker 3: I'm sorry, this is life expectancy. This is the heart
• 23:22
  Speaker 3: of the matter. This is what's changed for fossils like
• 23:25
  Speaker 3: me and even for the young turfs.
• 23:27
  Speaker 5: Michael Conrath with us. This is the immovable force is
• 23:30
  Speaker 5: that 90 is the new 65.
• 23:32
  Speaker 2: Yeah, it certainly is, Tom.
• 23:33
  Speaker 9: And it's great to be with you both here the
• 23:35
  Speaker 9: day before Halloween. And this is a scary figure to
• 23:39
  Speaker 9: a lot of people because one of the big questions
• 23:41
  Speaker 9: people have is how long does my money need to last?
• 23:44
  Speaker 9: And the short answer is it needs to last as
• 23:46
  Speaker 9: long as you do. But as you pointed out with
• 23:48
  Speaker 9: that chart, Tom, There is a 74% chance one member
• 23:52
  Speaker 9: of a 65-year-old couple today lives.
• 23:54
  Speaker 2: To age 90 or beyond.
• 23:56
  Speaker 9: 44% chance one of them lives to 95.
• 23:59
  Speaker 5: Cut to the chase.
• 24:00
  Speaker 3: You're in a bar with Gabriel Santos. Not that that
• 24:02
  Speaker 3: would ever happen, but cut to the chase. The kids
• 24:05
  Speaker 3: think they need to have X amount of a hundred
• 24:08
  Speaker 3: thousands or a million or whatever to get.
• 24:11
  Speaker 5: Out to 90.
• 24:11
  Speaker 3: What's the real number we need today to think about
• 24:16
  Speaker 3: given this longevity?
• 24:17
  Speaker 9: Well, Gabby is a close friend, just for reference, but
• 24:20
  Speaker 9: I will say that we have another page in that
• 24:22
  Speaker 9: guide as well that helps people answer that question, What
• 24:25
  Speaker 9: is my number?
• 24:26
  Speaker 2: And people sometimes shy away from that.
• 24:27
  Speaker 9: They get the Halloween spooks when they think of these
• 24:30
  Speaker 9: big numbers. We've made it very simple as a starting point.
• 24:33
  Speaker 9: If you can answer two questions that I'm sure everyone
• 24:36
  Speaker 9: can answer, what is my age and what is my income?
• 24:39
  Speaker 9: We give them a checkpoint. That is your target. The
• 24:43
  Speaker 9: unfortunate thing is half of people don't know what their
• 24:46
  Speaker 9: target is. They haven't even done a basic calculation.
• 24:48
  Speaker 2: Agreed.
• 24:49
  Speaker 1: Well, part of that is because inflation is staying high.
• 24:51
  Speaker 1: Interest rates are not falling. So it feels like that target,
• 24:54
  Speaker 1: that number is a moving target, right? It's not stable.
• 24:57
  Speaker 1: And the conditions are so volatile out there, you kind
• 25:00
  Speaker 1: of just throw your hands up in the air.
• 25:01
  Speaker 9: Yeah, and it's easy to get caught up in whatever
• 25:04
  Speaker 9: the crisis du jour is. But the important thing is
• 25:07
  Speaker 9: retirement planning, you have to play the long game. So
• 25:10
  Speaker 9: for people that are close to that finish line, it's
• 25:11
  Speaker 9: always important to check in.
• 25:12
  Speaker 2: Where am I at today?
• 25:14
  Speaker 9: Because their 60-40 portfolio a few years ago is now 75-25.
• 25:17
  Speaker 2: The heart of the.
• 25:18
  Speaker 5: Matter, Scott, for me, here's what's coming up in the e-block.
• 25:20
  Speaker 5: Let's bring it up right now. Bring it in here.
• 25:23
  Speaker 5: There we go.
• 25:23
  Speaker 3: The everywhere millionaire, he's working on a $ 5 million number.
• 25:28
  Speaker 2: Yeah.
• 25:28
  Speaker 3: Most people in your game aren't thinking about accumulating five million,
• 25:33
  Speaker 3: are they?
• 25:34
  Speaker 2: No, they're not.
• 25:35
  Speaker 9: And you have to think about not just that longevity risk.
• 25:38
  Speaker 9: You have to think about the rising cost of health
• 25:39
  Speaker 9: care as well, which has its own inflation rate built in.
• 25:43
  Speaker 9: I mean, Medicare costs alone rise six percent a year.
• 25:46
  Speaker 9: So you've got to factor in all these risks in
• 25:47
  Speaker 9: addition to thinking about market risks and the investment.
• 25:50
  Speaker 1: And there's also the risk of when you were born.
• 25:52
  Speaker 1: I think about 30-year-olds and how they feel priced out
• 25:55
  Speaker 1: of adulthood, right? They can't afford any of the financial
• 25:57
  Speaker 1: milestones like buying a home, having a baby, affording life
• 26:00
  Speaker 1: in the city where they work. I mean, savings is
• 26:02
  Speaker 1: a nice to have. Let's just say they get to
• 26:05
  Speaker 1: the point where they can start saving. It's just that
• 26:07
  Speaker 1: they're starting much, much later than what we say they
• 26:10
  Speaker 1: should do. So what is your strategy when you start
• 26:12
  Speaker 1: saving at age 40, at age 42? How do you
• 26:14
  Speaker 1: make up for that lost time?
• 26:15
  Speaker 9: Well, I think the core message to start, Scarlett, is
• 26:18
  Speaker 9: it's never too late. And that checkpoint chart that I
• 26:21
  Speaker 9: referenced can give you starting points and actual guidance on
• 26:24
  Speaker 9: what to do today. If you flip through the next pages,
• 26:26
  Speaker 9: we give them the dollar amounts to get close to
• 26:28
  Speaker 9: those targets.
• 26:29
  Speaker 2: But, you know, importantly.
• 26:31
  Speaker 9: You've got to get invested, stay invested. Don't try to
• 26:34
  Speaker 9: time markets. And I mean, we talk about these things
• 26:37
  Speaker 9: all the time. But I think one of the biggest
• 26:39
  Speaker 9: opportunities for that 30 and 40 year old cohort that
• 26:41
  Speaker 9: hasn't really gotten started is look at your employer. There's
• 26:44
  Speaker 9: a lot of company matches out there. Make sure you're
• 26:46
  Speaker 9: at least maxing out on that. That is probably one
• 26:48
  Speaker 9: of the few free lunches here.
• 26:50
  Speaker 3: Across America, thank you so much for the way you
• 26:52
  Speaker 3: choose to watch Bloomberg Money. Cole Smead out in Phoenix,
• 26:56
  Speaker 3: he's living large out there. It's like 8,000 square feet.
• 26:59
  Speaker 3: He can like see Albuquerque from where he lives. And
• 27:01
  Speaker 3: Cole Smead, who's an adult in the business, sends in
• 27:04
  Speaker 3: what really matters. Nobody talks about home ownership. Talking about
• 27:08
  Speaker 3: home ownership is a plug-in to retirement at J.P.
• 27:12
  Speaker 5: Morgan Asset Management.
• 27:13
  Speaker 2: Sure.
• 27:14
  Speaker 9: So we actually do look at home ownership. And we
• 27:17
  Speaker 9: so one of the benefits of working part of shaping
• 27:19
  Speaker 9: your chase is with access to data. And just to
• 27:21
  Speaker 9: be clear, it's anonymized data. So we could see quite
• 27:24
  Speaker 9: simply how people save, how they spend, how they borrow.
• 27:27
  Speaker 2: And we do look at home ownership. mortgages.
• 27:30
  Speaker 9: What's interesting is we see this trend towards partial retirement.
• 27:34
  Speaker 9: So retirement is no longer this binary thing, working or retiring.
• 27:38
  Speaker 9: Sometimes people are doing a mix of the two, if
• 27:40
  Speaker 9: you will. But we see a trend where people will
• 27:43
  Speaker 9: work until they pay off that mortgage and then they'll
• 27:46
  Speaker 9: transition from partial to full retirement. So all of these
• 27:49
  Speaker 9: things are interconnected and all of these data are built
• 27:52
  Speaker 9: into the guidance that we highlight here.
• 27:54
  Speaker 10: Right.
• 27:55
  Speaker 1: I mean, the categories that we used to identify no
• 27:57
  Speaker 1: longer exist. The lines are really blurred. You mentioned maximizing
• 28:01
  Speaker 1: your contributions to your 401k. That's great for salaried workers
• 28:06
  Speaker 1: like you, like Tom, like me. But if you're a
• 28:08
  Speaker 1: small business owner, you're reinvesting whatever profit you generate straight
• 28:11
  Speaker 1: back into the business along with your bread, blood, sweat,
• 28:14
  Speaker 1: and tears. What's the solution for people who work for
• 28:17
  Speaker 1: small businesses and small business owners?
• 28:18
  Speaker 2: Yeah, I'm glad you asked that, Scarlett.
• 28:20
  Speaker 9: So there is a tremendous opportunity because this is an
• 28:22
  Speaker 9: underserved part of the market. And I can tell you
• 28:24
  Speaker 9: as the son of a small business owner, I've seen
• 28:27
  Speaker 9: how much effort that my own father put in that business,
• 28:30
  Speaker 9: but didn't focus on his personal finances. And if you
• 28:33
  Speaker 9: were to go to him and say, hey, you should
• 28:34
  Speaker 9: set up a solo 401k, for example, he would have said,
• 28:37
  Speaker 9: what is it going to cost me? And how much
• 28:39
  Speaker 9: of a headache is this going to cost? I can't
• 28:40
  Speaker 9: distract from my clients, my customers, my employees. But there's
• 28:43
  Speaker 9: legislation under Secure 2.0 that offers tax incentives for small
• 28:48
  Speaker 9: businesses to start up a new plan today. So the
• 28:50
  Speaker 9: costs are offset, not just ongoing, but maintenance wise as well.
• 28:54
  Speaker 9: And just like product innovation, just with fee compression, bundled solutions.
• 28:59
  Speaker 2: It's really great.
• 28:59
  Speaker 3: But with the international reach of J.P. Morgan, there's got
• 29:02
  Speaker 3: to be other nations doing this better than we are.
• 29:05
  Speaker 3: If we assume ERISA of 1974 was a success, but
• 29:09
  Speaker 3: also a failure, your daily provisions in the J.P. Morgan building,
• 29:14
  Speaker 3: you're there with Mr.
• 29:15
  Speaker 5: Diamond, Mr. Erdos, Mr. Gash, the fancy people at J.P.
• 29:19
  Speaker 5: They don't go to daily provisions, but you know.
• 29:21
  Speaker 2: I do.
• 29:22
  Speaker 5: Conrath does. So anyways, you're sitting there having a cup
• 29:24
  Speaker 5: of coffee.
• 29:25
  Speaker 3: What do you need for legislation to help half of
• 29:29
  Speaker 3: America that's not participating in the game?
• 29:31
  Speaker 9: Yeah, so you mentioned international markets, and there are examples, Australia,
• 29:36
  Speaker 9: other parts of LATAM, where the conversation is shifting and
• 29:39
  Speaker 9: the legislation is changing. to require contributions, mandatory contributions up
• 29:44
  Speaker 9: to a certain level.
• 29:44
  Speaker 2: And guess what? Most people don't push back on that.
• 29:48
  Speaker 9: So I think there's some opportunity here to think of
• 29:50
  Speaker 9: that from a creative perspective. But just to be clear,
• 29:53
  Speaker 9: back to the small business opportunity, if you're a small
• 29:56
  Speaker 9: business that has more than 10 employees, like things like
• 29:59
  Speaker 9: auto enrollment, auto escalation, making sure your contributions go up
• 30:02
  Speaker 9: over time, those are things that are built into this
• 30:05
  Speaker 9: legislation too.
• 30:06
  Speaker 2: So we're getting there.
• 30:08
  Speaker 1: What if you're an independent operator, meaning you're Gen Z,
• 30:11
  Speaker 1: because there's a swath of Gen Z out there, trying
• 30:13
  Speaker 1: to make a living as influencers who earn enough to
• 30:16
  Speaker 1: finance their next vacation but not to save money?
• 30:19
  Speaker 8: Sure.
• 30:19
  Speaker 2: Well, it's interesting.
• 30:21
  Speaker 9: When we look at how people are spending, people are
• 30:24
  Speaker 9: not necessarily spending on things like vacations.
• 30:27
  Speaker 2: At the expense of their retirement savings.
• 30:29
  Speaker 9: For them, I think they still have access to something
• 30:31
  Speaker 9: like an individual retirement account, an IRA, and sometimes those
• 30:33
  Speaker 9: become a secondary thing relative to a 401k, but they
• 30:37
  Speaker 9: should not be forgotten.
• 30:39
  Speaker 3: Can we cut to the Chase return? we're addicted to
• 30:42
  Speaker 3: double-digit return.
• 30:43
  Speaker 5: We wake up every morning with our video.
• 30:45
  Speaker 2: We've had three, three years of it, yeah.
• 30:46
  Speaker 3: Well, more than three years, but within this just arching
• 30:49
  Speaker 3: bull market, do we really need to still model a
• 30:53
  Speaker 3: single-digit return as a responsible planning amount?
• 30:56
  Speaker 9: Yeah, that's a great point, Tom, because when we look
• 30:59
  Speaker 9: at all the modeling that we do, it's based on
• 31:01
  Speaker 9: our long-term capital market assumptions.
• 31:03
  Speaker 2: So you're looking at your.
• 31:04
  Speaker 9: Balanced portfolio, call it 7%, maybe get another 50 basis
• 31:08
  Speaker 9: points if you have some allocation alternatives in there. We're
• 31:11
  Speaker 9: not modeling based on what we saw happen in the
• 31:14
  Speaker 9: past two years, for example. It's what we see the
• 31:17
  Speaker 9: next 10, 15 plus years.
• 31:18
  Speaker 3: In your meetings, I mean, this is really important. I
• 31:21
  Speaker 3: have clear memory of parents as depression babies. Forget about
• 31:25
  Speaker 3: Jimmy Stewart and Wonderful Life and all that.
• 31:29
  Speaker 5: How do we do this forward if we've lost the
• 31:32
  Speaker 5: memory of 35% down?
• 31:34
  Speaker 2: Yeah.
• 31:35
  Speaker 5: Basically, as a nation, we have lost that depression worry.
• 31:38
  Speaker 1: Yeah.
• 31:38
  Speaker 9: No, it's there's certainly behavior because people will anchor on
• 31:42
  Speaker 9: what they've just seen. Not too far behind in that
• 31:45
  Speaker 9: rear view mirror. And that's why we're front footed with
• 31:48
  Speaker 9: the long term capital market assumptions, making it clear that
• 31:51
  Speaker 9: this is what we see happening. Look, we hope things
• 31:55
  Speaker 9: could be better than that. But you shouldn't expect double
• 31:57
  Speaker 9: digit returns in the near term and even over the
• 31:59
  Speaker 9: long term as well.
• 32:00
  Speaker 1: Michael Conrad, thank you so much.
• 32:02
  Speaker 3: J.P.
• 32:02
  Speaker 1: Morgan, asset management chief retirement strategist. Most people think the
• 32:06
  Speaker 1: path to great wealth runs through Wall Street or Silicon Valley.
• 32:09
  Speaker 1: The Everywhere Millionaire, a new book, challenges this idea using
• 32:13
  Speaker 1: data and real life stories about entrepreneurship to reveal the
• 32:15
  Speaker 1: hidden one percent. The author, Owen Zidar, joins us now
• 32:19
  Speaker 1: to discuss. He, of course, is an economist at Princeton University. Owen,
• 32:24
  Speaker 1: beyond the Elon Musks, Jeff Bezos, and indeed Mike Bloombergs,
• 32:27
  Speaker 1: who are the really rich in America, what surprised you
• 32:30
  Speaker 1: the most as you combed through the data to get
• 32:32
  Speaker 1: a better understanding of who the very rich are but
• 32:34
  Speaker 1: not the super wealthiest?
• 32:37
  Speaker 10: And if you go to any nice part of the
• 32:39
  Speaker 10: country where there's a nice lake or a golf resort
• 32:43
  Speaker 10: and you go and ask who owns that $ 4 million
• 32:45
  Speaker 10: vacation house or who has that nice boat, it's very
• 32:48
  Speaker 10: often not someone like Elon Musk or the moon men
• 32:51
  Speaker 10: who are kind of extraterrestrial.
• 32:52
  Speaker 2: It's much more mundane.
• 32:53
  Speaker 10: It can be very common businesses like auto dealers or
• 32:57
  Speaker 10: beverage distribution companies or restaurants.
• 32:59
  Speaker 2: People who, you know, are clearing.
• 33:02
  Speaker 10: Snow from a bunch of people's driveways and they do
• 33:04
  Speaker 10: that enough that they can make $ 5 million. And there's
• 33:07
  Speaker 10: $ 3 million of, or sorry, there's 3 million of these
• 33:09
  Speaker 10: everywhere millionaires across the country doing relatively ordinary things, making
• 33:13
  Speaker 10: a ton of money from it.
• 33:14
  Speaker 1: And what's key to them is that they are able
• 33:17
  Speaker 1: to organize their business as a pass-through business. Why is
• 33:19
  Speaker 1: this important? Why do we care?
• 33:21
  Speaker 10: I mean, that's one of the interesting things is that
• 33:23
  Speaker 10: that's how we're able to see them for the first
• 33:25
  Speaker 10: time because it creates a paper trail in terms of
• 33:28
  Speaker 10: the record keeping. And generally, it's just hard to know
• 33:30
  Speaker 10: who's wealthy if you just read what public companies are
• 33:33
  Speaker 10: saying because there's this huge legion of private business owners
• 33:37
  Speaker 10: that don't have to report how they're doing. And through
• 33:40
  Speaker 10: the pass-through structure, as researchers working with the Treasury Department,
• 33:43
  Speaker 10: we were able to see this hidden world of everywhere
• 33:46
  Speaker 10: millionaires that can inspire a lot of people to know
• 33:50
  Speaker 10: that there's a lot of opportunity and abundant wealth in
• 33:53
  Speaker 10: America nearby, and it's not just in Manhattan and California.
• 33:56
  Speaker 3: I think Scarlett undersold a book, a laureate up at MIT.
• 33:59
  Speaker 3: That's a school up in Boston, if you didn't know that, Owen.
• 34:02
  Speaker 3: Simon Johnson says, shut up and read it. And the giant,
• 34:05
  Speaker 3: I dearly miss him every day, Angus Deaton says, a
• 34:08
  Speaker 3: vitally important book. My childhood is in your book. I
• 34:12
  Speaker 3: went to camp. I knew the Wegman family of Rochester.
• 34:16
  Speaker 3: New York, and there were two kids on the block.
• 34:18
  Speaker 3: They lived on Monroe Avenue, and their name was Sands,
• 34:21
  Speaker 3: and dad started a beverage distribution company, as you put it,
• 34:26
  Speaker 3: called Canandaigua Wine. They start seat of the pants, don't they?
• 34:30
  Speaker 3: And they don't want the government taking their money, you know,
• 34:34
  Speaker 3: as a broad sense.
• 34:35
  Speaker 10: Yes. So we tell one of the industries that we
• 34:39
  Speaker 10: tell the story of is beverage distribution from the prohibition
• 34:43
  Speaker 10: to when you had people with a pickup truck and
• 34:45
  Speaker 10: some ice, and that was enough to be a beverage
• 34:47
  Speaker 10: distribution owner. Then if you fast forward, it was an
• 34:50
  Speaker 10: extremely lucrative thing where the Coors family in the 70s
• 34:55
  Speaker 10: had over 1,000 people applying to be one beverage distribution owner.
• 34:59
  Speaker 2: And now.
• 34:59
  Speaker 10: You know, in the book, we have anecdotes like you
• 35:01
  Speaker 10: go to San Antonio and the mayor will say, you know,
• 35:05
  Speaker 10: why are there so many private jets in San Antonio?
• 35:07
  Speaker 10: I've never seen so many private jets here. And it's like, oh,
• 35:09
  Speaker 10: it's the beer distribution conference.
• 35:11
  Speaker 1: So it's amazing because we're talking about very unglamorous businesses.
• 35:15
  Speaker 1: We're not talking about fancy businesses that get people excited,
• 35:17
  Speaker 1: that show up in the covers of magazines or anything,
• 35:19
  Speaker 1: or that even get talked about on television. I mean,
• 35:22
  Speaker 1: a lot of these are plumbing businesses, dental practices, things
• 35:26
  Speaker 1: that kind of get overlooked. If I'm determined to become
• 35:28
  Speaker 1: super rich then, I can't rely on my salary job then, right?
• 35:33
  Speaker 1: I need to go and take a risk.
• 35:35
  Speaker 10: So there are a few lessons in terms of getting wealthy.
• 35:37
  Speaker 10: One is own, don't earn. Most people don't get rich,
• 35:40
  Speaker 10: like really rich. you know, $ 10, $ 25 million from earning
• 35:44
  Speaker 10: a W-2 or a salary. The typical person, especially as
• 35:48
  Speaker 10: you go up from $ 25 million to $ 100 million, they
• 35:51
  Speaker 10: almost all own private businesses like the families of your childhood, Tom.
• 35:55
  Speaker 3: I look at this, Professor, and it's as simple as
• 35:57
  Speaker 3: you're at a school, and with the media frenzy today,
• 36:00
  Speaker 3: these kids think their starting pay ought to be $ 212, 000
• 36:04
  Speaker 3: a year, and if I'm not popping $ 450, 000 after three years,
• 36:07
  Speaker 3: I'm a failure. How do we adapt to a younger
• 36:10
  Speaker 3: generation that's talked themselves into big six-figure income, which we
• 36:15
  Speaker 3: all know is a fiction?
• 36:17
  Speaker 10: I think the definition of success right now is just
• 36:21
  Speaker 10: really narrowed, and one of the goals of the book
• 36:23
  Speaker 10: is to broaden the aperture to say— And you succeeded
• 36:25
  Speaker 10: at that.
• 36:26
  Speaker 2: I hope, being on shows like this.
• 36:29
  Speaker 10: One interesting thing is you just don't have to be
• 36:30
  Speaker 10: elite to be rich.
• 36:32
  Speaker 2: You don't have to start at one of these fancy jobs.
• 36:33
  Speaker 10: I think there's tremendous opportunity to have these private business owners,
• 36:37
  Speaker 10: many of whom are reaching retirement, who want to hand
• 36:39
  Speaker 10: it off to the next generation.
• 36:41
  Speaker 3: I'm in Switzerland as a spoiled rich kid in a
• 36:44
  Speaker 3: room looking out at the Geneva and the Mont Blanc
• 36:47
  Speaker 3: in Italy, and I'm reading a book I pick up
• 36:49
  Speaker 3: called Think and Grow Rich, Napoleon Hill.
• 36:53
  Speaker 5: I looked at it a million.
• 36:54
  Speaker 3: Years ago and thought, this is a, it was in
• 36:56
  Speaker 3: the 30s. It was my grandparents and parents, and I
• 36:59
  Speaker 3: never got it. I thought it was so simplistic. Napoleon Hill,
• 37:03
  Speaker 3: very controversial, built that franchise.
• 37:07
  Speaker 5: On spirit and energy, go get them and all that.
• 37:11
  Speaker 5: And the magic of your book is I don't see
• 37:13
  Speaker 5: that there. How do you feel about that American get
• 37:16
  Speaker 5: up and go spirit that was codified 40, 50 years ago?
• 37:20
  Speaker 2: It really shines through.
• 37:22
  Speaker 10: We talked to several of these business owners and they're
• 37:25
  Speaker 10: relentless and they work for decades. So I think You know,
• 37:28
  Speaker 10: for young people, there's a sense that you can get
• 37:30
  Speaker 10: rich quick and create an app.
• 37:32
  Speaker 2: And most of these stories are, you know, you.
• 37:34
  Speaker 10: Roll up your sleeves and it's several decades of hard
• 37:37
  Speaker 10: work and a lot of gumption and, you know, real
• 37:41
  Speaker 10: competitive drive. So I think it goes back to some
• 37:43
  Speaker 10: of these classic views. And it's just we have better
• 37:47
  Speaker 10: data than anyone's ever had before on wealth and opportunity
• 37:49
  Speaker 10: in America.
• 37:50
  Speaker 2: And that's what makes it exciting.
• 37:51
  Speaker 1: So for people who own these businesses that are doing
• 37:54
  Speaker 1: very well, they don't realize their wealth until they sell it.
• 37:56
  Speaker 1: And a lot of the times, the selling it, realizing it,
• 37:59
  Speaker 1: involves selling it to private equity. How big of a
• 38:01
  Speaker 1: role does that play in the everywhere millionaire?
• 38:04
  Speaker 10: So a big market, private equity has really grown since ERISA,
• 38:09
  Speaker 10: and it's... They're just very hungry for these types of companies.
• 38:12
  Speaker 10: And the typical everywhere millionaire in this country is 62.
• 38:15
  Speaker 10: As I said, it took decades to get there. And
• 38:17
  Speaker 10: now they're seeing retirement. And often they can give it
• 38:20
  Speaker 10: to their kids if their kids want to do it.
• 38:22
  Speaker 10: They could sell it to private equity, which you can
• 38:25
  Speaker 10: think of as the child they never had. Or they
• 38:28
  Speaker 10: can sell it to a young person who comes in
• 38:30
  Speaker 10: and says, hey, I'll shadow.
• 38:31
  Speaker 2: You for a few years. Let me learn the ropes.
• 38:33
  Speaker 1: I'll be your apprentice.
• 38:34
  Speaker 2: I'll be your apprentice.
• 38:35
  Speaker 10: And then I'll use some seller financing to have you
• 38:38
  Speaker 10: finance it with some share of the future profits. And
• 38:40
  Speaker 10: that's a very common way that even top MBA.
• 38:43
  Speaker 2: Students are now doing.
• 38:43
  Speaker 10: They're going and buying these businesses rather than working for
• 38:46
  Speaker 10: Goldman Sachs or McKinsey.
• 38:47
  Speaker 1: Is that what you're hearing from readers, from people you
• 38:49
  Speaker 1: talk to?
• 38:50
  Speaker 10: So people from all over, like, oh, you know, I've
• 38:53
  Speaker 10: been in this salary job for 10 years. I really
• 38:55
  Speaker 10: want to change gears. You can look at what happens
• 38:58
  Speaker 10: at the top business schools. I mean, they really are,
• 39:02
  Speaker 10: there's a lot of activity in search funds, and some
• 39:04
  Speaker 10: of the people we talk to in the book, they
• 39:05
  Speaker 10: spend a year searching for companies.
• 39:07
  Speaker 2: They raise money.
• 39:08
  Speaker 10: From people, and they end up in all sorts of adventures. And,
• 39:13
  Speaker 10: you know, they're pretty interesting stories. So I invite people
• 39:15
  Speaker 10: to read the book.
• 39:16
  Speaker 1: Owen, thank you so much for joining us today. Owen
• 39:18
  Speaker 1: Zadar is author of The Everywhere Millionaire with Princeton University.
• 39:22
  Speaker 1: And for the latest reviews and recommendations from Bloomberg, subscribe
• 39:26
  Speaker 1: to the On Books newsletter. We've got more on the
• 39:28
  Speaker 1: upcoming U.S. midterms. We're going to connect all of this,
• 39:31
  Speaker 1: the affordability questions, the ability to still live the American dream.
• 39:35
  Speaker 3: We have an expert parachuting in.
• 39:37
  Speaker 1: Yes, David Gerro will be joining us next. This is
• 39:39
  Speaker 1: Bloomberg Money.
• 39:42
  Speaker 3: You're listening to Bloomberg Money. Stay with us with more
• 39:46
  Speaker 3: to come after this.
• 39:55
  Speaker 5: Welcome back.
• 39:56
  Speaker 3: Bloomberg Money. It's on retirement. It's on personal finance. It's
• 39:59
  Speaker 3: on wealth management. It's on voting early.
• 40:01
  Speaker 5: Vote often.
• 40:02
  Speaker 1: Well, it's also about affordability. And on Bloomberg Money, our
• 40:05
  Speaker 1: guests have been talking about affordability and the American dream
• 40:07
  Speaker 1: ahead of the midterms. Take a listen.
• 40:10
  Speaker 2: You see it survey after survey, anecdote after anecdote.
• 40:12
  Speaker 10: But younger people today, especially in Gen Z, they just
• 40:15
  Speaker 10: don't really believe in that classic American dream.
• 40:17
  Speaker 8: And the American dream is being, you know, running past us.
• 40:20
  Speaker 5: We do and have had a K-shaped economy for some time.
• 40:24
  Speaker 9: But the branches of the K have been diverging more
• 40:27
  Speaker 9: widely in the last six or seven decades.
• 40:29
  Speaker 12: Forty-seven percent of Americans, according to our research, saw real
• 40:34
  Speaker 12: wage declines over the last four years because of inflation. So,
• 40:39
  Speaker 12: this is why consumer sentiment is dismal.
• 40:42
  Speaker 11: Trump's tariffs, the war in Iran, both of which have
• 40:46
  Speaker 11: jacked prices up for consumers. Cities like New York, in
• 40:49
  Speaker 11: states like California, where housing's become, you know, impossibly unaffordable.
• 40:53
  Speaker 6: And we have the midterms coming up, and people are
• 40:55
  Speaker 6: thinking about the economy.
• 40:57
  Speaker 8: But every politician should be talking about housing affordability.
• 41:01
  Speaker 12: These health care is climbing, and whether you shift it
• 41:03
  Speaker 12: to the work or you, you know, assume it as
• 41:06
  Speaker 12: a small business, they still have to be dealt with.
• 41:09
  Speaker 12: And a lot of people work just for benefits. It's
• 41:11
  Speaker 12: not just about the paycheck.
• 41:13
  Speaker 9: It may not be true in the world that we
• 41:15
  Speaker 9: live in, but for the majority of people retiring, they
• 41:19
  Speaker 9: cannot afford to give up 10 or 20 percent of
• 41:22
  Speaker 9: their Social Security.
• 41:23
  Speaker 1: So let's look ahead now to the weekend and next week.
• 41:26
  Speaker 1: Bloomberg This Weekend anchor David Gurra joins us. And it's
• 41:28
  Speaker 1: all about getting ready for the midterm elections. I know
• 41:30
  Speaker 1: you went out and already voted because you're going to
• 41:33
  Speaker 1: be working 24-7. I'll have no time otherwise.
• 41:35
  Speaker 7: Exactly.
• 41:36
  Speaker 1: Affordability is something that's obviously a talking point. But is
• 41:39
  Speaker 1: anyone addressing it really head on?
• 41:41
  Speaker 2: I think it's the talking point.
• 41:43
  Speaker 13: If you look at what's played out here over the
• 41:44
  Speaker 13: last week, you have a lot of candidates on the
• 41:45
  Speaker 13: Republican side who are acknowledging the fact that this is
• 41:48
  Speaker 13: an issue. There's very little the president can do that
• 41:51
  Speaker 13: he can talk about with regard to it here between
• 41:53
  Speaker 13: now and Election Day. So we've seen him cancel these rallies,
• 41:56
  Speaker 13: put them back on.
• 41:57
  Speaker 2: I think that there is a sense.
• 41:59
  Speaker 13: Here that he has created a lot of this, galvanized
• 42:02
  Speaker 13: a lot of it, catalyzed a lot of it. And
• 42:05
  Speaker 13: Republicans don't really know what to do with that. So
• 42:06
  Speaker 13: I think there has been a level of discipline among
• 42:08
  Speaker 13: Democrats talking about this issue, which is so front of
• 42:10
  Speaker 13: mind for so many people.
• 42:11
  Speaker 5: You're going to talk to the congressman from JFK this weekend, Mr.
• 42:14
  Speaker 4: Meeks.
• 42:14
  Speaker 3: I mean, the guy I've interviewed many times, wonderful guy,
• 42:18
  Speaker 3: grew up in a housing project. I mean, really seat
• 42:20
  Speaker 3: of the pants narcotics prosecutor and such. How does that
• 42:24
  Speaker 3: Democratic Party and Mr. Jeffries talk to the new conservative
• 42:28
  Speaker 3: Democrats across America?
• 42:30
  Speaker 5: This is Gregory Meeks.
• 42:31
  Speaker 13: He's the ranking member of the Foreign Affairs Committee. He
• 42:33
  Speaker 13: sits on financial services and stands to be a very
• 42:35
  Speaker 13: powerful person here in the new Congress if Democrats get
• 42:37
  Speaker 13: the majority. Look, he has that background. It's informed his
• 42:40
  Speaker 13: career in Congress. This would be his 14th term should
• 42:42
  Speaker 13: he be reelected, reelected as he's expected to be here.
• 42:45
  Speaker 13: I'm going to ask him about how they stitch together
• 42:47
  Speaker 13: a caucus in light of the fact that we've seen
• 42:50
  Speaker 13: so many disparate fibers here over the course of this campaign.
• 42:53
  Speaker 13: I think a huge question is how much do they
• 42:54
  Speaker 13: focus on this issue of affordability, cost of living, while
• 42:57
  Speaker 13: all the while there is this pressure from a significant
• 43:00
  Speaker 13: flank of the party on them to investigate and hold
• 43:02
  Speaker 13: hearings into this administration, what it's done so far.
• 43:04
  Speaker 1: It's too bad we can't elect technocrats because technocrats can't
• 43:07
  Speaker 1: win elections.
• 43:07
  Speaker 5: Oh, listen to you.
• 43:09
  Speaker 1: No, but seriously, they are very pragmatic about things. They
• 43:11
  Speaker 1: can commit themselves to politically painful choices.
• 43:13
  Speaker 5: Are we having a Mario Draghi moment?
• 43:17
  Speaker 1: Mario Draghi, a technocrat, yeah, who got things in order.
• 43:19
  Speaker 1: I mean, our political system doesn't have that kind of mechanism.
• 43:22
  Speaker 13: Yes, it looks like we're very far from that. And
• 43:23
  Speaker 13: I think that the primary process we've been through in
• 43:25
  Speaker 13: this general election shows us how far we are from
• 43:27
  Speaker 13: having a system like that in this country.
• 43:29
  Speaker 4: All right.
• 43:29
  Speaker 1: David Gurra, thank you so much. He's going to be
• 43:31
  Speaker 1: working hard the next couple of days.
• 43:33
  Speaker 2: You'll be here, too.
• 43:33
  Speaker 1: That's right. Make sure to watch Bloomberg this weekend. I'm
• 43:36
  Speaker 1: going to be here covering the election on Tuesday.
• 43:39
  Speaker 5: Why didn't they ask me?
• 43:40
  Speaker 1: You have to get up the next day to cover surveillance.
• 43:42
  Speaker 3: Are you missing flag football this weekend?
• 43:45
  Speaker 5: I will. You're okay. Thank you. A special edition of
• 43:50
  Speaker 5: Bloomberg Money.
• 43:55
  Speaker 3: This is the Bloomberg Money Podcast, bringing you a smart
• 43:58
  Speaker 3: look at the forces shaping your financial life. I'm Tom
• 44:02
  Speaker 3: Keen with Scarlett Fu. You can watch the show live
• 44:06
  Speaker 3: on Bloomberg TV every Friday at noon Wall Street time.
• 44:10
  Speaker 3: Subscribe to the podcast on Apple, Spotify, or wherever you listen.
• 44:14
  Speaker 3: And as always, on the Bloomberg Terminal and the Bloomberg
• 44:18
  Speaker 3: Business app.
• 44:22
  Speaker 12: Thank you.