Latest / Money And Wealth With John Hope Bryant / Breaking Down the Current Economy

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Breaking Down the Current Economy · Money And Wealth With John Hope Bryant

• 0:00
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  Speaker 1: Welcome the Money in Wealth with John O'Bryant, a production
• 0:49
  Speaker 1: of the Black Effect Podcast Network and iHeartRadio. Hey, Hey
• 1:00
  Speaker 1: is John Hobryant And this is Money and Wealth on
• 1:04
  Speaker 1: the Black Effect Network. iHeartRadio and I want to thank
• 1:09
  Speaker 1: everybody for continuing to support. The podcast is growing very rapidly.
• 1:13
  Speaker 1: It just shows that you want to understand how this
• 1:16
  Speaker 1: stuff works. We want to go from civil rights marching
• 1:19
  Speaker 1: in the streets to cutting business deals in the suites
• 1:23
  Speaker 1: the ownership class. Can I get an amen? This is
• 1:26
  Speaker 1: my pulpit of finance. So this week I'm going to
• 1:31
  Speaker 1: break down how the modern economy works. This is what
• 1:36
  Speaker 1: they never taught you in school. Like you're not dumb
• 1:39
  Speaker 1: and you're not stupid. Is what you don't know that
• 1:42
  Speaker 1: you don't know is killing you. But you think you
• 1:44
  Speaker 1: know and you're too ashamed, too embarrassed to ask questions.
• 1:49
  Speaker 1: Are you're just too busy. You're just moving and grooving
• 1:53
  Speaker 1: and trying to make a living and a life. You
• 1:54
  Speaker 1: got too much month at the end of your money.
• 1:56
  Speaker 1: You know, you're trying to live this life holding complete
• 2:01
  Speaker 1: and you're doing the very best you can, and I
• 2:03
  Speaker 1: commend you for that. You're trying to raise your family,
• 2:05
  Speaker 1: trying to build a family, trying to build a life. Meanwhile,
• 2:08
  Speaker 1: no one's ever taught you how this system works, and
• 2:12
  Speaker 1: people expect you to figure it out. For yourself, and
• 2:14
  Speaker 1: they throw all these terms at you and expect you
• 2:17
  Speaker 1: to understand what the heck it is. And I don't
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  Speaker 1: know why, because literally no one's taught you. So I'm
• 2:23
  Speaker 1: gonna break it down for you in this episode. I'm
• 2:26
  Speaker 1: going to unpack the basic stuff that you need to
• 2:31
  Speaker 1: know to navigate in this world and to understand the
• 2:36
  Speaker 1: terms right now in early twenty twenty five that are
• 2:39
  Speaker 1: being thrown at you with some presumption. So let's get
• 2:44
  Speaker 1: at it, and then I'm gonna leave you with some
• 2:47
  Speaker 1: helpful tips of what you do to maneuver to manage
• 2:52
  Speaker 1: yourself successfully in this environment. All right, So again, there's
• 2:57
  Speaker 1: nothing wrong with you in not knowing right out of failure.
• 3:01
  Speaker 1: You may have had a feled experiment, but that's just
• 3:04
  Speaker 1: the result of you trying. I rather you try and
• 3:06
  Speaker 1: slip and fall and never try at all. So it's
• 3:10
  Speaker 1: what you don't know that you don't know this killing you.
• 3:12
  Speaker 1: But you think you know and others presume you know,
• 3:17
  Speaker 1: and I'd rather you master the class. So this is
• 3:21
  Speaker 1: a master class. Here we go terms to break down inflation, recession,
• 3:34
  Speaker 1: interest rates, tariffs, GDP, stimulus and relief packages. The federal
• 3:50
  Speaker 1: reserve system. They call it the FED wage growth versus
• 3:57
  Speaker 1: cost of living, supply chain, unemployment rate. There are some
• 4:05
  Speaker 1: items I'm gonna spend more time on than others. I'm
• 4:07
  Speaker 1: gonna cover some of these, just gloss over them. But
• 4:10
  Speaker 1: I'm gonna spend a little bit of time on a
• 4:13
  Speaker 1: couple of these items in particular because they relate to
• 4:19
  Speaker 1: the current situation. All right, Inflation, what is it? In general?
• 4:28
  Speaker 1: Inflation is where everything just costs more and you can't
• 4:35
  Speaker 1: quite figure out why it costs more. The background of
• 4:43
  Speaker 1: inflation in the modern description we're gonna talk about here
• 4:49
  Speaker 1: is tied to COVID. So let's first start with what
• 4:52
  Speaker 1: is inflation. Inflation is when prices go up across the board.
• 4:56
  Speaker 1: I mean groceries and as we now know, eggs, gas, rent,
• 5:02
  Speaker 1: everything just seems to be going up, certainly at a
• 5:05
  Speaker 1: higher rate than your income, and is dang on frustrating.
• 5:08
  Speaker 1: Folks got too much month at the end of their money.
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  Speaker 1: Seventy percent of this country, seventy percent of the economy,
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  Speaker 1: and the biggest economy in the world, the United States
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  Speaker 1: of America, is consumer spending seventy percent, right, and seventy
• 5:23
  Speaker 1: percent of Americans So seventy percent of the economy, biggest
• 5:26
  Speaker 1: economy in the world's consumer spending, and seventy percent of
• 5:29
  Speaker 1: Americans are living from paycheck to paycheck. Not black people,
• 5:33
  Speaker 1: not brown people, everybody. And whether you're white, black, red, brown, yellow,
• 5:38
  Speaker 1: you want to see some more green, can I get
• 5:40
  Speaker 1: me amen? So, if inflation is when prices go up
• 5:47
  Speaker 1: across the board, it means your dollar doesn't go as
• 5:50
  Speaker 1: far as it used to. Now, why does this happen?
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  Speaker 1: At its core, it's basically too much money racing too
• 6:00
  Speaker 1: few goods. We call it supply and demand. When demand
• 6:04
  Speaker 1: is high, supplies low, prices rise. Why is COVID important
• 6:13
  Speaker 1: in this conversation? And why do I say it's all connected?
• 6:16
  Speaker 1: I mean, people want to blame this stuff on US
• 6:19
  Speaker 1: presidents and all this kind of stuff, And really that's
• 6:24
  Speaker 1: a false flag because of a virus probably created in
• 6:31
  Speaker 1: China unleashed. And I think I shouldn't say this, but
• 6:37
  Speaker 1: I wouldn't be surprised if someone, some elements unleash this
• 6:42
  Speaker 1: intentionally in order to trip up the biggest economy in
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  Speaker 1: the world, to try to take an advantage, to get
• 6:47
  Speaker 1: an advantage on the US, to leap fraud over US
• 6:52
  Speaker 1: to slow us down, use our freedoms against us. That
• 6:55
  Speaker 1: didn't work, but I wouldn't be surprised if it was
• 6:58
  Speaker 1: not intentional. China's at war with the United States. I'm
• 7:02
  Speaker 1: going to do a whole piece on Africa and China
• 7:05
  Speaker 1: as a separate podcast, but I'm trying to give you
• 7:07
  Speaker 1: some practical stuff that you need right now before I
• 7:09
  Speaker 1: start giving sort of macroeconomics and global economy stuff. So
• 7:13
  Speaker 1: just staying very focused. COVID was a reaction to something
• 7:18
  Speaker 1: not created here. It was created. It was a virus
• 7:21
  Speaker 1: that that literally stopped the US economy, stopped it and tracks.
• 7:25
  Speaker 1: I've already told you the biggest economy in the world
• 7:28
  Speaker 1: is driven by consumer spending. And then consumers were not moving, grooving, rolling, operating.
• 7:34
  Speaker 1: I mean we were all locked literally for a while,
• 7:37
  Speaker 1: locked into our homes, lockdown. The whole economy just basically
• 7:40
  Speaker 1: grind ground to a halt. So the US economy nearly
• 7:44
  Speaker 1: shut down to avoid a depression. I'm going to define
• 7:48
  Speaker 1: a depression in a moment, the government and the Federal
• 7:51
  Speaker 1: Reserve pumped over eight trillion dollars into the economy. Okay,
• 7:57
  Speaker 1: just to put this into context. Ever, in the history
• 8:00
  Speaker 1: of the modern world, has a government ever put a
• 8:07
  Speaker 1: trillion dollars into a stimulus I'm explained that at the
• 8:11
  Speaker 1: moment into the U into any economy, not just the
• 8:14
  Speaker 1: US economy, any economy in the world. There's never been
• 8:17
  Speaker 1: a trillion dollars of real money, I mean like fun
• 8:21
  Speaker 1: money or funding money, or some third world countries, real
• 8:24
  Speaker 1: money of a major currency invested in its economy. That's
• 8:29
  Speaker 1: how bad this was. And it wasn't one trillion or
• 8:31
  Speaker 1: two trillion, or three or four or five trillion or
• 8:35
  Speaker 1: six trillion. It was over eight trillion dollars. You can
• 8:39
  Speaker 1: bind what the Federal Reserve did and what the Congress,
• 8:45
  Speaker 1: bipartisan Republicans and Democrats, okay, and a Republican president Trump
• 8:50
  Speaker 1: and a Democratic President Biden did right to keep the
• 8:57
  Speaker 1: US economy from absolutely stalling, so to avoid a depression,
• 9:01
  Speaker 1: which is different than a recession, it's worse. Again explaining
• 9:05
  Speaker 1: that in a moment, to avoid a depression, the government
• 9:08
  Speaker 1: in the Federal Reserve pumped over eight trillion dollars in
• 9:10
  Speaker 1: the economy. That money came from one government stimulus spending.
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  Speaker 1: That's Congress, okay, bipartisan meaning both parties. So anybody explained
• 9:23
  Speaker 1: wants to blame this on Democrats or blame this on
• 9:26
  Speaker 1: the Republicans alone, It's just dead wrong. It was by partisan.
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  Speaker 1: Both parties realize how bad this was, and Republican and
• 9:34
  Speaker 1: Democratic presidents both did their own versions of what I'm
• 9:38
  Speaker 1: about to tell you. Direct checks to individuals three rounds,
• 9:42
  Speaker 1: twelve hundred dollars, six hundred dollars, and fourteen hundred dollars.
• 9:47
  Speaker 1: You probably know these numbers because you probably received a check. Okay.
• 9:52
  Speaker 1: There was some misinformation that this money was directly a
• 9:56
  Speaker 1: result of one of our former presidents because he had
• 9:59
  Speaker 1: his name on him. No, he just directed I think
• 10:03
  Speaker 1: the US Treasury Department, but I'm correct to put his
• 10:05
  Speaker 1: name on the checks. But the money came from Congress. Okay.
• 10:10
  Speaker 1: Expanded Unemployment Benefits was the second version of what is
• 10:15
  Speaker 1: included in the stimulus. The third perst portion you would
• 10:18
  Speaker 1: recognize PPP loans. There's a lot of fraud tied a
• 10:21
  Speaker 1: PPP loans that people are going to jail right now.
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  Speaker 1: And small business Assistance, rent and mortgage relief was the
• 10:31
  Speaker 1: fourth element, and child Tax Credit was the fifth element. Okay,
• 10:37
  Speaker 1: So this is the government stimulus spending through Congress first
• 10:42
  Speaker 1: part of the stimulus. Now, the purpose of this was
• 10:45
  Speaker 1: to keep Americans and businesses afloat while the economy was frozen,
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  Speaker 1: so we didn't go into a depression. Number two Federal
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  Speaker 1: Reserve actions. This is now two thousand year two thousand
• 10:59
  Speaker 1: years two. I don't if anybody's ever explained this to you.
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  Speaker 1: I'm explaining, I'm explaining it. I'm unpacking it, hopefully in
• 11:07
  Speaker 1: ways that everybody can understand. Spread this to your friends,
• 11:09
  Speaker 1: tell everybody to go back and listen to this. I
• 11:12
  Speaker 1: am explaining to you where inflation came from, what happened
• 11:15
  Speaker 1: during COVID, how transformation really if now I'm going to
• 11:21
  Speaker 1: be I guess political, if you want to are I'm
• 11:23
  Speaker 1: going to be deeply opinionated here for a moment. If
• 11:26
  Speaker 1: President Biden's advisors were really, really on top of it,
• 11:30
  Speaker 1: they would have told him to run for one term only.
• 11:33
  Speaker 1: You're going to fix the economy, You're going to get
• 11:35
  Speaker 1: America back on track, you're going to check all the boxes.
• 11:37
  Speaker 1: You're going to drop the mic, bounce and leave. That
• 11:40
  Speaker 1: would have been I think a brilliant piece and a
• 11:42
  Speaker 1: great legacy for him. I think he just stayed too long.
• 11:45
  Speaker 1: Power is very intoxicating. I understand it, and he wanted
• 11:49
  Speaker 1: a second term and all that kind of stuff, but
• 11:53
  Speaker 1: he did the Biden This is not a partisan comment.
• 11:57
  Speaker 1: I've advised three presidents from both parties. Biden Harris administration
• 12:04
  Speaker 1: did stabilize the biggest economy on the planet and kept
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  Speaker 1: it from going over the cliff. That plus a Republican
• 12:14
  Speaker 1: and Democratic Congress working together, That's just a fact. Got
• 12:20
  Speaker 1: no credit for it because I think they're horrible marketers
• 12:23
  Speaker 1: and horrible communicators of their successes. And then some people
• 12:28
  Speaker 1: even talked about how this are socialists. We're not a
• 12:31
  Speaker 1: socialist country, We're a capitalist country. Right. I'll do a
• 12:35
  Speaker 1: separate podcast explaining what socialism, communism, capitalism, all these things are.
• 12:40
  Speaker 1: Most people just I'm convinced and financially illiterate. But even
• 12:44
  Speaker 1: if you want to destrud money like a socialist, you
• 12:46
  Speaker 1: have to first collect it like a capitalist. Can I
• 12:49
  Speaker 1: get an a man? And as I keep saying, people
• 12:52
  Speaker 1: say they hate rich people, Oh you don't you hate
• 12:56
  Speaker 1: rich people until you become rich. What you hate is
• 12:58
  Speaker 1: a game system. Right, I'm trying to ungame the system
• 13:02
  Speaker 1: for you by explaining it to you and giving you
• 13:05
  Speaker 1: the rules of the game. Financial literacy, which I believe
• 13:07
  Speaker 1: is the civil rights issue of this generation. So you
• 13:09
  Speaker 1: know better, so you can do better. The second part
• 13:12
  Speaker 1: of the stimulus package was the Federal reserve actions. Number one,
• 13:18
  Speaker 1: they dropped interest rates to nearly zero to encourage borrowing
• 13:22
  Speaker 1: and spending to keep the party going. Two, they bought
• 13:27
  Speaker 1: trillions of dollars in bonds to inject cash into the system. Ok.
• 13:33
  Speaker 1: Number three, they supported financial markets to prevent collapse. This
• 13:37
  Speaker 1: put an artificial floor on the value of Wall Street stocks,
• 13:44
  Speaker 1: which meant that the value of stocks had no choice
• 13:47
  Speaker 1: really than to go up. So now this is contributing
• 13:51
  Speaker 1: to inflation because now you're inflating the value of cars,
• 13:57
  Speaker 1: inflating the value of art, inflating the value of real estate,
• 14:01
  Speaker 1: inflating you know, you name it, right, stuff, you're trying
• 14:05
  Speaker 1: to go buy stuff, there's not enough of it, and
• 14:09
  Speaker 1: the federal reserves keeping the markets from collapsing, so you
• 14:14
  Speaker 1: think you're getting richer because the government is subsidizing really
• 14:19
  Speaker 1: the whole situation. So in the short term effects it worked, right,
• 14:24
  Speaker 1: There was massive economic collapse that was avoided. People had
• 14:28
  Speaker 1: money to spend, businesses stayed open, jobs came back, the
• 14:34
  Speaker 1: stock market and the housing market boomed for the reasons
• 14:37
  Speaker 1: I just mentioned. You may have to go back and
• 14:38
  Speaker 1: replay some of what I'm saying, so it all sort
• 14:42
  Speaker 1: of locks in. But your heads should be nodding now,
• 14:44
  Speaker 1: going yeah, okay, okay, I get it, I get it.
• 14:48
  Speaker 1: Long term effects of these two actions inflation. All that
• 15:04
  Speaker 1: money flooded the economy. At the same time, supply chains
• 15:08
  Speaker 1: were broken, which means factory shut down, ships shipping, backed up,
• 15:14
  Speaker 1: labor shortages. The shipping companies were gouging companies for shipping bins.
• 15:23
  Speaker 1: I mean, it was just everybody sort of pump pimping
• 15:25
  Speaker 1: the system back. Then supply and demand not enough supply,
• 15:31
  Speaker 1: too much demand, prices go up. Combine that with all
• 15:34
  Speaker 1: this money flooding from the federal government, there's just too
• 15:37
  Speaker 1: much grease on the gears of the economy. It flooded
• 15:41
  Speaker 1: the engine. The result was more money in people's hands
• 15:44
  Speaker 1: plus fewer goods on shelves equals prices spiked. Did you
• 15:49
  Speaker 1: get that. I know you're smart. You made to repay this,
• 15:52
  Speaker 1: replay this and play it back again. Inflation hit forty
• 15:56
  Speaker 1: year highs between twenty twenty two and twenty twenty. That
• 16:00
  Speaker 1: was nobody's fault. It was either that or the economy
• 16:02
  Speaker 1: was going to implode. Now, was there too much stimulus? Probably?
• 16:08
  Speaker 1: In fact not probably. There's probably a tree and a
• 16:10
  Speaker 1: half dollars at least of too much stimulus. But let
• 16:13
  Speaker 1: me ask you this question, where's a stimulus where's the
• 16:16
  Speaker 1: pandemic manual? You pull off the shelf. If you're the
• 16:20
  Speaker 1: Federal Reserve chairman, or the President the United States where
• 16:24
  Speaker 1: or or Congress or whoever you're some you're some economists,
• 16:28
  Speaker 1: where's the man You pull off the shelves and go, yep,
• 16:30
  Speaker 1: this is exactly the amount of stimulus you need in
• 16:32
  Speaker 1: order to keep the biggest economy in the world from imploding.
• 16:35
  Speaker 1: There's not been a pandemic of this size since the
• 16:38
  Speaker 1: Spanish flew one hundred and twenty five plus years ago,
• 16:41
  Speaker 1: so there was no manual, and that was before the
• 16:43
  Speaker 1: Federal Reserve was creed and created. All right, So this
• 16:46
  Speaker 1: was just winging it. And it's better to put too
• 16:48
  Speaker 1: much oil on the gears than to starve the engine
• 16:51
  Speaker 1: from oil, and the engine seizes up. So you don't
• 16:54
  Speaker 1: want to be the guy sitting at the control booth
• 16:58
  Speaker 1: in the economy for the biggest economy in the world,
• 17:00
  Speaker 1: and the democracy collapses because you you didn't put enough
• 17:04
  Speaker 1: energy into it. So they put too much energy into it.
• 17:06
  Speaker 1: They overdid it probably by twenty percent, maybe twenty five percent, right,
• 17:13
  Speaker 1: and that has created sustained inflation that's not been seen
• 17:16
  Speaker 1: since in forty years. The Fed then had to slam
• 17:20
  Speaker 1: the brakes on raising interest rates by raising interest rates
• 17:24
  Speaker 1: aggressively to cool things off, so they hit interest rates
• 17:29
  Speaker 1: down to zero right to flood to create more activity,
• 17:34
  Speaker 1: and then to slam the brakes on that activity, they
• 17:36
  Speaker 1: raised interest rates, and people thought interest rates were just
• 17:40
  Speaker 1: way too high, But in reality, the interest rates of
• 17:42
  Speaker 1: five to six percent are pretty dang on good. It's
• 17:45
  Speaker 1: just we were used to for the longest time we're
• 17:48
  Speaker 1: listed form like a decade, used to interest rates one, two,
• 17:51
  Speaker 1: three percent, and then for a minute it was zero.
• 17:53
  Speaker 1: So we got spoiled. This generation got spoiled. But that's
• 17:55
  Speaker 1: not the reality. The real time impact today, higher prices
• 18:00
  Speaker 1: at the grocery store, the gas pump, rent, credit card
• 18:06
  Speaker 1: interest rates at historic highs, harder for people to buy homes, cars,
• 18:12
  Speaker 1: or borrow money. Okay, because the debt. The income ratios
• 18:15
  Speaker 1: are higher because interest rates are higher. I had one
• 18:19
  Speaker 1: line of credit that had a balance of It was
• 18:24
  Speaker 1: a million and a half dollars or something, and it
• 18:28
  Speaker 1: was a floating interest rate. And when interuest rates were
• 18:31
  Speaker 1: very low, I was paying like twenty five hundred dollars
• 18:34
  Speaker 1: a month in interest payments. I was like, oh, I
• 18:36
  Speaker 1: love this. But when interest rates went up, the monthly
• 18:40
  Speaker 1: payment was ten thousand dollars a month. Now, luckily I
• 18:43
  Speaker 1: can afford that. But that's a four x increase an
• 18:47
  Speaker 1: interest expense, and that happened to everybody, right, whether you're
• 18:51
  Speaker 1: wealthy or not. That hurts. The aftershocks of trillions of
• 18:57
  Speaker 1: dollars in emergency spending is still being felt today. Here's
• 19:01
  Speaker 1: the bottom line. The eight trillion dollars saved us from disaster,
• 19:06
  Speaker 1: but now we're paying the price in the form of
• 19:08
  Speaker 1: inflation and higher interest rates. Understanding the trade offs that
• 19:13
  Speaker 1: trade off of these things help people navigate, well, help
• 19:20
  Speaker 1: you navigate actually the economic realities of today with clear eyes.
• 19:29
  Speaker 1: Now let me back up and go back to breaking
• 19:36
  Speaker 1: down these different things. So now I've in the first
• 19:41
  Speaker 1: twenty minutes of this podcast, I've solved the biggest problem
• 19:44
  Speaker 1: for you. Now you can go talk to your friends
• 19:46
  Speaker 1: and be like I think, I keep saying, we need
• 19:50
  Speaker 1: to make smart sexy. We've been making dumb sexy for
• 19:52
  Speaker 1: way too long. We've dombe down and celebrated it. It's
• 19:54
  Speaker 1: time to make smart sexy again. Now you're going to
• 19:57
  Speaker 1: be the sexiest person at the cocktail party. Here are
• 19:59
  Speaker 1: hanging out with your friends because now you can explain
• 20:01
  Speaker 1: something that nobody understands. You can explain it. You can
• 20:04
  Speaker 1: explain inflation, Where did it come from, who's responsible all
• 20:08
  Speaker 1: of us? And and how long is it going to last?
• 20:12
  Speaker 1: A while? Right, But it's not a boogeyman anymore. It's
• 20:16
  Speaker 1: it's just the facts jet recession, what it actually means,
• 20:23
  Speaker 1: and why it sparks fear. Well, why what it means
• 20:27
  Speaker 1: and what it doesn't mean? Why does it spark fear?
• 20:29
  Speaker 1: Let me explain now, recession versus a depression. A recession
• 20:33
  Speaker 1: is a temporary economic decline where the economy shrinks negative
• 20:37
  Speaker 1: GDP growth for at least two consecutive quarters six months.
• 20:43
  Speaker 1: The key signs of recession slower economic activity. We're seeing
• 20:46
  Speaker 1: that right now in the economy, rising unemployment. You've seen
• 20:49
  Speaker 1: right now in that right now in the economy, decline
• 20:52
  Speaker 1: in consumer spending and business investment. You're seeing that right
• 20:54
  Speaker 1: now in the economy. Lower company profits. You're about to
• 20:58
  Speaker 1: see that in the economy. Sometimes triggered by inflation or
• 21:03
  Speaker 1: high interest rates. We're seeing both of those in the economy.
• 21:08
  Speaker 1: So thinking of it like this or the economy is
• 21:10
  Speaker 1: catching a code, it's serious, but it's usually short term.
• 21:15
  Speaker 1: If we experience a recession in twenty twenty five, and
• 21:18
  Speaker 1: I think there's a twenty five percent chance of it
• 21:21
  Speaker 1: and increasing, it's man made. It's it's intentional. It's well
• 21:26
  Speaker 1: not intentional. It's there is a bet being made in Washington,
• 21:29
  Speaker 1: d c. On economic policy that if I guess they
• 21:35
  Speaker 1: believe it's right, then I mean, I don't. I'm not
• 21:38
  Speaker 1: get in their heads. But if they're wrong, I can't
• 21:40
  Speaker 1: tell you about whether they're right. If they're wrong, it
• 21:42
  Speaker 1: could trigger a recession. Now, I think the economy is
• 21:47
  Speaker 1: basically strong, which is the bones' economy is basically strong.
• 21:50
  Speaker 1: It's not. This is not like two thousand and eight,
• 21:52
  Speaker 1: So we can recover quicker than we otherwise would, but
• 21:57
  Speaker 1: we are this is a if we have recession, it
• 22:00
  Speaker 1: is a man made recession. Here's what it's not. Is
• 22:07
  Speaker 1: not a depression. Here's a depression. Okay, not, you're depressed.
• 22:11
  Speaker 1: I'm talking about an economic depression. A depression is a
• 22:14
  Speaker 1: prolonged and severe recession that lasts years instead of six
• 22:19
  Speaker 1: months or less, with massive unemployment, deep declines in economic output,
• 22:25
  Speaker 1: and often a breakdown in financial systems. That's what have happened.
• 22:28
  Speaker 1: There wasn't the stimulus of two thousand to twenty twenty two.
• 22:32
  Speaker 1: The key signs of a depression GDP plunges dramatic, drastically,
• 22:36
  Speaker 1: unemployment hits double digits and stays high, wide spad poverty,
• 22:41
  Speaker 1: and bank failures, long periods of recovery, often a decade
• 22:47
  Speaker 1: or more. Now, what's an example of a depression? The
• 22:50
  Speaker 1: Great Depression nineteen twenty nine into the late nineteen thirties.
• 22:54
  Speaker 1: In fact, it took World War two and the spinning
• 22:56
  Speaker 1: tide to that of the government into the private sector.
• 23:00
  Speaker 1: That that was what actually shook us out of the
• 23:03
  Speaker 1: Great Depression. That wasn't this nineteen thirty nine nineteen forty
• 23:06
  Speaker 1: unemployment hit twenty five percent back then, the stock market
• 23:10
  Speaker 1: and lost nearly ninety percent of its value. Think about
• 23:14
  Speaker 1: that that was the Great Depression. Think of it like this,
• 23:18
  Speaker 1: the economy on life support, deep, painful and long lasting.
• 23:24
  Speaker 1: That's not what we're dealing with, right, So you can
• 23:27
  Speaker 1: check that box and remove that from your thought process.
• 23:31
  Speaker 1: Now let's deal with interest rates. I think I've covered
• 23:35
  Speaker 1: this to your satisfaction, but if you if you don't
• 23:39
  Speaker 1: know why interest rates are important and how why I'm
• 23:42
  Speaker 1: upsessing about credit scores. The higher your credit score, the
• 23:46
  Speaker 1: lower your interest rate. Right, The lower your credit score,
• 23:49
  Speaker 1: the higher your interest rate. It's almost in direct proportion
• 23:52
  Speaker 1: if you don't pay your bills, if you know you're
• 23:55
  Speaker 1: going to have if you're not responsible about your fiscal situation,
• 23:59
  Speaker 1: you have really crappy credit score. I've been there, and
• 24:02
  Speaker 1: you're going to pay a very high interest rate. Those
• 24:05
  Speaker 1: who those who make the least pay the most, certainly
• 24:10
  Speaker 1: if you don't manage your financial but frankly, it's not
• 24:12
  Speaker 1: just the poor. The poor pay the most, but generally speaking,
• 24:16
  Speaker 1: but if you're wealthy and don't pay your bills, same
• 24:20
  Speaker 1: it is also true. If you're wealthy, don't pay your bills,
• 24:22
  Speaker 1: you will have a crappy credit score. Anyway, that's what
• 24:24
  Speaker 1: interest rates are, and again, I covered that a minute ago,
• 24:27
  Speaker 1: so you know, back and listen to that. I'm trying
• 24:28
  Speaker 1: to get through a lot of ground in one podcast tariffs.
• 24:32
  Speaker 1: I love this conversation. Okay, so what the heck is
• 24:37
  Speaker 1: going on with tariffs? A tariff is a tax, Okay,
• 24:46
  Speaker 1: not an attack. It's a tax. Well maybe an attack too,
• 24:50
  Speaker 1: and it is a tax on the recipient, the buyer
• 24:57
  Speaker 1: of goods is not. So if we have a tariff
• 25:00
  Speaker 1: on China, or a tariff on Canada, or a teriff
• 25:04
  Speaker 1: on Mexico, this is not saying, oh, Mexico, we're gonna
• 25:07
  Speaker 1: make you paid, Canada will make you pay, Texas, Texas, China,
• 25:11
  Speaker 1: we're gonna make you pay. No, if you're the CEO
• 25:14
  Speaker 1: of a major retailer in America and you're buying products
• 25:17
  Speaker 1: from let's say China as an example, you're paying. The
• 25:19
  Speaker 1: retailer's paying, so they're paying the tax. The tax goes
• 25:25
  Speaker 1: to the federal government. So the federal government is theoretically
• 25:27
  Speaker 1: making some money, but it is not. This is I
• 25:30
  Speaker 1: don't think this is money that's worth it, because the
• 25:33
  Speaker 1: trade off on that is could be catastrophic if you
• 25:37
  Speaker 1: don't play it properly. What did I say seventy percent
• 25:39
  Speaker 1: of the US economy is consumer spending, right, And we've
• 25:42
  Speaker 1: already seen what happened when you when you stressed out
• 25:45
  Speaker 1: the consumer economy in COVID. So, a tariff is a
• 25:52
  Speaker 1: tax that is paid for by the buyer of the goods,
• 25:57
  Speaker 1: whoever that buyer is. Follow me here, now, what is
• 26:03
  Speaker 1: that buyer going to do in the natural scheme of things,
• 26:06
  Speaker 1: unless they just are making a crap load of profit
• 26:09
  Speaker 1: or somehow being offset by a credit by the federal government,
• 26:13
  Speaker 1: which that's not going to happen. The federal government is
• 26:16
  Speaker 1: actually trying to take the tax as revenue for the
• 26:19
  Speaker 1: federal government in this example. But that manufacturer, sorry, that
• 26:24
  Speaker 1: that manage, that importer is going to in all likelihood
• 26:28
  Speaker 1: pass on that cost to you, the consumer. What is
• 26:31
  Speaker 1: that going to do with your cost of goods? Raise them,
• 26:36
  Speaker 1: raise them? Sorry? In most situations that that the retailer.
• 26:41
  Speaker 1: I won't pick an I'm not gonna pick on the retailer.
• 26:43
  Speaker 1: It doesn't matter which one it is. If there is
• 26:46
  Speaker 1: a if there's a tariff on what they're buying from
• 26:51
  Speaker 1: China in this example, it will raise the cost of
• 26:53
  Speaker 1: that thing because they got to pay a tax on
• 26:56
  Speaker 1: it to the government. That means they got to pass
• 26:59
  Speaker 1: that in order to be profitable. They got to pass
• 27:01
  Speaker 1: that raise the costs from a buck to a buck
• 27:03
  Speaker 1: twenty five in this example, and pass that cost on
• 27:06
  Speaker 1: to you the consumer, and if the consumer has too
• 27:10
  Speaker 1: much month at the end of their money. Hello, okay,
• 27:13
  Speaker 1: So why does somebody why does a politician use a terraff?
• 27:16
  Speaker 1: They're trying to, in all likelihood to negotiate with the
• 27:20
  Speaker 1: company because there's trade and balances company the country that
• 27:23
  Speaker 1: they're putting the tariff on, because that means there's less
• 27:26
  Speaker 1: demand for that country's goods because the buyer is less
• 27:30
  Speaker 1: incentivized to buy the product from that country. So they're
• 27:34
  Speaker 1: trying to negotiate with that country by penalizing that country
• 27:37
  Speaker 1: with less demand of their goods. I hope this is
• 27:40
  Speaker 1: making you some sense. You can replay this if you
• 27:42
  Speaker 1: need me to slow this down for you, and I'm
• 27:46
  Speaker 1: explaining to you why I don't think it's going to
• 27:47
  Speaker 1: work in this example. So in the short term, you
• 27:50
  Speaker 1: can use this as a negotiating tool to extract what
• 27:53
  Speaker 1: you want politically from your adversary who you're trying to
• 27:58
  Speaker 1: hit over the head with this paroff to get them
• 28:01
  Speaker 1: to do what you want them to do. The secondary
• 28:04
  Speaker 1: reason you might want to do this is to make
• 28:07
  Speaker 1: goods that are foreign less cheap, less attractive than homemade goods,
• 28:19
  Speaker 1: and so that you're quote being bringing manufacturing back home.
• 28:24
  Speaker 1: Please in the comments, tell me whether when you see
• 28:26
  Speaker 1: this on social media, on YouTube, whatever, as a podcast
• 28:29
  Speaker 1: gets shared, let me know whether this is where I'm
• 28:32
  Speaker 1: doing a good job of translating this. It's really important
• 28:35
  Speaker 1: you get this. So I've just told you there's a
• 28:38
  Speaker 1: political reason to do tariffs, and then there is a
• 28:42
  Speaker 1: a bring back home manufacturing so that the homemade goods
• 28:47
  Speaker 1: are cheaper than the foreign goods rationale for doing this. Okay,
• 28:52
  Speaker 1: can tariffs work? Yes, if you extract, if you set
• 28:56
  Speaker 1: a tariffs and you make it short term, and you
• 29:04
  Speaker 1: make it definitive, then it can work. But you've got
• 29:09
  Speaker 1: to make sure you've got a strong economy. You got
• 29:10
  Speaker 1: to make sure you have all sets so that the
• 29:12
  Speaker 1: average every day American doesn't get whacked over the head
• 29:15
  Speaker 1: when this is going on, which means you need to
• 29:18
  Speaker 1: be very thoughtful about it. It needs to be really thought out.
• 29:21
  Speaker 1: So hold on to that for a minute. What's happening
• 29:25
  Speaker 1: now is it's the tariff today, tariff's off tomorrow, the
• 29:30
  Speaker 1: tariffs ten percent, tariffs twenty five percent. It's up is down,
• 29:33
  Speaker 1: as left is right, it's it's how do I feel today? Well,
• 29:36
  Speaker 1: that I don't think is as elegant a strategy and
• 29:40
  Speaker 1: may not be sustainable. And it's combined with the second
• 29:43
  Speaker 1: problem of here here. And I'm not being critical. I'm
• 29:46
  Speaker 1: just I mean, we need the we need our com
• 29:49
  Speaker 1: froment to be successful, so I'm rooting for them. I
• 29:51
  Speaker 1: just don't understand this particular strategy, and I don't think
• 29:56
  Speaker 1: it's well advised. Let me just say that for the record,
• 30:00
  Speaker 1: let me give you the big drop the mic. In
• 30:02
  Speaker 1: order for teriffs to work, where you're bringing manufacturing back home,
• 30:05
  Speaker 1: which is one of the talking points you would have
• 30:10
  Speaker 1: had a year before you became president, met with all
• 30:12
  Speaker 1: of the major banks and all the major capital providers, financiers,
• 30:17
  Speaker 1: all the major fortune five hundred company CEOs and said, look,
• 30:20
  Speaker 1: if I win, when I win, I'm going to be
• 30:24
  Speaker 1: bringing manufacturing back home. I'm going to be putting tariffs
• 30:27
  Speaker 1: in the following areas, and I need for you to
• 30:29
  Speaker 1: plan for that. I need for you to go to
• 30:31
  Speaker 1: your Board of directors, go to your governance committees, governance
• 30:34
  Speaker 1: committees of your board. I need you to go to
• 30:37
  Speaker 1: your shareholders, your investors, and tell them that we want
• 30:41
  Speaker 1: to allocate We want you to allocate capital in your
• 30:43
  Speaker 1: industries to build factories, you know, to create jobs in
• 30:48
  Speaker 1: all these different places. And by the way, this could
• 30:49
  Speaker 1: have worked and combine that with the Biden infrastr seventy
• 30:53
  Speaker 1: thousand Biden infrastructure projects, roads, bridges, etc. That are and
• 31:01
  Speaker 1: that all together create a bunch of jobs, and then
• 31:04
  Speaker 1: we're going to bring manufacturing back home. Theoretically that could
• 31:07
  Speaker 1: have worked. Two problems with that one. That didn't happen. Right,
• 31:12
  Speaker 1: nobody mad with anybody it made any long term plans.
• 31:14
  Speaker 1: I know because I'm talking to these CEOs. No one
• 31:17
  Speaker 1: this is all new news to them. They're finding out
• 31:19
  Speaker 1: on Twitter or ex or whatever. It is, just like
• 31:21
  Speaker 1: everybody else. So what the policy is, and you cannot
• 31:24
  Speaker 1: No one's going to allocate millions, tens of millions in
• 31:27
  Speaker 1: some case billions of dollars and bit tens of billions
• 31:30
  Speaker 1: of dollars in some cases for automobile manufacturers or steel
• 31:33
  Speaker 1: plants whatever. Just because somebody sends out a tweet today
• 31:36
  Speaker 1: and says that they're they're changing policy overnight. They just
• 31:39
  Speaker 1: can't pivot on a dime like that. Doesn't matter whether
• 31:41
  Speaker 1: they like it, don't like agree, or do disagree. You
• 31:43
  Speaker 1: just can't move that fast, particularly when you wake up
• 31:47
  Speaker 1: the next day and the policy is changed again. Uh So,
• 32:00
  Speaker 1: one they didn't have the chance the time to allocate
• 32:03
  Speaker 1: the capital. And two we're not a manufacturing country anymore,
• 32:08
  Speaker 1: not for heavy you know, traditional goods. We're too expensive.
• 32:11
  Speaker 1: The country took expensive of that that that party left
• 32:14
  Speaker 1: us that you know in the late seventies and eighties.
• 32:18
  Speaker 1: That does a game for developing nations where it's cheaper
• 32:21
  Speaker 1: to do it. Here's the other problem. Even if you're
• 32:23
  Speaker 1: manufacturing something at home that's not technology based or there
• 32:27
  Speaker 1: are some things we do do well knowledge based stuff.
• 32:29
  Speaker 1: But if you're manufacturing traditional stuff here, the parts of
• 32:32
  Speaker 1: that thing. Let's take an automobile as an example, are
• 32:35
  Speaker 1: often imported. Even if you manufacture the thing here, you
• 32:38
  Speaker 1: still need parts from other parts of the world, which
• 32:40
  Speaker 1: means we're still interdependent. Okay, so this is not this
• 32:46
  Speaker 1: is this is not designed well, in my opinion, to
• 32:51
  Speaker 1: work and that is why I think you're going to
• 32:53
  Speaker 1: see tariffs create an increase in prices for you and
• 33:00
  Speaker 1: short term until you know, they run the course of
• 33:03
  Speaker 1: this experiment, and hopefully this will stop sometime soon because
• 33:08
  Speaker 1: I think it's going to slow down the economy and
• 33:09
  Speaker 1: cause more pain to the average consumer. Let me know
• 33:12
  Speaker 1: if I explained that well, number five, so I've got
• 33:15
  Speaker 1: done tariffs number four. I'm gonna run through the rest
• 33:18
  Speaker 1: of them pretty quickly. Here tariff's number four. Number five
• 33:21
  Speaker 1: GDP Gross domestic product. You hear this talked about all
• 33:23
  Speaker 1: the time, but basically, this is how you measure the
• 33:25
  Speaker 1: economy's health. This is like you're saying, what's the income
• 33:27
  Speaker 1: of your household? How much money do you make? That's GDP.
• 33:31
  Speaker 1: It's not profit, is not net worth, It's how much
• 33:35
  Speaker 1: did you produce? How much did you make? What's the
• 33:37
  Speaker 1: health of the country the GDP Number six stimulus and
• 33:41
  Speaker 1: relief packages. Where the COVID money went, and why that
• 33:46
  Speaker 1: matters now is what I explained a little while ago.
• 33:50
  Speaker 1: But that was all COVID. That was all stimulus and
• 33:53
  Speaker 1: relief packages. So when you hear these phrases, now you
• 33:55
  Speaker 1: know what this means. Number seven, the Federal Reserve. The FED.
• 34:00
  Speaker 1: The Federal Reserve has a very important and unique uh
• 34:03
  Speaker 1: position in the economy. The Federal Reserve is the central
• 34:06
  Speaker 1: bank of the United States. This is gangster, now, I
• 34:09
  Speaker 1: mean you think that you think the rap is gangster.
• 34:12
  Speaker 1: No banking is gangster. It's a it's a I did
• 34:16
  Speaker 1: a whole podcast last year breaking down how banks work.
• 34:18
  Speaker 1: Go back and listen to that podcast. Think of the
• 34:22
  Speaker 1: Federal Reserve is the bank for banks and the referee
• 34:27
  Speaker 1: on the US economy. The main responsibilities of the FED
• 34:31
  Speaker 1: controlling inflation, so price stability. The Fed's job is to
• 34:34
  Speaker 1: keep prices stable so your money doesn't lose value too quickly.
• 34:39
  Speaker 1: When inflation is too high, the FED raises interest rates
• 34:42
  Speaker 1: to slow spending and borrowing. It hurts you in the
• 34:44
  Speaker 1: short term, but your money still has has value. That's
• 34:47
  Speaker 1: why the US currency is a flight to quality of
• 34:50
  Speaker 1: All around the world, people in China talking mess about US,
• 34:53
  Speaker 1: and Russia talking mess about US, and Iran talking mess
• 34:56
  Speaker 1: about US, in North Korea talking mess about US. But
• 34:59
  Speaker 1: all these leaders when the cameras are off, want they're
• 35:01
  Speaker 1: and their money to come to the United States and
• 35:04
  Speaker 1: want to own our real estate. They want on our stock.
• 35:06
  Speaker 1: They want their families in the US. They when their
• 35:09
  Speaker 1: money in the US. They want the US currency, which
• 35:12
  Speaker 1: is is not even backed by the dock by gold anymore.
• 35:14
  Speaker 1: It's a free flowing currency backed by the full faith
• 35:16
  Speaker 1: and credit of the US government. This is gangster, right.
• 35:20
  Speaker 1: That is vibe, is a it's a feeling, it's sentiment.
• 35:24
  Speaker 1: The US currency is the most valuable currency. It is
• 35:27
  Speaker 1: a world currency. Still, I don't care what anybody's saying.
• 35:30
  Speaker 1: Ain't nobody and I say, ain't on purpose. Ain't nobody
• 35:32
  Speaker 1: trying to use no Chinese currency or Russian currency or
• 35:36
  Speaker 1: even the euro as a global currency. Uh it? You
• 35:40
  Speaker 1: know that nobody's trying to use the British pound is
• 35:43
  Speaker 1: you know, we don't mind it. But it's the US.
• 35:46
  Speaker 1: It's the US currency is like a globally valuable and
• 35:50
  Speaker 1: that's what everybody wants. Number two row maximizing employment. The
• 35:56
  Speaker 1: fair tries to help create. By the way, even in cryptocurrency,
• 36:00
  Speaker 1: what's the ultimate goal of cryptocurrency practitioners? They want to
• 36:04
  Speaker 1: they want to cash it out for what US currency? Right.
• 36:06
  Speaker 1: They're not trying to live with crypto forever. They trying
• 36:08
  Speaker 1: to make that money and cash it out and get
• 36:10
  Speaker 1: paid with Hello, US currency, even if it's digital US
• 36:14
  Speaker 1: currency they want so the FEDS. The next second row
• 36:17
  Speaker 1: of the FED is a maximize employment. The FED tries
• 36:20
  Speaker 1: to create and conditions for as many people as possible
• 36:23
  Speaker 1: to have jobs. When the economy slows down, the FED
• 36:27
  Speaker 1: might lower interest rates to encourage businesses to invest in
• 36:30
  Speaker 1: to hire. Number three regulate banks and to keep financial
• 36:34
  Speaker 1: systems safe. The FED one of the regulators. You have
• 36:37
  Speaker 1: the culture of the currency. You have the fdi C
• 36:40
  Speaker 1: Federal Deposit Insurant Corporation that you have state bank state
• 36:44
  Speaker 1: bank regulators as well, But the Federal Reserve is the
• 36:48
  Speaker 1: big baller because they have a multifunction role and they
• 36:53
  Speaker 1: the banks. The banks, the banks bank in the in
• 36:56
  Speaker 1: the nation's bank. The FED oversees major banks to ensure
• 37:00
  Speaker 1: that they are playing by the rules and not taking
• 37:02
  Speaker 1: excessive risk. This helps prevent another financial crisis like we
• 37:06
  Speaker 1: saw in two thousand and eight. Number four and the
• 37:09
  Speaker 1: FED was created in response to the Great Depression. Just
• 37:11
  Speaker 1: so you know, the number four as the FDIC was
• 37:15
  Speaker 1: as well. Number four maintains stability in the financial system
• 37:18
  Speaker 1: in times of panic like during COVID or a bank run.
• 37:21
  Speaker 1: The FED can step in as a backstop, as they
• 37:24
  Speaker 1: did during COVID, which I've explained during this podcast, providing
• 37:27
  Speaker 1: emergency loans are liquidity to keep the systems from classing
• 37:30
  Speaker 1: that as they did in two thousand and eight, the
• 37:32
  Speaker 1: recession that happened after the mortgage the mortgage meltdown Number five.
• 37:36
  Speaker 1: Then manage the nation's money supply and interest rates. The
• 37:39
  Speaker 1: FED sets a key interest rate called the Federal Funds Rate,
• 37:43
  Speaker 1: which influences borrowing, calls for credit cards, mortgages, student loans, etc.
• 37:48
  Speaker 1: It also controls a supply of money circulating in the economy.
• 37:52
  Speaker 1: You want to be you want to have a cool experience,
• 37:53
  Speaker 1: Take your kids, take your loved ones to your local
• 37:56
  Speaker 1: Federal Reserve Bank. The twelves there's twelve of them in
• 37:59
  Speaker 1: the fact, the Federals Bank here in Atlanta. As a
• 38:01
  Speaker 1: black president, I think it is the first time in
• 38:03
  Speaker 1: US history they's ever had a black president. Boston, Raphael Boston,
• 38:06
  Speaker 1: brilliant brother. Go take your loved ones and go take
• 38:10
  Speaker 1: a tour of the FED, and then get them to
• 38:13
  Speaker 1: cut some give you some of these recently cut currency
• 38:16
  Speaker 1: you may have to pay for it. They'll give you
• 38:18
  Speaker 1: some ShredIt currency for free, which is the old currency
• 38:20
  Speaker 1: they actually destroy. I know it seems sacrilegious, they actually
• 38:26
  Speaker 1: destroy old currency. Take it out of circulation. Go check
• 38:32
  Speaker 1: it out. It's really gangster what they do. I mean,
• 38:34
  Speaker 1: it's pretty fascinating. You won't be bored. Go get a
• 38:37
  Speaker 1: Federal Reserve tour and ask them about the Freedman's Bank
• 38:40
  Speaker 1: when you're at it, which is something that I helped to.
• 38:43
  Speaker 1: I'm proud to see I'm the only American citizen ever
• 38:45
  Speaker 1: to trigger the renaming of a building on the White
• 38:47
  Speaker 1: House campus. It was a Treasury annex building. Now it's
• 38:49
  Speaker 1: called the Freedman's Bank building, which was a bank chartered
• 38:52
  Speaker 1: by Abraham Lincoln after the Civil War to teach free
• 38:54
  Speaker 1: slaves about money. The Freedman's Bank another podcast for another day.
• 38:59
  Speaker 1: Why is this all? All? This matters? When the Fed
• 39:01
  Speaker 1: raises interest rates, your mortgage and credit card rates go up,
• 39:05
  Speaker 1: but inflation may cool down when it lowers rates. Borrowing
• 39:09
  Speaker 1: is cheaper, but prices can rise. The fans actions affect
• 39:13
  Speaker 1: your job security, your savings, your debt in your future.
• 39:18
  Speaker 1: In short, the Federal Reserve is as important as the
• 39:21
  Speaker 1: President of the United States of America. That's why the
• 39:24
  Speaker 1: FED chairman, Pow, the current FED chairman, is always cited
• 39:28
  Speaker 1: in the news. All right, so we're at number eight now. Ways,
• 39:30
  Speaker 1: growth versus cost of living? Why your paycheck doesn't go
• 39:34
  Speaker 1: as far as you'd love it, you'd like it to. Why.
• 39:36
  Speaker 1: It explained part of that in talking about the pandemic.
• 39:41
  Speaker 1: And I'm trying to get through this through this podcast,
• 39:43
  Speaker 1: and within forty five minutes i'll paper over that unless
• 39:47
  Speaker 1: you tell me in comments you want me to drill down.
• 39:49
  Speaker 1: I think you can figure out ways growth has cost
• 39:51
  Speaker 1: of living pretty easily. Supply chain. I've talked about this
• 39:56
  Speaker 1: when I explained the pandemic. It's the is supply of
• 40:01
  Speaker 1: the chain of supply of goods and services, and what
• 40:03
  Speaker 1: happens when the supply of that and the demand of
• 40:07
  Speaker 1: that are in balance, you get inflation. Unemployment rate all right, Well,
• 40:13
  Speaker 1: so again once again it's obvious, right, the rate of
• 40:17
  Speaker 1: those not working, even though it's fascinating that certain people
• 40:23
  Speaker 1: are actually not even counted in the unemployment rate. But
• 40:25
  Speaker 1: I'm going to get into that. But if you if
• 40:27
  Speaker 1: you just want to, if you just want to, if
• 40:29
  Speaker 1: you want to be a geek. Do some research on
• 40:32
  Speaker 1: who is actually counted and not counted in the unemployment rate.
• 40:37
  Speaker 1: All right, so we've covered a lot of ground here.
• 40:42
  Speaker 1: Here's some tips to survive and thrive in tough economic times.
• 40:46
  Speaker 1: Number one, know your numbers. Track your income, your expenses
• 40:51
  Speaker 1: and debt. Clarity brings control. Know your numbers. I like
• 40:57
  Speaker 1: math because it doesn't have an opinion. That's Melody hops
• 41:00
  Speaker 1: in quotes. I give her credit, but I use it
• 41:02
  Speaker 1: all the time because it really is illuminating, and I think, well,
• 41:06
  Speaker 1: I look, I love making smart and sexy. That is
• 41:08
  Speaker 1: making that is making smart and sexy sexy. I like math,
• 41:11
  Speaker 1: it just doesn't have an opinion. Know your numbers. Number two,
• 41:15
  Speaker 1: build a budget that that breeds. Build a budget that breeds.
• 41:19
  Speaker 1: Not about restrictions. It's about prioritizing what matters most. So
• 41:23
  Speaker 1: you want an expansive budget, a flexible budget, but you
• 41:26
  Speaker 1: want to prioritize your mortgage, your rent, your car notes,
• 41:29
  Speaker 1: your food, your shelter, you utilities. Uh, you know, and
• 41:34
  Speaker 1: but you need to have a budget. I mean, I
• 41:36
  Speaker 1: used to pooh pooh the I thought budgets were boring.
• 41:39
  Speaker 1: I think budgets are sexy now everybody needs a budget.
• 41:42
  Speaker 1: Wealthy people need a budget. Poor people need a budget.
• 41:44
  Speaker 1: Everybody needs a budget. Number three, cut hidden costs. So
• 41:50
  Speaker 1: this is a real big one. Subscriptions, fees, auto renewals.
• 41:54
  Speaker 1: Clean them all up. Going to your phone, going in
• 41:57
  Speaker 1: subscriptions in the settings, and you will be stuck most
• 42:00
  Speaker 1: of you, And how many things you're paying for every
• 42:03
  Speaker 1: month every year that you forgot about you You may
• 42:06
  Speaker 1: pick up thousands of dollars a year simply by going
• 42:09
  Speaker 1: and canceling useless not These companies rely on you forgetting.
• 42:14
  Speaker 1: They rely on you having add like short attention span.
• 42:17
  Speaker 1: Moving on to the next. You subscribe to something and
• 42:20
  Speaker 1: you don't even think about it anymore, and they're charging
• 42:22
  Speaker 1: you a buck ninety nine a month or a buck
• 42:24
  Speaker 1: ninety nine a year, Well buck ninety ninety year times
• 42:26
  Speaker 1: millions of people or even one hundreds of thousand of
• 42:28
  Speaker 1: people is a grab load of money for them. So
• 42:32
  Speaker 1: they're counting on you not missing a dollar or five bucks.
• 42:36
  Speaker 1: And once they once you get intothing, it allo renew
• 42:39
  Speaker 1: so you got to opt out of it, right, You
• 42:41
  Speaker 1: got to ask them to take you out of that.
• 42:42
  Speaker 1: So that's probably the big drop the mic of the
• 42:44
  Speaker 1: whole podcast. I've just saved you some money. Go cut
• 42:48
  Speaker 1: your subscriptions from your phone. Subscription from your phone in
• 42:52
  Speaker 1: the settings, at least in an iPhone is under settings
• 42:54
  Speaker 1: and Android. You let me know whether it's different A
• 42:56
  Speaker 1: number four Build or rebuild an emergency fund. About forty
• 43:01
  Speaker 1: percent of Americans don't have four hundred dollars for the
• 43:04
  Speaker 1: unplanned event. At Delta Airlines, we did a whole program
• 43:07
  Speaker 1: with combining financial coaching with an emergency savior's account, funded
• 43:10
  Speaker 1: by my friend Ed Bash and CEO of Delta were
• 43:13
  Speaker 1: funded by Delta with his leadership, and it's a hit.
• 43:15
  Speaker 1: I mean, it's really been an extraordinary success at Delta,
• 43:19
  Speaker 1: and it's helping them become a healthier company. The employees
• 43:23
  Speaker 1: are happier. But this is not about poor people. Most
• 43:28
  Speaker 1: Americans don't have four hundred dollars from unplanned dinner. Not
• 43:30
  Speaker 1: talking about your credit card money, even though that forty
• 43:34
  Speaker 1: percent number includes people who access to a credit card.
• 43:36
  Speaker 1: Most the credit cards not cash, that's borrowing. I'm talking
• 43:38
  Speaker 1: about forty dollars for your own money. So just start small.
• 43:41
  Speaker 1: Start with a small fund, a few hundred bucks, try
• 43:45
  Speaker 1: to get to the five hundred to one thousand dollars.
• 43:47
  Speaker 1: You have a thousand dollars for the emergency oh crap fund,
• 43:50
  Speaker 1: than that, you're a winner. I don't want you to
• 43:52
  Speaker 1: do it going to a payday loan lender when Johnny
• 43:55
  Speaker 1: gets sick and you have to pay. You got to
• 43:57
  Speaker 1: pay for Johnny's medical bills, and you miss rent. Right.
• 44:00
  Speaker 1: Number five, don't chase lifestyle, chase legacy. Invest in your future,
• 44:06
  Speaker 1: not your appearances. Your assets cannot be on your ass
• 44:11
  Speaker 1: Number six. Watch your credit. Good credit equals access opportunity,
• 44:15
  Speaker 1: lower costs, aim for a seven of the credit score.
• 44:18
  Speaker 1: You've heard me talk about this a million times, so
• 44:20
  Speaker 1: I will not belabor this right now, but I'll just
• 44:24
  Speaker 1: say this. If you go to the club tonight and
• 44:29
  Speaker 1: you see somebody you like and she's beautiful, she's fine,
• 44:32
  Speaker 1: he's handsome, said, oh damn, what's your name? Oh yeah,
• 44:35
  Speaker 1: that's cool and nice to meet you. What's your credit score?
• 44:39
  Speaker 1: If you get serious about somebody, don't just be fascinated
• 44:44
  Speaker 1: with their looks. It looks will go away in time.
• 44:45
  Speaker 1: That's your business partner for life. This is the only
• 44:47
  Speaker 1: where the mass should be multiplication, not addition. Two plus
• 44:50
  Speaker 1: two should equals equal more than four. If it doesn't,
• 44:53
  Speaker 1: what are you doing? If you're not better together, If
• 44:55
  Speaker 1: it doesn't equal six to eight or ten, what are
• 44:58
  Speaker 1: you doing? You can do bad all by yourself. That
• 45:00
  Speaker 1: Quincy Jones once told me God rest is soul. John.
• 45:03
  Speaker 1: He said, the only worse than being alone is wishing
• 45:05
  Speaker 1: that you were. Can I get an amen? Number seven
• 45:11
  Speaker 1: Side hustle smart beside hustle smart turn your skills or
• 45:16
  Speaker 1: passions into a second income stream. The easy ones are
• 45:19
  Speaker 1: uber lyft. You can rent out of room through Airbnb.
• 45:24
  Speaker 1: You can rent out that that RV is sitting in
• 45:27
  Speaker 1: your in your driveway. You rent out a spare car.
• 45:31
  Speaker 1: There's a lot of ways to be to You become
• 45:33
  Speaker 1: a notary, a notary public and do that as a
• 45:36
  Speaker 1: side hustle. There's a whole bunch of side hustles that
• 45:39
  Speaker 1: you can get into quickly to earn you some additional income.
• 45:43
  Speaker 1: Number eight by smart not big. Think value over luxury,
• 45:46
  Speaker 1: especially with cars and big ticket items. You don't want
• 45:50
  Speaker 1: to know one thousand, two thousand and three thousand dollars car. Note.
• 45:52
  Speaker 1: I mean that is crazy and people do this on
• 45:55
  Speaker 1: the regular. I just don't understand it. But I mean
• 45:58
  Speaker 1: in a car is also a diminishing value asset. It is.
• 46:03
  Speaker 1: It's bad debt because it decreases in value. You want
• 46:06
  Speaker 1: to have debt tied to things that increase in value,
• 46:10
  Speaker 1: which I call good debt. Mortgage, car, a car note,
• 46:13
  Speaker 1: a mortgage on the home, so on and so forth.
• 46:16
  Speaker 1: Even student loan I consider good debt because that's making
• 46:19
  Speaker 1: you smarter, which will allow you to produce more income
• 46:21
  Speaker 1: for yourself, earn better income. Number nine, Uh, learn before
• 46:25
  Speaker 1: you leave. Financial literacy is power. It is a Financial
• 46:29
  Speaker 1: literacy is a civil rights issue this generation. You know better,
• 46:33
  Speaker 1: you do better. So read, listen, and grow. Read my
• 46:35
  Speaker 1: book Financial Literacy for All, which is a national bestseller
• 46:39
  Speaker 1: in business finance, number one in the country since last April,
• 46:43
  Speaker 1: so coming up on a year of it being number one.
• 46:46
  Speaker 1: Buy it at Amazon, buy it at Walmart, buy it
• 46:53
  Speaker 1: at a black or minority owned bookstore. But get that
• 46:57
  Speaker 1: book and sign up to a financial coach. You get
• 47:00
  Speaker 1: operation to hope, tell him I sent you. They'll give
• 47:01
  Speaker 1: you one thousand dollars emergency savings account, sorry, one thousand
• 47:06
  Speaker 1: dollars scholarship to do for coaching and counseling. It is
• 47:11
  Speaker 1: an emergency savings account, by the way, because it's going
• 47:14
  Speaker 1: to save you money. Two ways of making money may
• 47:15
  Speaker 1: more spend less. This will help you spend less, thus
• 47:19
  Speaker 1: make more. If you're spaking making thirty six thousand dollars
• 47:22
  Speaker 1: a year and you and you're smoking three six packs
• 47:24
  Speaker 1: of cigarettes a week, two or three packs cigarettes, reason
• 47:27
  Speaker 1: going to Starbucks for coffee, you're you know, that's six
• 47:31
  Speaker 1: thousand dollars a year. That's ten percent of your income.
• 47:34
  Speaker 1: So go get a cured machine and stop smoking. You'll
• 47:39
  Speaker 1: live longer, be happier, and you can repurpose that that
• 47:43
  Speaker 1: six grand, twenty percent year income to do something meaningful
• 47:46
  Speaker 1: in your life. And tell your friends that follow this
• 47:50
  Speaker 1: podcast Number ten invest in yourself, mentorship, training, health. It
• 47:55
  Speaker 1: all pays dividends. So the economy feel like a foreign language,
• 47:59
  Speaker 1: but doesn't have to. When we understand the rules of
• 48:02
  Speaker 1: the game, we can win. Encourage all of your friends
• 48:07
  Speaker 1: to share this episode. Listen to this episode, Subscribe to
• 48:11
  Speaker 1: Money and Wealth, go to Operation Hope, get my book
• 48:14
  Speaker 1: Financial Ligency for All, become a civil rights leader. And
• 48:18
  Speaker 1: I want you to understand that there's a difference between
• 48:21
  Speaker 1: being broken being poor. Being broke as economic being. Being
• 48:24
  Speaker 1: poor as a disabling frame of mind, a depressed condition
• 48:28
  Speaker 1: of your spirit, and you must vow never ever ever
• 48:30
  Speaker 1: to be poor again. I also want you to know
• 48:32
  Speaker 1: that there is a business plan for Black America coming
• 48:35
  Speaker 1: on April fourth. We will be meeting in Memphis, Tennessee,
• 48:40
  Speaker 1: fifty seventh anniversary of the assassination of doctor Martin LA
• 48:43
  Speaker 1: King Junior. I am co chairing. I was asked the
• 48:47
  Speaker 1: CoA chair with the Memphis Mayor Paul Young, doctor Bernice King,
• 48:51
  Speaker 1: the daughter of doctor King, and the CEO of the
• 48:53
  Speaker 1: King Center, Ambassador Andrew J. Young, who built modern Atlanta
• 48:56
  Speaker 1: to the tenth lars economy in the country and the
• 48:59
  Speaker 1: biggest on me for black brown folks in the world.
• 49:02
  Speaker 1: That's a city that's successful at this scale. Five hundred
• 49:06
  Speaker 1: and eighty billion dollars I believe is the last number
• 49:07
  Speaker 1: for GDP for the city of Atlanta. He was on
• 49:10
  Speaker 1: that balcony with doctor King was assassinated. All of them
• 49:13
  Speaker 1: will be co hosting with me. The Undefinished Dream event
• 49:17
  Speaker 1: in Memphis, Tennessee is going to be online and I
• 49:21
  Speaker 1: will encourage you to to Dream Forward, which is the
• 49:26
  Speaker 1: official name for the event. Go to operational dot org
• 49:30
  Speaker 1: or just search dream Forward, Operation Hope and register for
• 49:34
  Speaker 1: this global town hall is virtual April fourth, one to
• 49:38
  Speaker 1: three pm Easter Standard Time, twelve to noon Central Time.
• 49:43
  Speaker 1: A lot of ballers, heroes, heroes that you love and
• 49:47
  Speaker 1: respect will be speaking that day. Killer Mike sam Audman,
• 49:51
  Speaker 1: Bernice King, just the I mean, Nicole Pullin, Ross, Ray McGuire,
• 49:58
  Speaker 1: Stride Massieu with a six richest man in Africa's Van Jones,
• 50:04
  Speaker 1: Bishop TD Jakes, the CEO of Walmart W. Millan, the
• 50:07
  Speaker 1: sound of Brown Ducket I was running a two tree
• 50:09
  Speaker 1: dollar company as a black woman, Charlemagne, that God, the
• 50:12
  Speaker 1: CEO of the President of Shopifi, Harley Finkelstein. Uh just,
• 50:17
  Speaker 1: I mean, just an unbelievable group of leaders. And it'll
• 50:21
  Speaker 1: be Republicans and Democrats, blacks and whites, rich and poor.
• 50:24
  Speaker 1: Billionaire next to millionaire. Next somebody's trying to buy some
• 50:26
  Speaker 1: there right with a business plan for America, the business
• 50:31
  Speaker 1: plan for Black America, which is a signal for the
• 50:35
  Speaker 1: other business plans we're going to create for Latino Americans,
• 50:39
  Speaker 1: for Native American Indians, for rural America. Uh to so
• 50:43
  Speaker 1: that we all can come up from nothing. Uh So
• 50:46
  Speaker 1: make sure you register for that. It's free. It is
• 50:49
  Speaker 1: our service for you. This is a silver rights blueprint
• 50:55
  Speaker 1: for all of us. It is a business plan built
• 50:58
  Speaker 1: on hope and it includes you. And we're going to
• 51:00
  Speaker 1: tell you how to come up. I'm telling you how
• 51:03
  Speaker 1: to come up into individually, We're going to tell you
• 51:05
  Speaker 1: how we're gonna come up as a group. And yeah,
• 51:09
  Speaker 1: I'm very excited. So see you there, John O'Brien, this
• 51:12
  Speaker 1: is Money and Wealth. Let's go change the world as
• 51:15
  Speaker 1: be this change we want to see in the world.
• 51:32
  Speaker 1: Money and Wealth with John O'Brien is a production of
• 51:35
  Speaker 1: the Black Effect Podcast Network. For more podcasts from the
• 51:38
  Speaker 1: Black Effect Podcast Network, visit the iHeartRadio app, Apple Podcasts,
• 51:43
  Speaker 1: or wherever you listen to your favorite shows of