Live from FinCon, Joe sits down with historian and bestselling author Joseph Moore, Paula Pant, and Jesse Cramer to talk about what’s actually keeping people up at night: AI concentration in the stock market, inflation anxiety that won’t fully fade, interest rates that feel “stuck,” and a housing market that seems rigged against newcomers. The twist is that almost none of it is new. From a Scottish con man’s fake country bonds to the 1830s stock that was over 30% of the entire market, to a refrigerator boom that happened during the Great Depression, this conversation uses 300 years of financial history to put today’s anxieties in real perspective.
What You’ll Walk Away With
- Why “this time is different” has been true in every single era of financial history, and why that’s actually reassuring, not alarming
- The real reason today’s AI-heavy stock market concentration isn’t as extreme as people fear, compared to genuine historical outliers
- Why equal-weighted index funds tend to underperform market-weighted ones, and what that reveals about betting against your own winners
- A fascinating historical parallel between AI infrastructure spending today and the railroad boom of the 1800s, and where that comparison breaks down
- Why the fastest way to build real wealth during a technological boom is often working in the industry, not investing in it
- How the “golden handcuffs” of low mortgage rates are quietly fueling a broader sense of economic pessimism, even during a strong economy
- Why increasing your income is one of the few truly controllable levers in your financial life, and why it usually takes longer than people expect
Why This Matters Now
Every generation convinces itself that its economic moment is uniquely unprecedented, uniquely uncertain, uniquely dangerous. History suggests otherwise: markets concentrate around a handful of winners, technology booms take decades to actually change daily life, and financial anxiety tends to track personal experience more than actual data. None of that means today’s concerns aren’t real. It means the emotional weight of “this has never happened before” is usually misplaced, and understanding that can be the difference between panicking through a normal cycle and staying invested through one.
Resources Mentioned
Men Go To Mars — sponsor mentioned in the episode
How to Get Rich in American History by Joseph Moore — Joseph’s USA Today bestselling book on 300 years of financial advice, what worked and what didn’t
Afford Anything podcast — Paula Pant’s show
Personal Finance for Long-Term Investors podcast — Jesse Cramer’s show
Our Topic: What are you worried about with your money?
During our conversation, you’ll hear us mention:
- Inflation
- Housing affordability
- High interest rates
- House hacking
- Financial priorities
- Investor psychology
- Financial biases
- Market trauma
- Stock investing
- Real estate
- Housing shortages
- Zoning restrictions
- Population decline
- Social Security
- AI stocks
- Market concentration
- Index funds
- Equal-weighted indexes
- Market efficiency
- Small-cap diversification
- Technological disruption
- Railroad expansion
- AI infrastructure
- Career growth
- Increasing income
- AI job fears
- Great Depression
- Technology adoption
- AI productivity
- Consumer benefits
Our Contributors
A big thanks to our contributors! You can check out more links for our guests below.
Joseph Moore
Another thanks to Joseph Moore for joining our contributors this week! Learn more about Joseph by visiting his website at Joseph S. Moore – History Helps | Substack
Check out his newly released book Amazon.com: How to Get Rich in American History: 300 Years of Financial Advice That Worked (& Didn’t).
Jesse Cramer
Another thanks to Jesse Cramer for joining our contributors this week! Hear more from Jesse on his show, Personal Finance for Long-Term Investors – The Best Interest, on Spotify.
Learn how you can work with Jesse by visiting The Best Interest – Invest in Knowledge.
Paula Pant
Check out Paula’s site and amazing podcast at AffordAnything.com
Follow Paula on Twitter: @AffordAnything
Doug’s Game Show Trivia
- Write the trivia question here
Join Us on Monday!
Tune in on Monday when Joe and OG dive into their top FIVE strategies they wouldn’t recommend most Stackers use, but for the right person…. it’s the perfect fit.
Miss our last show? Check it out here: Robin Wigglesworth: The Boring Market That Actually Runs the World SB1901 | Stacking Benjamins.
Written by: Kevin Bailey
Episode transcript
[00:00:00] opener: Sven salutations. Zoo pa pa doo, and how do you do? I am the great P.T. Flea. I’m in need of your assist- oh, let’s just cut to the chase
[00:00:18] Doug: Live from the FinCon Expo, it’s the Stacking Benjamins show
[00:00:32] Doug: I’m Joe’s mom’s neighbor, Doug, and it’s time for our annual trip to the largest financial creator conference in all the land. Today’s topic: What are you worried about with your money? So without further ado, let’s send you to Palm Springs, California. Oh, yeah, sounds like a pretty tough assignment, Joe.
[00:00:51] Doug: Thanks for jumping on that grenade. Here he is, Joe Saul-Sehy. Thanks, Doug. Hey,
[00:00:59] Joe: everybody. Welcome to the Creator CPA podcast stage at FinCon. We’ve got a fantastic panel with us today. Let’s start with the woman right to my right, to your left Le- I don’t know, left, right? Yeah, right? Paula Pant is here from Afford Anything.
[00:01:15] Joe: How are you?
[00:01:15] Paula: I am fantastic. How are you, Joe?
[00:01:17] Joe: I gotta say, you and I work together a lot- Mm-hmm … but it’s always fun when we get to actually meet in person.
[00:01:22] Paula: I know. This- it’s so much fun in person, the energy, the vibes, it’s great.
[00:01:26] Joe: And a guy that I told Paula Pant, I’m like, “You’re gonna love this guy.” She’s like, “Whatever, Joe, whatever.”
[00:01:33] Joe: So she finally interviewed him. Yeah. Do you love this guy?
[00:01:35] Paula: He’s my favorite Joseph.
[00:01:37] Joe: Oh, no. I’m sitting right here. Bestselling author Joseph Moore back with us. How are you, man? I
[00:01:42] Joseph: am great. It’s great to be here. It is great to meet you in person as opposed to virtually. I didn’t know you had legs. I just saw you from here up, and so- It’s a m-
[00:01:49] Joseph: yeah, it’s wonderful …
[00:01:50] Joe: it’s a miracle. Joseph comes up to me, he’s like, “It’s a miracle. It’s incredible. You have legs.” How has the book tour gone?
[00:01:56] Joseph: Uh, still going, so that’s a good sign. I’ve gotten to meet so many interesting people, a lot of people who are here, too. Like, you just, you meet so many smart, fun, dedicated people, and that’s the joy of being on a book tour.
[00:02:07] Joe: That is, though, also I think what makes this conference this conference, Joseph- Yes … is that, somebody told me this yesterday, one of the vendors told me, they said, “We go to a lot of money conferences, but they’re usually bankers or in- the- investors, investment people. This is so collaborative.” Mm-hmm. And most of the people that create this stuff, it’s not like they’re getting wealthy on it.
[00:02:25] Joe: Right. They’re not getting rich on it. Right. That’s your next book, getting rich on creating financial content, right?
[00:02:30] Joseph: It’ll be, like, a half of a chapter maybe- … you know? Easy. That’s right. No, but I think you’re absolutely right. I think you go to many, and I’ve been to many of these, and I’ve interviewed a lot of these people, and nothing against them, but, like, there is a kind of baseline assumption of what’s in it for me, and the people around here is like, “What’s in it for my audience?”
[00:02:42] Joe: Yes.
[00:02:43] Joseph: Right? What’s in it for people I’m trying to serve? And that’s a, that does stand out.
[00:02:45] Joe: It is a really cool, really cool group of people. Speaking of, the guy to your right, super cool, always happy to see him, Jesse Cramer from Personal Finance for Long-Term Investors is here.
[00:02:56] Jesse: I, I was thinking about, as Joseph was talking, I was thinking a lot of, of audience members probably think we’re just these floating voices.
[00:03:03] Jesse: These bodiless voices. It’s like, God, is that you coming down? And then here we are, two legs, two arms, 11 fingers. No way out here. I was born with some.
[00:03:12] Joe: 11 fingers. And 12, 12 toes. Yes. Jesse, who’s watching the kids while you’re here?
[00:03:19] Jesse: Oh, my wife Kelly’s at home with the two little babies, but she is hanging out with her parents in Buffalo, go Bills, so she’s got some support from my in-laws, her parents.
[00:03:29] Joe: We have Jesse Cramer, Joseph Moore, Paula Pant here. Every year we do this at FinCon, so if you’re new to Stacking Benjamins, welcome. We do this topic of we’ve got these three wonderful people with us. I love talking about what’s going on in the zeitgeist. What is your audience worried about? And Joseph, for you, I wanted you on this panel because you have a unique perspective.
[00:03:50] Joe: You’re being interviewed by a lot of different people- Mm-hmm … and they’re always trying to tie history to things going on today. What are they obsessed about? Like, what has kinda struck you there? So we’re gonna talk to Paula, Joseph, and Jesse about that today. But we have a couple sponsors who help us keep on keeping on.
[00:04:08] Joe: We’re gonna hear from them, and then live from FinCon, we are gonna talk about what are you worried about? Wait a minute, Joe, I thought you were in Palm Springs. I was, but now as I’m finishing up the episode, I forgot I wanted to talk to you about Mars Men. I started to notice it in my 30s, a little bit more brain fog, had some difficulties concentrating.
[00:04:30] Joe: In my 40s, it got a bunch worse, and in fact, I just recently had an issue with caffeine that I really don’t wanna get into, but it’s just because I was taking more and more and more caffeine just trying to get it into the bloodstream and make sure that I was able to finish the long days that I do because I enjoy being here with you.
[00:04:50] Joe: Because people, and I was doing this too, you start to blame yourself for not wanting it enough. Do I want it like I used to? It’s not that at all. Turns out that starting in your 30s you lose about 1% of your testosterone per year, guys. So I’m talking specifically to the men. If you’re feeling the way that I did, the answer might not be caffeine.
[00:05:09] Joe: It might be Mars Men. Because when I started using it, this was amazing. Here’s what you don’t realize is that your testosterone’s still being made by your body, but it’s being blocked. And so this protein SHBG they call it… I’m a finance guy, so a lot of this I had to dive into to find out what the science is behind Mars Men.
[00:05:32] Joe: Even if your T levels look fine on paper, a lot of it’s bound up, it’s not doing anything because of this protein. Well, Mars Men is designed to solve that problem. It uses clinically dosed ingredients to help free up that bound testosterone, plus other ingredients support natural T production, energy, and recovery.
[00:05:52] Joe: So instead of forcing hormones into your body, Mars Men’s designed to allow you to use what your body’s already producing. What’s happened now? Well, I feel like Joe got his groove back, right? I feel like the brain fog is gone. Caffeine levels are down, and those long days that I do because I love them, very effective.
[00:06:13] Joe: Love, love, love my Mars Men. For a limited time, you can get… And I gotta read this because it, this is an amazing offer. Our stackers get 50% off for life, plus free shipping and three free gifts at mengotomars.com. That’s mengotomars.com for 50% off and three free gifts when you check out. After you purchase, they’re gonna ask you where you heard about them.
[00:06:39] Joe: Please, please, please tell them that we sent you
[00:06:52] Joe: Paula Pant. Kick this thing off, girlfriend.
[00:06:54] Paula: Absolutely.
[00:06:55] Joe: What, what are the afforders really worried about?
[00:06:58] Paula: What’s in the zeitgeist? Yeah. So I’d say there’s sort of two categories of questions that… Joe, you and I answer questions on my podcast. Yeah. There are really two categories of questions. One that’s evergreen, and those evergreen questions are, “Hey, how do I prioritize am- among all of these different goals?”
[00:07:14] Paula: Right. You know, they, “I want to retire in the next five years. I want to pay for my kid’s college. My car is 10 years old, so in the next five years I’m gonna have to replace it. I’d like to buy my next car in cash. Should I pay off the mortgage or invest that money instead?” Those are the evergreen questions, and those don’t stop.
[00:07:32] Paula: So no matter what era we’re in, they’re always on people’s minds. Same, same.
[00:07:36] Joe: Yeah.
[00:07:36] Paula: Layered on top of that are questions around inflation, money feels tighter, I’m golden handcuffed to my… If they’re an existing homeowner, “I’m golden handcuffed to my home because I’ve got this 3% mortgage interest rate.” And if they’re not a homeowner yet, it’s like, “All right.
[00:07:52] Paula: Well, I don’t know if I can buy a home,” or, “Do I need a… Does this mean I need a house hack?” Um, so there, I’ve gotten more house hacking questions, more like what are the rental property ways to get into homeownership, either house hacking or, like, buying something out of state, and those are all functions of inflation and high interest rates.
[00:08:11] Joe: Okay. I asked you for one. You gave me seven. Thank you very much. Well, let’s take this off the top. Let’s talk about inflation. Mm-hmm. Because last year when we were here, we were worried about inflation. Mm-hmm. Year before that, we were worried about inflation. It was a long time before that, Paula, we didn’t talk about inflation on my show, your show, Jesse’s show.
[00:08:28] Joe: We didn’t talk about inflation at all. Yeah. And now we’re all obsessed with inflation. I watched a CNBC piece yesterday in my hotel room where the person said, “Listen, all the numbers around inflation are looking a lot better now than they did before, so this is kind of in the past.” Mm-hmm. Do you think it’s in the past?
[00:08:45] Joe: Are w- is this gonna be the last FinCon we talk about inflation for a while?
[00:08:48] Paula: It will not be, uh, the last FinCon that we talk about inflation, for a couple of reasons. Number one, you know, when you’re healthy, you don’t think about things that could go wrong. Like, when you’re in your 20s, no one talks about their blood pressure.
[00:09:00] Joe: Yeah.
[00:09:00] Paula: But then once it becomes part of your awareness, then you… It’s something that you’re always monitoring for a long time. So inflation, just for that reason alone, like the fact that we’ve all gone through 2021, 2022, where we had, where it peaked at 9% So now we’re
[00:09:14] Joe: hypervigilant?
[00:09:15] Paula: Exactly, yeah. Yeah. It created that hypervigilance.
[00:09:18] Paula: Um, it created that aware- For a lot of us, like, you know, if you’re a millennial, you’ve never experienced inflation in your life until 2021, 2022. For people who didn’t experience the late ’70s, early ’80s, like, this is our first encounter with it, so that awareness that got developed, like, that’s always gonna be there
[00:09:36] Joe: Joseph, this woman on CNBC said that, uh, maybe inflation’s behind us.
[00:09:41] Joe: We always tend, I feel like, at least during my career, that we worry about stuff after sh- wh- when it’s too late, right? Right. Is this the way it’s been throughout history? That we’re like, “Oh, I should have seen that coming,
[00:09:53] Joseph: but I didn’t.” And, and what h- what tends to happen is you look at what was normal when you were of age, when you were coming of age, when you were getting the advice you were getting, and receiving it and trying to adopt it, and then you overlay that onto the future.
[00:10:05] Joseph: And then when something doesn’t work, you tend to, like, overreact to that one thing that didn’t work. Nobody’s paying attention to all the things that did work, right? Like, if you were doing a lot of the smart things that continue to work, you don’t pay attention to… You pay attention to the one thing that, like, nobody really prepared you for 7%, 8% home mortgages.
[00:10:21] Joseph: And so you’re, you’re kind of obsessed with the, the handful of things that are new instead of seeing, you know, it, the stability behind it. So I think there’s a lot of people who are jumping onto this simply because they weren’t told what to do. Nobody gave you… The only people alive right now who ever saw inflation even hint at something close to, you know, to where it is today, oh, that was what, back in the ’80s?
[00:10:41] Joseph: Like, there, there’s just- Yeah … nobody saw this. Yeah. Nobody was- Early ’80s. Yeah, nobody has advice built for this, especially not real estate investors. Mm-hmm. Like, if you’re a real estate investor, the last group of real estate investors who ever saw eight, nine, 10, or, you know, the idea of it, just conceptualizing, not that it’s here now- Those people were investing in the early to mid-’80s, so there’s nobody around to give you that advice.
[00:11:01] Joseph: Yeah. So you just don’t have it. You have nobody to lean on.
[00:11:02] Joe: It is interesting. I want to go back to, though, the obsession that we have. I know we looked at a lot of statistics around millennials. Mm-hmm. Like millennials coming of age during the 2008 housing crisis, a lot of people became afraid of saving before they even started saving.
[00:11:16] Joe: Mm-hmm. Because they’re like, “Lookit, people lost their house. People lost their savings.” And you’re saying that carries through your entire life.
[00:11:22] Joseph: Yeah. You lock into what you think should be the right a- answer. Yeah. And so you give that answer, whatever the equation is. Yeah. And that becomes a problem. You know- That’s-
[00:11:29] Joseph: you have to stay adaptable, and that, that adaptability’s hard. That’s why you have to con- continuously learn and grow.
[00:11:33] Joe: Yeah. J- Jesse, on the financial planning side of that- Mm … like, you see this. You see the bias people walk into your office with, right? Yeah. How, how do you kind of kick people out of the bias, or how do you at least point it out and help them change course?
[00:11:46] Jesse: It’s so hard. Uh, it’s so behavioral. It’s so psychological. A, a dear, uh, contact of mine lost a lot of money in the dot-com bubble, right, in 1999, 2000, 2001. Lost a lot of money in stocks, was, was picking the stocks, picking, you know, bread.com, whatever those tech companies were, quote-unquote tech companies, and, uh, lost a lot of money- Wait, did
[00:12:04] Joe: you say bread.com?
[00:12:05] Jesse: Whatever they were, shoes.com. Have you ever heard of
[00:12:07] Paula: bread.com? I’ve never. I’ve heard of pets.com.
[00:12:10] Jesse: Well, you know, bread.com, it was a big company back in 19- 2000. You can tell Jesse was there. And then, and then just went out of business. Everything was rising. The bread was deflating. No yeast. Uh, anyway, this guy hasn’t owned a stock since.
[00:12:23] Jesse: He hasn’t owned a stock since- No stocks. Wow. Oh, Lord. All bonds. All bonds. A- and, and, and again, it’s, it’s not a, there’s not a technical reason why. It’s, it, it’s, it’s a feeling. It’s, it’s the feeling of, at the time, he was probably in his mid to late 30s- He had kids, and he lost a lot of money that otherwise could have done something productive for his family, and probably the, the guilt or the anger or the shame of that has, that feeling has never quite gone away.
[00:12:48] Jesse: Like, the scar tissue from that feeling is still somewhere in his brain, and it’s, I think it’s just, it’s hard to overcome that without, I suppose, probably a lot of conversations, and that’s where that, there’s this weird border between financial planning and, and, you know, financial therapy, and it probably exists for, for these kind of situations.
[00:13:04] Joseph: There’s actually some good s- research studies on this. So for the generation that lived through the Great Depression and the crash- Yeah, yeah, yeah, yeah … they were perpetually terrified of stocks. And, and even as the stock market rebounded, did not take part in it for a- Right … long, long time. Similarly, with inflation, there’s a fun study that was done of the biographies of Fed governors.
[00:13:23] Joseph: This is the boar- the board of governors for the Federal Reserve, and what they found is, like, the inflation rate in their childhood was a better predictor of their votes to change the base rate- Yeah … than was the data they were presented. Wow. Wow. So, like, we, I mean, even, so whether you’re the average person on the street trying to figure out what to do with your paycheck, or whether you’re a governor on the board of the Federal Reserve, the way you encountered financial experience and life when you were younger, it shapes you for the rest of your life of what you think is normal, what you think should happen.
[00:13:52] Joseph: And it’s
[00:13:52] Joe: pro- and we tell ourselves it doesn’t. Oh, yeah. We tell ourselves we’re like, “No, I’m not biased.”
[00:13:56] Joseph: I look at the data.
[00:13:57] Joe: Yeah. Yeah. Just, just the data. Jesse, that gentleman didn’t invest in stocks. Mm-hmm. Did he invest in real estate?
[00:14:03] Jesse: Uh, he, he owns a primary home. But no, no, I mean- No … he was a- No stocks, no real estate
[00:14:08] Jesse: he was a put money in the bank account, uh, put money in bonds that are earning anywhere from 3 to 5%, and then, uh, Social Security and a small pension. I mean, it’s just fixed income all the way through. A- and, and granted, he’s living a perfectly reasonable retirement, but there’s this idea of like, well, man, could he have retired sooner?
[00:14:25] Jesse: Sure. Could he be living a little bit more? Like, of course, and, and, you know.
[00:14:28] Joe: But he must have a pension then because i- i- otherwise you gotta save, like, dollar for dollar- Right … the money you’re gonna spend.
[00:14:33] Jesse: Right. He does. He does. He does. Good. But again, it, it… the funny thing is from a planning point of view, if you have a pension, you don’t even need that much extra fixed income.
[00:14:41] Jesse: If anything- Right … if you have a pension, that is the fixed income. That is your fixed income. You can get away with less. So it… but again, this is one of those ones where psychology and behavior just trumps what the numbers, what the numbers look like.
[00:14:52] Joe: I brought up real estate on purpose because historically real estate and stocks are the two things that, that have driven growth in your portfolio.
[00:15:00] Joe: But I saw this video yesterday that I found really compelling. Somebody said the game is rigged. Like, and what a g- great way to start a video, right? Yeah. With this hook, the game is rigged. You’re gonna get no
[00:15:10] Joseph: clicks with that.
[00:15:10] Joe: No, not at all. The game’s rigged. But then here’s what they said that I found very compelling, which is that over the years as more people become dependent on stocks in their 401plan and their 403and whatever retirement plan they have, and more people become real estate investors, the lawmakers make laws that are f- more friendly to stocks and are more friendly to real estate.
[00:15:34] Joe: And this person’s real point of view was if you’re not in stocks and real estate, you’re not in this rigged game. These are positioned, lawmakers are positioned to help them go up as much as possible. Do you agree with that, Paula?
[00:15:45] Paula: I, I do agree with that, and I think, you know, one of the challenges when it comes to housing affordability is we have a system in which incumbent homeowners are incentivized to protect their home values.
[00:15:56] Paula: Oh,
[00:15:56] Joe: yeah.
[00:15:56] Paula: And because of that, incumbent homeowners often don’t want higher density, they don’t want multi-family construction. They want to preserve single family home zoning, um-
[00:16:08] Joe: They’re directly against solving the biggest problem we have in housing.
[00:16:11] Paula: Exactly, right? So if you’re preserving single family home zoning and there’s parking requirements and minimum lot sizes, then you, you’re trying to impose these anti-density regulations, which is what we see across municipalities.
[00:16:24] Paula: Yeah. What does that do? Anti-density regulations means that you can’t build more housing and put more people in that same land, which means- Home values, like, w- we have a shortage of housing supply, so it protects existing home values, but it also locks newcomers out of the system. And so one of the challenges really in the, the housing market, and one of the reasons that we have such a lack of affordability in housing, is because you have a system in which incumbent homeowners are- Protecting
[00:16:53] Paula: protecting their home values at the expense of incomers.
[00:16:57] Joseph: Yeah. Wow. We’ve seen this before, by the way. So this has been my argument all, all along about why Social Security’s not going away. You know the joke that Social Security should be called social insecurity? That joke goes all the way back to the ’60s.
[00:17:08] Joe: Really?
[00:17:08] Joseph: Yes, and it was actually and originally a critique from the left, not from the right. Mm. Because they said, “This is not nearly enough to survive on in old age.” And so this has been this debate about what’s wrong with Social Security forever, and that it’ll certainly never make it. It will never… I hear people saying in the early ’70s, “This system’s gonna go bankrupt by 1980.”
[00:17:24] Joseph: And, like, over and over and over. You, but here’s the thing, all these incumbents, all these voters who elect all these lawmakers are not going to vote for someone to take this benefit away from them. Away, yeah. And so we see this in a lot of areas of the economy that people start to, to look at as somehow not, not fair or not solvent or whatever, but then th- there’s no incentive for anyone to remove the peg that would cause it to fall.
[00:17:46] Joe: I remember, uh, legendary finance writer, James Bryant Quinn, during the 1990s- Yes … saying, “There is no way Social Security’s going away,” for exactly the reason you said, Joseph. Mm. It’s the biggest social program in the United States. You think they’re not gonna do something to at least duct tape this? I mean, you’re voted out immediately- Right
[00:18:02] Joe: if you don’t do it. You also looked at me funny when I said stocks and real estate over the long term have been the two ways. I bet you’re, you’re going, “Yeah, not so much.”
[00:18:11] Joseph: Well, real estate has an on-again, off-again relationship with, uh, with the investing world. Now, again, this idea that you just bide it, buy it and hold it and it will just go up because, you know, that nobody has a thing of, after because.
[00:18:22] Joseph: And the, historically, people would’ve thought you buy real estate, as Paula knows very well, you go in and you change that property. You make it better. You add value. Mm. That wasn’t traditionally the way people would’ve in- invested in real estate. Now, the people, the way people invest in real estate is they look at a shortage, and they want part of that shortage.
[00:18:35] Joseph: We’re, we’re talking about, right? Right, yeah. They see that all of these incumbents who are tripping up the YIMBY movement, the Yes In My Backyard movement, and saying, “No, you will not in my backyard.” You know, “We will not allow this.” There’s just so many forces at play, and so people, not illogically, are going, “Huh, it’s highly unlikely we solve this quickly.”
[00:18:52] Joseph: And so they’re trying to buy into a limited pool of real estate that you can rent out. I say oftentimes, I don’t really own real estate. I don’t own houses. I own zoned land, and it’s the zoned land that is valuable. It just so happens there’s a house on top of it in a good school district. And so wh- when, when you kind of see- Mm
[00:19:08] Joseph: that people are, uh, they’re, they’re honestly eyeballing the shortage that’s in front of them in their lifetime. It wouldn’t have worked in previous eras. It really wouldn’t have worked in previous… You’re just like, “I’m just gonna buy it. It’s gonna go up.” People did that in West Virginia, died with no profits because no human being to this day has ever been on that land.
[00:19:23] Joseph: So you d- it doesn’t go up because it’s there. Today, however, it goes up because it’s zoned the right way, and they’re not making more of the zoning. It’s such a
[00:19:32] Joe: complex conundrum we have with the housing crisis, and it’s gonna be interesting to see where this goes the next few years. I think there’s an opportunity to make more land.
[00:19:43] Joe: Like- Follow me here. The
[00:19:45] Jesse: moon Bring it down, spread it over the ocean like frosting on a cake, zone it- … build a nice school there, lunar school, sell it. That’s
[00:19:55] Joe: all you gotta do.
[00:19:55] Jesse: Profit.
[00:19:56] Paula: Wait, why do we have to bring it down? Why don’t we just go there?
[00:19:59] Jesse: Good question. We got the rockets. Let’s get Elon on. Let’s get Elon on.
[00:20:01] Jesse: Yeah, ‘
[00:20:01] Joe: cause then we… Well, well, if we go there, then we give Elon all the money, as if he doesn’t already
[00:20:06] Jesse: have all
[00:20:06] Joseph: the money. Yeah, yeah. But, but that’s not happening. Which, by the way, was, was one of the arguments in the 1940s and ’50s against… There was an argument for not letting the private market solve the housing crisis.
[00:20:13] Joseph: They had a huge housing crisis in the 1940s, bigger than ours today. There was a bestselling book from, uh, members of the Truman administration who said, “The private market can’t solve this. For one, they won’t build them fast enough. For two, then, then people would get more… All the builders would get wealthy.”
[00:20:26] Joseph: Mm. “And so just let the government solve it.” Well, how did that work out, right? And so what actually solved it, if you go to Queens, New York, that used to be farmland until you get the, is it, uh- Levittown … Le- Levittown. Yeah. Levittown’s farmland, and these guys come in and they just, like, make all these 8, 900 vacation homes in some places.
[00:20:42] Joseph: But, like, for some people it’s their primary residence, and that was what caused the building boom of the ’50s and ’60s. So we’ve seen it before, where people said, “It can’t be solved.” It can be solved, but you gotta build more houses, and you gotta either do it on the moon or with farmland or something. Or you gotta go up or you gotta go out, but you gotta find a way to solve it.
[00:20:56] Joseph: I, I’m, I’m rooting for us to solve it. I have a ton of real estate. Please make me poor. I beg you. Like, let’s find a way to solve this problem, because it’s not good for the next generation. Mm-hmm. Now, here’s the one fly in the ointment nobody’s talking about. We’re going to peak. You know, you and I know as real estate investors- Mm-hmm
[00:21:10] Joseph: it’s place-
[00:21:12] Paula: Yep …
[00:21:12] Joseph: right? Supply, population. People.
[00:21:14] Paula: Yep.
[00:21:15] Joseph: And so what nobody’s talking about is in about 2035 we’re gonna peak in population, and it’s gonna start to decline. And what happens to real estate as an investment class that always goes up when that third leg of the stool, the increased population driving up rents, goes away or starts to reverse?
[00:21:30] Joseph: So
[00:21:30] Joe: you actually think that population changes might help solve the problem?
[00:21:34] Joseph: I think it’ll ease the pressure. I don’t think it’s gonna be… And don’t hear me saying it’s gonna crash, ’cause that’s not what I’m saying. I think the, one, one of the big pressure points is all the people looking for not enough houses.
[00:21:43] Joseph: Right. Well, you gotta want it… You can solve it one of two ways: more houses- Less people Less people … and about 20, mid-2030s is like
[00:21:48] Joe: the- That’s all you gotta do, Jesse, less people. It’s- We don’t gotta go to the moon. We just have less people.
[00:21:52] Jesse: Send them to the moon.
[00:21:53] Joseph: You’re gonna solve some, yeah, you solve it in both directions.
[00:21:56] Joe: There’s people driving around listening to us right now going, “Jesse’s from the moon.”
[00:21:59] Paula: Yeah. When, when you- What a space
[00:22:00] Jesse: cadet …
[00:22:01] Paula: when you said that you could build more land, I thought you were talking about, isn’t there… Is it Dubai or Abu Dhabi? There’s somewhere in the Middle East where they’re, they’re literally making land in the water.
[00:22:09] Jesse: I think so, and I think China’s doing it, too. Mm. I think China is building, you know, like, dumping dirt in the ocean and building islands.
[00:22:15] Joseph: Uh, Miami Beach is dredged out of the ocean. For sure. When people tell me, “You gotta invest in real estate,”- Yeah … you hear this a lot in the South, “They ain’t making any more land.”
[00:22:23] Joseph: I was like, “Actually, Miami Beach, they made that out of-” “… a lot of the ocean.” Well,
[00:22:26] Joe: a lot of the, uh, Hudson Yards in Manhattan, right, where you are, largely was not there-
[00:22:31] Joseph: Yeah … if I understand. That’s correct. A significant part of Manhattan real estate did not exist in the ni- in the year 1900.
[00:22:35] Joe: Yeah, yeah. Jesse Cramer- We heard from Paula, uh, seven of them, but we chose inflation.
[00:22:43] Joe: We ch- What are the, uh, Flity- Yeah … community worried about?
[00:22:48] Jesse: I think a good zeitgeist topic right now that, again, is… it’s, it’s this border between evergreen, it feels evergreen ’cause it’s been 15 years, but it is, uh, a little more zeitgeisty, is, you know, am I over-concentrated in AI stocks? I, I own index funds.
[00:23:01] Jesse: Oh. I own index funds, and yet it feels like all I really own underneath the hood are AI stocks- Mm … and, and, and the pickaxes and the shovels for AI, and the chip makers, and, and how is it all gonna play out? So I think that’s a, an interesting and kinda nuanced topic that people are bringing up a lot in maybe the last six months, six months plus.
[00:23:20] Joe: Yeah, this is interesting. We actually got a question on the show that we have not answered yet, but the question was, “Is it time that we go from, like, investing in the S&P 500 to the NASDAQ, which is largely fewer and fewer companies, to more of an equal weighted index so that we get rid of some of that risk?”
[00:23:38] Joe: What do you think, Paula? Yeah. Time to, time to make the change?
[00:23:40] Paula: No. Uh, number one, equally weighted indexes do, historically speaking, underperform, um, market-weighted indexes. And number two-
[00:23:49] Joe: Why is that? Is that because of the fact that-
[00:23:51] Paula: Oh …
[00:23:51] Joe: the greater weighting-
[00:23:53] Paula: Mm-hmm …
[00:23:53] Joe: the greater weighting is because those are the companies that are actually moving?
[00:23:56] Paula: Yeah, yeah. So the number two is the why that is.
[00:23:58] Joe: Okay.
[00:23:59] Paula: So the- I,
[00:23:59] Joe: I should have waited.
[00:24:01] Paula: So yeah, e- equally weighted indexes tend to underperform market-weighted, and the reason for that is because the idea that there are a few companies that are the runaway winners is a feature, not a bug. Yeah. Like, it has always been the case that there are a couple of companies that are runaway winners.
[00:24:17] Paula: It was railroad stocks for a while, and now it’s AI stocks.
[00:24:20] Joe: Jesse, let’s start a fight. Tell me you disagree. Yeah. You disagree.
[00:24:23] Jesse: It’s funny that I was ha- having this conversation last week. I don’t disagree. Damn it. And, and I’m sorry, Joe. I’m sorry. The fact of the matter is that the, the price that NVIDIA, Facebook, Corning, whatever company you wanna pick, that price was arrived at.
[00:24:35] Jesse: Essentially, it’s the, um, average opinion of investors en masse all across the world. And if you believe that markets are efficient, the, the theory is you cannot have more information more readily available to you than what everybody else in the world has available to them. And when you own a market cap index, you are basically saying, “Eh, on average, the market is correct, and I accept those prices.”
[00:24:58] Jesse: And when you own an equal weighted index, what you are tacitly saying is the market is incorrect. I shouldn’t own 7% of my S&P 500 index fund shouldn’t be NVIDIA. It shouldn’t be 7%. It should be 1/500. Or, or 0.2%. And so what you would do is you would say, “I’m gonna underweight Nvidia.” And, and that is an active decision.
[00:25:21] Jesse: So it just comes down to more of a passive decision versus active decision, and on average, active decision-making in the stock market tends to underperform over time.
[00:25:29] Joseph: That’s a great point. I mean, you’re basically saying is you’re forcing index investors to become shorts on the, on the biggest companies.
[00:25:34] Joseph: Shorts
[00:25:34] Jesse: on the big ones- And, and that’s- … and overweight on the small ones.
[00:25:36] Joseph: Yeah, and by definition, that’s not what an index investor is trying to do, right? Right. They’re trying to do the opposite of, you know, putting in a position on, you know, I think the big ones will fall and the small ones will pop. You know, by the way, what Paul is talking about is so true, and it’s been true for the entirety of the history of the stock market.
[00:25:51] Joseph: Almost all of returns beyond Treasury bills, this is a famous study out of, uh, Arizona State, I believe. Arizona,
[00:25:56] Jesse: yeah.
[00:25:57] Joseph: Uh, Arizona, is that 90… It’s, c- correct me if I’m wrong. I wanna say, like, 92% of all stocks in American history have tied or underperformed Treasury bills Is, uh, maybe even 94%. I-
[00:26:08] Jesse: I think it’s that all of the outperformance- Mm-hmm
[00:26:11] Jesse: going back 100 years comes from 4%. 4%, you’re right. The needles are 4%. Yep. The other 96% gets you to Treasury bills.
[00:26:19] Joseph: Yeah.
[00:26:20] Paula: Wow.
[00:26:20] Joseph: Yeah. And you don’t know which ones those are gonna be, and they often are the out-performers. Mm-hmm. It’s a significant portion of that remaining 4% that are actually carrying the weight for the, for that bit.
[00:26:29] Joseph: So it’s actually a handful of companies. And so you, you don’t wanna be in a position where you don’t bet on the horse that’s winning.
[00:26:35] Joe: You’ve heard this a lot though, Joseph, and I’ve heard this my entire career when I would try to allay people’s fears of the next thing. People will tell me, and probably tell you, “This time is different.”
[00:26:46] Joe: Mm-hmm. “You don’t understand. This time is different. This is the thing that’s going to… You know, maybe robots don’t take over the world, or maybe they don’t kill us all, but they’re certainly gonna fundamentally, completely change the game.” Do you think this time is different? ‘Cause this, this is a big shift.
[00:27:00] Joseph: This time is always different. It’s never not different. Like, that’s the thing that people… They, they want it to, to be one or the other. Either it’s gonna be just like it always was, slow and steady, don’t worry, or everything’s crashing, or everything’s booming and nothing will ever be the same. It’s actually always been changing.
[00:27:19] Joseph: Uh, the people you’re looking back on, as they say, were living a stable life, they were living what they thought was rapid, insane change they didn’t know how to handle either. We are living in a new era, because every era is a new era. So you can’t… I, I, I don’t, I don’t put a lot of stock in the whole, you know, you know, this time is different, or this time is not different.
[00:27:34] Joseph: I think it’s, it’s just constant change. That’s capitalism. That’s what makes it work.
[00:27:38] Paula: And, and I would say if this is something that a person is really concerned about, the solution, rather than equally weighted index, why not just pay attention to your small cap allocation? You know, it does make sense if you, if you don’t wanna be entirely VTSAX and chill, you can have a little small cap allocation, and that’s reasonable, and that’s a way that you can, you can diversify outside of the Mag Seven.
[00:28:01] Joe: Are you saying diversification wins the day, Paula?
[00:28:04] Paula: N- I mean, not necessarily. Like, I- Oh, I think
[00:28:05] Joe: it does.
[00:28:07] Joseph: So, and here’s the other thing is we, we talk about this idea that we’ve, we’ve got an overly concentrated stock index. Try the 1830s when there was a single stock that was well over 30% of the entire stock market value.
[00:28:18] Joseph: You, the Second Bank of the United States stock, and it went from $125 a share to a buck 50 in, like, a year See, and
[00:28:24] Joe: this is what people are worried about
[00:28:26] Joseph: Yeah, but this, we don’t have that. We don’t have that. So we th- that’s concentration you have to worry. You know, if you look at the Mag Seven or you look at, like, whatever the biggest parts of the, of, of the index are, they’re actually across…
[00:28:36] Joseph: Yes, they’re all starting to get into AI, and there’s, but they’re doing different things with AI. They’re in different industries. Google is not Facebook. Facebook is not Nvidia. I understand that they work in an ecosystem, but this is not nearly as concentrated as earlier eras have been. So that argument, to me, doesn’t carry a ton of weight.
[00:28:51] Joseph: It doesn’t worry me at all. I have not lost a single minute of sleep to the idea of overmarket concentration. Hmm.
[00:28:57] Paula: I would also say, if you think about, like, all right, are they AI companies? It’s, it’s almost, I think in the future we’re gonna look back on that question in the way that right now we would consider it to be a silly question if you ask, “Is something an internet company?”
[00:29:10] Paula: Or- Right. Hmm … you know, like- Hmm … every company, Disney, Coca-Cola, Nike, Lululemon, like, they all have an internet presence. They all use the internet.
[00:29:20] Joe: Well, and this fascinates me. Let’s talk about the upside of AI because when we looked at internet 1.0, right? The go-go years of 1997, 1998, 1999-
[00:29:30] Jesse: Bread.com
[00:29:30] Joe: Yeah, Bread Stock so popular, I’d never heard of it.
[00:29:36] Joe: But I remember, you know, and I’ve told this story before, I had a client that was getting, uh, with the allocation I helped him put together, he was getting well over 45%, and he fired me because his friends were getting, like, 70, 65, 70%. And he wanted to keep up with them bec- So he goes heavy duty into tech, 2000, we know what happens.
[00:29:55] Joe: Fired me literally in, uh, January of 2000. So, and not that I’m still bitter about it. And I don’t remember the exact date, but it might’ve been January 23rd. No, I’m kidding. But what’s interesting is I saw a video yesterday where this gentleman was saying, Paula, kind of what you’re alluding to, which is internet 1.0 was all about these companies like Cisco that are creating the internet, right?
[00:30:18] Joe: And it’s gonna be amazing. And of course then Cisco stock didn’t do a lot for a long period of time. Mm. But companies that use the internet and leverage the internet like Amazon- Mm … did phenomenally well, did great. Is this the same thing, Jesse, when it comes to AI? Like, we’ve got Nvidia helping create it, but w- we really need to be focused on AI 2.0
[00:30:42] Jesse: Maybe.
[00:30:42] Jesse: A- and, and that’s where I guess the, the honest answer, Joe, is I don’t know enough about AI infrastructure, AI build-outs, how companies are really gonna start using AI. I, I am not the AI expert per se.
[00:30:55] bumper: Oh.
[00:30:55] Jesse: But do I want to try to own these companies in some reasonable proportion? And am I, am I accepting of the fact that going, going back to Joseph’s statistic, that the overwhelming majority of them might underperform.
[00:31:06] Jesse: They might be the haystack. And, and that’s okay. I’m gonna own the haystack. I’m also gonna own the needles too. I’m gonna try to do that. I am okay with that. It’s, yeah, I don’t know. And, and I think it’s okay to not know. And I think for the stackers out there listening who say, “We have no idea,” am I owning, you know, bread.ai?
[00:31:22] Jesse: Maybe. But hopefully you’re also owning amazon.ai too, and, and that’s a good thing.
[00:31:26] Joe: In the second half of today’s show, I’m gonna keep asking Jesse Cramer to predict the future. He’s gonna continue to say he can’t, which is so annoying. But we haven’t heard Joseph’s thing that’s in the zeitgeist, and Joseph has been interviewed by a lot of people that are trying to connect history to today.
[00:31:43] Joe: We’re gonna find out his after the break in a couple more when we come back to Palm Springs and, uh, the Creator CPA stage at FinCon.
[00:31:55] bumper: Hey, this is Andy Hill from the Marriage, Kids, and Money podcast, and when I’m not singing Disney karaoke songs with my kids at home, I’m Stacking Benjamins.
[00:32:05] Joe: All right. We talked inflation, we talked AI. Joseph Moore, you’re going on all these interviews, and everybody has the sexy question.
[00:32:15] Joseph: Oh, yeah.
[00:32:15] Joe: And I’m wondering where all the sexy questions tend to end up overlapping.
[00:32:22] Joseph: So the… where do I hear the zeitgeist? Because, you know, everybody thinks I’m the history guy, and they’re like, “Well, tell us a story from the past.” You know, like- Right.
[00:32:29] Jesse: Hey, Grandpa.
[00:32:29] Joseph: Yeah, exactly. Grandpa. Make this make sense to me. So the thing I get is, a lot is railroads.
[00:32:35] Jesse: What?
[00:32:36] Joseph: Yeah, railroads are huge right now.
[00:32:37] Joseph: And what I mean by that is everybody’s grasping at history to find some analog to the AI build-out, and there’s not that many times that this much infrastructure build-out happened at the same time with a universal agreement that this was the way of the future, and everybody’s locked onto railroads.
[00:32:54] Joseph: Like, this is their mind, is, like, the one thing they’re gonna… And then, you know, some books have come out on this that have gotten a lot of traction, and so people are like, “Oh, great, so if I just study railroad history, I know what happens with AI.” And that might not be a great strategy. A lot of analogs to a huge roll-out, a hu- you know, a massive build-out, uh, huge portions of GDP going into an industry.
[00:33:14] Joseph: All that holds. What doesn’t hold, it w- back to my point of it’s always different, this time is always different. We’re doing all this. We’re not on the gold standard. We have very different fiscal policy. We have very different politics. Like, there’s a lot of things that are underlying this build-out that don’t map easily to the railroad build-out.
[00:33:32] Joseph: But everybody wants to ask me, “So this, just like railroads, right? Like, we’re gonna have 1873.” It’s just like, “Oh, we’re gonna have this huge depression from AI, from the… It’s all gonna collapse, just like 1873.” And I have to tell them, “Well, tap the brakes. This isn’t 1873. How many of you go to work in a wagon?”
[00:33:48] Joseph: But still, are there are there some things we can glean looking at Union Pacific or the Golden Spike or- There are. There are plenty of lessons that you can take away in terms of the way human beings interacted with the bold new future that was right in front of them, but they’re generally not the lessons people grasp onto.
[00:34:07] Joseph: So for instance, if you actually look at the timeline of how long it took, not just for all that infrastructure to build out, but for how long it took for an average person’s life to be changed by it. It’s like two decades. So you kind of kept living the same life you had always lived. We grossly underestimate the choke points in technological transformations.
[00:34:27] Joseph: For when… And think about the internet. There was an internet well before many of us were doing most of our lives online, and many of us who lived through the eight– you know, through the ’90s and early 2000s remember it was more of a novelty item, and now it’s the rails on which the entire economy runs often.
[00:34:42] Joseph: And so I, I think there’s this tendency to, to overextrapolate there was change, everything happened in an instant, the booms and the busts, and they tend to take their time to get here. The future takes its time to get here, and people aren’t indexing for the time constraints and the, and the choke points.
[00:34:56] Joseph: Now, are there lessons? Sure, there are lessons. One of which is that the real way to make money in a technological revolution tends to be working in it, not investing in it. Oh. Like, you make more money investing on the technology, being somebody who’s built part of the build-out. I, I point out to many people, like, if you have an electrician’s license right now, you are in high demand.
[00:35:15] Joseph: You can make two hundred thousand dollars working on an AI, you know, build-out, and then get offered thirty thousand more to drop your tools and go to another job site. So it– like, you’re gonna make a lot more money building this out than you are trying to predict which of these railroads or AI companies are gonna be the winners.
[00:35:30] Joe: That’s so interesting because, Paula, you have a course in negotiation. Mm-hmm. And one thing that you and I have experienced is a lot of people want their portfolio to do a lot of the heavy lifting. Mm-hmm. They want their portfolio to do better, and yet often the opportunity to make money- Right …way more money is right in front of them, and if they focus as much on their career-
[00:35:51] Paula: Right …
[00:35:52] Joe: as they did on their investment portfolio, it might end up being a better life for them.
[00:35:56] Paula: Absolutely. So I– Increasing your income is one of the strongest levers because that is directly inside of your, your zone of control, your locus of control. We can’t control what the stock market is going to do. We can’t control the broader macroeconomy, but we can control how much, to a large degree, we can control how much money we make.
[00:36:16] Paula: The more you stay inside of that locus of control, over time, the greater that locus of control grows, right? So the more you focus on what you can control, the more that what you can control expands- Mm …over the years.
[00:36:30] Joe: Jesse, how often do you go into a meeting with people after you help them do a financial plan, and you tell them, “This is an income problem.
[00:36:38] Joe: You just need to make more money”?
[00:36:41] Jesse: Uh, fair question. It, it de- it depends, I guess. It, ’cause y- Right, it’s the idea that for some people their goals are just simply outpacing their earnings, their income. Mm-hmm. Yes. I mean, in, in some cases the answer is yes, and, and people will come in and say, “You know, I’m a nurse, I’m married to a teacher, and we want a $4 million house.
[00:37:00] Jesse: We wanna retire by 42, and, and we wanna go move to the Moon- … where there’s new land.”
[00:37:04] Joe: Yes.
[00:37:05] Jesse: Yeah, okay, it’s an income problem. Or it’s just a, a matter of- And you’re
[00:37:09] Joe: like, “Here’s your financial plan, and here’s your ruby slippers. Just click these together three times.” Yeah.
[00:37:13] Jesse: If, if you live to 180 years old-
[00:37:15] Jesse: you’ll, you’ll be fine. You’ll be fine. You’ll be fine. And so income, the nice thing is income is something where, it’s kind of funny, I feel like it’s both, it can be hard to control in the short run, right? It’s hard to say, “Just go double your salary in the next week.” It’s hard to control in the short run.
[00:37:31] Jesse: But something that I think, you know, Paula can attest to, and, like, I see, a- and, like, I, I hear some of the stories where it’s like if you put together a mid to long-term plan, maybe it takes you a couple years, maybe it takes you five years to actually affect your income in a positive way. It’s very, very possible, and I think a lot of people maybe don’t realize that.
[00:37:49] Jesse: I- it took me a while to realize that. That like, “Oh, I, I could kind of pave my own path and actually start to really increase my income.” It, it’s, it’s not easy per se. It takes some time, but it is very doable, and it’s, and it’s within your control, your locus.
[00:38:03] Paula: Locus.
[00:38:04] Jesse: Lo- love that word. Mm. Love that word.
[00:38:06] Paula: Locus.
[00:38:07] Paula: It came from, uh, Seven Habits of Highly Effective People by Stephen Covey. Ooh.
[00:38:11] Joe: A book I never quote. I feel like I quote that book nonstop. To an annoying degree.
[00:38:16] Paula: Yeah, it’s one of the most important books I’ve ever read.
[00:38:18] Joe: But at the time I didn’t think so. At the time I was like, “Yes, it’s okay. Whatever. Pick up one end of the stick, you pick up the other end.
[00:38:24] Joe: Big deal. Sharpen the saw. Eh, yeah, okay, I’ll do that.” Joseph, it’s interesting what a lot of people worry about with AI is they worry about their income. So while we’re talking about income, I think we worry about the 1930s, right? We worry about this Great Depression when so many people didn’t have jobs.
[00:38:42] Joe: What really happened in the Great Depression? What really happened during this timeframe? I mean, we’ve read The Grapes of Wrath and- Mm … you know, we kind of see the stories of, of Jack Kerouac, you know, people just trying to get part-time jobs. If we can’t correlate to railroads, can we correlate to maybe there’s gonna be another Great Depression?
[00:39:00] Joseph: Oh, I am not on that particular train. Ba
[00:39:05] Paula: dum, pow.
[00:39:06] Joseph: Oh. I’m… He’s here all week. Come for the financial advice, stay for the dad jokes. Uh, so first of all, um, the Great Depression is, yet again, has a whole lot more to do with fiscal policy than it has to do with anything about the infrastructure or technologies that were happening at the time.
[00:39:20] Joseph: Mm. Yes, a lot of pain in that. You know, what had happened? A lot of people did lose their jobs. There was a lot of suffering. Read, you know, read thy Steinbeck is one of the lessons. Mm. Here’s some of the things that we don’t remember. Most of the technological transformations that we live with today and assume are just normal, we often associate with the 19- teens and ’20s.
[00:39:37] Joseph: Refrigerators in your house, everybody having a car, everybody having a telephone, all these things. Actually, all of those were v- were single-digit technologies. Maybe the car… Not, not the car. The car had already get do- d- in double digits. But most of those technologies were single-digit technologies in terms of percentage of households that adopted them.
[00:39:57] Joseph: It’s in the 1930s that most Americans started to acquire those things, refrigerators being the most famous example. You went from having either no way to keep food cool or having a literal icebox with a block of ice in it delivered by horse. By the end of the ’30s, by the end of the Great Depression, most people have refrigerators.
[00:40:14] Joseph: Now, how did that happen? Well, everything got cheaper. We forget that there’s this, this other side to an economic contraction, that things get cheaper. And as things got cheaper, people adopted them more.
[00:40:24] Joe: It’s a healthy part of the economy, you’re saying.
[00:40:26] Joseph: Right. And
[00:40:26] Joe: so- I mean, not in the moment. The moment- Not in-
[00:40:27] Joe: it sucks … it suck.
[00:40:28] Joseph: Yeah, you don’t want to live through- Sure,
[00:40:29] Joe: yeah …
[00:40:30] Joseph: 1935.
[00:40:30] Joe: Right.
[00:40:30] Joseph: But nonetheless, like, we actually can look back historically and realize this is when most Americans started to adopt these technologies we live with today. You know, you look at the, the AI, uh, sorry, the, uh, the internet boom. I think most people actually started to use the internet in a productive, non-cute way.
[00:40:44] Joseph: I c- the first thing I did on the internet was look at a picture of Paris, France, ’cause I was in rural South Carolina. And I was like, “Oh, look.” And it was like, remember those pictures that would, like, refresh, and it would like ch, ch, ch, ch, ch, ch, ch, ch, ch? And it was, like, every five minutes it would refresh.
[00:40:57] Joseph: You’re like, “I’m looking at Paris, I think.” They could be making it up. Yeah. I have no clue. But, like, we weren’t using it for any sh- You
[00:41:02] Joe: go get coffee and come back, and your picture’s finally there.
[00:41:04] Joseph: Yeah. Right. Exactly. So it was after the dot-com bust that most of us started to use the internet in a productive capacity because everything got cheaper.
[00:41:14] Joseph: And so a lot of times when you see these, these build-outs, you’ll see a point where it, it contracts back. There’s a lot of losers if you’re in the investment space of that. Well, let’s be honest, most of those stocks are not publicly traded. Most of the real AI companies- Mm-hmm … well, they may be soon, but, like, that contraction is for the investor side.
[00:41:32] Joseph: But for the user side, that’s when actually most people were able to adopt it and use it productively. So as a historian, so long as you’re in a good financial place, if you’re a stacker, you’re probably in a decent financial position. Let’s be honest. Like, you’re gonna be okay. That’s probably the time in history that you’ll see most of the actual AI adoption occur.
[00:41:49] Joseph: Right now, there’s a stat came out I think just this week, companies that are adopting AI at the fastest rates are hiring more than other companies.
[00:41:57] Joe: Oh, that’s interesting.
[00:41:58] Joseph: So, like, actually peop- they, they still haven’t figured out how to make AI replace the workers. They are trying to figure out how to use AI to make their workers more productive.
[00:42:05] Joseph: We’re not in the phase yet that it’s, it’s 1929.
[00:42:08] Joe: Yeah, I haven’t, I haven’t found… You know, we talk about these productivity gains, and s- so much has been written about really haven’t been huge productivity gains. I do feel like though, Paula, AI hasn’t m- made me more productive, but it has made my work crisper, a little better.
[00:42:23] Paula: Hmm.
[00:42:24] Joe: Have you?
[00:42:24] Paula: Uh, I I think it has allowed us to do more, which I guess is the definition of productivity.
[00:42:31] Joe: Yeah.
[00:42:31] Paula: But, but- But
[00:42:33] Joe: the stats don’t, don’t bear out there yet.
[00:42:36] Paula: Uh, I mean, I- I was speaking, uh, the broad aggregate stats do not show that in, in mass.
[00:42:42] Joe: Yes. But of
[00:42:42] Paula: course- But for
[00:42:43] Joe: you…
[00:42:43] Paula: Yeah, but for us specifically, I think the AI has allowed us…
[00:42:48] Paula: It has accelerated many of our processes, some of those, like, very time-consuming, and, and therefore expensive processes- Yeah … because time is labor costs. But then rather than pay less for labor, it actually means that we’re… I’m, I’m still paying just as much, actually a little bit more for labor costs, like continuing to hire and continuing to grow.
[00:43:10] Paula: But-
[00:43:10] Joe: You’re translating this into more output.
[00:43:12] Paula: Exactly, yeah. Mm. It’s all translating into more output.
[00:43:15] Joe: That’s interesting. It’ll be, it’ll be interesting to see what happens with GDP then over time, right? And that seems to be human history, isn’t it? That we, we just take these gains, and we use it to do more.
[00:43:26] Joe: Like, remember when, at least when I was young, people were like, “Oh, the future, we only get to work 10 hours a week or 20 hours a week.” I feel like now we’re on the average person’s more on the wheel working more and more and more.
[00:43:37] Paula: Right. Well, I think there’s the, what is it? Parkinson’s law, work expands to fill the time you give it.
[00:43:41] Joe: Yeah.
[00:43:42] Paula: And I think there, it, it is very, to build and to create is human, right? There’s a very, uh, I think, intrinsic human drive to, to do things, to make something.
[00:43:52] Joe: To create colonies on the moon
[00:43:54] Paula: or we can live. Exactly. Correct. Exactly. Correct. And so as certain things become less time-intensive, uh, we fill that time doing other more productive things.
[00:44:04] Paula: Or differently productive things
[00:44:06] Jesse: I was thinking though, Joe, a- about this whole AI build out, and isn’t there– Joseph, you probably know more about this than me, like airlines. You look around the country, we’ve got airports everywhere, we’ve got thousands of planes flying everywhere every day. It took me, you know, half a day to go from dinky little Rochester to dinky little Palm Springs, and yet airlines as an investment are kind of bad- Mm
[00:44:26] Jesse: and historically have been really bad because they’re so competitive that there’s no profit to be had because everything gets reinvested to be more competitive. Right. And, and it’s worth asking, like, again, going back to this idea of are you gonna make money investing in AI, or rather is it like being part of the picks and sh- Like, there– for all we know, all these AI companies are gonna out-compete the profits away from the industry itself, and it, it won’t end up being a particularly novel investment.
[00:44:50] Jesse: Like, who, who knows?
[00:44:51] Joseph: I’m very close to committing to that narrative, exactly what you just described. Ooh. The idea of, like, a private… But what are, what are railroads today? What are, uh, airlines today? They’re functionally privately held utilities, right? They’re, they’re- Yeah … we all just ride their rails, uh, but we choose to have them privately owned so that they’re run in a more cost-efficient way, so that, you know, all the, all the– for all these reasons.
[00:45:12] Joseph: We forget that if AI becomes so productive, right, that it changes the GDP statistics so that we have so much more productivity, most of the gains from those productivities in previous technological revolutions went to consumers, right? They went to actually making the thing accessible in the first place.
[00:45:30] Joseph: There was an era, I don’t know if… I, I was raised in the rural South. When my parents were growing up, you got oranges for Christmas in your stocking because for their parents you didn’t get oranges but literally once a year at Christmas because they were hard to get because there wasn’t a road to Southern Florida.
[00:45:47] Joseph: It didn’t exist, and then the railroads put it there, and you could get citrus out of Florida before it rotted. And that was- I
[00:45:53] Joe: was, I was so excited to get grapefruits.
[00:45:56] Joseph: Yes, that was… Yeah. So you would get these things because in an earlier generation it was new. All right. Now, like, my kids, like, orange, big deal.
[00:46:03] Joseph: There’s thousands of them at the store. We forget that most– the access to things you didn’t have before comes, and the cost of the, that access goes down over time, often dramatically, and most of that gain goes to the consumer. So if there’s less people being employed in the process of getting that access to you because it is getting cheaper, that frees up money in the GDP to go into these new things.
[00:46:25] Joseph: Like, what’s a YouTuber? Like, let’s go back to 1990 and describe the idea- Right … that some people will be-
[00:46:30] Joe: A podcast …
[00:46:30] Joseph: a podcaster. Mm. Um, and let me explain that this will be a viable thing people can do, and it actually can be a huge benefit in people’s lives. These are things that will come out of that slack that gets freed up in the line, and you’ll have all these new industries and all these new things people, uh, these things people- Mm
[00:46:45] Joseph: will do with that free time that you’re talking about, Parkinson’s law. So I think the, uh, people will fill that time with all the slack that it creates. If it’s the boom everyone predicts it will be, I think it’s good for the average person.
[00:46:55] Paula: Mm.
[00:46:56] Joseph: Paula, pick another one
[00:46:57] Joe: of the seven things that you gave us earlier.
[00:46:59] Paula: Ooh.
[00:47:01] Joseph: We wanna talk interest
[00:47:02] Joe: rates?
[00:47:03] Paula: Yeah, let’s talk interest rates. Why not? So the, the Fed, uh, just hiked interest rates-
[00:47:06] Joe: Yeah …
[00:47:07] Paula: again. As we
[00:47:07] Joe: record this.
[00:47:08] Paula: Yeah, exactly. Mm-hmm. So, uh, interest rates are up another 25 basis points. So essentially it creates a goal for if you are already a, a homeowner, and you purchased your home during the ZIRP era when interest rates were, were quite low, you likely have a, a mortgage rate on your home that is a two-handle, a three-handle, maybe a four, low fours.
[00:47:27] Paula: And- What does that
[00:47:27] Joe: mean? People don’t know what you’re referring to.
[00:47:29] Paula: Oh, uh, two-point-something percent. Gotcha. Three-point-something percent.
[00:47:33] Joe: Okay. Yeah.
[00:47:34] Paula: So you likely have a fairly low interest rate on your, uh, mortgage if you got it in, you know, prior to, uh, 2021.
[00:47:43] Joe: Yeah.
[00:47:44] Paula: That means that, uh, you likely have a golden handcuff scenario right now, where you- Can’t move
[00:47:50] Paula: can’t move or don’t want to move because if you were to move, the fact that home prices are higher than they were, and the fact that mortgage interest rates are now higher means that- Cost
[00:48:00] Joe: of money so much more.
[00:48:01] Paula: Yeah, exactly. So, um, what that creates is a, is a situation where people feel that they don’t have mobility.
[00:48:08] Paula: And if people don’t have mobility, then you feel like you can’t move for a job, you can’t move to take care of elderly parents. You feel this stuckness because you are literally, uh, you have the, the feeling that you are stuck in your home. That, I think, is responsible for a lot of the, the pessimism out there right now.
[00:48:27] Paula: You know, we’ve got, like, a booming stock market, we’ve got a great economy by every standard economic metric, and yet people feel very pessimistic. So how do you square the low consumer sentiment and the, the overwhelming sense of pessimism with the positive economic data? I think one of… There are a lot of reasons for it, but one of many reasons is a feeling of a lack of mobility tied to the golden handcuffs scenario that incumbent homeowners are facing.
[00:48:52] Joe: L- let’s zoom out. We like to zoom in, right, on the issue today. Joseph, uh, interest rates historically, high or low? Based on your research …
[00:49:02] Joseph: historically dead center normal almost. I mean, if, if not a hair low. But nobody wants to hear that, so the other thing I’m hearing in the zeitgeist is this when will my normal come back, right?
[00:49:11] Joseph: Because everyone for, for this generation, and maybe two generations, has lived with having 4 to 5%, uh, in, you know, rates as, as the going rate is kind of the normal, and they want to know when it’s coming back. And so you had a lot of people who thought they were really smart saying, “I’m gonna wait for rates to come back down.
[00:49:29] Joseph: Uh, rates will c- Oh, don’t worry, rates will come back down,” and they don’t. And this, by the way, happened in the ’60s, and it happened in the early ’70s. You had all these people saying, “Rates will come back down.” The next thing you know, they were 9%, 10%, 11%. Then people panic to the e- they flip the switch to panic mode.
[00:49:44] Joseph: Oh, Lord. “Oh, no, it’s outrunning me. I have to go grab it now.” And so we see a lot of this. We’ve… That does have a lot of historical precedent, and I’m hearing a lot of people who are starting to change th- change their language from when will it come down to how far will it get ahead of me if I don’t jump.
[00:49:59] Joseph: And so I, I’m hearing a lot of that anxiety as well.
[00:50:02] Joe: Mm. We did a lot of talk today, Jesse, on trying to predict the future, which you annoyingly don’t want to do. But how often do you gotta talk clients off the ledge with this? You know, stop trying to predict the future and deal with things the way they are today
[00:50:16] Jesse: Well, th- the act of financial planning is so forward-leaning.
[00:50:20] Jesse: I mean, it is. It’s looking decades out into the future, and the thing that I think about is good planning or just these kind of conversations that we’re having right now, all we’re trying to do is put a bracket on your range of outcomes. And, and so through the act of smart planning, maybe using some historical context like Joseph would do or, or, or looking at interest rate numbers and, and thing, like, if we can just try to bracket the problem and understand the range of, of potential outcomes, that tends to put people at ease.
[00:50:47] Jesse: It’s not that we’re predicting a precise future but rather just trying to put a box around it. And, and that’s, I think, the best you can do. That’s the best you can do unless your crystal ball is, is working like yours, Joe. But not all of us- … have that, that luxury.
[00:51:00] Joseph: Or if you had bought bread.com in 1995.
[00:51:01] Joe: That’s
[00:51:02] Jesse: right. Bread.com. If you were a bread investor- Look at how
[00:51:03] Joe: wealthy you’d be. You’d be on the
[00:51:05] Jesse: moon You’d be
[00:51:05] Joe: so wealthy nobody would even know what you own. Great discussion, guys. Thank you so much for joining me. Jesse Cramer, what’s coming up at the Personal Finance for Long-Term Investors podcast?
[00:51:15] Jesse: Got some more AMA episodes coming out soon. I’m trying to think of any big topics that… Oh, I’ve got one, one, uh, uh, it’s called Billionaire Misconceptions.
[00:51:22] Joe: Oh.
[00:51:23] Jesse: I just got a few different questions over time where someone’s like, “I’ve heard that billionaires don’t pay their fair share of tax. Is that true?”
[00:51:28] Jesse: Some of them are true, some of them might not be true, and I explain what’s going on, but it’s, it’s kind of a fun theme episode, Billionaire Misconceptions.
[00:51:34] Joe: That’s awesome. Mm. Joseph Moore, thanks for joining us, and the book, uh, How to Get Rich in American History, available everywhere.
[00:51:41] Joseph: All the Amazons.
[00:51:42] Joe: It’s awesome.
[00:51:43] Joe: What’s your favorite review of the book?
[00:51:45] Joseph: Oh, my goodness. Uh, m- my deep gratitude to everybody who takes time to read the book. Honestly, even an Amazon review, like, that means the world to me. Somebody took the time to, to think about my book, spend time with my ideas. I will say Jason Zweig at The Wall Street Journal said it was the funniest finance book since Where Are the Customers’ Yachts?,
[00:52:01] Joseph: which was written in 1940. Awesome. So I’ll taking the funniest finance book since 1940 as a- Well- … it’s a, it’s a compliment.
[00:52:06] Joe: Never heard of that guy. I don’t know a Jason Zweig. No, I’m kidding. That, that is awesome. When Jason talks about your book, I think that’s, that’s, uh, uh-
[00:52:13] Joseph: It was, it was hu- it was profoundly humbling
[00:52:14] Joe: that, that might be good. Paula Pant, what’s going on at Afford Anything?
[00:52:18] Paula: Uh, on the Afford Anything podcast, we’ve got an interview, uh, for our first Friday episode, for the first Friday of, well- October? … October. We are actually going to be doing something a little bit different than our norm.
[00:52:29] Joe: Ooh.
[00:52:30] Paula: Um, so rather than our standard macroeconomic here’s what happened in the jobs report episode, we’ll briefly talk about the Fed governor’s, uh, decision to, to raise interest rates, and after that, we’re gonna go into an interview with Rob Berger- So Rob-
[00:52:44] Joe: The Rob Berger
[00:52:44] Paula: the Rob Berger. So- What an
[00:52:45] Joe: awesome
[00:52:46] Paula: man … we recorded that interview right here at FinCon. He’s been covering personal finance ever since his days of writing Doughroller in 2007, so he’s been covering this for 19 years. And so we have a discussion similar to what we did today, like over the last 19 years, what’s changed and what’s stayed the same?
[00:53:01] Paula: What’s timeless and what’s timely?
[00:53:03] Joe: And Rob is such the voice of reason. Absolutely. Just such the… Calm, cool, collected, that guy.
[00:53:08] Paula: Exactly.
[00:53:08] Joe: If I could be Rob Berger, man, that’d be great. All right. Thank you so much to Steve Stewart for helping us out. Steve is always right there in the background, but today we get to be face-to-face with Steve.
[00:53:19] Joe: Thanks to Steve. Thanks to Kevin from our team for being here with us. Thanks to my old friend Jean for hanging out with us. Jean and I go way back, now like an hour. Come to FinCon if you’re a creator. Please do. Thank you so much to Philip Taylor for letting us do this. We’ll see you next time. Doug, what should we have learned from today’s episode?
[00:53:35] Doug: Well, Joe, here’s what we should’ve learned. First, take some advice from the team. Investing, it’s always a long game. And second, are things different this time? Well, as Joseph Moore points out, it’s always different. That doesn’t mean, however, that your reaction should be different. But the big lesson, don’t let Joe gallivant off to Palm Springs and leave you alone in the basement.
[00:54:00] Doug: I mean, sure, it sounds good, no noise from him and plenty of time to figure out where OG hid the Cheetos. But quickly, it turns out that, “Hey, take care of things in the basement,” really means, “Organize the Nintendo cartridges while I’m gone.” Not cool, Sehy. Thanks to Joseph Moore for joining us today. Find his new hit book, How to Get Rich in American History, wherever books are sold.
[00:54:25] Doug: We’ll also include links in our show notes at stackingbenjamins.com. Thanks to Paula Pant for hanging out with us. You’ll find her fabulous podcast, Afford Anything, wherever you listen to finer podcasts. And finally, thanks to Jesse Cramer for joining us. You’ll find his Personal Finance for Long-Term Investors, or as we call it, the FILTY podcast, wherever you’re listening to us now.
[00:54:49] Doug: Go on and subscribe. This show is the property of SP Podcast LLC, copyright 2026, and is created by Joe Saul-Sehy. You’ll find out about our awesome team at stackingbenjamins.com, along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. And oh yeah, before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know.
[00:55:18] Doug: This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s mom’s neighbor, Doug, and we’ll see you next time back here at the Stacking Benjamins show.
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