And at a young age, you should be putting your money into equities and riskier assets and put it in an equity position that's not expensive to manage.
Oh, that's my favorite advice that you could have given me.
What's up, rich people? It's me, Haley, aka Mrs. Dow Jones, and this is Financial Tea. What's up, sippers? Welcome back to Financial Tea. This is a podcast where I teach you how to build wealth with a side of market drama, money scandals, and of course, financial pop culture. And today is a very exciting day for us here at Mrs. Dow Jones headquarters because we have one of the most influential figures in finance over the past 50 years in the studio. Former CEO of Goldman Sachs and author of the new memoir Streetwise: Getting to and Through Goldman Sachs, Lloyd Blankfein is here to spill the financial tea. I have to say in preparing for this interview, I listened to the audio book of this memoir and it is so good. I listened to it in two days. So, I highly recommend it if you're looking for a new audio book or actual book. So good. But yeah, Lloyd literally needs no introduction. I was so excited to talk to him and he was so open. He spilled the tea on generational wealth, on leading Goldman through the financial crisis, on the money advice he'd give us, how AI is going to affect everything, and so much more. But first, let's get into the MDJ market report, Brood Fresh Weekly. Hey guys, welcome back to the market report. I have four stories that you need to know. The first of which is about Disney, which yes, is a great brand, but unfortunately is a very bad stock. Like, if you had invested $100 in Disney 10 years ago, you would currently have $100. And just for reference, the S&P 500 has returned 180% in that same window. And you know, the park business is definitely booming. That is, you know, driving 76% of profits and hitting record revenue. Disney adults will not be held back. Like you guys are really just, you know, you're a vibe. And streaming finally has made money, too, after losing $10 billion. But the rest of the business is bleeding. Linear TV is down 16% year-over-year and the stock is down around 50% in five years, which I just think is interesting because like if you hear the name Disney, you definitely think, oh, like that's a good company. Like I like am bullish on Disney, but you know, numbers don't lie. Check the scoreboard. Um, I will say they do have a new CEO though, so maybe he can make this magical experience into something for your money. Next story is obviously about the Bachelorette. I'm sure that you know this by now, but Taylor Frankie Paul's season was cancelled three days before it was supposed to air. And this is going to cost ABC around $50 to $60 million. But I just want to be real that like ABC cost themselves that money because the writing was on the wall that this woman was a liability to work with and they did it anyways. Like they knew about her 2023 arrest. They knew about the headlines. And then the video leaked. It was horrific. And obviously advertisers like Cinnabon then pull down immediately. They don't avoid losses. They just know how to cut them fast. And by the way, this is a perfect example of something called sunk cost fallacy. ABC didn't pull the plug sooner because they had already spent millions on casting, locations, crew, and I think they told themselves like, 'We've already come this far. We have to make it work.' But I just want to remind you that the most expensive thing that you will ever own is something that you refuse to cut loose. Like whether it is a $50 million TV show or maybe a broken stock you're waiting to come back or a job you've been at for 10 years but won't give you a raise or a relationship with a guy who still has a roommate and will never propose. Like if the fundamentals are broken on something, do not average down. Sell. Don't wait for a comeback. Make a move. The smartest investors don't avoid losses, they just know when to cut them fast. Okay, next we need to talk about the economic phenomenon called stagflation because guys, there is a 35% chance that we are about to fall victim to this. The war, obviously we all know about the war, the war in Iran is about to make life more expensive if it hasn't already. I talked to my sister who lives in Boston. She told me that it was $130 to fill up her gas tank. So, we're already feeling it at the pump for sure. But what's crazy is that we went into this war in an economy where inflation was already rising. Like gas is up nearly 27% in a month. Oil has jumped 50% in 2 weeks. And like shipping, food, travel, your entire life is about to get more expensive because of this. Not to mention the US economy is taking on way more debt because we're paying an extra $500 million a day to be overseas in Iran invading them. So the Federal Reserve, which is supposed to be like our balancing scale, who makes sure that the economy is perfectly in order, nothing goes like too far to one side or the other side is stuck. Because if they cut rates, then inflation is going to get worse. But if they raise rates then the economy is going to slow down more. So they are just sort of sitting there and that is why stagflation odds are going up because life is getting more expensive but incomes are not keeping up. So I never want to give you guys economic news without some sort of action step because there's so much in the media already that scares the [__] out of all of us and that's not why I'm here. I think that there's always a way to take action and to protect yourself and like moves to be made that are going to put you in a better position. And that's the most important thing is just being proactive. So, I will say like if you're really worried about this, lock in prices where you can lock in your rent, your fixed rate debt, pre-book things that are expensive. I've booked a bunch of flights. Took me a few hours this weekend to play like the whole points game, but I just wanted to make sure that I was covered. And also cut the random spending. It seems crazy because right now my Instagram feed is like half people buying the new collection from Chanel and half like economic distress about the war. But don't buy the new Chanel. Those bags are like $8,000. You don't need it. Buy a vintage bag and build your cushion because just by having an emergency fund, you're going to buy yourself so much peace of mind. So I'd really recommend like six months. Um, and I'm also going to be putting up content about how to negotiate with your boss salaries during this time because obviously wages haven't moved but prices have gone up and so can you get a cost of living adjustment? That's really the question that I'm hearing a lot. So just look out on my page because that will be coming out this week. Um, okay. Now let's go into my conversation with a guy who knows a lot about the economy. None other than Lloyd Blankfein is on the financial tea. He is the former CEO of Goldman Sachs. He was the head of that company during the financial crisis. But this was such a great conversation. I'm really excited for you guys to hear it. Um, yeah. So, let's go talk to my friend Lloyd.
Okay. Lloyd Blankfein is on the financial tea. Former CEO of Goldman Sachs, future New York Times bestseller for Streetwise just came out. I have a signed copy. Thank you for being here. I have to admit, last time I saw you, you were on the walking path in Miami listening to a podcast about the English language.
Preparation for Mrs. D. Oh, Mrs. Dow Jones. May I call you Mrs. or Dao or Haley?
You know what? It all works. So, there are so many amazing stories in this book. I told you before we started that I listened to it in two days. The audio book is amazing. You read it. So were there any, there are a lot of great stories but what were there any darlings that you have to kill like that you want to share any stories that?
No, I like, part of this is, you know, it's kind of a personal story. It's a history of kind of Goldman Sachs of which there's always a lot of curiosity because of Goldman Sachs. You know, there's no crisis in the world that doesn't wildly affect Goldman Sachs and about three-quarters of the time Goldman gets accused of causing it, whatever it was. So there's a lot of interest in Goldman, financial history of the period. And it's a bit of a, you could decide for yourself, but accumulated wisdom of dealing with very, very capable, fanatically ambitious people who generally are oriented towards making a positive contribution to the world but having to get everybody to kind of sacrifice their personal interest in the short term to support the platform of the firm which they then can use for their own interest. Because once you become a senior person at Goldman Sachs, you become to other people a known quantity and have a lot of influence. But you have to get people to work together and make the kind of sacrifices of individual, you know, what people would want as an individual to just throw in with the whole, become a good team player. Not everybody can do that.
I liked reading about your management style and I feel like I've been using it with my own team a little. And so do you have any tips for people who are managing because you obviously you're running a huge company with a lot of really smart people, ambitious people.
In my tenure at the firm, we were half of my tenure it was a private partnership and half it was a public company. And I would say and again this may be subtle but I'll explain. I tended to operate because that's my history and my roots were in the partnership. I tended to behave like a senior partner as opposed to you behave like a CEO. And the difference is in a normal corporation which is hierarchical there's the person on the top lightning bolts come from his or her fingernails and do this and there's not a lot of dissension and the people who work there working in their job they do their job well but they don't have any particular curiosity about what may happen in the rest of the company and certainly don't feel they necessarily have any influence or entitled to know a lot about it. Whereas in a partnership, the people who work there are all owners and they behave like owners and they feel entitled to know what goes on and they feel accountable for the whole firm and the firm only has one reputation and it's yours. So if something goes wrong in a bit, you know, somebody who's working in London, it affects your reputation in New York and so you care about it and you feel an entitlement to hear about what's going on in the rest of the firm. You feel an entitlement to complain if the firm is going in the wrong direction or if the person who's the senior-most person in the firm wants to do something, you disagree. And guess what? The senior person kind of slows down and takes account of what your fellow owners want to do, even if they're subordinate to you on the organizational chart. And it's a very different organization, but you get a very different outcome. It may slow down somewhat decision-making, but it's a better decision-making process. And because people are owners, they're more committed. And that's how I always tried to do my management style. I learned it, you know, the normal way because we were a partnership. And just because we changed our form, we didn't really adapt. The senior people in the firm feel like owners and they feel and they expect to be treated like owners. And I did that. And the reward for that is when you have to call on them, they're not merely employees who think of themselves as coming or going before their next job. They behave like owners, which is a good thing for me.
It's a great transition into the pay structure of being the CEO of a big bank like Goldman because you get a base salary and then you're getting paid bonuses from the profits of the firm, right?
And nobody really in the firm is paid out of his individual performance. It's really obviously if somebody does better, they'll do better. Somebody more senior will do a little bit better. But the better or worse is within a narrow band. The most important thing for everybody is how did the firm do as a whole. So everybody is a partner in the whole firm and that makes everybody much more helpful to their colleagues because everybody is, as a partner, as an owner, I share in everybody's good performance or unfortunately I share in their bad performance so I really care.
What's the salary of a CEO at a bank like Goldman on a good year? Well, and or not a salary, sorry. What's the pay package? Pardon my question.
The pay package is generally just like everybody else, there's a fixed, there's mostly a fixed salary which is not expected to be the bulk of your pay. And then there's a discretionary bonus and the discretionary bonus the discretion is largely shaped by how well the overall performance of the firm is and then your performance within it. But I'd say the most important part of that is the overall performance of the firm and it's going to generally it would be called a pay for performance. And by the way, that's also helpful in running the firm. You there are places where people have a contract, you know, contractually committed to receive a certain amount of money whether the firm performs well or not that could force the firm into big losses. If the firm underperforms well guess what the overhead goes down because people get paid less. And they get judged in arrears. It's not like somebody will know this is what I'm going to make next year. At the end of the year, you get told what you made the prior year.
You eat what everyone kills.
What everyone kills. Yes. Um so I mean this is the financial tea. We do like to get the juicy scoop. So can you tell us how much did you make fully like one say 2007?
Yes. I read somewhere that it was 70 million.
You know it was, yeah. You're kind of in the ballpark.
That's a lot of money for someone who grew up. What I loved in the book is so much about your upbringing. You grew up in public housing in Brooklyn and you rose to being the CEO of Goldman Sachs. And what I think is really interesting is like psychologists say that your relationship to money is formed by the time that you were 7 years old, right? And so how have you adapted to this crazy abundant financial situation now? Like does that kid from the project still show up in your spending?
Yeah. Well, there are a lot of adjustments. Because there's some adjustments I can't make. So, I run around the house turning off lights. If anybody's going to be outside of a room for more than 45 seconds, I point out to them you could turn off the light and turn it on again.
So, you're turning off the lights. What are other like sort of habits and things that?
But you know what? More realistically, with my own kids, I spend half my time giving them stuff and the other half of my time resenting them. Kind of resenting them for having the stuff that I just forced on them. Yes. And they're very good kids and they work very hard and they're highly productive and I sometimes I wonder, you know, God, you know, I must make them absolutely crazy because I'm really like that. I'll say, 'Oh, you this I want you to have this. You should live really well and blah blah blah.' And I'll go in and go, 'Whoa, well la dah.' And I said, 'You're living really well.' And they must look at me like I'm nuts because I am. Um other forms, here's another form that it takes. I was used to in my early life because again we grew up in the public housing in the projects. I got a lot of things for free and on scholarship when I applied to.
Yeah. Harvard gave you $5,000.
Oh my. Yes. When I took my SATs, I didn't have to pay for them. We were title one school or whatever it was called. I just signed my name. I lived my whole life on scholarship. When I went to college, it was always on scholarship. When I ran out of money and, you know, I went back and they gave me $500 on the spot to do it. Then I go to, you know, this fancy school and fancy law school and a job and, you know, at some point I'm looking and by the way, I'm writing out as if I, you know, my big achievement in life was overcoming all these disadvantages. But then, you know, at some point there's a crossover and I have to stop and say, you know, at this point I've had pretty much more advantages than disadvantages because I did go to all these fancy schools after it and I said, I have to readjust my thinking. And one of the ways on the money side is I had to go where I expected to be the recipient of financial aid and other people's philanthropy. I had to start thinking of myself as the giver.
Yes. And that was something that one day I kind of woke up and I said, you know, because I never thought I was always the one who was applying for grants.
And now you're giving them.
And then I thought to myself, well, that would be really, that's going to look really bad if I'm taking, you know, but it was almost instantaneous, like there was never a period of neutrality. I went from my attitude of I'm a taker to whoa, whoa, whoa, whoa. You know, a new day has dawned here. I really have to be a giver. And I did that. And the oddity of it is that people only know me this way.
Yeah. And don't know because the point that you made earlier, you know, you get a certain kind of imprint when you're young.
100% stays with you and you never shake it.
No way. My audience is obsessed with growing generational wealth though. Like everyone is sort of in that like baby having phase and they're like, 'We need to make our kids rich. How do we do it?' So, how did you handle your kids accounts? Like what accounts did you open? Do you have financial advice you could give to listeners who are trying to grow wealth for their children?
You know, there's that old saw from Warren Buffett that he wanted to make his kids just wealthy enough so they could do whatever they wanted to do, but not wealthy enough so they could do nothing. And I think that that's a way to look at it. But, you know, I think with my kids, you know, and you'd have to ask them, also, I don't think money and that was ever really the incentive for them or the cudgel that I used. What they want is they want to be perceived as doing well. This is like what I said, I don't underestimate the important draw of being financially secure. That's the most important thing. But once you get there, it's much less important because you're already there. And I understand the irony if you're not there it's the only thing that matters to people is subsistence but once you get there, there's a million contests that you try to succeed at and you know getting self-respect, performing, doing well in your job, the approval of your peers, good relationships, and they're all, you know, they're all strivers in that respect so they don't have to strive for subsistence department but there's other things and those things turn out to be much more powerful. Hey, I'll take it from the other way. One of the advantages I had is that I didn't have to source my motivation. I needed to make money. And in my first job out of law school, there was a firm that was, you know, paying like literally $100 a week more, which, you know, which wasn't that much money in the scheme of things at that point, but for $100 more, I didn't bother researching which was the better firm, where my career better. $100, I went to that firm. Today, if you are financially well off, you're like, Hamlet, to be or not to be, what should I do? What's the meaning of life? What's going to be fulfilling? I wasn't burdened by all those extraneous. No, it was just show me the money. And it's, and by the way, it sounds funny to, you know, and I hear it say, and it sounds bad, but it also simplifies things in a way. Life is much more complex to me because, you know, there's something that there's always a thought that always came up to me through the various crises that I had to manage through and what I would say to myself at times, no choice, no problem. If you don't have a choice you don't have a problem.
So when you don't have money or you need to do this or the baby, you're about to have another baby or something like that and you know you love your job but it doesn't pay you enough, you know, no choice, no problem.
So I've got to be honest you're being very candid and I'm, you know, this is so fun to talk to you, but I've listened to a lot of your interviews and I got to be real like you do need Rosetta Stone for some of it. Like it is very inside baseball and I think that is the central problem for most people trying to build wealth is that finance does feel like this foreign language.
Everything is simple. If people are using jargon, you should be able to explain anything to a very, you know, to an attentive, reasonably bright eighth grader.
Oh, 100%. Which is sort of like the level that I consider myself at. So, it's perfect. But I want to try something. Pretend that I am a 25-year-old with a normal job and maybe I have like $5,000 saved. What do I actually do? Like, walk me through what are my next financial steps? Like, you know, I don't know any of the words.
Well, the first thing I did was I bought an insurance policy because I were, yes, the first purchase I made. Hard to do it so young. And there were a lot of people who I work with and they bought, you know, an uptick in cars. And I bought an insurance policy because I thought that was the right thing to do.
It was. And by the way, the amount of people that I talked to who are financial planners who have done the same exact thing. They're like, 'Oh, yeah. I got it when I was 23, 25.'
By the way, obviously a lot cheaper when you start to buy it and the whole life and I just didn't. It was a form of, it's also, as I'm sure you've told your audience, it's a form of savings because you accumulate, you know, value in the insurance company that you could tap if you need it. So it's tax advantaged and so because it grows tax-free.
Of course we do because we don't like taxes.
You didn't? Oh my god. Hate, hate, hate, hate, hate, hate. None of those. Um and also in back of your mind if you have obligations, you have a young family and a growing family, you kind of owe it to them to think about them and protect them. So, so insurance and by the way after that, um obviously you want to have some fun in your life. So, you know, you could buy that 14-year-old used car. I'll give you that. But then you know you should invest it and at a young age you should be putting your money into equities and riskier assets and then the rest of the excess put in equities because that's likely to grow faster and put it in an equity position that's not expensive to manage.
Oh, that's my favorite advice that you could have given me. I think now I've been a financial professional myself but and advice, you know, advice is important but things that have high fees are just, you know.
Coming as this co-head of Goldman Sachs you're telling us to avoid fees? Well, avoid high fees and ridiculous, you know, Goldman Sachs has no problem justifying and earning and, you know, our business and people say thank you after it and we're in a different kind of business we're not in 100% except with Marcus. But you know, we all know that.
Yeah. Well, that's a savings account. And by the way, it's a relatively high-yielding savings account insured like everyone else. I put every, in fact, I have my excess cash that liquidity in Marcus because.
Since it doesn't have branch offices and doesn't have to pay for a lot of people.
No pens to give out. No TVs or toasters and so.
That's a high, you don't want to pay a lot of money for you. No, no, of course not. So that's a good thing for liquidity, but other than that, your other stuff, put it in a low-cost ETF.
Mhm. Love it. So I do want to at that point pause the podcast because I know you are still an active aggressive day trader. So I just want to give you the space here to sort of do what you need to do. I'm sure it's been hard not to like check the prices as we've been here. Are you
Seeing my hands shake? As I go through withdrawal. Hold on just a second. Let me look at my phone a bit and see. But I'm cool. I'm cool. It could be up 30%, down 30%, you won't see a reaction from me. Oh my god. No, you won't see a reaction from me most times. But it is an occupational hazard. I've known the price of everything all the time for just about 40-some years. And so can't turn that off. I always thought like if I'm, you know, again, not to put a smile on something dark, if they when they bury me, they better put in a market screen and extra batteries because they're going to create like a new kind of casket that has or either have a wire that just goes down with a permanent power source so I can just keep checking the market.
I think we can make that happen. By the way, in my line of work, it's not considered rude to be having a conversation with somebody while you're staring at your... That's why I wanted to give you the space. This is a safe space for you if you need to do your day trading.
No, no, but I can, you know, I could put it off for a while.
Okay. Well, you let us know what you're in on cuz maybe we can hold my breath for 6 minutes and I cannot look at the market for about 12. So, it works. It works. Okay. You're like me with celebrity gossip. That's how I am.
Okay. I was on threads yesterday, which low-key is my favorite social media. And I saw someone write that they feel like all the financial advice books out there are so outdated because like the economy and the world has changed so much since they were written. And so I just wanted to give a general PSA that they are, but there is a new one coming out May 12th. I wrote it and it's called Future Rich Person: The New Rules for Building Wealth Even if you're stuck broke. And that billionaire won't text you back. If you want to work for yourself, or you want to buy a house with your best friend, or you want to have a kid when you're 45, or you want to learn how to optimize credit card points to fund your lifestyle even though your parents always said that they were dangerous, or you want to grow generational wealth, like all of these new things, these new opportunities that we have in 2026, it explains how to leverage and utilize to really get your financial freedom on. So, right now I'm doing all of these insane promos around the pre-order. Like, if you pre-order, you unlock all of these amazing resources that are usually behind pay walls. So, go to mrsdowjones.com/book to pre-order Future Rich Person. It is out May 12th. But, if you pre-order, you're going to unlock access to the Future Rich Club, which will give you lots of freebies that will help you get rich. Thanks for the support.
I want to ask you specifically though because you watch the trading floor go from pure human chaos to almost total automation. Like you talk about another thing, right? In the book like when you started out everyone's screaming on the phone, buy sell, which is like...
There's a movie that people... that's an old movie and nobody likes to watch, you know, old movies, but there's an old movie called Trading Places, but you know, people are waving their arms on a trading room floor. That's the way it was. You could hear, you know, it's very funny. People be screaming at each other. They'd be sitting there, everyone sitting next to each other by way smoking cigarettes, you know, trying to take out containers on the floor and screens that weren't, you know, they didn't have windows in those days. You stacked one screen at top and another. People were risking their lives sitting at a desk because it could topple on your head and people shouting across the room. And but if somebody said something wrong, you could then all noise would stop and you could hear a pin drop and people are fighting with their husbands and their wives while they're sitting on the floor. And now you go into a trading floor today and people are communicating digitally to the person sitting next to them. You could hear a pin drop and I go, 'Wow, this is sure difference.' When I first started out, mistakes are expensive. You know, you say the wrong commodity. You think you bought something, but you sold it and it turns out that was wrong. You have to undo and you lose. How much could you lose? You could lose millions. Today on a trading room floor, if there's a wrong piece of software, you're not listening to it. You're not seeing it. It's invisible. You can have something go wrong and in one second, thousands of transactions could happen. You could lose tens of... I mean, the world is more dangerous.
Yes. My dad works at Goldman and there was like something during the pandemic where someone was trading from their house for a client and it was a disaster. Well, they put in a piece of Eron software and it somehow it sold every security for a dollar for like 30 seconds, but it was like a half a billion dollars worth of stuff.
So, I have something to show you. Producer Emma, will you please bring me... This is such... You are so well staffed. Thank you so much. It's so crazy. So, what I have here is there is this is the new edition of Interview magazine and there is an article in it about the finest men in finance.
Oh my goodness. Oh, I'm so honored.
Well, first of all, I was going to say, are you upset that you're not in it? Um would you have done this at their age? Like these are I think two of these people work at Goldman.
Oh, I see. So, what they are doing is they are asking to be killed. Is that it?
Exactly. Exactly. Yeah. No, I wouldn't.
