658: Let's Talk Money: Real-World Financial Advice with Megan Gorman, Author of All the Presidents' Money: How the Men Who Governed America Governed Their Money

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Welcome to the Holistic Survival show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary to survive and prosper? The Holistic Survival show is your family's insurance for a better life. Jason will teach you to think independently, to understand threats and how to create the ultimate action plan. Sudden change or worst case scenario, you'll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host, Jason Hartman.

It is my pleasure to welcome Megan Gorman to the author of a fascinating new book entitled all the President's Money. No, it's not really about corruption as the title might indicate. It's about different presidents throughout history and what we can learn from them. But it's not going to be just a history lesson because Megan has real world experience as a financial advisor to high net worth and ultra high net worth individuals. She's a tax attorney, a wealth manager, and I think this is just going to be a fascinating show. Megan, welcome.

Jason, thanks for having me on. I'm excited to be here.

Glad you're here. You're coming to us from San Francisco and I am in Warsaw, Poland here recording from my hotel room.

So I think you're from in the more exciting place. Although it is summer in San Francisco, so it's probably, I'm in a, probably a cooler place. It's only about 65 degrees today.

Yeah, no, it is a little warmer here but not too warm. The weather is actually quite nice. Megan, first of all, give us some context as to why you wrote the book and kind of tell us a little bit about it. I don't know if the book has an overriding thesis to it because really every president is so different in how they felt about money, how they managed money. Some were very frugal, some were spendthrifts and it's all over the board. But we're going to tie this in with interesting historical anecdotes, but also real world lessons that everybody can take away here. So yeah, just give us an overview.

Yeah, so the genesis of the book is. First, I'm a history geek. I read history all the time and I think first of all, anyone who's an investor should read history because it tends to, you know, as Mark Twain said, doesn't repeat but it rhymes, right? But I started my career at a division of Goldman Sachs and right out of the gate, you know, I came from a middle class background in southern New Jersey and here I am with a front row seat to high net worth and ultra high net worth individuals. And over the 23 years I've been doing this, I have started to notice there are certain traits or skills or mindsets that they have that have allowed them to build wealth. And some of them build wealth better than others. Right. Sometimes they undermine themselves. And you know, I sometimes have had to say to clients, look, your net worth is X, but it really should be. Why? So you know, in looking at that love of history and the traits that you need to have to build wealth in the United States today, I thought, wouldn't it be great to understand which of the presidents had those traits and really did a really great job with them and which of the presidents really struggled and didn't have do a good job at building wealth? Because I think today we're also accustomed to people becoming president, leaving office, getting the book deals, the speeches and so on. But that's sort of a modern invention. And to be really candid, you know, most of the presidents, most of these people struggle with the same money issues that we do today. You know, should I buy this property? How should I pay for my child's education? You know, why am I up in the middle of the night worried about money? So I liked the idea that just because they're presidents doesn't mean that they're not like us. So I try to keep the book very non political because I'm really focused on the human aspect of money, which is what I see in my clients.

Sure, sure. And just to your point about presidents going on speaking tours and writing books after they're out of office, I really remember reading about Gerald Ford and how he was the first one that really did that. I may be wrong about this, you know, I don't know back as far as, you know, Kennedy or Nixon or you know, Nixon obviously was Nixon or lb. But I know that Ford really had a real speaking career, like a significant speaking career after he was out of office. And then I would say Bill Clinton just took it to a whole new level of, you know, insanity in terms of speaking fees and so forth. But yeah, so just take us through a little history. Like you go way back. I mean folks, I want you to know that this show is going to really teach some real world stuff, but let's, let's just cover some history because it's fascinating. Thomas Jefferson, Abraham Lincoln, Ulysses S. Grant, John F. Kennedy. You know, what were these people like?

Yeah. So, you know, they're all very different. Right. Just because you were a great president or a great leader, or in Jefferson's case, even a great writer and philosopher, did not make you very good with money. And so, you know, I think the thing about US History is, you know, the earlier presidents struggled with the concept of illiquidity. So, you know, if you think about Washington, you think about Jefferson, Madison, Monroe, these were all gentlemen who owned plantations. And obviously there's the issue of slavery, which is reprehensible. But what was a struggle for all of them was in managing liquidity. And this is something I see with clients as well today. Right. Like, I've got clients that have huge real estate portfolios, and we're focused on making sure we have the right level of liquidity. And what's interesting about Jefferson is that at that time period, the average person lived to about 50 years old. And Jefferson said, suffered with a lot of loss in the course of his life, particularly early in his life, you know, losing family members, losing his wife. And so he became enamored with all things French. I mean, if you ever have ice cream, you should thank Thomas Jefferson. So he was very good at spending money, but not having the liquidity to support his lifestyle. And so he would engage in that thing that we would see a lot of times where he would do his budget in his head, but he wasn't actually writing it out. And he was making those promises we see people make, you know, like, okay, well, if I spend the money here, I'll borrow it from here and then do this. And in Thomas Jefferson's case, it actually ends up catching up with him. So at the end of his life, he is in tremendous debt, the equivalent of about $2 million of debt today. And the only real asset he has is Monticello and his lands around Monticello. And so he's, well, I've been to.

Monticello, and that is gorgeous. So that's a pretty good asset.

Beautiful. But you have to remember we had never really had presidents before, never had retired presidents. Right. So this is like a new thing. And so he's these. This illiquidity issue. And he decides he's going to put Monticello up for a lottery. And so you see this in the newspaper. They start selling tickets. It's the craziest thing. I mean, could you imagine today George W. Bush or Barack Obama putting their house up for auction? It's just not something we, in our modern world think of. But if you think about owning a lot of real estate and not being able to have the liquidity to pay your bills and having incredibly expensive taste, that is a modern struggle a lot of people have today.

Well, I guess in the days of Monticello, you know, there wasn't a lot of refi. Liquidity out there.

No, not at all. And you have to remember, we didn't really.

It was before Fannie Mae and Freddie Mac.

This is way before that. And he wasn't gonna put a heloc. And, you know, you do see stories by the way of these presidents loaning each other money. Like Madison loads Monroe money when Monroe comes back from France, because Monroe doesn't have the cash flow to buy furniture. So in Jefferson's case, they end up just going to him and saying, look, this doesn't really look good for a. Be doing a lottery. We'll raise money for you privately. So they sort of, you know, go down the path of creating a GoFundMe for him. Right. Which if you think about your own personal finances, this is not the best way to handle your retirement, especially for someone who's now in his 80s. But, you know, they don't ever raise enough money for him and he conveniently passes away at this point and his family is left to deal with this and, you know, they end up having to sell Monticello. They end up selling the, you know, having slave auctions to cover his debt. So I think with Jefferson, when you're an investor, you know, they study our brains, right? Who makes the best wealth? Builders. And Jason, you probably know this. Like, it's the ability to connect with your future self. Like, if you think of Jason in 20, 30, 40 years and you think he's your friend, you're more apt to act in his best interest.

That's really interesting. So, you know, one of the things I always say, Megan, is one of the real signs of financial maturity, or maturity in general, is the ability to delay gratification for a longer term, bigger goal. But I like the way you put it, because if you connect with your future self and you care about your future self, you're friends with your future self, you're not going to betray your future self. Right. That's really good. Elaborate on that.

You want that person to do well. Right. And. And the thing about it is, it sounds corny, but if you ever work with a financial advisor or wealth manager, they ask a lot of questions, right? How do you envision retirement where do you see yourself in 20, 30, 40 years? Well, these questions have become sort of hokey because everybody does them. They're actually psychological triggers, right, because they're trying to understand how do you see yourself? And so NYU Stern School of Business have done a lot of research on this, and they notice the brains light up differently for those who can connect with their future self than with those who can't.

What, do they put them in MRI machines and ask these questions?

And they're scanning the brains, they're doing, looking at the brain waves, where the brain lights up. And it's sort of fascinating because this is one of those things where if you are not able to make that connection, you know, if I can't connect with Megan at 70, what are some of the things you should be doing? And some of it is things like visualization, you know, writing down goals, working with someone who can coach you so it's fixable. And poor Thomas Jefferson, you know, we didn't have wealth managers back in the day. You know, you were hopeful to find a good manager to manage your plantation. So he didn't really have anyone to sort of work with him and coach him. And you think about how brilliant he was and the fact that he missed out on this, and Madison and Monroe had similar issues. But what's really fascinating, Jason, is if you had to ask me who was an awesome president with money, I would tell you it was George Washington. And I think one of the things you see with people who build wealth is often it's really good if they've had some struggle over the course of their life. Resistance is good because it teaches you the grit to build wealth. And Washington owned substantial land, but he didn't start out with a lot of land because when his father died, his father owned a lot of land. Washington was the second son of a second marriage. His brother inherited everything, and so Washington couldn't even go to college. His father didn't leave anything in his estate plan. Right. At one point, they were going to put him in the Navy, but his mother was like, oh, no, no, no. Like, he'll get hurt. And he's this very tall, strapping gu. In the 1740s and 50s, people were like, five, six. But he was six, two. And so he was very good looking, very intellectually curious. And he does something with money that I think a lot of us do, and we don't even realize it. He wants to learn something. He wants to learn a vocation. And he uses his connections. His next door neighbor, who were the Fairfaxes which, you know, Fairfax, Virginia, who owned all this land, and they taught him to survey, they lent him books on it, they took him out to survey. And like a lot of people who get into real estate, he learns how to buy real estate. And, you know, George Washington ends up owning so much land in this country, his estate, when he finally dies in 1799, is so complex, it takes 50 years to actually probate the entire estate. So Washington has a lot of the same issues that Thomas Jefferson has, but Washington had to figure it out, and he had to think about himself. And Washington was a great budgeter. So I always point out to my clients that have a lot of real estate, like, we have to get it down on paper, what the real estate is really doing. Like, is it, you know, if it's a rental property, what does the cash flows look like? How is depreciation impacting us? Are we really making money on this? Is the money really tax free, or is this just putting money into something that's just losing money? And I think Washington was excellent at that. And you see him in the course of his letters over the course of his life, not just budgets, but him sometimes having to sell property that he doesn't want to sell, but he needs the liquidity to help his other properties.

Very interesting. And were all those properties back then that they owned, you know, was it basically like just land? You know, raw land, farmland, or. Or did they actually have rental properties like we do today? I mean, you know, of course, people have read rental properties for a couple thousand years now. You know, I did a show talking about how ancient Rome did rental properties, and I thought that was quite interesting. Yeah, but what did the President's own.

Yeah, I mean, you. It's funny because first of all, with the early presidents, you have to have an asterisk to say these were slaveholders. So they were also getting free labor. Right. Or very inexpensive labor. They obviously had to take care of the slaves. But when they owned the land, some of it was undeveloped, some of it was further developed. You know, they were developing it for agriculture, and some of it they were leasing out to people, whether there were structures on it to live on, where they were leasing out land, you know, they were trying to just amass significant portfolios of land, because, particularly in the south, that was how wealth was built. And, you know, there was such a divide at that point between the north and the south because the Southerners were landholders and all struggled with illiquidity. So, you know, Washington, you know, he owned a lot of Property. He was a landlord. He would sublet properties out. And you have to remember, he also, when he married his mar. His wife Martha, she was a wealthy widow. And I will tell people, if you also want to build wealth, be like the presidents, marry up Washington, Lincoln, you know, Eisenhower, all of them married wealthier women.

John Kerry almost became president.

Yeah, I'm sorry.

John Kerry, who almost became president.

John Kerry. You know, it's an interesting phenomenon with money and wealth is that they tend to marry up in Washington. In this case, married a woman who by all accounts was a, you know, stunning widow who had, you know, inherited money from her late husband, which was even more money than Washington had. So by marrying her, he got more land and greater wealth.

Interesting. Let's jump forward, and then I want to get into some more practical stuff, but let's talk about someone like John F. Kennedy.

Kennedy. You know, Kennedy's interesting because he was.

Surprisingly frugal, wasn't he?

He was. You know, there's this misconception with people with money that they don't worry and they don't think about the bottom line. I will tell you, I work with a lot of people who, one, are always double checking, right? One, because that's how they made the money, right? By being very diligent. And two, they do fear that people are going to take advantage of them. And, you know, Kennedy's interesting because he was obviously in a family where they focused on wealth transfer. And his father had philosophy. And when I work with clients, we work a lot on, okay, what is the family philosophy? You know, I've worked with clients who tell me, we don't want any money to go to our kids. And then I'm working with families who are saying, forget the third generation. I'm trying to get money down to generations four, five, and six, right? So Kennedy was interesting because his father set up trusts for him and his siblings. And so, in a way, he didn't have to worry about money, but he was focused on it. He was focused on being frugal. And so, as you learn about Kennedy over the years, there's a great story I found in the oral histories at the Kennedy Library from Lem Billings, his best friend. And they went to college together, and they would go in the summers to New York, and the hottest club was the Stork Club. You know, there were beautiful women, there was champagne, and the Stork Club would do this crazy thing where they had these balloons that they would drop from the ceiling with little prizes in it. So what was expected is you would go there and order a bottle of champagne, you know, bottle service. Well, Kennedy could afford that, but Lem Billings and their other friends, they couldn't. So what they would do is they would buy, you know, buy a drink there and then they'd say, hold our table. And they'd run down the street and go slam back some beers at a cheap bar and then come back into the Stork Club and finish their drink and slowly sip their cock. And I can tell you, as somebody who in their 20s was in the New York City area, I did the same thing. When you don't have a lot of money, you drink very strongly.

That's what all the college kids call pregaming.

Exactly. But Kennedy's interesting with his frugalness because he had certain struggles with money because. And there's tons of books up this with better historians than me. But, you know, John Kennedy and Jackie Kennedy didn't always see eye to eye on things. And she was much more of a spender and he was obviously very frugal. And so you do find buried in recollections of them as couples stories where Kennedy is infuriated by her spending. And she. And it's a very passive aggressive relationship between the two because she's furious, because one day she finds out in like 1962 that since he became a congressman, he's never taken his salary, he's always donated it to charity. And she's going, wait a minute, why aren't you. I need this salary. And he's looking at the credit card bills going, how are we spending so much?

Like, wow, that's just amazing to think about this. I mean, the only credit card probably they had was Diners Club back then.

And they would put things on credit, you would have store accounts.

And, and, and this is not before he's in office. This is when he's president. I mean, this is a. It's amazing. I don't think people realize, I mean, I certainly didn't think about it, that, that a president would actually be having an argument with his wife over money. Like, that's kind of shocking to me.

Yeah. And you know, she would, especially people who witnessed it would say she would feign this, like, innocence like, like, you know, I don't know where it all went. Right. So they had dynamics in their marriage. And what's interesting, we often compare Kennedy assassination to the Lincoln assassination. And some of the parallels. What's really interesting is Abraham Lincoln had a lot of the same issues. Mary Todd, you know, and historians love to Diagnose her. Right. I've. I've heard things as ranging from bipolar to OCD to diabetic issues. Right. But Mary Todd Lincoln was a spender and she would do crazy things. You know, basically she would like, in one time, she went to a store in Springfield and bought all. Like, there was a beautiful bolt of silk and normally they would have cut some off for her to have a dress made. She buys the whole bolt because she doesn't want any other woman in town to have the same dress as her. And when he becomes president, now she's got access to New York City, you know, in Kentucky. New York's a journey. But now she's going up to New York and there's stories in the papers. She's going up there and buying copious amount of gloves and furs and dresses, buying it all in credit and hiding it from him. So what's fascinating here is.

Mrs. Keckley is her dressmaker. And Mrs. Keckley recounts that during the reelection campaign for Lincoln, Mary says to her, look, I gotta have him get reelected because if we have to go back to Kentucky, he's gonna find out about all this debt we have. So you think about these people and you think about how revered they are and, you know, how, you know, they're historical figures, but Abraham Lincoln and John F. Kennedy, they had wives who spent and it stressed them out. So, you know, it goes back to that, you know, concept of the two most important decisions you make in your life and about your money is what you do and who you marry.

Yep, sure, sure, sure. Okay. Really, really interesting stuff. Okay, let's. Let's get practical here for a bit and talk about maybe lessons from the presidents for people listening, but also just from your own experience as a financial advis working for, you know, Goldman and so forth.

Yeah, I mean, it's funny, I always tell you that wealth is that intersection of having opportunity with discipline. And that's what I've seen over the years. But what I have also seen is you need to have a healthy dose of risk. So when I'm working with clients and building their balance sheets, you know, the public markets are great, right? Investing in the S and P, investing in the stock market. But. But I also really encourage them to also invest in the private markets. You know, private equity, private credit, venture capital. And remember, 90% of those opportunity sets are absolute crap. So if you're going to go into the private space, you want to stay with the best possible managers to get access to the best possible deals. But the Other thing I feel very strongly about, and if my clients are listening right now, they'll laugh, is I love real estate. I do think in studying these families, generation after generation, the ones who have a lot of real estate seem to do well. But if you're going to own a lot of real estate, you know, like Washington and Jefferson, you're going to have a lot of illiquidity. And so what I really try to work with, with people is not just to think about it in gathering assets, but what does it mean for us on an income tax basis and what does it mean for us for an estate tax purpose? And this is really important coming up, because as you probably know, Jason, at the end of 2025, the current estate tax law as put into place by President Trump will expire and it will revert back to the law as it was under President Obama. So what that means is today, if you have, as an individual, 13.6 million or less in assets, you will not have an estate tax due at death. And for a married couple, it's 20, you know, combined just over 27 million and the estate taxes due at the second death.

Death.

But if we go back to the Obama era, It'll be roughly 6 million a person. Right. And if you think about that, and you own a lot of real estate, there's a good chance if you're a single person and you have a lot of real estate, you may have an estate tax issue. So if you're going to own a lot of real estate or these more illiquid assets and you feel strongly that you want to make sure that you can pass these assets down generationally, you really have to think through not just your income tax strategy, but your state tax strategy.

Yeah. Okay, so we're seeing some sunsetting. And so, you know, some people will literally time their death. I mean, that's actually kind of true. I think people do do that.

Well, by the way, the one person who benefited of the Trump tax exemption was Donald Trump's kids because Ivana Trump passed away with the higher exemption. So that was just by chance. You can't plan your death. But, yeah, it's, it's interesting who gets to benefit under which law.

By the way, you know, we should just mention, you know, I did a show a long time ago, not on this show, but one of my other shows about home accidents and home health risk. And that was really fascinating. You know, that's how a lot of people die. I mean, if on a Trump died with a simple stumble down the stairs, right?

I think one of the things we don't talk about a lot, and I say this because I'm a Gen Xer, you know, in my late 40s. And I think everybody in their late 40s and early 50s are dealing with parents and aging. And you know, what we don't ever really talk about is one of the biggest, most dangerous things that happen as you age is UTIs. Right? Because UTIs as you age cause confusion and cause falling. And so to your point, homes are really, really risky. And you know, one of the things a lot of my clients work on is what home are we going to age in? We try to, you know, can we get the primary bedroom on the main floor? And here in California, what's been interesting is we have a new law regarding ADUs, right, those additional dwelling units because we have a housing shortage here.

Right.

And what I'm having hearing a lot of people do, that's not going to.

Solve the problem though.

It won't solve the problem because I'll give you an example. I have people doing ADUs because they want a house on the property that they can eventually put a caretaker in for when they want to age in their house. So yes, I agree, it's not going to solve the problem. But you know, when the law is a certain way, you want to see, is there an opportunity set that benefits you?

Yep. Yeah. Okay. Yeah, good. Okay. So sorry to get off on the little tangent.

No, no, I love this.

Okay, so talk to us about the healthy amount of risk that you mentioned before. Risk taking. You know, sometimes the biggest risk in life is not to take the risk. I think that's a very significant thing. Share, maybe elaborate on that or share some experiences from some of your clients, your high net worth clients.

And yeah, yeah, I mean, look, I think with a lot of people, right, you know, risk is tough because it's emotional. Right. You know, we all wish we could be like a poker player, right? The best person in risk and presidents was Dwight Eisenhower. Right. He was a poker player, very cool, calm and collected. But for most of us there's an emotional draw. So what I always tell people is, look, look, as you navigate things, the important thing is to have someone who you can talk to about it that is unemotional about your money. Where people are really good that I've seen in sort of taking risk is deciding what they're willing to put at risk. And what I mean by that is I work with a lot of corporate executives who are in publicly traded companies. We're holding millions in Single stock positions. Right. And that violates everything.

That is in portfolio construction. You're not supposed to have concentration. But the thing I would tell you is great wealth is not created by diversification.

Right.

Diversification maintains it at a steady rate of return over the long term. It's boring, and it's like watching paint dry. You want to become wealthy, you need to do it by, you know, having a business owning a single stock position. Concentration.

Yeah. And concentration, as I always say, you know, diversification perpetuates wealth, Concentration creates wealth. So depending on the stage you're in, if you're wealthy and you want to just be conservative and put it in neutral, hey, diversify. But if you want to create wealth, you need to do what Andrew Carnegie said. Put all your eggs in one basket and watch that basket. You know, Now I like the income property basket the best. And so what you can do is you can be all in that basket, but you can diversify your risk geographically by being in different markets. And we say be in at least three markets, not more than five.

I like that a lot. That's a good rule. Yeah. And also, you know, I'm a big believer in if you're going to own rental properties, know, know where you're renting. So I was sharing with you before the call. I own a rental property, but it's in my hometown on the Jersey Shore. I know the rhythm of the Jersey Shore. I know how.

Yeah. You live in California, though.

But I live in California. Yeah. Trust me, I'm doing it from afar. But when you're from somewhere and you know the market, it gives you a little bit of like, some people would say, oh, buying a, a home on the Jersey Shore when you live in California is taking on a lot of unnecessary risk.

Yeah. But the risk could be like. See, the problem is with most of our clients is they live in these nicer Mark. Or I don't want to say nicer. They're not always nicer. They're just more expensive markets.

Correct.

And you can never make the properties pencil in those markets. You got to be in the cheap markets for investing. And you know what I always say is invest in markets that make sense. So you can afford to live in markets that don't make sense. Right. So, you know, you live in San Francisco half the time in Corona del Mar, California, where I used to live half the time. Right. And so you live in places that make no sense whatsoever. Right.

No, and I actually had an experience recently in my own situation, which, you know, I think it's good to know when to like fold them, right? So for a long time, when I moved out to California, my real estate story is interesting in the sense that in 2002 I graduate law school and my ex husband And I take 10 grand and we buy a condo in Hoboken, New Jersey. Okay. And we had no idea, but it had parking. We didn't know how valuable that was to have a garage spot. And when we, when Goldman moved me to Southern California three years later, you know, we sold it and had doubled our money, which gave me the ability to enter the California market. But I had a great little house, the worst house on the best street in the villages of Corona del Mar. And if you know Corona del Mar, it's got these really cute streets called the flower street streets.

And the land, they're in alphabetical order.

Except there's two M's and two P's and it stops after Poppy. So don't ask.

Sorry, go ahead.

There's no Z street.

Yeah, there's no Z's even though there's zinnias. Right. So what was interesting is in Corona de Mar, when I moved out there, the land is so valuable and I know I sound crazy saying this, that a lot of times there's a front house and a back house, right? And this sounded nuts when I got there from Jersey, I'm like, who does this, this? But the back houses were a way to get entry to the marketplace. And I ended up hold having the house for 17 years. Sometimes it was my primary residence, sometimes a secondary. Then it was a primary at the end and people said to me when I went to go sell it, do you want to rent it? And I thought long and hard about it and I penciled out the numbers and I could not justify renting it. Yeah, they don't work because even though I could cover the expenses, but your.

Rent to value ratio there is so out of whack it's insane. Like you can never, you can never make those high end markets. Pencil. And you know what's interesting, Megan, is I've been to 97 countries now and I'm currently in Poland. And I, I was just looking at properties a few days ago with a couple different real estate brokers here and the real estate developer, the rent to value ratios here, they hold the same rule holds pretty much worldwide. So a million five really nice condo here in Warsaw, Poland will rent for about five grand a month. And I'm converting all this to dollars, not zlottis or you know, Polish currency. It's like that same rent to value ratio holds true around the world, you know, in high end and low end markets or, or cyclical and linear markets.

And I have a lot of clients that have rental real estate around the world. You know, I have people in Portugal and Sicily, you know, in Africa, Costa Rica. And you know, I will tell you, like some of the markets, like Spain, it's very easy to get into the property market. It's not that expensive. Cost of living there isn't expensive. But you also don't get a lot in rent, so it's not as great a situation. So I, you know, I find the rental thing, you have to be incredibly selective to make it work. Now where I've had people be successful, I'll give you an example. I have someone with a beautiful home in Park City, Utah. Park City is a great place to have a rental. It's a lot like I saw people in Bend, Oregon. Right. These are great year round.

You know, 20 years ago we used to sell properties in Park City. Okay. And just think about that folks listening to me, okay? You know, between about 2004 and 2008, we were selling properties to clients that were buying in Park City, Utah. You couldn't touch that today, like and make it make sense as a rental. But back then you could make that actually make sense as a rental.

And the ones I have there make sense, sense.

So yeah, the markets you think now today, they're just uninteresting markets, right? Just wait, you know, wait a decade and you'll change your mind. It's really.

Well, let me, let me ask you this question because I've watched people at Park City with Bend do incredibly well. Six figures of rental income a year.

You know, we used to do Redmond, Oregon, Bend. Yeah, Park City.

I had a hypothesis. So let me, let me run this by you. So Las Vegas likes to reinvent itself constantly, right? You know, it was at one point it was the family friendly place and then it's a food city. And now it's trying to be a sports and entertainment city. Right. You know, with the senior F, one is little.

I don't like Las Vegas very much at all. But Las Vegas was better when the mafia ran it, probably. Now the corporations run it and they've screwed it up.

But what I'm always wondering is, as this latest reinvention, when you're sports and entertainment, you're getting very wealthy people come in who want to stay in luxurious spaces. So the thing that I'm wondering, you know, I've been kicking the can around in my head is. Is Vegas the place where you buy a gorgeous condo that you rent out, which when you've got the F1 going on or the sphere, you're able to get really good rents like you could in a Park City or a Bend or to your point, Redmond years ago. And these are the things I think you have to kick the can around on to sort of pencil it out.

I'm just, I'm just not a huge fan of condos. Like the deal has to be so good to convince me to do a condo. You know, I'm just not a huge fan. But, but I see what you're getting at. The thing I wanted to toy around with you with the real estate thing for a minute is, you know, you mentioned Corona del Mar and now you're mentioning Vegas. A lot of this has been driven by the concentration of wealth and the wealth gap issue. Okay, totally. You know, the rich have gotten extremely rich in this country, you know, during COVID but long before COVID as well. And there's definitely a huge wealth transfer going on. Right. You know, and if you don't believe me about this, just look at like anecdotal stuff. And what I always say to my listeners is, is watch old TV shows, listen to old music and just look at the scenery around people. When you watch an old TV show like Columbo the Detective. Right. Or that old show Heart to Heart, do you remember that one?

Yeah.

Right. And that was considered ultra wealthy back then.

Right.

And compare that to what we call ultra wealthy today, which is insane levels of wealth. Wealth today. Right. I mean, it's just so different. The wealthy are so much more mega wealthy than they ever were. Right. And so is that going to continue to drive these higher end markets and higher end properties? Is it going to maybe become even more severe, the wealth gap? I don't know. I don't think it's good for society. I'm glad I'm on the right side of that equation personally. And a lot of my clients were helping them get there because the middle class is getting hollowed out, which I, I think is a very bad thing overall and I'm sad to see it happen. And, and you know, it's even happened in Corona del Mar. And I'll tell you one of the things that happened there is I remember in the 90s when they changed the law and they made it easier to subdivide the lots in Corona del Mar. They have these little hundred foot by 35 foot lots. I think that's the measurements before they were all R1, you could only have one house on them. And then they made it really easy. The city changed the rules and made it really easy to subdivide it and have two units. Units, okay. And when they did that, all the developers came in and started, you know, knocking down the old beach house that was three bedroom, two bath or one bath and you know, built in the Post World War II baby boom maybe. And then they built like two condos, okay. That were brand new and you know, they made them really high density and you know, they went up and you know, all that stuff. And so it really moved the middle class out of there, you know, and, and it became a much more expensive market. And so, you know, there's all these dynamics going on. But, but what are your thoughts with all of your experience, Megan, about are the rich just going to keep getting richer or is that due for a change? What do you think?

So I think a couple things. You asked a bunch of questions there. So let me, let me start.

I'm the king of the compound questions.

I think I got them all in my head. So I think the first thing I would say is in writing my book, my biggest takeaway was that the American dream is still alive. It is so much harder to achieve it today. Right. I mean, in 1910, Calvin Coolidge could have built a house for six grand. Right. That's still a lot. Yeah.

But adjusted for inflation, 6 grand, well.

It'S probably still a lot less under 100 grand. Right. So that was possible. You know, Richard Nixon went to college for $280 a year in 1930. Right. So you think about this and then you think about what's happened today. We're not adjusting our institutions the right way in order for us to achieve the dream. So when you ask me these questions, I think the bigger thing is I don't mind people growing wealth in this country. I think that's part of the American dream. I want more people to have a shot at it. So the challenges we have today, right. Is if you're self employed, getting a mortgage is a nightmare. What's more American than being an entrepreneur? But by the way, we won't let you buy a house. So we're going to make it really difficult for you to get access to capital. So why, why is it that way? Why is it we have to put 20% down? That's a rule from like the 50s when banks didn't have much recourse if they had to take a house.

House.

So some of the challenges I think.

Is, oh, so you think the down payments are too high.

Okay, let me say this for me with where I am in life, I think it's appropriate, okay. If I'm a 25 year old trying to get in the market for the first time, I think we need to work on how banks work with them. I think we have to work on how the tax code handles them. I'm a tax attorney. Right. I do think certain incentives to help those guys get in. Because you and I know once you're in the game, then you can move around.

Right.

But if you can't get in the game, it's hard. And we're 5 million housing units short in this country.

Yeah.

So to your point, if you have means and then, you know, and you're able to go in all cash, you are going to get a bigger piece of the pie and really build wealth. We need to think about, okay, keeping those guys having the access to do what they want to do. But how do you get more people in the game? And that to me is the biggest challenge.

So I think the answer to that question is you incentivize the developers, not the buyers. We have enough demand, we have not enough supply. You need to make it easy to build more houses. You know that that's where the, it has to be on the supply side, supply side economics.

But, but if you're a developer, like we talk about Corona del Mar, right. You know, they're buying these old houses, like there's one up the street from me, amazing views, great location. And they're going to buy it and scrape it, but to justify the resale cost. And this is happening across the country. I see it in my hometown of Cape May, I see it everywhere. They have to put the houses on it and make them so big to justify the cost. And so part of that is, that's, that's some of the issues.

It's because the land value is so high, that's what's driving that.

Yeah. It's funny, I always say one of these days I would take my little nephew down to my rental house in KMA and say, this house, the house is worth nothing. It's all about the land and that's where the value is. So I think we've got to reshape some of this in terms of behaviors and how land can be treated, how get, how to get people in, how to get people to get access to capital. Right. And I think realtors have been part of the issue because when like I just went through this last week with a client. When my clients go in to buy a property, we go in all cash because we have 90 days to put a mortgage on to keep the mortgage indebtedness deduction on the tax return. So the, the real estate world is telling us when you get two bids and this happened when I sold my houses. When you get an all cash bid, you're being pushed to take that because it's a sure thing. And so if you're a 25 year old trying to get in the market for the first time, how can you compete? So the competition isn't fair. And I think the best way to.

Go about this, I wish we could go into the institutional investors. RFK has made quite an issue of that. But anyway, go ahead. That's a wrap.

I think a couple things. I think the tax code is often the best way to create a better sense of fairness. And you know, the tax code is weird. We focus on low income people and then we try to take everything away from people who have tons of money. But in the United States today, if you make between 150,000 and 400,000 in this country, you're not getting any benefits from the code. You know, you hear they make fun of people who say, oh I make 250 a year and I'm living paycheck to paycheck. But that's the truth in this country today. And so if you want to bolster the middle class, if you want to of it's the people who make 150 to 400, how do you give them incentives, how do you give them tax breaks that can really allow them to get in and wealth built?

Make a suggestion or two on that, like what would they be?

What would it be? So first of all, I think one of the things that we really have to change and I mentioned to this to you before the show started, is we used to the way a sale of homes worked is you used to roll your gain into your next house. And in 1998 they changed that and they gave each of us an exemption. So if it's your primary residence two out of the past five years, you.

Would get for singles, 500 for married.

Correct. We've never indexed that. Right. You know, people are making decisions not to move because they know they're going to pay tax because.

And that's construction. What's interesting, we talk about the mortgage lockdown effect a lot, but that tax policy is also constricting inventory and supplies and, and so you know, people and Prop 13 in California does that too, which I, you know, think Prop 13 good in a lot of ways. But it also causes inventory to remain off the market. That would come on the market.

You know, I think one of the things that most people, most people hear about the estate tax, right? They think, oh, it doesn't impact me. But there is one thing with the estate tax that's so incredibly important. And depending if you're in your community property state or separate property state, it's the step up in income tax basis. And it's one of the most powerful tools we have, right? So what I mean by that is if you bought a house for 100,000 and on the day you die, it's worth a million, your heirs inherit it with a tax basis in California, because it's a community property at a million, right? Depends on separate property states if you, if you own it with someone.

So that's great when you're inheriting because the basis steps up to market value.

So, but, but here's the thing. Most people don't always know that rule. And there have been times when they've been kicking around the estate tax rules that they've said they want to get rid of that, you know, the exemption is the exemption. And, and if you are going to have a taxable state, you work with people like me and I can help you, right? But losing the step up or that risk of that when they go and look at the estate tax law, that's a big problem for real estate owners. And people should stay on top of that and really encourage your representative or your senator to know that the step up is important to you. But I think when you ask me what I would do is I think that some of this has to be, how do you incentivize people? How do you incentivize people to improve your home, sell your house when it's up to move into another house house. And I think we got to go back to schedule A of the tax code, you know, the Tax Cuts and Jobs act, which I think is the biggest misnomer because my clients all had tax increases, nobody got a tax cut. But losing the state and local tax deduction for things like real estate taxes was a really painful thing. So a lot of people who used to be able to itemize because they had their mortgage interest, they had their real estate taxes, their state taxes are now taking the standard deduction. And I'm from the great state of New Jersey. New Jersey, if you live in a nice neighborhood, you have a lot of property taxes. That's Hurting people and so not getting more, more of a benefit from that, that's injuring the middle class. So I think the thing is we need to stop seeing the IRS and the tax code as our enemy, but see it as a tool to drive the ability to protect certain things like the middle class to get new buyers in. And we really need to think about banks and how they operate. And obviously we don't want. Remember the scene in the Big short where they're talking about NINJA loans, no income, no job loans, we don't want those types of mortgages. But if you got a young couple trying to buy their first house and they only have, you know, 10% to put down or they're self employed, we've got to stop making it so arduous on them.

Yeah, that's.

And then the last thing I'll say, Jason, before I get off my soapbox.

Is well, the reason they do that on the self employed is because they, they want you to pay your taxes. That's why the system is a circular system. But go ahead.

Yeah, no, no, yeah. The self employed thing is difficult because you're, you're self reporting your income. But banks, when you go in as a self employed person to get a mortgage, it's almost like they don't believe you. Like they want to see your P and L. Of course. And there's a lot of businesses in this country, people who have like a solo small business, they're not keeping the best books. Right. People are not good at some of the belt and suspender stuff of personal finance. So you know, it just is hard to get qualified. And like I've know people where when they finally get qualified they have to pay a higher interest rate.

Yeah.

But I think the other thing with real estate that is concerning and it's a crisis coming at all of us is the home insurance issue. So if I could be anything today, I'd want to be a roofer. In California, every client of mine is putting do new roofs on because they're desperate to save their home insurance coverage. I have people who before were paying four or five thousand dollars a year in homeowners that are now paying 15,000 and are being moved into the California fair plan to get coverage. So this is important as real estate investors because it's, it's getting harder to maintain your property and the states are not stepping in to protect us. Whether it's California, Florida, Massachusetts, Texas, North Carolina, we're all struggling with this issue and it's going to make being a real estate investor a Lot harder.

Yeah, but the thing is that ultimately landlords and corporations are just pass through entities. The tenant ends up paying the bill for that. So if the landlord, you know, has to improve their property or if they have to pay higher insurance, they don't pass it through immediately. But it does get passed through and it just means higher rents ultimately. Otherwise fewer landlords or fewer investors enter the market. There's fewer landlords, there's less supply. And you know, we have that problem. I mean the thing is with all this stuff is everybody panics about higher insurance or higher mortgage rates or whatever, but all you have to do do is lag everything by two years and it all starts to pencil again. You know, it's just the waiting period for the two years before things when they're imbalanced, they all balance in a couple of years. You know, a lot of people.

Let me ask you this question, right, because like you, I love real estate. I have assets and I get that right. I can pass it on to my tenants. But like there's that struggle of okay, you know, I want to make sure I'm good as a landlord and able to make money. But then there's a struggle of I also want others in the United States to be able to be financially successful. To me, the middle class that center the ability to have a strong middle class is when America does best, right? And we're seeing them get eroded away and with rents going up, it makes it harder.

Read the book from years ago that I've been recommending for 20 years, Lou Dobbs book, War on the Middle Class. It's fantastic. Yeah, go ahead.

Yeah, and he's, he's, he was right, he was right, like, and so this is where it's like, how do you find that balance? And, and one of the things that frustrates me about the divisiveness of this country today is, you know, I don't really. They're both extreme, right? We gotta go towards the middle because we need to come up with solutions to help people feel that they can build wealth, make the American dream pay for college. And there's just a lot of things that the systems today that don't make sense. You know, that did you know when they first gave 501C3 status to colleges? Right. You know, tuitions weren't what they are.

Today or section 230 protection to big tech companies. You know, one of the major problems in this country is these goddamn iron triangles. You know, you get all these, these self interested people and companies and they just Won't let it go. The politicians are getting paid off by lobbyists and the corporations are benefiting. And it's just a triangle you can't break. You know, you could use that example with labor unions, homeowners associations, a million things. There' many problems. It's just terrible.

It, it going back to my book, right. What was really striking to me is how many of our presidents were born poor or, you know, didn't have a lot of money. Not middle class. I mean, Jerry Ford talks about growing up with not a lot of money. Richard Nixon.

Same with Nixon. Yeah, yeah.

I mean Nixon, Whittier, California. He, his dad owned a Citron.

I've been to his little house. I've been to his little house at his library.

Know, I mean, Herbert Hoover, these guys. But they all had this idea that if they worked hard and they talk about it, if you read their letters and you read what they say, they all believed if they worked hard, they were going to get access to the opportunity set. I don't believe people today have the same belief. And I think you're completely correct. That iron triangle is making it so difficult to have belief. And that's, that's what's so frustrating. I mean, I. Well, the fact that tuitions are $90,000 a year, it's, it's crazy and it.

Well, that's because the government insures student loans. If they would stop doing that, the tuitions would fall to where they should be in the market.

Student loan people have lobbyists. So it's like that vicious circle.

It's, it's awful. And, and why is it to your point earlier, Megan, why is it that it's so hard for a 25 year old to get a home loan, yet it's a cinch for an 18 year old to get a student loan for the same amount of money? Money. Yes. And they don't, they don't have to have any income as the student, but they got to have tons of income as the home buyer. But I'll tell you something. The good news is this, okay, for all the millennials and the gen zers, okay, You've got, and I know you've analyzed this when you worked at Goldman Sachs, I'm sure you did. And as a wealth manager now you do. They've got about $85 trillion in inheritances coming their way, okay? So that is the biggest wealth transfer in world history coming at them. It's almost equivalent to the GDP of the entire planet, the entire human race, in one year coming at millennials. And gen zers as that wealth is passed through the generations from their parents down. So that's one thing. The other thing is the technologies we've access to nowadays make it really easy for people to start their own business. Easier than they ever could before. And the upside potential in what they can do and what they know and their access to information now is absolutely staggering. So probably for most people you shouldn't bother going to college. It's a complete rip off. If you're going to be a professional, you got to go to college. So there are cases where it's needed. But if you can just self educate, if you're going to be an entrepreneur, you probably that's your best plan. Get some internships and learn that way.

Abraham Lincoln, George Washington route, right?

Yeah. Well, I don't know. Tell us.

Yeah, no, Lincoln. We had 12 presidents that didn't go to college. Lincoln, Washington, you know, Truman. Right. All of them. They couldn't afford it. They could not afford it.

And back then it was cheap.

Right. I mean Lincoln arguably could have tried to find a way to get into Harvard. He was brilliant. But part of it is, is it's the grit of figuring it out. And part of it is the self education. Right. The constant learning. And that's the thing you learn. You know, I'm willing to make a. I'm not saying it's going to happen in our lifetime, but I think the US will have a president again who didn't go to college or didn't finish because we're starting to see data. Pew, Pew Research center came out with a study like 1 in 4Americans don't find a college degree important anymore. Anymore. That's a big deal. That has changed over 20 years. Because when I was young and you were young, Jason. Not that we're not young now, but when we were growing up we were told you had to go to college to get a good job and good salary. And today the mindset you have to have is, is going to college going to help me grow net worth.

Now people, people are rejecting it and listen, college would be fine if it was reasonably priced. Okay? I would say everybody should go to college if they're paying, you know, thousand dollars a semester. But it's absurd.

Or don't give them 501c3 status. Right?

Yeah. Oh, I agree. Why, why should they be non profits? Why should Harvard or any of these schools have these giant endowments? It's absurd. They're. All of these colleges are just hedge funds. They're the biggest landowners in Any of their towns. The college owns more real estate. They're investing in all kinds of stuff. They're hiring brand managers and companies to promote their athletic teams. They're scoring patents and trademar marks. This is insane.

It's a racket. And look, by the way, if they want to be a diverse, they're not.

Supposed to be businesses.

Right. But if they do, then we shouldn't give them the tax exemption and of course it's okay. Like, and that rule was put into place when things were different. Right. And it's not. I mean, this is where I think as Americans, we need to have better discussions about our institutions because Americans are constantly reinventing themselves from, you know, the 1700s to, you know, the settlers going west. Yes. To building of the railroad. Right. All of this stuff that we've gone through, it's because we've been able to reshape our institutions.

Right.

Right now we're in a period of time where we're, we're struggling to reshape the institutions and we're not able to help others get to build wealth. I never think of wealth as a pie where it's only a limited amount of pie. Wealth is something anybody can achieve if they have the opportunity set.

And you can grow this, you can grow the size of the pie. But the reason these institutions are in gridlock now and controlling so much is number one, the way capital formation works in this world is it's too much of a winner take all system. We need term limits on these politicians.

Yes.

Being in office in any public office was never meant to be a career. None of our founding fathers thought that that wasn't the way it was supposed to be. They were supposed to, to leave their district and serve for a short time and go back and run their businesses and do their thing. And we've got to have term limits and we've got to change the way lobbying works in this country. It is. And we've got to get the companies and the foreign governments and the foreign interest out of our political money system. It's just. Oh boy. Megan.

Yeah. There's a lot you and I could go on about.

I know it's, it's so interesting to talk to you, but just kind of wrap it up for us on wherever you want to take it. Something we didn't talk about and of course give out your website. And the book is fascinating, so everybody should check it out.

Yeah. Look again, you know, I think that we can learn a lot from the presidents in building wealth and sort of the ups and downs, like people think to make money, it's all one upward journey, right. It's a lot of ups and downs. And you started this talking about Jerry Ford. And I, I think I'll finish with Jerry Ford. You know, this was some. He was someone who, who didn't grow up a lot of money. He actually used to donate blood at $25 a pop to help pay for his tuition. But he was never afraid of the pivot. And what I mean by that is when things were starting to maybe go sideways or he was given an opportunity set, he was never afraid to go against the grain. And he was first recruited to be an NFL player, he turned it down. Right. Every time. He wasn't afraid to be different. And then in his finances is he struggled paycheck to paycheck till he left the White House. And the reason he ended up monetizing is he said, and I have it in an oral history, he was like, look, I'm a capitalist, God damn it. I'm going to go make some money. And he did a bunch of different things. Took on speeches, built real estate, got on corporate boards. But he also made mistakes at times. He did a series of medals with the Franklin Mint. And people were like, oh, that's not. That's very gauche. Right. And so he wasn't afraid when he started to fail to pivot away from it. And so I really encourage people to think about that with their own Money is not every day is going to be puppies and kittens and rainbows, but when you see yourself starting to not do well, don't be afraid to say, this isn't working, and move in the other direction. Yeah.

And Megan, that is such a great point. You know, the other thing I'd like to just add to that before we go is that we all have all of these challenges and setbacks in our life, and some people allow a setback to become the excuse to not keep going, right? And the. The world just forgets about them. This adversity, it, like Nixon says in his. His book, you know, in the arena, which is such a great book, by the way, is that the adversity that doesn't kill you makes you stronger, basically is, you know, in some aspect, and just the power of momentum, of keeping going, of just every day getting up and doing the work, it just has this incredible effect on. On the flywheel of your life. So I really encourage people to, to.

Look, when you study luck, right? Luck is not something that's whimsical. That happens, you realize it's about consistency. And so even though people chalk things up to lie luck, when they're really talking about is I've been consistent in my behaviors.

Yep, you make your own luck. Very good, Megan.

So, Jason, you can find my book@allthepresidentsmoney.com or on Amazon, Barnes and Nobles or Books a Million. And feel free to check out my website because we're going to be having a tour at the presidential libraries. And I appreciate you having me on.

Good stuff. Well, thank you, Megan. All the president's money. Check it out. And Megan Gorman, thanks so much. Thanks.

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