Compound Growth

Episode 07 - The Inequality Equation

• Compound Growth • Season 1 • Episode 7

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In this episode of Compound Growth, Wheeler and Collin tackle one of the most  persistent and complicated issues in American life today: wealth inequality. Starting with a humorous anecdote about poison ivy and prescription overload, we quickly pivot into deeper territory—exploring how the mechanics of capitalism, the psychology of comparison, and generational shifts in consumption have all played a part in creating today’s economic divide.

We unpack how the concept of compound growth, while a powerful tool for building wealth, can also become a wedge that pushes people further apart if they’re not participating in the game. The episode highlights how inflation, lifestyle creep, and the push for "more" have distorted our definition of success—driving societal overconsumption and worsening inequality. From housing costs and car size to international travel and higher education, the discussion touches on both statistics and stories to illustrate the systemic and personal nature of financial disparity.

Rather than offering a simple solution, we focus on reframing the problem—encouraging listeners to be intentional in how they interact with a capitalistic society. With nods to gratitude, delayed gratification, and the power of long-term thinking, we suggest that progress—personal and collective—starts with awareness. As always, the episode ends with a reminder that understanding the system is the first step to navigating it wisely.

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Credits:
Created By: Wheeler Crowley and Colin Walker
Production Assistance: Tori Rothwell
Editing and Post-Production: Steven Sims

My color blindness has struck again. Uh, so, as you know, I was, uh, out in the yard the other day and I can't tell the difference between red and green. I have to tell you- Yes? poison ivy is mostly green. Like, when you look at poison ivy, it's not all that red unless it's fall. Fair. I wouldn't know. Um- S- to me- everything looks green. So- as I was weeding, what I thought were weeds, and doing our household a favor, turns out I was weeding poison ivy. Mm-hmm. Uh, you know, I'm touching my face, scratching my arms, hanging out on my phone, just having the best time. Weeding. Go to the dermatologist on Monday, just for a routine, you know, kind of checkup, and it just happened to be that I had a small breakout of poison ivy on my face. Mm-hmm. By the end of the day, whole face had swollen up. Next day I woke up, couldn't open my left eye. Broken out all over my body. Now I'm on 4,000 different drugs and it looks- like I've had a fight with a really bad sunburn or something. You lost a fight with the sun. I lost a fight with the sun. Yeah. So now my face is all messed up. Uh, so if people are wondering why I look so weird. I'm not my normal, stud self. I think we're gonna have to cut it so that it's just you saying that you're on 4,000 types of drugs right now. You're like the Elon Musk- They're all prescribed. Well, yes, yes, they're all legal. They are. They are- all legal. So- So, what ha- what have you learned from this experience, aside from, like- Hmm. don't, don't weed? As it turns out, I'm very allergic to poison ivy. Mm-hmm. So now I have to wear boots wherever I go and, basically in a hazmat suit when I'm outside in the woods. Uh, the other thing I learned is when you have a really bad allergic reaction, it can lead to hives. Mm-hmm. Mm-hmm. So your immune response freaks out and anything that happens to my body, I develop a hive. So if I just sit here and scratch my arm, by the end of this thing, I will have a strip of hives right here. Mm-hmm. It is amazing. The human body, what it will do and how annoying it can be at times. like punishes you. It does punish me, but, I had no idea any of this could happen, so I don't have a wedding ring on today because my whole finger broke out- Yeah. from my wedding ring. I can't- Yeah. wear a watch, my WHOOP. Oh, your WHOOP? My WHOOP. So What are you doing? You can't track anything. It's actually probably- This is horrible. a thing that I'm not tracking it because the last week, I've just been- Right. lethargic. Yeah. Myth busting though, because we've also learned that- Mm-hmm. if you have poison ivy, and- I cannot give it. You cannot give it to me. Correct. Which is something that, when I was a kid and used to get poison ivy all the time, I was- thought that too. Right. Yeah. Yep. Yeah. The one thing though, the caveat to that, is if I touch the poison ivy and then touched you. Right. And the oils were still- The oils were still on. on then you would get it. Right. But, uh, if I wash my hands, then I can't give it to you. Right. So just because you rode in my car the other day, my car is not unsafe- Correct. for the next passenger. Well, the funny thing was, that I was a little nervous about, I did the poison ivy, the weeding, and I made cookies. Oh yeah? Then I brought the cookies to a party. But I haven't heard anything from any 1 Yeah. of parties. So either they're all dead, or, uh, that everyone's fine. Well, did you You must have washed your hands before you made the cookies. probably, yeah. I don't recall, I'm usually a pretty clean person, so- Yeah. I would assume that I did that. Yeah. yeah. Or they all just have poison ivy and nobody's- talking about- No one's"How did I get this poison ivy?" Correct. It's like- a COVID party when like everybody went and they all got COVID. And no one said anything? And anything. Yeah, because they didn't want other people- to think they had COVID. Everybody's got poison ivy now- Yeah. but no one says- Yeah. anything about it. Okay. Yeah. All right. just started a poison ivy epidemic amongst our friend group. I, this is, this is a real fear for me because when I was a kid, I always got poison ivy, so I've always been very, very concerned about getting- Oh, really? poison ivy and that's why we hired this poison ivy company to come remove the poison ivy from our property. Yeah. I've shared their contact information with you. They're coming Saturday. It's worth it. Yeah. It's so worth it, because you don't want to like I, I just found some poison ivy by my deck for the first time ever. Maybe it's like a really bad poison ivy year or something. I don't know. Uh, uh, granted, I haven't ever really looked for it, so maybe I'm just paranoid about it, and when you're paranoid about something- Yeah. you notice it. Yeah. I've had it before, and it's just broken out a little bit around my ankles and around my wrists and stuff like that. Yeah. But this was mean, just look at me. Yeah. You know, your recency bias is gonna be pretty strong on this one. It is. For a long time. Yeah. Now I I don't want to say I have a fear of poison ivy. But I definitely don't want it again. Yeah. All right. Fair enough. Fair enough. Welcome to the Compound Growth Podcast with Collin and Wheeler, where we talk all things growth. From financial growth to career growth, personal development to societal progress, we explore how each layer builds on the next, compounding over time to shape who we become. Each week, we break down complex ideas and emerging trends into clear, actionable insights, because growth isn't just about numbers. It's about understanding the world and our place in it. The information in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. Investment advice offered through Integrated Partners doing business as COFI Advisors, LLC, a registered investment advisor. Integrated Partners does not provide legal, tax, mortgage advice or services. Please consult your legal tax advisor regarding your specific situation. Past performance is no guarantee of future results. All investing involves risk, including loss of principal. No strategy assures success or protects against loss. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that the strategies promoted will be successful.Today, we are talking about wealth inequality and- I love this topic. the, the state of wealth in our country, how we perceive wealth, what our relationship is with wealth, and maybe what our relationship is with just money in general, because sometimes it doesn't really kind of feel like wealth, right? agree. Yeah, sometimes it's not wealth at all, sometime it's, it's a limiting factor. Yeah. The opposite of wealth. Yeah. And it's, it, I feel like it's a, uh, it's a, it's a reoccurring conversation and it's not just like a reoccurring, it's not something that necessarily comes up a lot in our meetings with our clients. Sure. But it comes up in our clients' lives a lot. And I feel like it's something I never thought about when I was growing up, I wasn't really like all that aware of wealth inequality, honestly. And I think one of the reasons for that is that it's, uh, just a, it's just a issue that continues to compound negatively and get worse, right? So, we focus a lot more on growth overall and talking about the wealth, wealth inequality almost feels like focusing on the opposite of growth, is like focu- focusing on- The negative sides of money. the Yeah, yeah, yeah. So it's interesting to think about it and try to apply a growth mindset to it, and I guess you start by understanding it. Yeah. I think it's a very interesting topic because we always talk about compound growth. And if you aren't having compound growth work for you, but if compound growth is working for other people- Mm-hmm. then that's causing a huge disparity in wealth in and of itself. I guess when you think about it, compound growth is great when you're a benefactor. When you are not a benefactor, other people's compound growth in a capitalistic society can hold you back. Absolutely. Absolutely, and I think it's, so if you, if you, if you were to ask the average person today if you had a room full of, you know, 10 people, right? 2thirds of the people in that room would feel like wealth inequality is an issue, right? Mm-hmm. And if you think about the haves and the have-nots, it, it really makes sense because part of what the focus is, is on how few there are in the haves and how many there are in the have-nots. And as that number increases in either direction or decreases in some directions, that wealth inequality becomes more apparent the more people. Is it really 66%? 61 to 71%, depending on which research you look at. So let's, yeah, let's say 2thirds. Wow. They, so they feel like wealth inequality is an issue, and it's not one, it's, I feel like it's, it's a, um, it's a non-partisan issue. It doesn't matter if you're a Republican, Democrat, whatever the, the third party is that'll make it some day- It's Yeah. It doesn't matter what you politically believe. I think that we are all aware that some people have money and some people don't. Mm-hmm. Right? I mean, you also hear the quotes all the time about the rich get richer. Mm-hmm. Mm-hmm. And the reason for that is because stock market tends to go up, real estate tends to go up, and if you don't own any stocks, real estates or business- Right. You're falling behind. you're falling behind. Every day. Yeah. So if you think about that then and you think about anec- you know, we have the percentages, we have the studies. Anecdotally, you see it around you, right? We live in the seacoast, New Hampshire. Right. Trying to buy a house here is next to impossible, right? Unless you find yourself in a situation where you have somebody helping you out with that house, um, you've got, I don't know what, an inside track. Like it's, y- the market is very limited. Mm-hmm. There aren't a ton of houses for sale. Right. The asking prices are extremely high. And mortgage rates are almost unmanageable. The only way, not the only way, but one of the most common ways that people navigate that is if they're already current homeowners. Right. I look at our situation, we're gonna move in the next few years. If we didn't own the house that we own now and if we didn't buy it, I mean, we bought it back in 2017- Yeah. but if we didn't buy it around that time period, we'll say pre-COVID, you've missed out on a lot of appreciation. We wouldn't be able to move to the next house without that appreciation in our investment. Yeah. You know, the people We bought the house, we bought our house in 2015, so 10 years ago. This is our 10-year anniversary of moving into our home. nice. Yeah. Yeah. Celebrating with some furniture. Cool. Uh, meaning that we finally have furniture for our house. No, I'm just kidding. we're getting some, some grown-up, adult furniture. But, uh, the people we bought it from, the guy was complaining to me. He's like, "Ugh, I'm taking a bath on this one," right? Like, he- you know, he felt like because he basically broke even during the time that he was there that I was, like, hosing him or something like that. Right. But the people he bought it from literally took a bath because they bought it in 2006, and he bought it from them in 2010. Oh. And the housing market had not recovered. No. Right? Yeah. So perspective. Right. Right? It really matters. But yeah, to your point, if you, if you are already in the market- Yep. that can be a saving grace. Well, the thing that I think about, and you're a perfect example as well, I can't remember the exact stat, but I wanna say the average person holds onto a house about 6 years. Hmm, okay. I think it's around there. Can we verify that? Yeah. Yeah, we'll verify that. Lateralize toward fact check. So if you think about the way that mortgages work, an amortization schedule means that you're paying all of your interest up front. A lot of people think when you have a house and you're paying on your mortgage, the first few years that you're also paying down your principal. It's very, very little. So if you bought a house for 500,000, after 10 years of making those mortgage payments- Yeah. you've hardly made any impact to your principal. Yeah. So unless you've had significant appreciation in your house, the only thing you've done is hand interest payments to the bank. Yeah. So you're trying to grow into the next house, right? Like, you're trying- Right. you're hoping that your house is appreciating to the point where you can actually sell it and take some money from that growth, because you've done nothing to increase the, the Right. Right, yeah. 100%. Yeah, it's a very interesting situation because if you don't hold it for the life of the mortgage, people say, "Oh, well, I have this 3% mortgage rate." That's true, you do have a 3% mortgage rate if you have the mortgage for 30 years. Yeah, sure. If you have the mortgage for a verified 11.8 years, if you have a mortgage for 11.8 years, and if you have a 3% mortgage, really your mortgage is probably in the teens- Yeah. if you don't hold it for the life of it. So you're suffering from that. Now, going back to the compound growth and the disparity of wages and income and assets, it's probably not until recently that we've seen so much of an increase in real estate- Yeah. where it's caused even more of a disparage, disparity. Yeah, that's true. I mean, we, especially with COVID, like, we pulled forward, like, at least a decade- For sure. worth of growth, right? And if you were along for that ride, then great, and if you weren't in the market, then, you know, you're even further behind than you were or should have been pre-COVID. Totally. Right? So walk me through this, then. Has it always been this bad? Right. So what's interesting is that perspective really paints a picture and Tangent. Meditating this morning, guided meditation, and the It was a visualization meditation, and it was essentially you're in a field, you're looking up at the sky. Okay. Right? It's a wide, open, expansive sky for as far as you can see, blue sky, right? And then one lone eagle flies across the sky. And you're reminded that your perception is just your own. You are one person with one perception. This is a Peloton one? This is a Peloton one. Okay. Which is- might have done this one. Right, right. So it was good, right? But it reminds me that, you know, I think we can agree there's a problem. Yeah. Understanding why there's a problem and how to think about the problem and, you know, what your perspective is of the problem versus mine, versus Tori's, versus anybody else's are gonna be somewhat different. But I think we have to first understand exactly what the problem is, right? So let's go back to the 1970s. Okay. And the reason we're talking about this is because Jessica's Uncle Paul said to a group of the of family members, uh, recently that, you know, if you look at a chart of wealth and equality, I think is what he called it at that time, and wage inflation, you can see that it has just worsened and worsened and the gap has broadened and broadened since the, since the 1970s, right? Mm-hmm. Now, he later sent that article, and that article was about, uh, wage inflation versus productivity. And I feel like that's a very- That's very different. different conversation. That's not the same. But it got me thinking about this, and I didn't wanna comment without taking time to understand this a little bit. So there's a sentence I'm gonna say, and you can take it a couple different ways. I'm gonna tell you that wage inflation has grown at a pace where the lifestyle that if you were, you know, let's say that you In the 1970s, you were a teacher, for example, or- Okay. um, you had just average income. Maybe in the 1970s, a teacher still wasn't being paid average income, but let's say that you had a typical household income in the 1970s, right? Wage inflation has grown to the point where that income would basically be the same today, right? You would be able to buy th- the same loaf of bread. You're growing by, we'll say if inflation's 3, you're growing by 3. Well, so wage inflation has actually been 40%. The 3% inflation that we use for planning purposes is measured in a lot of different ways, right? Yeah. But wage inflation, or wages have grown by 40% since the 1970s. Okay. Okay? So your lifestyle in the 1970s, you can say that the, the average worker in the '70s can afford the same lifestyle that they- did in the '70s they can afford today. Okay. Right? The problem is you can say that, "Okay, there's not really a, you know, that's not really a problem. They just haven't made any progress." Mm-hmm. Right? The problem is that the lifestyle that you wanted in the '70s is very different from the lifestyle that you want today. Talk me through that. All right, so let's think about how we got here. Let's get some crazy numbers, 'cause we're gonna be a little bit, uh, dependent on the, uh, the stats today, 'cause I think there's some really cool, interesting stats. You're familiar with Keeping Up the Jones, with the Joneses? Of course. Right? Okay. So that's essentially a perceived dislocation in your lifestyle versus your neighbors, right? Mm-hmm. And what happened, if you really think back to let's call it, let's start with the early '40s and into the '50s, right, so- Okay. America in the early 1940s, industrialized America, right? Mm-hmm. We have this massive dislocation come through in, in World War II, right? That takes a lot of the men out of the workforce. Sure. It brings more women into the workforce, and then on the other side of World War II, we have this, you know, new day in America, right, this idea of America is now the superpower, right? Right. And we are going to just excel through innovation. There was a ton of innovation during World War II. Yep. And now you go from, uh, an, an America in the 1940s where, you know, life was a little bit simpler, there weren't that many technical, technological advances to now everybody has a TV. And it doesn't happen overnight, but at some point people have TVs, right? Right. And when everybody has a TV, there are 3 or 4 channels that they can choose from, so it doesn't matter if you are a millionaire- Hm. and I make $20,000 a year. We're both watching the same television programming at night, right? Hm. If you think about the disparity in cars, nobody's driving around Lamborghinis. Nobody's driving around Porsches. Nobody's driving around SUVs. They were all one version or another of a very basic car. I have a fact on that. Yeah. As you know, I'm a car guy. As you are. So, uh, Ferrari in the '50s made the Ferrari 250 GTO, which is now the most valuable car in the world. Okay. Okay, so it sells at auction, 50 to $75 million depending on the condition. That was considered, um, basically a race car for the road at the time. Okay. And do you know how many they made? 100. Less than 100. Yes. Less than 20. Less than 20. Now, when a Ferrari comes out with a limited edition race car for the road- Mm-hmm. their V12 flagship cars, they make 1,000. Okay, So when we talk about disparity and all of those kinds of other things, I mean, the reason why those are so expensive is because there's very limited supply because there were so few buyers- Mm-hmm. in the '50s and '60s. I mean, you could've bought one of those cars in the '80s for, like, next to nothing. Yeah. But now people realize that there's none of them around, and- Scarcity. there's a lot of people online and on websites and on car auction websites that- Yeah. the prices just skyrocket on- Yeah. that sort of thing. Yeah, so, like, the ave- so if there was 20 of those, if, if one of those was driving around in your neighborhood, that really stood out. Oh, yeah. Right? For sure. And you might see that car and say, "Wow, that's a really cool car. I wish I could get one," but the, you wouldn't be able to fool yourself into thinking that you could. Right. Right? So, like, your, your perception of wealth of having, right, was very similar to what your neighbor had, right? Yeah. There weren't that many differences. As technology advances, there become more and more differences- Mm-hmm. right? And then as other demographics evolve, right, as women So women were not in the workforce. They were, you know, the traditional American family, stay at home, you know, house, homemakers, housekeepers- Yeah, homemakers. whatever it might be. Then some of them go into the workforce, not as many as you might think. Like Rosie the Riveter did not actually get 100% of women into the factories. Right. Uh, but more women go into the workforce. They are displaced to a large degree when the men come home from the war- Mm-hmm. but not, not a hundred percent because a hundred percent of the men came home. So- Fair. So there's an increased, uh, percentage of women in the workforce post World War II. Okay. And that goes up little, by little, by little up until right around 2019 is when it peaks, right? So we get from the point where we're like in the high 30s in percentage of, of workforce contribution from women- Okay. in the 1950s, like early 1950s, we hit 60%. Really? Yep. Wow. At one point that was the very peak that we hit for women in the workforce. And then I take it went down after that. And then it went down, Okay. COVID, right? Mm-hmm. COVID, women go home. Or sorry- After h- More women stay at home because the kids are at home. Right. It's always dispro- proportionate that way. It's, it still skews more that the women are gonna take care of the children. Right. Right? Just societally, that's what we've- Yeah. done, So at the same time though, as women enter the workforce, that increases income- Mm-hmm. and that increases spending. And we go from a society where we are a single income household to two incomes in a household. Mm-hmm. But as that normalizes, that goes from like, "Oh, wow, we have all this extra money," to being, "Oh, you need to be a dual income household or else you can't afford life." Right. And why can't you afford life? Well, it's inflation, but it's also just increased consumption, right? So let's think about you're a car guy. Okay. Right? What was the I have pop quiz questions that you may know- I'm excited. most people won't. Okay. How much And we'll, we'll think in decades. How much was a Honda Civic in the 1970s? I'm going 6,000. Ooh, you went high. Yeah, it was 2,000- Oh, wow. in the 1970s. Okay. Right? How much is a Honda Civic today? Uh, starts probably around 22 for the lowest price one you could possibly have- Yeah, yeah. if I had to guess. And middle of the road might be like 25,000. 25, 26, yeah. Nailed it, right? Okay. So massive inflation in Hos- Honda Civic. Right. Even deeper, how big, how many pounds is a Honda Civic now? Uh, I would say, without knowing the specific Let me think on this a second. I'm gonna go that it is probably now 3,600 pounds. Oh, I thought you were gonna get it. I was like, "He's gonna be so close." It's 2,500 pounds. Damn. But in the 1970s, 1,500 pounds. So a thousand pounds of additional technology- Right. features added to the car. Yeah. Just why? We need more space. Our car in the 1970s is too small and we need more space, right? Yeah. Think about the So the average vehicle price at that, at that time, the Honda Civic was fairly close to an average vehicle price in the 1970s, right? Now, the average ve- vehicle price is driven up to the 50s, right? Right. It's like $50,000 is the average vehicle purchase price in a min- for a new car in America. Because most people want SUVs. Exactly. They want more People don't want the Honda Civic. Nobody's buying the Honda Civics now. Well, isn't it Ford just completely discontinued pretty much the making of every single car- Yeah. and now they only make SUVs and trucks? Yeah.'Cause it wasn't profitable to make Nobody's making money on those sedans anymore. Nobody wants to drive that. Well, the only reason in my mind why probably Honda and Toyota and all these other companies that are Japanese that continue to make these small cars is probably because they're being bought so largely overseas. Mm-hmm. You know, if you go to Europe, there's a ton- Yeah. of small cars. Versus here, it's just massive- Yeah. SUVs, pickup trucks- Yeah. whatever it might be. So if you think about we need more space in our cars, let's think about the houses. Need. Right, need, right? Yes. We desire more, and more, and more, and more. Right. So let's think about a house, So average size of the house today. 2,300. Yeah, right around that, 2,400, 2,500, right? Okay. Average size house in the 1970s. 1,500. Yes, nailed it. Really? 1,500 square feet. Okay. Right? House I grew up built in the '70s, I think it was. Yeah, it was a little bit bigger than that. It was like 1,800 square feet, For a family of four. For a family eigh- of, well, we were three- Yeah. at that point. Um, so we need more or want more space in our cars. Yeah. We want more space in our homes. We also want better improving technology. We don't wanna just sit there and be hot and miserable in our nice brand new homes, so we want air conditioning- AC. right, and efficiencies. Yeah. It We want, want, want, want, want. And we want these things 'cause they're marketed to us not just by, like, social media, not just by, like, TV- Mm-hmm. but by the Joneses next door. Right. Right? They have it, so we have to have it. Um, another fun fact. Okay, keep going. What percentage of people had a, uh, passport in the 1980s? Uh, 18%. 3%. Three? 3% of Americans had a passport in the 1980s. Why is it Well, 1989 was that specific measurement, 3%, and now it's nearly 50%. Really? Which I'm actually I was surprised that it's 50% now, but- my family of three just got our passports- So that it does hold the a decade. Yeah, so- Okay. Yeah, it happens, yeah. But international travel was an absolute luxury- Right. in the 1980s and, and earlier than that, right? It was actually one of the things they used to try to get to, you know, have, uh, Americans sign up to be in the army. See the world. You would get a passport, right? Right. Yeah. the world. See the world. That's interesting. So, and I don't know if this is your argument, but do you believe that the reason why there's such a disparity is because of consumption and keeping up with the Joneses? Is that where you're arriving to? I think that's a large part of it. I think there's The fact is it's not just perceived. It's all around us, right? Mm-hmm. And it's, it's in our faces more and more and more, right? It's every time you pick up a phone, it's in your face. Every time you look out the window on the highway, it's in your face. You turn on the TV- Mm-hmm. it's in your face. And we went from a society that was all in it together to in competition with another, right? And there, I think, uh, uh, you know, the, one of the reasons that you have this, like, anchoring to the 1950s America is because, uh, we were basically on a high from winning the war, right? And it was the, really the first time in history that it felt like we were all in it together. Because before that, there was tons of struggle. There was like a, a brand new country that went through all these growing pains. You had the financial or the, the Great Depression, right? Yep. But that Great Depression affected different people in different ways. Farmers were impacted differently than factory workers, et cetera. Right. And it was really impacting people who owned stocks more than anything else. But, uh, you know, this was the first time in the history of the country where it felt like there was a lot of equality and everybody was on the winning side, right? The '50s. In the '50s. And we have, since the '50s, moved further and further away from that. So you had that 44% wage increase for the average American worker, and for the top 1%, a 200% increase in wages since the 1970s. I have a question and a theory. Okay. Pause it. Okay. So, we watched the original Wolf of Wall Street not too long ago. The original Wolf of Wall Street? Or sorry, the original Wall Street. Not Wolf of Wall Street. We watched the original Wall Street. Yeah. And, um, the speech, "Is greed good?" Mm-hmm. Greed is good. Mm-hmm. He gives that big speech in front of the stockholders and everything like that- Mm-hmm. basically saying, you know, you should be trying to make more money to get ahead and position yourself and blah, blah, Yeah. Do you think that in a capitalistic society, that it is even possible to have a level playing field? I personally do not think so. I agree. I think if we look through history, there have been periods of times where there's been huge disparity. Yeah. We could even go back to the late 1800s. Yeah. You know, like the people that founded the country were exorbitantly wealthy and that built the country through the Industrial Revolution. Then I would say natural disasters and war maybe bring people to a level playing field. And this is just me spit-balling- Mm-hmm. But, you know, after that war, there was so much destruction and chaos. People came together again on a level playing field. Then it evolved. Then you had the '80s and everything, and people were spending money like crazy in the '80s. Mm-hmm. Yeah. I mean, those were- Yep. like crazy drug days and fancy cars and Wall Street and blah, blah, blah. Yeah. Then you had several things happen in the '90s. You had the dot-com bubble, then you had 2008. So I wonder if there will always be a convergence and disparity, convergence, disparity. I don't know if we're ever actually going to be able to get to convergence again. I think that we built a machine, and we talk about this with AI, not necessarily just you and I, but people are always very fearful of AI taking over, and- Of course. like, be careful what you wish for. Be careful what you build, right? Yeah. We've built a country that is itself now built upon the stock market. It's built upon big business. Mm-hmm. And I'm not sure that we can ever actually undo that because the immense impact on the people with power in that situation. You know, there was Do you remember Occupy Wall Street? Yeah, of course. So, you know, I, I think that we will go through these, like, periods of time where there will be massive disruption in culture, and people will become very angry, and you'll get the eat-the-rich type of approach, right? And you wanna burn it all down. But you can't just burn it all down, because you've literally set yourself on fire, right? So if you're going to find a different solution, it isn't just to hit restart. But you have to recognize that a lot of this is psychological. We want more and more space in our cars. We want more and more space in our homes. We want all the finest luxuries. Meanwhile, the average American household is shrinking, and we used to be 3.2 people per household, and now it's 2.5. Right, but we're consuming more. We're consuming more, and we're producing more. Productivity goes- Right. up and up and up, right? And you can talk about the disparity between productivity and earnings, but I think it's really about productivity in consumption. We're driving productivity up because we're consuming more and more and more, and that's what led to the global expansion, right? Mm-hmm. That's why we rely so heavily on China. I will say, and I was doing some research on this ahead of time, um, the differences in spending habits by generation and the difference in savings between generation. Hm. Yeah, that's interesting. the average, uh, baby boomer saved 10.8% on average of their earnings. Yeah. Now, um, the current workforce saves 4.9. So the baby boom, average baby boomer, is that, uh, at what point, like, over the course of their career? Course of earnings. Yep, and then on top of that, the thing that's also interesting about this is, I think it was 45% of baby boomers were covered by a pension- Mm-hmm, yeah. during their peak working days. Yep. Now it's 11. Yeah. So a lot of the benefits have also gone away, which, um, also speaks more to that disparity. But when I think about the way that this all breaks down, I agree that I don't necessarily think we'll ever get back to a level playing field, but I think it's important to recognize the fact that we're being pushed a lot of unnecessary stuff- Yeah. all of the time, and I'm guilty of it. I buy stuff all the time that I don't necessarily need- Mm-hmm. but I want it, and, you know, it's all good. It, it is interesting, though, a- and I think when it comes to this sort of thing, it's almost un-American- some people would argue, to want a level playing field. Yeah. Well, I would, look, it is. I I think what's, what's tricky is that I, I personally consider myself a capitalist. Mm-hmm. And that is a dirty word in my household. Yeah. And- Why, why is it dirty? I think it's because the focus on When, when you say capitalism- Mm-hmm. the focus is on the negative. Okay. And I know that capitalism, just like anything else, when it's mismanaged or, you know, just let loose, can create a lot of problems. It created this wealth disparity, right? Yeah. It can also create solutions. Mm-hmm. It can also provide opportunities. Mm-hmm. So can't say that a- anything Just, you brought up this point a number of times. Nothing is a Well, very few things are all good or all bad. Right? And I think capitalism, it gets a bad rap, and it earns a bad rap a lot of the time. But if we just focus on that, then we lose sight of what we can create, the abundance that we can create with capitalism. Yeah, if you think about Yeah, I feel like I could really unpack this. But capitalism, what it is is just recognizing the fact that the principles behind it is that money drives progress. Mm-hmm. And if you recognize that, and if you recognize the fact that it's gonna be very difficult to get ahead without some sort of savings or without some sort of acknowledgement of the fact that you need to participate in the game. Yeah. If you don't play the game, you're gonna lose. Yeah. If you acknowledge the fact that you're in a game, and you play by the rules and play to win, then it will work out well for you, in my mind. Yeah. As an example, we have clients that don't necessarily make a ton of money by modern-day standards. I'll say they're average, and even we've had some people that make below average. But they don't buy the new cars. They don't buy the fancy purses. They don't do this, and they're still able to shell away a ton of money. And- Yeah. A, a ton's relative- Right. but when you've been doing it for 20 to 30 years- Yeah. it compounds, and it works out pretty well. You stay in the same house. Now, granted, you're not keeping up with the Joneses, but it just depends on the destination you're trying to get to. I think it Like, I feel this push-pull, for sure. You know, I'm aware of the problem, and I contribute to the problem. Mm-hmm. And I think that the more time you can spend understanding the whys, which is really what we're trying to do today, right? Yes. Why is there this massive gap, and ever-increasing gap, in wealth? Well, it's because these companies are just so- so well run. Mm-hmm. Like, the, the one thing that our, our greatest product, aside from technological innovation, is here's how you run a company, right? Right. That's what this country does really, really well. Yeah. And if the, the main focus of the CEO is to increase profit for its shareholders- Mm-hmm. it's always going to be the main focus, the number one priority for the CEO of any large company. So, you have to accept that and, to your point, learn to play the game, right? Think about Did ya, ya ever see Miracle? Yes. Right? Not for a long time. So, Miracle on Ice, 1980. Ice, yep. What's great about that story is that the, the underdogs, it's one of the great underdog stories out there. The Americans had absolutely no right to beat the Russians in that game. There was, they were outmatched- In every way. in every single way, except for one, and that was endurance, and heart, and just the, the ability to just create a team that was going to kind of, you know, die for each other to that, to one degree, right? They, they worked harder than the Russians did and they won because of that, and they had the right spirit. They kind of emulated the American spirit at that time, and that's why everybody, I think, latched onto that, that story. You said something about companies- Mm-hmm. and them being very well run, running society so successful. I think, personally, one of the biggest benefits as an American citizen, sure, we can talk about freedom of speech, security, all that good stuff. I personally think the greatest benefit of being an American citizen is being able to participate in capital markets. Hmm. Yeah, I mean, what are, what are the other benefits, aside from perceived freedoms? Well Right. So, I mean, but if you think about it, you go to many other countries, they don't have a Fidelity app, they don't have a Vanguard app, where we can just take money. I can put $10,000 in, compound it over 30 years, and walk away with $150,000. Mm-hmm. That doesn't exist in other places of the world. And for us to have that ability to say, "Well, I won't buy this car, I'll buy this car, and I'll take that money and I'll invest it." That is the biggest benefit of capital markets, in my opinion, is that you can actually walk away with- I think you, yeah, you can. Yeah. Right? But you have to dedicate some capacity to that. You have to dedicate some aspect of yourself to that. You do. But the fact that it's even an option, now it's becoming easier and easier, it's becoming more commoditized. Bein' able to trade. Being able to trade and participate. Yes. I mean, in my mind, capitalism, if it You could say that capitalism only benefits the wealthy, that's true. But at a lot of points, these people weren't wealthy- Yeah. and they had to start off at somewhere without capitalism. In the same way that- Yeah. if you just say, "Capitalism is bad," that's one thing, but if you say, "I recognize I'm in a capitalistic society, so I'm gonna participate." Yeah, that's again, that's my point. Yeah. That's why you can't burn it down. Right. You have to recognize that the game is not in your favor and that you have to play it anyways, unless you're gonna leave the country, right? Unless you wanna go live somewhere else. Um, and I think that that's, th- the acceptance aspect of this is really pr- important. We tal- we talk about increasing value, right? And not blaming the system. I think that you can't blame capitalism for being capitalism. No. You may not have had a choice to be a member of this country in the first place, right? Of course. Um, at some point, you may choose not to be. But while you are here, instead of rebelling against the system, you can do, I think, 2 things. You can participate and you can improve. Because while One thing, and w- and you, it was, uh, it was, um, just a slip, you didn't mean to say it, but you said, "Companies run society well," right? And I agree that companies run society, but they don't run it well, necessarily. Fair. I mean, they're quite self-interested. Right. So, but what can you do, right? Like, we've, you and I have created a company. And we get to control, or at least guide, you know, our culture here, right? Our impact here. Like, we get to make a difference in our small little piece of the world. And I think that if you look for opportunities to make a difference, and if you can use the wealth to make a difference, then you can operate within this, this prism in this society, and not just kind of fall victim to it. You don't have to buy the Rivian just because it looks cool and, you know- Hm. that you know you're gonna have fun camping out in that car once over the next 3 years. Like- you don't have to do these things. You can choose not to, and then you can choose to take that money and give it to the GATHER Food Kitchen, which is- Good. not exactly the same thing. It was like a sev- I, I donated $700 to GATHER, it would've been $100,000 for a Rivian, so- Yes. But I think that you have a, one of the freedoms that you do have is the freedom to choose how you, or what your relationship is to our society, overall. I think that's fair. I think it's probably easier said than done from someone that's struggling to make certain payments on certain things- Yeah. and is thinking, "Well, I can't even afford to put money away for retirement or, you know, send my kids to daycare." And that's, um, probably a tough thing to kinda sit back and soak some of these conversations in. So- Yeah. I can't necessarily say that, you know, I relate to everybody's struggles in regards to that. But there has to be some way to see the fact that we're in this situation, and capitalism isn't going away anytime soon. And in fact, money is being fueled and brought to us all over the world to expand our capitalism. Yeah, well- Um- as so now. I was talking, about, um, just a, a while ago, and I was having a similar conversation with my father-in-law recently about, you know, how he was saying, um, capital markets is basically our biggest export. Yes, it is. And something that I was just looking up is the amount of money that we bring in every year as a country from capital markets, it is trillions and trillions of dollars come into our country every year- Yeah. through capital market investments, because the US is still the number one destination for money investments. Yep. And if you're a US citizen, you're benefiting from that because that's going to the companies that we're all involved with. Yeah. Whether that's through hiring, whether that's through products, whether that's from whatever it might be. It, it is an interesting situation, um, but if you're not on the receiving end from that, that's tough, and that's something that I don't, I don't know. I think it's tough when you think about, you know, we talked about wage inflation, so wage inflation being up 44% since the 1970s for the average household. Mm-hmm. We talked about 200% for the top 1%- Yep. of Americans, right? But in reality, CPI is up 700%- Right. since the 1970s. So if, if you want to cure inflation, it isn't to put everybody out of work, it's to change the collective mindset. And I don't know if we're capable of that as a country, right? But I know that we have created this monster, and we've gotta figure out how to tame it, right? We've gotta fig- figure out how to not get clawed to bits and pieces by it. Um, and I think that that starts individually, and then maybe at a family level, and then as a community, and then as a culture. It has to be from starting at square one with education. Like, people have to develop I, I think it's really messed up how there's basically predatory lending as you go onto college. Yeah, yeah. You know, we've talked about higher education before. Um, however, there has to be some sort of educational system where it teaches young people to save- Yeah. to avoid taking on high-interest debt, to avoid taking on those high-interest car loans and things like that that are gonna hold them down. Yeah. Because if you get into that cycle of overspending from the start, you're set back so far in advance, versus people and kids that we have as clients that started putting money away in a Roth IRA when they were mowing lawns. Mm-hmm. Now- Yeah. they have so much more money than everybody else, and it's absurd. Uh, Kaylee and I were talking about this the other day, that the cost of Harvard now is $84,000- Yeah. a year. And if you were to take, let's just say, we had a child that was gifted and really wanted to go to Harvard, and made it in. So obviously, this is 18 years from now, so it's gonna be even more, but we'll say it's $350,000 when you factor everything in for- For the- the books- 4, 4 years? Yeah, for the 4 years. Okay. Yep. Yeah. So we'll say $350,000, make it a nice whole number. As opposed to paying for that education, what happens if we took that child and said- Yeah."You can go to trade school. We'll take that $350,000 and we'll invest that for you." Mm-hmm."Or you can use it to buy a first-time house." I think, and we were talking about this earlier as a team, um, I feel like the higher education system is finally going to change so drastically. And I feel like there's been all these evolutions, you know, I didn't have a laptop, right, in the classroom. Sure. Um, and now AI is there and available to write your papers for you. I think that we need to change the way we think. That's the whole point, I think, of school, is to go and figure out who you are and how to think. Right. Right? And if you go there and you just regurgitate facts or put together, slap together AI papers-That's not going to help you do those things anymore. No, 100%, and it's certainly not worth the value. I mean, we had a discussion about this yesterday, whether or not it would ever make sense to send our kids to, like, an Ivy League school- Yeah. where it's that expensive. Yeah.'Cause $350,000 in 30 years, we'll call it as near as it makes no difference, three million dollars- Mm-hmm. is what that child would walk away with, um, if you were to invest it at going market rates. If you're not going to benefit from the networking- Yeah. at school, if you're going to Harvard Law and you really wanna become a high-powered lawyer, I could make a pretty good argument that the people you're going to network with there will set you ahead. And I, I saw this thing where it was talking about how, um Have you seen these, where they ask the people on the streets what their ideal spouse is like? Oh, no. I don't know if I wanna know what these answers are. I love I'm sure Tori's seen these. So it goes around and it asks women and men, you know, "What does your ideal partner look like?" Yeah. And they always say somebody to the extent of, you know, "Oh, well, they're this height, they have blue eyes, they make a half a million dollars a year." Oh, God."They're a lawyer," and all this. Yeah. And, uh, the odds of them finding that person are, like,.2%. Mm-hmm. That doesn't really exist. And the typical response is, "Well, how do I find someone like that?" And, "Well, research it." So the only real way to necessarily date or find someone consistently from an Ivy League school or that is in that career is to be doing it yourself. Hm. So if you really wanted to go work with people who went from, you know, went to Harvard Law and are very high-paying lawyers and things like that, you should probably go to that situation. In the same way, when I was in college, I remember we were all interviewing for private banking positions out of college. Pretty much me and all my friends got passed up because we didn't go to an Ivy League school. In fact- Okay. my friend made it to the final round, and one of his final questions was, you know, "Where'd you go to school?" And because he didn't say Harvard, MIT, or any of those other schools, he was basically out after, like, a 6round interview. Yeah. So if that's the route you wanna go, I could see it making a difference, but if your job is to, you know, find something that's gonna pay you really well, I think higher education's really tough to find an ROI once it gets that expensive. I think measuring the ROI on, on higher education in general is, uh, it's an appropriate way to do it. It's a difficult way to do it. Right. I think that, you know, when you look ba- I, when I look back over, th- the money I spent on various forms of higher education, especially as a, as a, uh, a household, uh, you know, whatever, it got us to where we are today, and we're happy with where we are today, so- Right. happiness is, is hard to measure. But I, you're right, it's when you think about the kids One thing that I really appreciate about my daughter is that, you know, she went to a birthday party on Saturday, and the, the house she went to is a really, really nice house. It's huge, right? Yeah. And there's all these rooms and all these, you know It's got a laundry chute that she could, like, throw things down and friends would catch below or whatever. She was having- The things. so much fun. She said, "You know, that house is the coolest house ever." Okay. I'm like, "Okay. Well, do you wanna sell our house and go buy a bigger house?" She's like, "No, I love my house," right? That's nice. Um, when she wanted a Tesla is because it made fart sounds, not because it was a Tesla. Of course. Right? And when I told her that I didn't think we were gonna buy a Rivian, she was disappointed because she really liked the sunroof. And then she said, "But what would we do with this car anyways?" I'm like, "Well, we'd have to sell this car." And she's like, "But I love this car," right? And, you know, I've, I've got a, uh, it's, uh, I don't, a mediocre SUV, right? And it's, it's 5 years old, and it's halfway through its life probably. And, but she loves it because it's all she needs. It's not, it's not anything more or less, right? And she doesn't need more. And the She very rarely needs anything outside the moment. When she wants something, it's because it's right in front of her, and if she doesn't get it, she forgets about it and she moves on with her life. And I feel like if I could approach things a little bit more that way and not And she gives in a lot, right? I she's like, "Oh, I'm gonna spend my, my money on this thing that I saw walking out the door of the store," um, but if, if she were a l- if she were able to get away from that point of sale and I could have that mindset of what I have is enough, which is what her general mindset is, I think, most days. Yeah. Um, you know, I, I find myself just taking moments to walk around my house, which is, you know, a house that I've thought many times about how have we outgrown this house. It's not in the neighborhood we wanted to be in, whatever. Um, and I've felt trapped there because I have a, I refinanced during COVID and, you know, it's, it's a great rate. Why would I ever sell this house? Of course. Um, but when I walk around the house and I think about the memories I've made in the house, it's hard to imagine myself ever leaving it. Mm-hmm. You know? The Keeping Up with the Joneses hasn't rubbed off on Mikaela. She, she hates the Joneses. No, I'm just kidding. Okay. She, she likes to watch the Joneses on TV and- Okay. and imagine their, their fun lives, but yeah. I guess on your point, though, if you're not happy with what you have, you won't be happy with what you get. Yeah, like all the construction above us that's been- Exactly. It's been so loud today. Yeah. But yeah, you're right. That's a good point, Colin. I think that, you know, being able to just appreciate what you have, I feel like it really starts with appreciation and gratitude, and we don't do enough of that. And I recognize that if we were, as a society, were just to hit a button and stop our spending, the stock market would tumble, the country would, would fall into chaos. Like, we can't do that. It's all propped up on greed. Right. But I think that when we, when we accept that greed has a purpose, if not a admirable quality, like, it's all of these elements of our country, good and bad, have some sort of purpose, and hopefully we can recognize that purpose and move forward in the right direction from wherever we are. I think what's tricky is capitalism, in my mind, is competition. Yeah. And there's a lot of competitive people out there. Yeah. And, uh, keeping up with the Joneses is competition. So if you're a really competitive person, I'm, I tend to be fairly competitive when it comes to things. I hate losing at sports and board games, in particular. Um, but with that being said, it's, it's, they put people against each other to really drive that competition and send it home. It's, I think it's kind of what this country is really built on. It is. So I don't know what the solution is here, but I think ultimately, just understanding our place and how we can try to improve our circumstances, and maybe the circumstances of our- of the people around us, then we're moving as a, as a group in the right direction. Well, I think if, to go back on it, um, if we're going to improve, is there a problem? There isn't a problem. There's definitely a problem because we're improving. Right? Is, is the problem, though, the, the mentality of it all? I think it's, yes. I think that we probably, we could do with less, and I think we're gonna find ourselves in the very near future identifying that and, and having to grapple with it. Because if we look at some of the estimates for job dislocation when it comes to the AI wave that's coming, you know, I, you know, what are we at for unemployment right now? 3 or 4%, something like- Yeah, right around there. something really low. Yeah. I've heard estimates, obviously, there's always doomers out there, but 20, 30, 40% unemployment rates. Yeah. Some people feel like we're gonna have a 20% unemployment rate with universal income and everything's gonna be fine. And I think, you know, if you feel like AI is going to replace you and you're a victim to it, well, then, you're right. And if you feel like you're going to use AI to enhance your life and to improve your career, then you're right. You're right. So I don't know what that world looks like, and you and I talk about it a lot, but I can't imagine it's gonna solve the wealth inequality problem, and I can certainly imagine ways where it's going to make it worse. I can appreciate that. I was reflecting on this a little bit, and something I was thinking about was the amount of people that are gonna get displaced by AI. It's not gonna happen overnight. It's gonna take some time. But the industries where they're going to get displaced. Yeah. Certainly tech, probably a lot of service industries. I think there's going to be other areas, though, where people are pushed, where there's a massive need right now. Yeah. Yeah. So I'll go back to the trade schools just as a perfect example. Um, if you really wanna make a ton of money, go to the trade schools, because I know three or four of our highest earning clients are all in the trades. And, um, what's kind of interesting about this is everybody says, "I'm gonna lose my job." Well, maybe, if you're in tech. Maybe. Yeah. And if you're a programmer and things like that, or if you're in a service industry or whatever it is, um, you know, maybe even financial services. But at the end of the day, the job that you're doing now probably may not be the job that you're going to be doing if you do get displaced.'Cause there's a huge need for teachers. There's a huge need for people in trade schools. There's a huge need for people in a lot of different positions in healthcare all over the country and while there is probably an overstaffing of certain industries, while people may be laid off, AI can't replace everything. AI can't replace everything. The robots are coming. The robots are coming, that's true. And I, do- maybe, that this could go two different ways, either we all have robots and it's like when we all had TVs, right? And it's like, it's the great equalizer again. Right. Or the robots are the ones servicing my HVAC and that trade school option isn't really a thing. It's, it's so hard to predict, but I, I'll, all I think you can do is try to make the right decisions with the information that's in front of you. Sure. And some of that might be to just increase the reserves that you have on hand and that might mean that you don't buy the next Rivian, and maybe Rivian fails because of that. Mm-hmm. And, you know, the downside of, uh, this culture and the society and this, uh, way of approaching business is that businesses fail all the time and we have to let them. Sears was a great business that failed. Right? We moved on. Yeah. Um, businesses are not people. They are just means to an end. Capitalism is competition. Collin's comment really struck me and I think it really drives a lot of the psychological relationship we have with this country and our place in it. Keeping Up with the Joneses is about competition. It's about comparison. It's about consumption and more and more, it's about over-consumption. It's about looking at someone else or something else that someone has and thinking, "I should have that too." Competition drives innovation. Need drives creation. We grow, we strive, we push for more. There can be a lot of good that comes from this, but there also comes a clear delineation of winners and losers and no one wants to feel like a loser. We wanna feel like winners, or at least like we're on the winning team, but when we're surrounded by inequity and inequality, by the juxtaposition of the haves and the have-nots, it really feels like more and more, people are not on the winning team. I don't know what changes this. There doesn't seem to be an easy answer and if there is one, we don't have it, but we can try. We can be proactive members of society. We can take an active role in our own lives. We can learn the rules of the game and play it to the best of our abilities. We can acknowledge that the playing field may never be even, and yet, there are always ways to tip the odds in our favor. And maybe, in some cases, we can accept that we don't always get to win or even need to win, and sometimes maybe more often than not, winning isn't really the point. There's real value in slowing down and reassessing what truly matters in life and in finance. Now I'm going to ask you for a favor. 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