00:00:00
Speaker 1: Welcome to How to Money. I'm Joel and today I'm talking about how Americans got rich the history of wealth in America with Joseph Moore. So there's nothing new under the sun that comes from the book Ecclesiastes, but it's a piece of wisdom we tend to neglect. And it's often said that those who forget history are doomed to repeat it. We've all heard that phrase. But what if a poor understanding of history does something else too, leaving us less grounded and giving us unrealistic expectations about how life used to be. It's time for a history lesson today. But not just for the sake of memorizing names, dates and events, not trying to take you back to middle school in those rough classes you had to endure, but drawing on American history, Doctor Joseph Moore argues that while we're constantly looking back with nostalgia at the good old days, we may actually be living through the greatest era of prosperity in American history. Reframe my brains a little bit. There's a lot to unpack here. I'm excited to dive in. The national best selling book is How to Get Rich in American history doctor Joseph More. Thanks for joining me today, Joel.

00:01:09
Speaker 2: I am so excited to be here.

00:01:11
Speaker 1: Me too. Okay, first question I ask everybody who comes on so glad you're here, is what do you like to splurge on? We call it the craft beer equivalent because craft beer is a delicious beverage, right, But at the same time, while you buy awesome stuff you love, you got to be saving and investing for the future. But what are you splurging on.

00:01:27
Speaker 2: I was ready for this question because I listened to this show because my brother's a fan of this show. So the answer is brother. Shout out to my brother. In all honesty, the answer is girls basketball because Caitlyn Clark has cost me so much money. My daughter got into basketball right before the Caitlyn Clark phenomenon back you know, when there weren't many girls that you could look up to and that we're national celebrities, and so, you know, we were kind of right before that. And then right as she hit middle school, that thing just exploded. And I have spent money on Caitlin Clark. I have watched Caitlyn Clark drain a logo three. I have bought so many Caitlyn Clark paraphernalia. That is my My world is basically history money in girls basket. Okay, all right.

00:02:13
Speaker 1: That's fascinating. And have you have you tickets to see her play in person? Have you seen her play?

00:02:17
Speaker 2: We have. We watched her at Iowa, Okay, and got really good seats. And just because I was like, I'm gonna do this one time, which ended up not being true, but anyway, I was like, all right, I'm gonna take you up to Charlotte, North Carolina where they were playing, and we watched her drain a logo three and I realized in that moment that if you gave me all day and asked me to hit from that spot on the court, it would not happen with no defense, nothing, just give me the ball and I can't hit that shot. And so she is as advertised.

00:02:44
Speaker 1: That's incredible. That's incredible. Yeah. No, she has definitely garnered so much attention and her skill is undeniable. So that's fun. It's really fun to see women's basketball have this like moment in heyday. And I love that you and your daughter are getting a bond over it. I want to talk about your book. It was fascinating to me, and I think maybe the vast majority of us have preconceived notions about how things used to be. Maybe we watched Little House on the Prairie. I think there's a new version of that coming out on Netflix, or maybe it's already out. I used to watch the Little House on the Prairie, and so I guess my opinion of how good we have it today, I'm kind of comparing it to the show I watched back in the day, and I'm like, well, all four of us, don't you know, Me and my siblings don't sleep on some lofted hey bail or something like that. So I'm curious, why did you write this book and what sort of historical lessons were you trying to kind of to mine from it.

00:03:35
Speaker 2: Yeah, so the thing I wanted to know is, like what were people told to do with their money and did it work? And like is there some magical like gem of financial advice that always worked in every period of time? And naively, I went after this thinking I would just walk this, you know, kind of one money wisdom story all the way back to the beginning. And I was wrong, And that really blew my mind that like, actually the smart advice about what to do with your money changed in every era, because every era is financially different, So like what makes sense depends on the lay of the land, and the land keeps changing. The reason I got into this was because in two thousand and eight, oh, actually two thousand and six, I was getting a PhD in history on a completely other topic, and back then the lesson of history was clear, right, renting is throwing your money away, And instead of thinking about that for a second, my wife and I was like nodded our head and signed the paperwork for a mortgage for a tiny, little townhouse. We're graduate students, graduate students. We literally used the student loan money to qualify for the mortgage. That it is as bad as people say it was back then at the height of it. And so in two thousand and eight, a friend at church offers a personal finance class, which you know, churches, as you and I know like all across the country, Like, churches serve so many needs in families lives, and one of them is like teaching people how to handle their finances. And so we go to this class and they make us fill out the budget. Go home. I didn't sleep a wink. I was like, who gave us a mortgage? Like, who are the pulse Joseph? You were allowed to get a mortgage if you exactly? It was like, and two idiots signed the paperwork name you and me? Like what's going on? And so we put our house at the market sold it on a Saturday. The reason I remember that this is two thousand and eight is that my neighbor put her house on the market the next Saturday and it didn't sell. And we were the last two people off the financial Titanic in two thousand and eight. And I was like, I thought I was so smart, and yet I got saved by common sense principles taught a church basement. I need to know more, I need to understand more, and so there has to be a history here, and nobody had really studied that history. So I was like, well, I'll figure it out. And so along the way I realized what I was really doing was putting it together kind of a recipe book of like all the recipes Americans had whipped up financially to get through their lives and to get ahead. And so eventually I started, well, I'll just I'll try to eat the cooking, and so in every era that whatever people were doing, I would try to do today to see if it worked for good or for ill.

00:05:58
Speaker 1: So it was fun creating your own crypto coin. I created my own cryptocurrency.

00:06:02
Speaker 2: Yeah, I was for about five days a billionaire, which was which of course was meant to prove a point. I understood that this was not real money that I was making, and so but for technically, on the on the market exchanges, my crypto was registered as a billion dollar coin. So those are the kind of things that I was like, well, what if people live through this in their lives in real time? I want to see what was like for them too. So it's been a fun project. I hope people can learn a lot from it. I mean, it's it's interesting to realize that like things are changing. People think we think that like things changed for them, but we live the life that's now kind of like everything solved and fixed in stasis. But actually our lives are in the middle of change too. I think of all the things that we assume will always work that don't have to always work, and so one of the lessons of history is that what always worked was always changing, and you have to be adaptable.

00:06:54
Speaker 1: And that I mean, I think that's such a such an important thing to recognize, but it's something that most of us don't recognize or even that's it. Like, we used to talk a lot more about real estate investing back in two thousand, like when we first started the podcast, which was nine plus years ago, right, And so there was just a lot more ability to do well as a real estate investor back in twenty sixteen, twenty seventeen, twenty eighteen, twenty nineteen, But we talk about it far less today, or we talk about it in much different terms because the opportunities are more difficult to come by and a lot more people are getting burned by real estate investing. So you could take the approach to say people have always made money, you know, in history investing in real estate, and that would be true, but there are times, right that are easier to make money and that are harder to make money, And it's just important to recognize that thing that markets are always changing and shifting as well in the ways the best ways to make money are to invest, They change over time. So I'm curious too in terms of just like how things have changed in terms of wealth levels in American society. How much richer are we Americans people listening in twenty twenty six, If we're able to door dash a twenty dollars burrito to our house, how much rich are we then our ancestors from one hundred, fifty or two hundred years ago.

00:08:12
Speaker 2: It is nearly impossible to wrap your mind around how much richer you are than your grandparents, much less your great great grandparents, Like it really is trying to explain to Americans how wealthy you are and the society you live in is, and not just Jeff Bezos on his super yacht, Like, just let him sail off on the super yacht. You're still wealthier. The median American and the average American are wealthier than your great grandparents could have dreamed you would ever be. And so, you know, one of my absolute favorite historical facts that I've ever found was that the average American in eighteen seventy owned one and a half shirts. Like that's an actual historic out to me that so stuck out to me, I was, which means, of course that the typical American family, in some families you own one shirt and some families you own three, which averages out to one point five, like Americans didn't clothing was expensive, food was expensive, housing was expensive. Yes, it's expensive. Now we could talk about the kind of ebb and flow of housing crisis in this country, and they're very real, including this one. But when you try to wrap your mind around how wealthy Americans are, it's really hard to get people to feel it because it's just the water we swim in, so we don't think about it. So to illustrate this a bit, thirty seven dollars a day is kind of considered above the poverty line, but like you could enough to have a sustainable life. Like you're not rich, you're not doing okay, you're not doing great, but you're alive, right, You're having a decent, survivable life at thirty seven dollars a day. And the number of the percentage of Americans who live above that line is greater than in Great Britain, than in France, Italy, and Japan. Like if any of those countries that we think of as wealthy and culture and all these things, if they were to join the United States, they would be the fifty first, fifty second, fifty third, and fifty fourth riches states. Mississippi is richer than every single one of them, and by the way, richer on every metric, average wealth, median wealth, and it's it's diverging, like we're getting richer than the rest of the world even today. And when I saw that.

00:10:20
Speaker 1: By the way, in the you know, Europeans visiting the United States for the World Cup and just they were did kind of in awe right out of the way we live here.

00:10:28
Speaker 2: Yes, And I was in New York when the first round came, and I was in Atlanta for the second round, and the degree of just jaw dropping. It wasn't just for show. People could not believe the wealth and abundance they were encounting everywhere, for everyday people. It wasn't just in the heart of the city. It's like you could go out and have a waffle house or or you know, the size of our stores, and people were blown away by how how well we have it right. And so when you try to explain that to America, they say, but what about all our problems. I'm not dismissing any of our problems. I want you to know how much smaller our problems are compared to what they used to be. Yeah, and so, and it's a very real, hard thing to wrap your mind around.

00:11:10
Speaker 1: Okay, the American Dream, it feels like it's a hotly debated topic. Still, like, can is it still possible to achieve the American dream? And especially especially right now with housing prices right which if if if you're a millennial who like you missed the boat and you didn't buy when prices were low, when when interest rates were low, you feel like that ship is sailed? Can I still live the American Dream? I guess, like, where does that stand for you now? Because it's also a little bit nebulous and hard to define.

00:11:41
Speaker 2: Yeah, so that's a great question. Let's let's do the Let's talk about the American dream first, and I'm gonna come to that housing crisis question, which is really important because there's there's a few sticky issues that make people think that the whole thing is destroyed and therefore like the American dream is dead. Because I have this one very real challenge, and the housing crisis right now is a very real challenge. So let's let's end there. Let's talk about the American Dream. I can find people telling you the American dream is dead about three hundred years before the phrase shows up. The fray shows up in the nineteen thirties, interestingly because it shows up in the depression era, but in the sixteen seventies, not the seventeen seventies when Hamilton is rapping on Broadway. The sixteen seventies, one hundred years before Hamilton, the colonist of Virginia burned their own capital to the ground to protest that nobody got ahead anymore. And they were told that like, if you'd only showed up ten years earlier, in the sixteen sixties, you would have had it okay, But just showed up in the sixteen seventies, right in the sixties seventies eight, like the eighteen hundreds. There's all these speeches given the rungs on the ladder to success got sold off by the people who showed up ahead of you. My favorite example of this is a book in nineteen eighty four. I own a copy. It sold almost one hundred thousand copies, which is a huge runaway best for people who've written books, Like one hundred thousand copies is like nobody gets there except the top. So it's almost one hundred thousand copies, and the thesis of the book in nineteen eighty four is the baby boomers will never be able to retire. Right. So, I've heard all of this before as a historian, But what I call big woe, the despair industrial complex, is very loud right now and very present, and they're in your phone and on your screen, and you can't really turn anywhere that you can't see their message because there's no clicks for a journalist, there's no votes for a politician, there's no tenure for academics like me. If we tell you the world is getting better. But if we tell you it's getting worse and we know who broke it and trust us to fix it, we can have all of those things. So the reality is we get empowered. Big woe gets empowered by telling you it's broken. We get authority by telling you it's You get disempowered by listening. We're actually actively hurting the people taking that message in because they think they can't act on the world. But here's the reality. You can act on the world. My favorite example, I'll round this out here, but my favorite example of this is a speech by Frederick Douglas. Now, Frederick Douglas is the famous abolitionist. His most famous speech is what to the slave is the fourth of July. We teach it in schools. I've taught it. We should teach It's incredible speech. But that was not his most popular speech. Everywhere he went people would ask him to give a speech called self Made Men, And the crescendo line of that speech is we say our motto is go ahead, I can be prosperous. And this is a speech that everywhere he went people would holler it like it was a rock concert. You're like play the hits right, like. People would call out for him to give the speech, even if it wasn't speech he was planning to give. Now, think about his audience. Half of his audience used to be slaves. Yeah, And like, if you think you have a steep climb, it isn't that steep, I promise you. So I come back to like the American dream has been buried many times and it keeps refusing to die. But now we're inundated with a message. It doesn't make it true. Just because it's loud doesn't make it true.

00:15:16
Speaker 1: And the people who ignore the naysayers are the ones who are they're creating a better life for themselves though they are listening and intently and living their lives according to the fact that they won't be able to achieve that are the ones who won't be able.

00:15:32
Speaker 2: To think of the basic logic, if you sit on your couch that you're paying twenty one percent interest on saying you cannot get ahead, then you will not get up and go and do it. But if you believe you can, you will. The Consumer Financial Protection Bureau did this fascinating two studies back to back in which they looked at people's actual finances and actual behaviors, and they found that the greatest predictor of financial wellness and it out predicted income and it out predicted inheritance, was a positive attitude or an internal lope of control if you want to use a technical term. It was basically means a belief that you could do something, combined with the habit of saving. Like those two things combined outperformed inheritance. So and this has been further study in a larger study by another group, they went and found the basically the same thing. So, if you believe that you can, you will, and if you're disempowerable, if you can't, you probably won't. And that's really important to understand, let's go to the housing crisis, because it's real. We really do have a housing crisis in this country. It is neither the first nor is it the worst. In nineteen forty eight, the housing shortage was statistically twice what it is today. It was so bad a young man came home from World War Two and he decided to run for Congress on this issue. And his number one platform issue was the housing affordability crisis in this country. His name was John F. Kennedy. Like that's his first political step in life is to say, I'm going to address this housing crisis. So we've seen this before. The eighteen seventies eighteen nineties. They were horrible housing crises, but people figured out how to get through them. And the one thing I try to encourage people to think about is if you are in an era when there's a housing shortage, you have to decide which side of it you're going to get on. And I don't like that. I wrote an essay for subset called I wish I were poor because I have a lot of real estate wealth and this housing shortage can only make me wealthier, and I really want to own a smaller slice of a larger pie. So we need to build more houses. We know how to solve this. The answer is build more houses. That's it. It's because that's how we solved all the other ones.

00:17:36
Speaker 1: But I know economists of all political stripes seem to know that's the answer, and yes, a hard time actually making it happen.

00:17:42
Speaker 2: All the other solutions are absolutely not helping. The one solution that will help is build more houses relentlessly. That said, while you wait for the politicians to save you, you have to decide which side of the housing crisis you're going to get on. And I encourage people to figure out how they can get on the ownership side, if they can, if they can responsibly. Anyway, that was a lot in that answer, But that's.

00:18:04
Speaker 1: Talk to me about the complicated reality of managing finances and building wealth and investing in twenty twenty six versus American history. How it seems like it's more complicated than ever, right, And we don't have pensions anymore in the way that we used to fours ROTHI rates, there's like this alphabet soup of accounts that we have to manage, so more complex in twenty twenty six.

00:18:28
Speaker 2: Or less, I argue that it is incredibly simple compared to what it used to be. And people look at me like I have a you know, third eye, like what are you talking about. So one of the primary investment strategies for everyday families, especially women in the eighteen hundreds, was that they would lend out mortgages. They would actually go through the process of figuring out the rate table on a mortgage, lending out money to local people who are building houses. And the kind of what we call the bank of mom and dad today was like the bank of the old ladies in town. You would go to them and they would issue mortgage, which involved legal documents. It involved filing paperwork at the county courthouse, It involved figuring out the right tables. All of this stuff. All of this has done for you now, right, Like you don't have to sit in some old woman's parlor and ask for a mortgage. You just go to a bang and signed the paperwork. Right, And so we live. And by the way, all the budget, like the idea of the family budget is actually fairly new. It's about one hundred and ten years old. I joke that budgets are like cubist art, like they're about one hundred years old, and everybody pretends they follow them, but nobody really gets it. And so you know, sure, it's two squares and one's a boy and one's a backpack. Okay, you're like, it's the same with the budget, like we all try to follow it. Now, imagine the first people that were originally called spending plans. This has to be done, by the way, almost exclusively by women. They're doing it in pencil and paper and I actually own some of these, and they are endlessly complex, and you're having to do it all in pencil and paper work. Every single bit of the math is done by you, and if you make a mistake, it carries over to the next page. Right, So yeah, load up your budget software and click down on kids' sports and assign the credit card transaction and you'll be fine. So it's so much simpler than it used to be. Now we do, some of us, and I'm one of these people, by the way, some of us have a tendency to make it way more complicated than it needs to be. And one of the real lessons of history that actually stands the test of time is simple systems tend to work better than more complicated systems, so you probably don't need the forty seven envelopes and the you know, twenty two spreadsheets that correlate onto the next tab page. Like, you can do that if you find it helpful. But simple systems tend to be more robust and more anti fragile than really complicated ones. So that's one That's one thing I did take away from studying the past is like, simple systems are pretty good.

00:20:54
Speaker 1: One of the things that also struck me reading the book and then kind of looking at what happens today in America is that people used to to move at much in much greater numbers in America one hundred hundred and fifty years ago. We don't really move in the same way as And some of that's fine, right for opportunity, but like maybe we want to be close to family and we want to stay and we're willing to take a job that doesn't have as much opportunity as we could get if we were to move somewhere else. But that seemed to be kind of the norm in American life, was like moving for opportunity, where it's not anymore. This is one of the things that worries me, especially for younger people like gen Z millennial types like it's less important necessarily if you're you know, above a certain point in your career. But we used to be a really mobile country in a way that shocks people. In the eighteen hundreds, one in three people changed addresses every single year, and you think, oh, that's back then the old West. Okay, in nineteen fifty it was still one in five. So we were a really mobile country for a really long time. People just expected there's opportunity somewhere, but I have to go where the opportunity is. Now that stat is one in thirteen, and a lot of the one in the thirteen is old people going to Florida and Arizona, so it's not even like one in thirteen young people. So one of the things that happens, I mean, what I try to explain to younger people is is the like to big woe and nobody gets ahead, And I try to confront them with this reality. You live in the largest, most successful free market zone.

00:22:31
Speaker 2: In the history of the world, full stop. There is an opportunity for you somewhere. You may have to go where it is, and that is an expectation in the eighteen hundreds, in the twentieth century America just had you had to go where the opportunity was, and we have the sense now, I think that the opportunity is supposed to be where I am, And that is a hard it's a hard you know, that's a hard conversation to have with somebody that the opportunity for you to go ahead.

00:22:57
Speaker 1: May not be near grandma in some ways, in a you know, a world that's super connected, where there's a fast internet speed at grandma's house, like wherever you are, like that expectation is not completely unrealistic. But it's also true that, especially for young people, the way they're going to get ahead is often, especially as the trends go back to going back to the office, being in the office and being in the place where opportunity is and being in a thriving city, which is why people for so long have been moving two cities. That was the trend, because that's where the opportunity was.

00:23:33
Speaker 2: I will tell you, as somebody who's from the rural South and never put a whole lot of stock in like living in a big, fancy, exciting city because I'm just I'm a historian. I read dead people's mail, and I think it's fun. Like I'm already not the guy you want at the party, right Like, so I've never been like a big city guy. I will tell you, having done the research on this book and also having done like the book tour, I end up in LA and New York a good bit and I am away just the concentration of talent, and you start to realize the network effects of all these talented people being so close to each other, and so especially for young people like you got to get up and go, and you want to get up and go where a lot of the talent and doing what you do is. Now not every career field is the same, and some career fields are you know, very You know, obviously where you can find that opportunity is going to differ by what it is you do and what you do well. But I promise you, like the people who went ahead in this country did not just like save their ten percent and quietly get there. I mean some people did, the baby boomers especially, but most people assumed the way you were going to get ahead was by going where you could earn a bunch more money and taking that money and investing it in things that mattered.

00:24:41
Speaker 1: Yeah, I love that. Okay, we got more to get to h with you, Joseph Moore. We're going to talk more about the history of building wealth in America. Got more questions and specifically maybe even some aphorisms. We'll get to some of that too right after this. All right, we're back still talking with doctor Joseph more about getting rich in American history and what we can learn from how our predecessors built wealth, because I mean, I think there is there's a lot we can learn, right And one of the things you talk about in the book, Joseph, is that like the ways that we conceive of things now almost says like advice that defies time, timeless advice about like stocks for the long run, right, like investing in stocks is and always has been the best way to build wealth in America. And you're like, ah, actually that's not a timeless conception, right.

00:25:41
Speaker 2: Right, Yeah, so stocks actually used to be bad for the long run, So people don't you know, we have a great phrase, so why wouldn't we stick with it? But the problem is that it breaks down. So there's been a couple of kind of moments that this idea that stocks for the long run has always worked popped up one s popped up in nineteen teens, and then of course the famous book by Jeremy Siegel. And the problem is not that stocks have not been good for the relatively recent term. They obviously have. It's that a lot of the data sets from before World War Two were hard to put together, and so since those books came out, some academics went and really put together what the real stock market in America looked like back in say, the eighteen hundreds, in the early twentieth century, and turns out bonds actually beat stocks for the entirety of the eighteen hundreds, and they were tied until about World War two, which means stocks for the long run has only been true about as old as our last two presidents are, you know, in age, right, So it's like it's true for about the baby Bimmer generation's length of time, and before that it wasn't true.

00:26:46
Speaker 1: And so so what do we do with that information?

00:26:49
Speaker 2: Yeah, so I think one of the things I do with it is it's not that I don't invest in stocks. I own stocks. I assume that most people who are listening to a show like this invest in stocks and stock market. But it's to under stand that just because someone told you it always works doesn't mean it always will. The stock market does not owe you a return. It doesn't owe you a certain return, right it. It has a tendency to return a certain amount, and that tendency has held for the last say eighty years, and that's a pretty good run. But you need to be versatile and flexible if and when things change in And one of the things that I talk about in the book is slow change and versus fast what I call fast time versus slow time, so like fast change versus slow change. So things like index funds, right, the index funds were a very American revolution. It's literally in nineteen seventy six. The bisentennial year two hundred years of America is the year that the index fund is released. So it's a peculiarly American thing, Like everyday people should be able to buy the whole stock market, and you should be able to do that pretty cheaply. Yeah, So then there's this image that well, that's that's what people always did, but it literally is only since nineteen seventy six. And so one of the things I call is like the chart every find if you go to a financial advisor, because you want to be a grown up, and they sit you down and they slide you the chart and the dates changed, with the point is always the same. If you had started investing money back then, and you had kept reinvesting all dividends until now, you'd be wildly rich. Mine was nineteen twenty nine. It was like night. That was the first one I was ever given, nineteen twenty nine hype before the depression. If you'd invested ten thousand dollars, reinvested all the dividends, you have ten million dollars today. And the guy steps back like waiting for me to talk about how amazing compound interest is. And I said, houses did not cost ten thousand dollars in nineteen twenty nine. Yoh, so you're telling me somebody like put their life savings in the market, lost eighty percent, fought Nazis, feared nuclear holocaust, and cried when Ross and Rachel got back together, never once touched this money. Okay, that's a problem, But the bigger problem was, like, you couldn't actually do that before nineteen seventy six, could not cheaply invest in the index and reinvest the dividends until about the nineteen seventies. So again, just understanding that these things have changed, you're living through that change, and just be adaptable to it. It's not to say get don't invest in stocks. It's to say understand that things do do evolve and change over time. Last point on that would be in nineteen seventy six when they came up with index funds ten percent of American zone stocks today sixty almost sixty five percent of American zone stocks. So it's like, these are inventions for a different world that have evolved and carried over into hours and we need to be aware of that.

00:29:35
Speaker 1: Yeah, okay, what about At one point in the book you talk about how money advice in early America actually was better to not save money, that spending more quickly was actually the best way to go.

00:29:50
Speaker 2: Can you imagine if your grandpa or your dad came in to sat down with the grandkids, but like new kids, whatever you do, don't save money like you'd be like, dad, I need you to go, I need you to lay off the saw something yet get away, Yeah, dad, get away from the kids. That is actually that was considered very smart advice in the middle of the eighteen hundreds, and I literally have the story in the book of a grandfather telling his grandson, whatever you do with money, do not save it. Now. Why on earth was that smart advice? Because money was different. Money in the eighteen hundreds was a whole lot more like cryptocurrency today. So if you went to working got paid in doge coin, and I went to work and got paid in fart coin, which is, by the way, a real thing.

00:30:30
Speaker 1: Yeah, sadly, what are we going to do now?

00:30:33
Speaker 2: We might hold on to it hoping it goes up, but it is highly likely it will go down and go down quickly, and you don't want to be holding it. So the goal is to spend it as fast as possible. The federal government did not make money until the Civil War. It was it was a job for banks, for private businesses, and even for individuals. You could individually issue money in the eighteen hundreds. I tell the story in the book of a runaway sleigh from Kentucky named William Wells Brown. He gets as far as Michigan and he gets stuck, knows nobody has nothing. A local landlord takes mercy on him and says, look, I've got some space. Why don't you open up a barber shop and get on your feet. It's fabulous idea. Three problems. Number one doesn't know how to cut hair. Number two doesn't own scissors. Number three nobody in town has money to pay him with. Now he solves the first problem. He tells no one. In fact, he paints a sign that says fashionable hairdresser from New York. He's a runaway slave from Kentucky. And he's like faking it till he makes it right. And then he bars a pair of shears. And then he goes to a local printer and he says, will you print me money? And he does, He prints him money, and then he goes around town and he uses this to pay for his food, his lodging, because it's basically redeemable, buy haircuts in his store ioe yous essentially. But then what happens is, well, I've already had my haircut and you have it, so I get I'll pay you with this for whatever you and I are transacting on. And within a year, this money printed by a runaway slave is is functionally good currency in Monroe, Michigan. Now, when he finally does get enough good money to leave and go tow he actually goes to New York and freedom. He ends up like all that money. Great for him, by the way, but like all that money collapses to zero. This was normal. It was perfectly normal for this to happen. And in fact, we have all these tragic stories of immigrants who showed up and nobody told them that's how it worked. So they would save in cash and whoever had issued it, the bank or the whatever would go down to zero and they lost all their money. They lost to year savings.

00:32:32
Speaker 1: So you're holding on to a bunch of that cash that this hairs hairdresser created out of thin air, and he moves to New York like it's gone. You can't get those haircuts anymore.

00:32:43
Speaker 2: Yeah, Yeah, there were Yeah, And it was same with banks. Banks would issue it and then find out they didn't have anything in the in the were called wildcat banks because they would hide them in places like if you went to go redeem it, you couldn't find it without going through like trails where there were wildcats everywhere. You know, basically risk your life to redeem your money. And so this was normal and then it wasn't. And so one of the things to understand about history is like, again, what always worked, was always changing. You have to do what works in your era. And just when somebody tells you that they know what worked because it worked for them, remember that their life was lived in a different era than your life. And so be very wary of anyone says that they know what has always worked financially, because it is very dependent on when you are living your life. Back to your real estate point. I made a lot of money in real estate after the two thousand and eight financial crisis because I took the lessons of history, which is that Iowa farmland would boom and bust, but it never went to zero, and if you got it when it was cheap, it would come back. And I had this basic insight that I've seen all this before and I was able to invest when it was cheap. And then have all these young people come to me. It's like, so how do I get started making money in real estate? And I'm like, whoa, whoa, whoa, whoa. This is not twenty twelve. Yeah, right, Like, so I want you to understand that you are living in a different era at your age than I was at your age. You need to think about what works in your.

00:33:59
Speaker 1: Era, and so there's so many real estate influence influencers out there who want to say you're an idiot if you're putting money in your four oh one K and you know, real estate's the real way to build wealth in this country, and it's like the great great for you, like, and it's it's possible. Obviously, it's possible, I think in every market for people to do well. It's just it takes a lot more diligence, a lot and a lot more knowledge of the market and patience. Right, there's all of these additional things where it's like shoot shooting fish in a barrel back in twenty eleven to buy a home that was going to ultimately do well and produce, you know, help you build wealth. But things change and we have to realize the I guess what you're maybe what you're getting at is if it really is the underlying truth and reality and not just some sort of slogan that somebody says to us and just like take them at face value exactly.

00:34:51
Speaker 2: And a lot of those slogans were built in a different era. And so I'm all for real estate investing. I'm a real estate investor, but what you do in real estate that works is different in every part of the cycle, and mistaking what worked in an earlier part of a cycle for what would work now can get you in a lot of trouble. You know, talk about real estate, I really do. I think there's a lot of mythologies around real estate that we need to kind of bust through for people, again not to say don't invest in real estate, but to understand what you're investing in. So, as someone who is himself a real estate investor, there are some big myths around it. Number one is that it always goes up. Number two is that it's passive. And number three is that this is how the big fortunes got made. No, it doesn't know it isn't. No, they didn't. Not a single one of the top one hundred fortunes in the world was made in real estate. Now, don't mistake what they have today. They often put it in real estate. That's not what they made their money in. So talk about it always going up. There are plenty of peiers in American history when houses in the price of houses did not go up. A house in eighteen nineties, Pittsburgh, Atlanta, Houston, not New York, not LA. Houses in eighteen ninety I'm sorry, nineteen ninety cost the same as they had in eighteen ninety, inflation adjusted. I tell people that and they're like, there's no way you're making this stuff up. And I say, go to the Federal Reserve Bank of Philadelphia. They have the database. It's easily discoverable. The reality is most Americans did not think I just buy real estate and it go up, right like it wasn't this like number go up kind of phenomenon. The assumption was I buy real estate and I improve it. I make it better, I make it more valuable. Whether it's farmland in Illinois or whether it's urban rentals, you know, whatever it is, the way you made money in real estate was to buy it and make it better. To illustrate this, I bought land on the Moon, which, by the way, was another real fascinating kind of period when people thought, I'm gonna be the one who owns the moon before we get there, and.

00:36:55
Speaker 1: So do you have the plot next to Elon's? Are you guys gonna be neighbors?

00:36:58
Speaker 2: I don't know which which how much of it he's claimed. There's two competing groups that claim they own the moon, and I went to one of them, and bought an acre on the Sea of Serenity, and which was advertised as having a phenomenal Earth views zoned for tourism, and I was like, well, that makes sense because if it was zoned for heavy industrial that would just ruin the phenomena on Earth completely. But I so I buy this. And I did this to illustrate two things. One to let you know that there was a time when people thought they were going to get rich in Moonland. But the second was to ask, Okay, I've got a great cocktail party story, but other than that, is there any way I can make this more valuable. I got to get Elon to give me a ride. I've got to oxygenate the Moon with billions of dollars. It's gonna be pretty hard to make my So my acre of land on the Moon won't just go up because I own it.

00:37:48
Speaker 1: In the metaverse, that's got to be similarly valuable, right.

00:37:50
Speaker 2: You know, I think this is probably a good time to get on the cheap on that, because I don't think that's just worth anything anymore. You definitely buy it at the bottom. I don't know there's ever going to be another top, No, I I really you know, I find these people think I buy it and it goes up. Why Because in our generation there's been a tremendous housing shortage, and for the last thirty to forty years a lot of the real estate has gone up because we haven't been building enough land. And so it's not say that's going to pivot tomorrow. I'm very big on telling people just because we had two thousand and eight once doesn't mean we have to have it again. There's a tendency and a mistake prices for problems to say, oh, prices are high, therefore it must be a bubble. There's another mistake people make with history. They just go back and look at the bubbles. They see the high prices, and they assume that all high priced eras lead to popping bubbles. But I could show you plenty of high priced eras in all kinds of asset classes that never pop because they weren't bubbles.

00:38:42
Speaker 1: Especially birth rate could lead to over time. I think you're right, like a softer landing for real estate where prices and we're already seeing kind of a plateau, a plateau in prices, right, which is I think welcomed for people who do want to buy a home still want to I want to keep moving on that. I don't want to just while in real estate. I have so many more questions. I want to talk about financial independence and how we think about financial independence. You talk about Henry David Thoreau what his response to the fire movement would have been, And this is a movement that, over the last decade is really kind of taking the personal finance movement or sphere by storm. And there's some good aspects to it, but I think some of it is a little bit overblown or a little intense also, but like, yeah, what would Thereau have said about the fire movement? So I call the fire movement the CrossFit of personal finance.

00:39:31
Speaker 2: It's like, if you're willing to commit to this incredibly rigorous diet and exercise routine, you will either a get injured or be end up in incredible shape, and not many of your friends will want to do it with you, And so there is this kind of intensity to fire. The reality is people were financial independent retiring early hundreds of years before there was a phrase for it. It was actually a not uncommon thing to know somebody in town who'd kind of done it. There. It wasn't overly celebrated. I talk about I got himed Sylvester Judd in the book. He was born the year of the Constitutional Convention or the year the Constitution was ratified, I think, and then he dies the year before the Civil War. He like lives every single year of Anabellum America. He works for half of it because he sold a printing business, made enough. He wasn't fabulously wealthy, but he made enough, and he knew what enough was. And so after the rest of his life he pursued his interest, which, as it turns out, were like pinning histories of New England, which is why we know a lot of what we know about New England history. Most early science was done by people who were fire like who has the time to go out in nature and like run experiments over and over and then like write up the findings long hand and send it into journals like this was a lot. Most towns had one or two people like this, but no one was talking about it. And then Henry Throw comes along and you know, chops a cabin out of the wood like a real man. His best friend is Emerson. Emerson like travels around Europe and just like writes essays about not letting work take over your life and your meaning. And there's a couple named Helen and Scott Nearing who write books similar to the Rose but in the nineteen fifties and sixties and the New York Times just like fawns over them. They found the way back to Walden Pond, you know they live on. They say they work four hours a day. It was like the original four hour work week. They work four hours. Yeah, Tim Ferris, but they were the first Tim Farris, and they work four hours a day in Vermont on their farm. It's a maple farm. And then they read and walk for pleasure. Okay, let's go back through that. Throw's mom is bringing him food so he won't starve. Emerson's maybe the worst. Emerson marries a wife with a trust fund. She dies, He sues her family for the trust fund. The day he wins, quits his job and goes to Europe to write about not having to work too hard and the nearings. People started to flock to them because they were celebrities, kind of like today's TikTok influencers. And people start starving. They cannot figure how to work four hours a day in Vermont and make this thing. Come to find out not one, but two massive inheritances that each of them had gotten and that's what they're living on, and they didn't want to tell anybody. So, like, what I tell people is financial independence. It's been going on forever. You can do it. It's a math equation. But be careful of what they put in the fire movement because some of that can get toxic and you can get sold a bill of goods that's making somebody else money and has nothing to do with your independence.

00:42:24
Speaker 1: Yeah, okay, I mean I love that. And one of the other things I think we often we point to history, especially for married couples, and we're like, man, it used to be easier for a family to get by on one income living the American dream, and now it feels like the only way to live the American dream is to be a two income household, which just makes it harder to have kids. And it feels like this narrative that spins out. But your argument is essentially that dual income households have been around forever, we just didn't think about it in those terms. This has been one of the more controversial parts of the book. In the sense that like I went through the history was like, women have been working since the dawn of the American Republic. Now they weren't always working for an official employer. They were doing a lot of what we would call self employment income. But it was it wasn't like insignificant income. In fact, the general rule of thumb was that you would survive on the husband's income and you would thrive off of what the woman brought in, and the difference between barely making it and getting ahead was often the female's income. And this is not like since the sixties. I'm talking about like since the seventeen sixties. So why well, because marriage, like you do not choose the family you start with. So the family you start is one of the most powerful things under your financial control. And as it turns out, capitalism is kind of a team sport. It's it's best to play with two players. Women were making insane amounts of money for the family.

00:43:58
Speaker 2: Like let me get an example. There was a peer when in farmers, especially farmers learning to farm, where women's butter churning was about one third of the family's income. Right, A very common method for buying a home was for the woman and the husband to both work hard save up the down payment. Then they would use the down payment, which often came from both their incomes, to buy the house. Then she would quote unquote stop working. But the advice you and I've read so many of these. They're in English, they're in Polish, they're in Italian, they're like people are writing like this is how you buy a house at America. You get the down payment, you buy it. Then the wife stops working, but she then runs the house like an airbnb, and she rents out all the rooms in the house for eight to ten years. She's doing she's interviewing the tenants, she's getting the checks from the payment from them, she's doing laundry and meals service come standard. And that's how most families are paying off their houses. You even go as late as the nineteen fifties and you go into real estate advertisements for like a single family home, and they will say great for income, like when the realtor writes up the thing, and what it means is there's extra rooms you can rent out. And women were doing this. So the difference between surviving in America and thriving in America was often the woman's income but we somehow it got written out of history and we decided that women started working in the nineteen sixties and seventies, and that's just not true.

00:45:19
Speaker 1: Yeah, all right, that's yeah. I mean that's really helpful to clear up that misconception and just kind of how throughout history women's involvement in bringing income into the house. It's not like that started in the eighties. And now we're forced to have two income households to be able to get by. How has that been impacted to by the desires the growing desires of America in the higher levels of consumption that fuels, right, at least to some extent, the need for to have two working individuals to be able to make ends meet.

00:45:50
Speaker 2: Yes, I mean this could cut in a lot of different directions, and I'm not making light of anybody's frustration. We feel like we work hard, we look at the paycheck and then we pay all the bills and like there's more month than there is money. Right, all had that experience. So one good thing to point out is like all those families of the nineteen fifties that we idolized as like the single family or the dad gets up and he rides to the to the factory or whatever in mom stays home. Those houses in the nineteen forties and early fifties averaged eight hundred and eighty square feet.

00:46:18
Speaker 1: I lived in one. Yeah, they are just little boxes with like two bedrooms, a tiny old kitchen, tiny old dining room. I mean there's not much to them.

00:46:27
Speaker 2: Yeah, Like we're if you're a teenager, where do you hide your cigarettes? Like there's no like the parents could see everything. If your mom and dad, how do you make baby number three without babies one and two hearing you? Like, there's just a lot going on there. And we idealized what was in essence like a very meager and families talked about this, like these are really small homes. They wanted bigger homes. It's not like they wanted bigger that was just what was available to them and affordable. As we got richer, we started wanting nicer and bigger things as a society. Back to where we started the conversation, like we're in a richer society. That's why all of our new our starter homes are double and triple the size of the old homes that were normal for that single family home. And there's cost involved now it's not the only thing going on. There's there Again, housing shortages are about land and a shortage of zoned land for housing. But there really is a sense we have idealized the time when there was one car, my grandmother used to drive my grandfather to work, right and then come back with the car because there was to the nine hundred square foot house. Yeah, and that was one side of my family. The other reason I kind of was able to put some of this together instinctively was like my mom's side of the family, they were farmers. My grandmother worked from the day she was able to hold anything, and like all my great aunts and uncles, they'd all worked their whole lives. And so it didn't make any sense that like, well, you're telling me that all this started in the sixties. That doesn't that doesn't compute.

00:47:49
Speaker 1: And so I think, yeah, we didn't get to high school education, right, that started later than most people that.

00:47:55
Speaker 2: Stopped in the eighth grade. I mean, like that was it was a perfectly the fact that he had made it to the eighth grade was more than his siblings. So you know, we've we've we've kind of we've created an image of how we think America was and we've forgotten what was going on there. Give you some nothing about the nineteen fifties, the team pregnancy rate was ten times today's. That the single team pregnancy rate was ten times today's. So like we've we've clem a lotus back then. That's going to be part of it. Yes, yeah, exactly, But imagine how much harder it is to get ahead as a like a you know, a sixteen year old pregnant girl than it is, like like, there were just so many things that we've we've we've taken out of the story that we don't want to talk about. So no, we have it so much better today.

00:48:37
Speaker 1: All right, I got a few more questions. I want to get to Aclude. I want to talk about retirement, how we think about retirement, how that's changed course across the course of American nursuy. We'll get to a few more questions of doctor Joseph Borr right after this. All right, we're not done yet. We're still talking about how Americans got rich and just kind of the way we think about money has changed essentially over the course of hundreds of years. Joseph, one of the things you talked about in the book is is the concept of retirement?

00:49:13
Speaker 2: Right?

00:49:13
Speaker 1: And it it feels like the way we think about retirement is very different than the way our ancestors thought about retirement. Can you talk about how that's changed over the course, I mean, the last fifty years has changed quite a bit, but especially if you talk about even further back than that.

00:49:30
Speaker 2: Yeah, So the first ideas that somehow people never retired until pretty recently, and that's not true. Actually people were retiring if they lived long enough to retire, they were retiring. Now that's the big difference, right. You know, the average life expectancy of the Old West was forty five, so you know, some of the high idea that retirement is new is just like it's new that people lived that long.

00:49:49
Speaker 1: Yeah, but people talk and that was intermortality. But that was also like the gun gun fights, and yeah, it just bites I guess, you know.

00:49:56
Speaker 2: The harder life and just harder work, right, Like men's bodies were down because they did harder work earlier and longer. Now that said, people talked about retirement all the time. One of my favorite things I found a letter from a guy in Baltimore in the eighteen thirties or forties, and he says in the letter, I cannot wait to retire to a villa in Florida. It's like, dude, there's literally not a road to Florida. When he writes that, literally not a road that goes all the way through Florida.

00:50:23
Speaker 1: And it was pretty much swamp land back then too.

00:50:25
Speaker 2: Yeah, yeah, you couldn't get through. You had to go around it on a boat. But nonetheless, people were trying to retire to Florida. Coral Gables was built in the nineteen twenties before Social Security. So the way people retired is what I call retirement stacking. They didn't have like one pool of thing they'd put everything into for retirement. They would kind of have a series of things they would have. Maybe they'd paid for the house, they might sell their business if they had a business to like junior associates or junior partners. Often they'd have an annuity, right, which is really what social Security is. It's a government funded annuity.

00:50:58
Speaker 1: Yea.

00:50:58
Speaker 2: There were a few retireirement programs early on. They might have savings, they might have help from their kids, but they would they would stack a bunch of things together into making their retirement work and believe it or not, that's still functionally what we need to do today. So if you if you take the average person social Security check, it's a pretty meager income all by itself. If you took the average four oh one K balance and you run, you assume you only live on that.

00:51:22
Speaker 1: No.

00:51:22
Speaker 2: Social Security run every historical scenario as if you live like a money Carlo simulator, and in every historical scenario you're broke by the time you're seventy one. But if you combine social Security with a four oh one K with a paid four house with like then the didn't run the same money Carlo scenario. The most common outcome is to die with more money than you started with. So stacking your retirement with different you know under people retired before social Security.

00:51:52
Speaker 1: I promise you you can retire just fine with it now. That's how people were doing it. You argue, essentially, yeah, for a long time social Security. In the beginning years of social security, and in the beginning years of social Security it most people didn't live long enough to get their first Social Security check, right they.

00:52:11
Speaker 2: Did, and even the by theirs by the time the Ida Fuller is the name of the woman who cashed the first social Security check ever. And there's a picture of her in the newspaper cashing like the first social Security check. The day of that newspaper article, almost fifty percent of American sixty fiven up are already retired, so like, and it was trending in a straight line. There's a graph you could find it, Like, there's a graph of the percentage of people retiring at sixty who are sixty five and older who are retired, and social Security is like a little tiny blip and it just keeps going the same. The reason we're all retiring is because our nation keeps getting wealthier and wealthier and wealthier. Like it is a wealthier, healthier world that is allowing people to retire. And so those strategies from before social Security still work today.

00:52:56
Speaker 1: How I'm curious you digging into all this history writing this book, kind of living through essentially the last two hundred and fifty years of America and the way Americans related to money. What changes have you made in your life as you've kind of seen this arc and what's it done to you in your personal finance habits.

00:53:16
Speaker 2: So one of the things I said earlier I wanted to do for the books, like if Americans were trying to do it, I wanted to try to do it too. So anything within reason people did I tried on within reason was set by my wife saying under no circumstances. But she was pretty flexible. I mean, I AIRBN beat all the rooms in our house, okay, because that's what immigrant families did to pay off the house, right, Like that was the normal. I bought land on the moon. We talked about that. I founded a cryptocurrency. I shorted all of Jim Kramer's stock picks, just to say, like all kinds of verse Jim Kramer in first Jim Kramer, yep. I did that for three months of my life and missed my daughter's first steps while Jim was yelling at me like I was a child. And it was just a good reason, like you can beat the market, do you want to? But here's what I took away from all of it, you know, I kind of it was of my personal finances. I started this journey very left of center, like I am a liberal academic at heart. I'm a liberal humanities professor assigning Karl Marx on the first day of class. That is literally something I used to do and the longer I went and studying this, the more I like, you can only torture the evidence for so long to make it say what you want to say before you realize maybe I'm wrong. And I started just kind of ask myself, like, am I what's wrong here? Like are people actually getting ahead of American history? Am I? Like? Are people actually getting ahead today? And so, like I had to flip completely sides from the nobody really gets ahead and the American dreams a scam to being the person who who is optimistic about the American dream and believes that it's actually getting easier, and so.

00:54:46
Speaker 1: One of the only people in America who is willing to publicly say that their priors were overturned.

00:54:52
Speaker 2: Well, it took ten years. So so like I did it overnight, right, Like it just eventually you start to realize, like I kept meeting all these people in the past and meeting all these people in the present who actually had succeeded by not by cheating the rules, by living a diligent life in pursuing. And so the answer to.

00:55:07
Speaker 1: Your question to say, nobody cheats the rules. And that's not to say everyone gets ahead, but what you're saying is like, this isn't an anomaly, Like there is a there's a steady trend of more wealth in this country, and there is the reality that average Americans, over the course of hundreds of years have been able to under this system do quite well for themselves.

00:55:26
Speaker 2: Right, And that was something I mean. I literally have had students email me, former students who are now like, you know, grown adults. Like in my freshman history class, you told us that the American Dream was a scam perpetrated to keep our eyes off our shackles. What changed? And I was like sorry about that, like for real, Like if at some point the evidence persuaded me yea, and it persuaded me to be more optimistic to take chances. I think. So that's what I've really is. I've been more optimistic, more willing to take chances, and more willing to focus not so much on me and my financial issues, but to figure out where I can solve somebody else's problems and trust that, like, the biggest reward for me is going to be in going out there and solving problems in the economy. And the bigger the problem I solve, the more reward I get. So you know, when I when I talk to people about like, what are the takeaways In the book, there's a chapter at the end twenty five lessons from history, like twenty five things that tended to work in every era and kind of seven things that always failed in every era, like don't co sign alone, like you know these these are kind of the tangible takeaways. But I could boil that down to five things. The first is solve someone else's problems. If I walk in a personal finance section of Barnes and Noble and I grab a random book, I guarantee you it's going to tell me to focus on me and my spending habits, you know, me and the you know I'm drinking too many lattes or what. By the way, you can find that in every era. I can find like a book saying like it's the beer. If you just stop drinking beer and invest the beer money, then you're going to be, you know rich in the nineteen teens.

00:56:53
Speaker 1: It's not it's not worth the sacrifice.

00:56:55
Speaker 2: Yeah, enjoy your life. No, so like it's yes, solving your problem this will keep you from going broke. It will not get you rich like you get rich solving somebody else's problems. The second is to take bigger risks. We live in the least risky era in American history and human history. Your house, your spouse can all be insured. If you go broke, I promise you they will not take you and your wife and your kids to jail. That used to happen for decades in this country. Not just you go to debtor's prison. Your whole family has to go. That's not going to happen to you. You live in the least risky age. Take the risk. The third is the third is that you need to move more. We already talked about that, and go where the opportunity is. The fourth is marry well. Marriage survives every era as good financial advice, Like a good marriage confounds so many things that you think are powerful financially, a good marriage will overcome them.

00:57:48
Speaker 1: It shouldn't marry for money, but let's be honest, marriage is not. It's an economic relationship in part at least, and.

00:57:54
Speaker 2: It's not just marrying into money, by the way. That's the mistake people think it's marrying about. This advice is in the seventeen, eighteen hundred and twenty century today, marrying for the character that will allow you to build something together, because you are, at the end of the day, two people joining an enterprise to build something together. And whether that's you know, and this has happened in my own life, like whether it's telling my spouse or my spouse selling me go take the risk and I will cover you with my income so you can take that leap, or whether and a lot of whys have had this experience. It's kind of patting your husband on the shoulder, going, this sounds like a really dumb idea. I'm glad you're excited about how you're going to get rich in you know, you know, whatever the thing is. But like maybe we think about this for a night. Yeah, And so it's that wisdom that comes from working together on building something. And then the final thing is believe you can do it. Like just the optimism that says I believe I have a shot increases your chances of that shot landing beautiful.

00:58:48
Speaker 1: I don't think we could ended this any better, Doctor Joseph Moore. The book national best selling book is How to Get Rich in American History. Thank you so much for joining me today on the show, Joel.

00:58:58
Speaker 2: It is an absolute pleasure. Thank you for the time and hopefully we'll talk again m