התמלול המלא של 'Ugly' Midterms, Increasing Your Nest Egg, Everywhere Millionaires

more CapEx than expected. That's down 2%. NVIDIA didn't even report. That's not for another couple of weeks, but it's also being dragged lower. And Bitcoin, I wanted to include because there's a big, big hack, $ 6. 3 billion stolen from Binance. That is crypto's biggest hack ever. 00:02:53 Speaker 5: And we'll have to see on that. 00:02:54 Speaker 3: But huge news flow on this Friday as we welcome you as you watch us on digital throughout the weekend as well. An important special edition conversation, the leadership of Tyler Kendall really covering the grind of this election. 00:03:08 Speaker 5: She could be with us. Even more special, Sarah Fryer. 00:03:12 Speaker 3: Parachutes in from the West Coast, now driving all of our East Coast Bloomberg Tech coverage. And on short edition, he's been work from home the last. 00:03:21 Speaker 1: 60 weeks in a row. 00:03:23 Speaker 3: We dragged them in. Miles Miller. And we'll get to that in a moment. Tyler, an immediate update here on where we stand. 00:03:31 Speaker 4: At the moment, as we go into election day. 00:03:33 Speaker 5: The president's out to Kansas. You and I talked two hours ago. 00:03:36 Speaker 4: No. Yeah, a new reporting out from the Associated Press saying that President Trump indeed is going to resume these campaign stops that the White House said that he wasn't going to make to reliably red states in Iowa and Kansas. Those states that really highlight the economic headwinds, like higher diesel costs in the middle of harvest season. But pair that, Tom, with now 20 additional tele-rallies that the White House says. 00:03:58 Speaker 5: A tele-rally. 00:03:59 Speaker 4: It's a bid to have President Trump's outreach go further, according to the White House. 00:04:03 Speaker 1: But what is the content of these rallies? What is he talking about? He's talked about Nicki Minaj and Senator John Husted's backside. He was upset about the cheese factory. But is he talking about inflation, about the economy? 00:04:15 Speaker 4: So it depends where he is in some of these states. Like yesterday, he was in South Carolina, a state he won by 18 percentage points. But we're seeing a closer than expected Senate race there for Darlene Graham. He had a lot of rhetoric to try to rally his base, because those are the states that Republicans are going to try to turn out the vote. And it's going to come down to really making sure that those voters that voted for President Trump last time will remain committed to the Republican Party. In other areas, like these rural states, he's touting things that he attempted to do to bring down gas prices, easing restrictions on red-dyed diesel, for example. But I'm looking at AAA today, the national average for a gallon of gas, $ 4. 20 above that $ 4 threshold. 00:04:56 Speaker 3: Still beneath that at the Wawa in New Jersey. Thank you, John Tucker, for that New Jersey gas quote. This is a pleasure for us. Sarah Fryer changed the debate on technology a few years ago. A small book on Instagram that did better than good. She drives all of our technology coverage. 00:05:13 Speaker 5: I got eight ways to go here. 00:05:15 Speaker 3: Scarlett's overwhelmed by how Amazon's down, Intel's down. 00:05:18 Speaker 5: I don't care. 00:05:19 Speaker 3: You are viscerally attached to Silicon Valley. How many billionaires are going to leave California? 00:05:25 Speaker 6: Well, I mean, as long as Mark Zuckerberg gets his share split. 00:05:30 Speaker 5: His C-class shares. 00:05:30 Speaker 6: Yeah, his C-class shares, he's planning to stay. I mean, I think that that is a little... That is certainly a. 00:05:40 Speaker 6: Problem that they've raised, like, you got to keep us here. But I've seen this movie before. I've seen billionaires move to Austin, Texas. I've seen them move to Miami. They always come back to the Bay Area when it's time to build, right? When they need the engineers, when they need the money, that's where it is. And so California does have some leverage over them because that is where If you want to build an important technology company, you build it there, and that's where their employees are. 00:06:07 Speaker 1: Well, speaking of California, Miles Miller, you've been keeping an eye on the security, the stepped-up security at voting sites across the nation. And California is really under focus. The Trump administration has really put its eye on that state. 00:06:18 Speaker 7: They want to be able to set aside as many as 20,000 mail-in ballots. That's been an issue that has been going back and forth, obviously went to the Supreme Court, and is something that will continue to be an issue for, that this administration wants to make an issue. Whether it's California, whether it's some of these other states that they see as key to their map, the Department of Justice for What they say is not the first time. They said this has been happening for many years. The Department of Justice wants there to be election monitors there to make sure that everything goes smoothly. But, of course, Democrats see that as a way to do voter disenfranchisement. And we'll see what actually happens on Election Day, what they actually will do at these poll sites. 00:06:56 Speaker 3: Real treat later in the program, Scarlett made this happen. Professor Zidar will join us on the everywhere millionaire. Miles, this election and all of Bloomberg money is about the fancy people. What is Hakeem Jeffries, who you spoke to recently, what's he going to do about people crushed by affordability? 00:07:15 Speaker 7: Well, Hakeem Jeffries was, of course, born and built in Brooklyn. I happen to live in Brooklyn, so I was driving to pick up my son, and I see a couple of SUVs outside. 00:07:24 Speaker 5: You stalked him for three miles. 00:07:26 Speaker 7: I said, I got to go in there and see who's there. And I see that's my video. I'm pretty good, steady on the camera. But the one thing that he knows, being first in the Assembly and then being in

Congress now, is that this is going to be all about affordability and a way to make money. Americans whole again. And so that's going to be the case that he puts forth if he becomes Speaker of the House, if Democrats do wind up taking the majority in the House. And what's that going to look like? It's going to look like actually prosecuting the case against what has happened in the Trump administration thus far. You look at the agency I cover, DHS, and some of the issues that they've had with some of these planes they bought and all that kind of stuff. It'll be many months of oversight. And my poor child will see me only on the days that I'll be not in Washington. 00:08:10 Speaker 1: The sacrifices you make, Miles, for your career. I want to bring back Sarah because we talk about Democrats and we're hearing that big tech firms are quietly hiring people in the event that the Democrats do sweep Congress and will perhaps turn their eye to those companies and start investigations into them. 00:08:27 Speaker 6: Well, it has been a dramatic buddy-buddy relationship that has bloomed over the last couple of years between big tech executives and Trump. They've gone on trips with him. They've done dinners. They've had summits. They've been his entourage when he's meeting Xi Jinping. This has been beneficial for them. 00:08:48 Speaker 8: As AI requires. 00:08:51 Speaker 6: government to be on board with the companies. 00:08:53 Speaker 2: They need energy. 00:08:54 Speaker 8: They need infrastructure. 00:08:55 Speaker 2: They need all of that. 00:08:58 Speaker 6: But it's also risky because if the leadership changes in Congress, then they could be tied in with some of what you're referring to. And they do have to build their rosters for that. 00:09:11 Speaker 1: We are seeing that. 00:09:13 Speaker 3: I want to combine the two worlds here of Friar and Kendall. I'm looking here at S Street Northwest, the old Woodhouse and Pope House mansions, and a guy named Bezos loaded the boat and bought them a number of years ago. What's going to be the relationship of Bezos and tech in this new post-midterm Washington? 00:09:34 Speaker 4: Well, of course, we'll have to see ultimately how Congress goes. But we can say that there was actually a flurry of legislation from both sides of the aisle particularly not around curbing the technology, but curbing data centers that serve as the backbone. 00:09:47 Speaker 5: That's embedded now in the conversation. 00:09:49 Speaker 8: That is on both sides of the aisle. 00:09:50 Speaker 4: I don't know if we've seen another issue bridge the partisan divide quite as much as opposition to data centers. 300 construction moratoriums currently in place. A slate of states are going to have individual localized statutes on the ballot when we get closer. 00:10:06 Speaker 2: But we saw already.... 00:10:09 Speaker 4: A flurry of bills to impose new taxes to prevent them from having tax breaks to curb data center development. 00:10:16 Speaker 3: Should we cancel Henrietta Trace and just keep this conversation going? 00:10:19 Speaker 1: We should continue this conversation, but we can't cancel Henrietta Trace. No way. Before we go, very quickly, is social media playing a role in this midterm election? 00:10:28 Speaker 8: Oh, always. 00:10:29 Speaker 6: I mean, I think the main problem now and always with elections is whether people get wrong information on methods or times for voting. 00:10:37 Speaker 4: Right. 00:10:38 Speaker 6: That is the most harmful type of misinformation you can find on social media. Whether there's misinformation about candidates, you know, people are sort of used to that now. But if they're misled in where and how to vote, that's a big problem. 00:10:52 Speaker 5: 20 seconds. 00:10:52 Speaker 3: Is the Instagram now what you envisioned when you sat down to write your book? 00:10:57 Speaker 4: Oh, no. 00:10:58 Speaker 6: It has become, you know, very aligned with what TikTok is. They're yet again met a company chasing the competition, copying it. 00:11:07 Speaker 1: All right, Sarah Fryer, Bloomberg Tech reporter. She covers all things big tech for us here. Miles Miller, our senior reporter covering security. And Tyler Kendall, our Washington correspondent here in New York through the midterm elections. And, of course, see her live on Election Night on Bloomberg Television for our special coverage. 00:11:22 Speaker 9: Tom. 00:11:23 Speaker 5: Coming up, Henrietta Trace. We need an update on this election. 00:11:28 Speaker 3: We drive to it here through the weekend, Monday, to all of our coverage on Tuesday and Wednesday. 00:11:34 Speaker 1: T-minus four days. 00:11:38 Speaker 3: You're listening to Bloomberg Money. Stay with us with more to come after this. Scarlett Fu and Tom Keen, let's dive right into it. A special edition today, of course, Election Central, I would say, with Henrietta Trey's Avaida Partners. I was trying to find a single sentence that I'm most curious about. This is from a number of years ago. This is the woman out of Colgate, Monica Crowley, of course, associated with Fox TV and her service to the Trump administration. And I just love the simplicity. Voting is as much an emotional act as it is an intellectual one. You have captured that with your service in the marble halls of Capitol. What's the sweat, the emotion right now on Capitol Hill? 00:12:29 Speaker 8: It's honestly a difference between earned, learned experience and wisdom from your own life having gone through these elections all the way back to 2008. And then looking at the polls and seeing that this is going to be a big blue tidal wave. Certainly leadership is preparing for that outcome, preparing for the fourth quarter and a reconciliation bill. But amongst prognosticators, you either are trusting your earned wisdom or you're just following the numbers. It's a very hard time. 00:12:56 Speaker 1: Do we trust the numbers? The polls have been wrong so many times. You just look

at what happened in Brazil and how people were completely shocked by Lula pulling out an upset victory. 00:13:05 Speaker 8: I have a hard time with predictive markets and with just a blanket numbers game because they're so closely correlated. It's not a deep sample set. And you really need to get out into the heart of the country and see what voters are talking about. One of the benefits, I think, of living in Louisiana is all my neighbors have an F-150. Many of them voted for Trump. Up here, it's much more Dems are going to win 56 Senate seats. I mean, I hear that live in real time from investors. It's extraordinarily emotional, as Tom just suggested. 00:13:36 Speaker 3: I look at this and, you know, I guess I just want to go back to the basic principles. What has changed for you and your wonderful work from the cliche of kissing babies? Nobody's kissing babies anymore, are they? 00:13:48 Speaker 8: Nobody's out here kissing babies. Gosh, I hadn't even really put it into that kind of context. But it's absolutely an anti-Republican, anti-Democrat fervor. And both parties are deeply unpopular. You know, we're out here just slamming folks, talking about things like sexual abuse of minors and having these crazy already impeached candidates. I mean, it's just ugly out there. So I think a large question is, who's more angry? Anger turns out voters. It gets them galvanized. So who's angrier, the Democrats or the Republicans right now? especially the independents. 00:14:20 Speaker 10: Right. 00:14:20 Speaker 1: And there are intractable problems that need to be solved, but no one's really addressing it. I think about, for instance, the higher rates and Social Security. Let's get a money must read here from Alison Schrager. She's one of our Bloomberg Opinion contributors. And she wrote that in this new reality, neither party got the memo on our new rate situation. Both continue to promise an even bigger state, universal generous health care, child tax credits, etc., The saving grace in America has been higher economic growth. That is our advantage right now. But we also know, Henrietta, that AI investment was a big driver of growth in the third quarter. So our growth is very much dependent on continued investment in AI, which a lot of people are voting against this election day. 00:15:00 Speaker 8: It's all about AI. That's boosted the stock market. You could argue there'd be a recession without it. And yet we all hate AI. You hate a data center. You're unclear about what it's going to do for your college kids that are graduating and can't get a job or anybody that's stuck in a job that they don't feel comfortable leaving because they don't know if AI is going to replace that job. I mean, it is a extraordinarily fraught, tumultuous time. And I think it's going to shape the 2028 race as soon as we get over this midterm. We're going to be talking about how to regulate and tax AI. 00:15:30 Speaker 3: I want to pick on someone who's been a great supporter, even though he supports Arkansas football. French Hill is a ranking Republican. How angry is Chairman Hill right now with President Trump? 00:15:41 Speaker 8: Well, I mean, I think there's a lot of folks who are angry with President Trump. 00:15:44 Speaker 5: They're talking to you, but they're not talking to the visible media, are they? 00:15:47 Speaker 8: No, it's quiet. It's very quiet. And one of the things that I'm running around the street talking about is the fourth quarter reconciliation bill. Now, why are we not hearing about it? 00:15:54 Speaker 5: Translate that, please. It's Bloomberg money. 00:15:56 Speaker 8: OK, this is the most important thing, in my opinion. So the House is lost. This is why French Hill is mad. They're going to have to change the chamber. It's no fun to go to the minority chambers. You're going to want to be in the majority. OK, so the House is lost. I think that's pretty clear. What happens next doesn't matter what happens in the United States Senate. This means that President Trump needs to negotiate with Democrats next year to fund the war in Iran, which is on month eight and still hasn't gotten an emergency supplemental. and to hike the debt ceiling. The debt ceiling is the kind of existential fight that you could have next August with the credit ratings agencies downgrading the United States, Dem saying you need to repeal the tariffs or we won't budge, and Trump saying, well, let's see what happens if you do flip the switch on the debt ceiling and don't hike it. Let's see what happens. So they're going to have to act in the fourth quarter of this year on a reconciliation bill that they don't want to come back and vote for. They don't want to be the only ones carrying $ 100 billion for defense, a third farmer's bailout, a $ 5 trillion debt ceiling hike. Maybe they throw in some stuff on crypto or even the hemp ban. But that's not a fun bill to write. And my odds are 30% that we get that must-pass reconciliation bill because, like you mentioned, so many of these members just don't want to come back. 00:17:04 Speaker 1: None of these are fun bills to pass or to write. And that's kind of the problem. I mean, I think about how states are required to balance their operating budgets. 00:17:10 Speaker 8: Right. 00:17:11 Speaker 1: But we know plenty of capable state governors end up getting elected to higher office. What happens to these guys once they get to Washington, where the idea of spending within your means goes out the window completely? 00:17:21 Speaker 8: No, runs straight into a wood chipper. One of my favorite data sets is that members of Congress who are in and new now, there's I think 83 percent of the Republican conference was not there when we did TARP, when we did the auto bailout, when we dealt with all that spending we did to come out of the recession. So they don't they don't think it's their problem. Why should I have to take those votes to backfill that deficit that y'all created? I didn't do

this. 00:17:46 Speaker 5: She said y'all. It's New Orleans. 00:17:48 Speaker 1: Yeah, I get it. 00:17:49 Speaker 5: Translate that, folks. Quickly here. We're out of time. 00:17:52 Speaker 3: $ 118 barrel oil. I got a secretary of defense or whatever he's called unloading on the latest general on planning. At Fort Bragg, then to Fort Liberty, back to Fort Bragg and Fayetteville. Is the military normally conservative, maybe Republican? Are they behind this election? Are they walking away from the administration? 00:18:15 Speaker 8: I'm friends with a lot of Marines and military guys down in Louisiana, and I will tell you that they don't like any of this. And I would say that many of them don't vote. There is support for President Trump, but not necessarily support for down-ballot Republicans. I mean, that's the benefit of President Trump, and he very much is on the ticket. One final point I would make here is that he handpicked the senators running in Texas, North Carolina, South Carolina now with Darlene Graham, and Louisiana. And so you're getting this turnout, especially among black military voters. I was just at a Jamie Davis rally at the World War II Museum. They're going to turn out. It's a question of whether the Republicans show. 00:18:51 Speaker 2: Up for Trump. 00:18:52 Speaker 8: All right. 00:18:52 Speaker 1: Henrietta Trace, she's going to be sticking with us to discuss her personal strategy for personal finance. And later on, we're going to speak with the author of The Everywhere Millionaire, Owen Zidar of Princeton University. All that coming up. This is Bloomberg Money. 00:19:07 Speaker 3: You're listening to Bloomberg Money. Stay with us with more to come after this. Bloomberg Money, the work of Henrietta Trace, her personal finance, her retirement, her wealth. 00:19:25 Speaker 5: Management, it's all voodoo. 00:19:28 Speaker 1: That's your Halloween treat, isn't it? 00:19:29 Speaker 5: She brought me my New Orleans NOLA voodoo thingy. 00:19:33 Speaker 2: Well, we're really. 00:19:34 Speaker 1: Pleased that she's here from New Orleans. Henrietta, knowing what you know about how the sausage is made in Washington, how things get passed or don't or get addressed or don't, how do you plan your own personal finances, your own retirement? I mean, do you assume that Social Security will be there or not by the time you retire? retire? 00:19:51 Speaker 8: I do not assume that Social Security will be there. I see how many deficit reduction commissions we've done, Simpson-Bowles, trying to pass legislation that is painful, like raising the retirement age, raising the tax rates on the wealthy, creating a new income tax bracket. They know they need to do this. It's not confusing. It's very clear. And they don't have the votes for it. And they don't want to. And I would imagine with AI emerging, they're not going to run a campaign in 2028 on saving Social Security. They're going to talk about what we see out of the Trump administration, which is growth is going to get us back to solid GDP. It's going to fix Medicare. It's going to fix Social Security. I don't have that kind of faith and I don't assume so. 00:20:30 Speaker 1: Do we have any lawmakers in Washington who have the soul of a technocrat who can go in there and like look at this very clinically and just say we need to do this and this? 00:20:39 Speaker 8: There's not a lot of senior elder statesmen left, to be honest. And the budget committees, which is where you'd start a lot of this stuff, have turned over in the last many years, 10 years. And one of the other things that's true about this election, no matter who wins, Dems or Republicans, we're going to get at least 63 new congressmen next year. 00:20:58 Speaker 1: Those are freshmen. 00:20:59 Speaker 8: I have something very unpopular that I will say, but I don't love a term limit because I want the old guys there who've done this for a long time to know how to get a bill through. 00:21:07 Speaker 11: Yes. 00:21:07 Speaker 4: Yes. 00:21:09 Speaker 8: I mean, that's what I want. I think that's what works. 00:21:11 Speaker 5: Yes, you can come back. 00:21:13 Speaker 1: You want the institutional knowledge to be put to work. 00:21:16 Speaker 4: Yes. 00:21:16 Speaker 1: Henrietta Trace, thank you so much for sharing your institutional knowledge. She is, of course, with Veta Partners. 00:21:21 Speaker 2: Thank you. 00:21:26 Speaker 3: Tom Keenan, Scarlett Fu, it's a great day to be in the triple leverage. 00:21:29 Speaker 5: It's all cash fun. 00:21:30 Speaker 1: Yeah, it certainly is. You look at what's happening in stocks. We're going to end the week on a down note. Third straight week of losses for the S & P 500. But the real pain is in the Nasdaq Composite Index. It is down. It is just off session lows right now. 00:21:43 Speaker 5: Let's expand our data check today. 00:21:44 Speaker 1: Yes, let's do that. Let's get to some individual names. Intel down about 28%, 29% on its own. Amazon down. Reported more CapEx than expected, so investors are punishing that name. 00:21:56 Speaker 5: VIX out to 20 again. 00:21:58 Speaker 1: Yeah, VIX out to 20. NVIDIA didn't do anything, didn't report, but it's down 4%, poster child for the AI play. And Bitcoin also lower because there's a big hack, the biggest hack in the crypto industry. 00:22:09 Speaker 3: This is where I would say in the middle of this data check, you really fall back on having a plan B. 00:22:15 Speaker 5: I mean, Bloomberg money, wealth management. 00:22:17 Speaker 1: They're always planning. 00:22:18 Speaker 5: No, but a lot of people don't have a plan. 00:22:20 Speaker 1: Oh, I see where you're getting at. 00:22:21 Speaker 3: They watch Bloomberg surveillance on television or radio, and they go, go to cash. 00:22:25 Speaker 5: They're on the phone. 00:22:27 Speaker 3: Brammo's talking. They're like, go to cash or that. Let's do cross-asset here quickly if we have time. 00:22:32 Speaker 5: Let's get it up here. And

of course, there are some. 00:22:34 Speaker 3: interdependencies here within equities, bonds, currencies, commodities. The VIX out of 20 gets my attention. It feels like a 24 or 27 VIX. 00:22:44 Speaker 5: Market, but it's really not that bad. 00:22:47 Speaker 3: Right now, in this special edition, with all of our election coverage and the emotion of the nation, we need to get back to what we do. Michael Conrath is an adult in the room on retirement with JPMorgan Asset Management, and he usually shows up with a PowerPoint And I got a chart I made. Of course, his chart's better. But what's important, page 60, 60 pages and page four is the money chart. 00:23:11 Speaker 5: This is the one that matters. Luigi, bring up the chart here. Have the interns bring up. 00:23:15 Speaker 3: The chart, Luigi. I know you're voting right now. And I'm sorry, this is life expectancy. This is the heart of the matter. This is what's changed for fossils like me and even for the young turfs. 00:23:27 Speaker 5: Michael Conrath with us. This is the immovable force is that 90 is the new 65. 00:23:32 Speaker 2: Yeah, it certainly is, Tom. 00:23:33 Speaker 9: And it's great to be with you both here the day before Halloween. And this is a scary figure to a lot of people because one of the big questions people have is how long does my money need to last? And the short answer is it needs to last as long as you do. But as you pointed out with that chart, Tom, There is a 74% chance one member of a 65-year-old couple today lives. 00:23:54 Speaker 2: To age 90 or beyond. 00:23:56 Speaker 9: 44% chance one of them lives to 95. 00:23:59 Speaker 5: Cut to the chase. 00:24:00 Speaker 3: You're in a bar with Gabriel Santos. Not that that would ever happen, but cut to the chase. The kids think they need to have X amount of a hundred thousands or a million or whatever to get. 00:24:11 Speaker 5: Out to 90. 00:24:11 Speaker 3: What's the real number we need today to think about given this longevity? 00:24:17 Speaker 9: Well, Gabby is a close friend, just for reference, but I will say that we have another page in that guide as well that helps people answer that question, What is my number? 00:24:26 Speaker 2: And people sometimes shy away from that. 00:24:27 Speaker 9: They get the Halloween spooks when they think of these big numbers. We've made it very simple as a starting point. If you can answer two questions that I'm sure everyone can answer, what is my age and what is my income? We give them a checkpoint. That is your target. The unfortunate thing is half of people don't know what their target is. They haven't even done a basic calculation. 00:24:48 Speaker 2: Agreed. 00:24:49 Speaker 1: Well, part of that is because inflation is staying high. Interest rates are not falling. So it feels like that target, that number is a moving target, right? It's not stable. And the conditions are so volatile out there, you kind of just throw your hands up in the air. 00:25:01 Speaker 9: Yeah, and

it's easy to get caught up in whatever the crisis du jour is. But the important thing is retirement planning, you have to play the long game. So for people that are close to that finish line, it's always important to check in. 00:25:12 Speaker 2: Where am I at today? 00:25:14 Speaker 9: Because their 60-40 portfolio a few years ago is now 75-25. 00:25:17 Speaker 2: The heart of the. 00:25:18 Speaker 5: Matter, Scott, for me, here's what's coming up in the e-block. Let's bring it up right now. Bring it in here. There we go. 00:25:23 Speaker 3: The everywhere millionaire, he's working on a $ 5 million number. 00:25:28 Speaker 2: Yeah. 00:25:28 Speaker 3: Most people in your game aren't thinking about accumulating five million, are they? 00:25:34 Speaker 2: No, they're not. 00:25:35 Speaker 9: And you have to think about not just that longevity risk. You have to think about the rising cost of health care as well, which has its own inflation rate built in. I mean, Medicare costs alone rise six percent a year. So you've got to factor in all these risks in addition to thinking about market risks and the investment. 00:25:50 Speaker 1: And there's also the risk of when you were born. I think about 30-year-olds and how they feel priced out of adulthood, right? They can't afford any of the financial milestones like buying a home, having a baby, affording life in the city where they work. I mean, savings is a nice to have. Let's just say they get to the point where they can start saving. It's just that they're starting much, much later than what we say they should do. So what is your strategy when you start saving at age 40, at age 42? How do you make up for that lost time? 00:26:15 Speaker 9: Well, I think the core message to start, Scarlett, is it's never too late. And that checkpoint chart that I referenced can give you starting points and actual guidance on what to do today. If you flip through the next pages, we give them the dollar amounts to get close to those targets. 00:26:29 Speaker 2: But, you know, importantly. 00:26:31 Speaker 9: You've got to get invested, stay invested. Don't try to time markets. And I mean, we talk about these things all the time. But I think one of the biggest opportunities for that 30 and 40 year old cohort that hasn't really gotten started is look at your employer. There's a lot of company matches out there. Make sure you're at least maxing out on that. That is probably one of the few free lunches here. 00:26:50 Speaker 3: Across America, thank you so much for the way you choose to watch Bloomberg Money. Cole Smead out in Phoenix, he's living large out there. It's like 8,000 square feet. He can like see Albuquerque from where he lives. And Cole Smead, who's an adult in the business, sends in what really matters. Nobody talks about home ownership. Talking about home ownership is a plug-in to retirement at J.P. 00:27:12 Speaker 5: Morgan Asset Management. 00:27:13 Speaker 2: Sure. 00:27:14 Speaker 9: So we actually do look

at home ownership. And we so one of the benefits of working part of shaping your chase is with access to data. And just to be clear, it's anonymized data. So we could see quite simply how people save, how they spend, how they borrow. 00:27:27 Speaker 2: And we do look at home ownership. mortgages. 00:27:30 Speaker 9: What's interesting is we see this trend towards partial retirement. So retirement is no longer this binary thing, working or retiring. Sometimes people are doing a mix of the two, if you will. But we see a trend where people will work until they pay off that mortgage and then they'll transition from partial to full retirement. So all of these things are interconnected and all of these data are built into the guidance that we highlight here. 00:27:54 Speaker 10: Right. 00:27:55 Speaker 1: I mean, the categories that we used to identify no longer exist. The lines are really blurred. You mentioned maximizing your contributions to your 401k. That's great for salaried workers like you, like Tom, like me. But if you're a small business owner, you're reinvesting whatever profit you generate straight back into the business along with your bread, blood, sweat, and tears. What's the solution for people who work for small businesses and small business owners? 00:28:18 Speaker 2: Yeah, I'm glad you asked that, Scarlett. 00:28:20 Speaker 9: So there is a tremendous opportunity because this is an underserved part of the market. And I can tell you as the son of a small business owner, I've seen how much effort that my own father put in that business, but didn't focus on his personal finances. And if you were to go to him and say, hey, you should set up a solo 401k, for example, he would have said, what is it going to cost me? And how much of a headache is this going to cost? I can't distract from my clients, my customers, my employees. But there's legislation under Secure 2.0 that offers tax incentives for small businesses to start up a new plan today. So the costs are offset, not just ongoing, but maintenance wise as well. And just like product innovation, just with fee compression, bundled solutions. 00:28:59 Speaker 2: It's really great. 00:28:59 Speaker 3: But with the international reach of J.P. Morgan, there's got to be other nations doing this better than we are. If we assume ERISA of 1974 was a success, but also a failure, your daily provisions in the J.P. Morgan building, you're there with Mr. 00:29:15 Speaker 5: Diamond, Mr. Erdos, Mr. Gash, the fancy people at J.P. They don't go to daily provisions, but you know. 00:29:21 Speaker 2: I do. 00:29:22 Speaker 5: Conrath does. So anyways, you're sitting there having a cup of coffee. 00:29:25 Speaker 3: What do you need for legislation to help half of America that's not participating in the game? 00:29:31 Speaker 9: Yeah, so you mentioned international markets, and there are examples, Australia, other parts of LATAM, where the conversation is shifting and the legislation is changing. to require contributions, mandatory contributions up to a certain level. 00:29:44 Speaker 2: And guess what? Most people don't push back on that. 00:29:48 Speaker 9: So I think there's some opportunity here to think of that from a creative perspective. But just to be clear, back to the small business opportunity, if you're a small business that has more than 10 employees, like things like auto enrollment, auto escalation, making sure your contributions go up over time, those are things that are built into this legislation too. 00:30:06 Speaker 2: So we're getting there. 00:30:08 Speaker 1: What if you're an independent operator, meaning you're Gen Z, because there's a swath of Gen Z out there, trying to make a living as influencers who earn enough to finance their next vacation but not to save money? 00:30:19 Speaker 8: Sure. 00:30:19 Speaker 2: Well, it's interesting. 00:30:21 Speaker 9: When we look at how people are spending, people are not necessarily spending on things like vacations. 00:30:27 Speaker 2: At the expense of their retirement savings. 00:30:29 Speaker 9: For them, I think they still have access to something like an individual retirement account, an IRA, and sometimes those become a secondary thing relative to a 401k, but they should not be forgotten. 00:30:39 Speaker 3: Can we cut to the Chase return? we're addicted to double-digit return. 00:30:43 Speaker 5: We wake up every morning with our video. 00:30:45 Speaker 2: We've had three, three years of it, yeah. 00:30:46 Speaker 3: Well, more than three years, but within this just arching bull market, do we really need to still model a single-digit return as a responsible planning amount? 00:30:56 Speaker 9: Yeah, that's a great point, Tom, because when we look at all the modeling that we do, it's based on our long-term capital market assumptions. 00:31:03 Speaker 2: So you're looking at your. 00:31:04 Speaker 9: Balanced portfolio, call it 7%, maybe get another 50 basis points if you have some allocation alternatives in there. We're not modeling based on what we saw happen in the past two years, for example. It's what we see the next 10, 15 plus years. 00:31:18 Speaker 3: In your meetings, I mean, this is really important. I have clear memory of parents as depression babies. Forget about Jimmy Stewart and Wonderful Life and all that. 00:31:29 Speaker 5: How do we do this forward if we've lost the memory of 35% down? 00:31:34 Speaker 2: Yeah. 00:31:35 Speaker 5: Basically, as a nation, we have lost that depression worry. 00:31:38 Speaker 1: Yeah. 00:31:38 Speaker 9: No, it's there's certainly behavior because people will anchor on what they've just seen. Not too far behind in that rear view mirror. And that's why we're front footed with the long term capital market assumptions, making it clear that this is what we see happening. Look, we hope things could be better than that. But you shouldn't expect double digit returns in the near term and even over the long term as well. 00:32:00

Speaker 1: Michael Conrad, thank you so much. 00:32:02 Speaker 3: J.P. 00:32:02 Speaker 1: Morgan, asset management chief retirement strategist. Most people think the path to great wealth runs through Wall Street or Silicon Valley. The Everywhere Millionaire, a new book, challenges this idea using data and real life stories about entrepreneurship to reveal the hidden one percent. The author, Owen Zidar, joins us now to discuss. He, of course, is an economist at Princeton University. Owen, beyond the Elon Musks, Jeff Bezos, and indeed Mike Bloombergs, who are the really rich in America, what surprised you the most as you combed through the data to get a better understanding of who the very rich are but not the super wealthiest? 00:32:37 Speaker 10: And if you go to any nice part of the country where there's a nice lake or a golf resort and you go and ask who owns that $ 4 million vacation house or who has that nice boat, it's very often not someone like Elon Musk or the moon men who are kind of extraterrestrial. 00:32:52 Speaker 2: It's much more mundane. 00:32:53 Speaker 10: It can be very common businesses like auto dealers or beverage distribution companies or restaurants. 00:32:59 Speaker 2: People who, you know, are clearing. 00:33:02 Speaker 10: Snow from a bunch of people's driveways and they do that enough that they can make $ 5 million. And there's $ 3 million of, or sorry, there's 3 million of these everywhere millionaires across the country doing relatively ordinary things, making a ton of money from it. 00:33:14 Speaker 1: And what's key to them is that they are able to organize their business as a pass-through business. Why is this important? Why do we care? 00:33:21 Speaker 10: I mean, that's one of the interesting things is that that's how we're able to see them for the first time because it creates a paper trail in terms of the record keeping. And generally, it's just hard to know who's wealthy if you just read what public companies are saying because there's this huge legion of private business owners that don't have to report how they're doing. And through the pass-through structure, as researchers working with the Treasury Department, we were able to see this hidden world of everywhere millionaires that can inspire a lot of people to know that there's a lot of opportunity and abundant wealth in America nearby, and it's not just in Manhattan and California. 00:33:56 Speaker 3: I think Scarlett undersold a book, a laureate up at MIT. That's a school up in Boston, if you didn't know that, Owen. Simon Johnson says, shut up and read it. And the giant, I dearly miss him every day, Angus Deaton says, a vitally important book. My childhood is in your book. I went to camp. I knew the Wegman family of Rochester. New York, and there were two kids on the block. They lived on Monroe Avenue, and their name was Sands, and dad started a beverage distribution company, as you put it, called Canandaigua Wine. They start seat of the pants, don't they? And they don't want the government taking their money, you know, as a broad sense. 00:34:35 Speaker 10: Yes. So we tell one of the industries that we tell the story of is beverage distribution from the prohibition to when you had people with a pickup truck and some ice, and that was enough to be a beverage distribution owner. Then if you fast forward, it was an extremely lucrative thing where the Coors family in the 70s had over 1,000 people applying to be one beverage distribution owner. 00:34:59 Speaker 2: And now. 00:34:59 Speaker 10: You know, in the book, we have anecdotes like you go to San Antonio and the mayor will say, you know, why are there so many private jets in San Antonio? I've never seen so many private jets here. And it's like, oh, it's the beer distribution conference. 00:35:11 Speaker 1: So it's amazing because we're talking about very unglamorous businesses. We're not talking about fancy businesses that get people excited, that show up in the covers of magazines or anything, or that even get talked about on television. I mean, a lot of these are plumbing businesses, dental practices, things that kind of get overlooked. If I'm determined to become super rich then, I can't rely on my salary job then, right? I need to go and take a risk. 00:35:35 Speaker 10: So there are a few lessons in terms of getting wealthy. One is own, don't earn. Most people don't get rich, like really rich. you know, $ 10, $ 25 million from earning a W-2 or a salary. The typical person, especially as you go up from $ 25 million to $ 100 million, they almost all own private businesses like the families of your childhood, Tom. 00:35:55 Speaker 3: I look at this, Professor, and it's as simple as you're at a school, and with the media frenzy today, these kids think their starting pay ought to be $ 212, 000 a year, and if I'm not popping $ 450, 000 after three years, I'm a failure. How do we adapt to a younger generation that's talked themselves into big six-figure income, which we all know is a fiction? 00:36:17 Speaker 10: I think the definition of success right now is just really narrowed, and one of the goals of the book is to broaden the aperture to say— And you succeeded at that. 00:36:26 Speaker 2: I hope, being on shows like this. 00:36:29 Speaker 10: One interesting thing is you just don't have to be elite to be rich. 00:36:32 Speaker 2: You don't have to start at one of these fancy jobs. 00:36:33 Speaker 10: I think there's tremendous opportunity to have these private business owners, many of whom are reaching retirement, who want to hand it off to the next generation. 00:36:41 Speaker 3: I'm in Switzerland as a spoiled rich kid in a room looking out at the Geneva and the Mont Blanc in Italy, and I'm reading a book I pick up called Think and Grow Rich, Napoleon Hill. 00:36:53 Speaker 5: I looked at it a million. 00:36:54 Speaker 3: Years ago and thought, this is a, it was in the 30s. It was my grandparents and parents, and I never got it. I

thought it was so simplistic. Napoleon Hill, very controversial, built that franchise. 00:37:07 Speaker 5: On spirit and energy, go get them and all that. And the magic of your book is I don't see that there. How do you feel about that American get up and go spirit that was codified 40, 50 years ago? 00:37:20 Speaker 2: It really shines through. 00:37:22 Speaker 10: We talked to several of these business owners and they're relentless and they work for decades. So I think You know, for young people, there's a sense that you can get rich quick and create an app. 00:37:32 Speaker 2: And most of these stories are, you know, you. 00:37:34 Speaker 10: Roll up your sleeves and it's several decades of hard work and a lot of gumption and, you know, real competitive drive. So I think it goes back to some of these classic views. And it's just we have better data than anyone's ever had before on wealth and opportunity in America. 00:37:50 Speaker 2: And that's what makes it exciting. 00:37:51 Speaker 1: So for people who own these businesses that are doing very well, they don't realize their wealth until they sell it. And a lot of the times, the selling it, realizing it, involves selling it to private equity. How big of a role does that play in the everywhere millionaire? 00:38:04 Speaker 10: So a big market, private equity has really grown since ERISA, and it's... They're just very hungry for these types of companies. And the typical everywhere millionaire in this country is 62. As I said, it took decades to get there. And now they're seeing retirement. And often they can give it to their kids if their kids want to do it. They could sell it to private equity, which you can think of as the child they never had. Or they can sell it to a young person who comes in and says, hey, I'll shadow. 00:38:31 Speaker 2: You for a few years. Let me learn the ropes. 00:38:33 Speaker 1: I'll be your apprentice. 00:38:34 Speaker 2: I'll be your apprentice. 00:38:35 Speaker 10: And then I'll use some seller financing to have you finance it with some share of the future profits. And that's a very common way that even top MBA. 00:38:43 Speaker 2: Students are now doing. 00:38:43 Speaker 10: They're going and buying these businesses rather than working for Goldman Sachs or McKinsey. 00:38:47 Speaker 1: Is that what you're hearing from readers, from people you talk to? 00:38:50 Speaker 10: So people from all over, like, oh, you know, I've been in this salary job for 10 years. I really want to change gears. You can look at what happens at the top business schools. I mean, they really are, there's a lot of activity in search funds, and some of the people we talk to in the book, they spend a year searching for companies. 00:39:07 Speaker 2: They raise money. 00:39:08 Speaker 10: From people, and they end up in all sorts of adventures. And, you know, they're pretty interesting stories. So I invite people to read the book. 00:39:16 Speaker 1: Owen, thank you so much for joining us today. Owen Zadar is author of The Everywhere Millionaire with Princeton University. And for the latest reviews and recommendations from Bloomberg, subscribe to the On Books newsletter. We've got more on the upcoming U.S. midterms. We're going to connect all of this, the affordability questions, the ability to still live the American dream. 00:39:35 Speaker 3: We have an expert parachuting in. 00:39:37 Speaker 1: Yes, David Gerro will be joining us next. This is Bloomberg Money. 00:39:42 Speaker 3: You're listening to Bloomberg Money. Stay with us with more to come after this. 00:39:55 Speaker 5: Welcome back. 00:39:56 Speaker 3: Bloomberg Money. It's on retirement. It's on personal finance. It's on wealth management. It's on voting early. 00:40:01 Speaker 5: Vote often. 00:40:02 Speaker 1: Well, it's also about affordability. And on Bloomberg Money, our guests have been talking about affordability and the American dream ahead of the midterms. Take a listen. 00:40:10 Speaker 2: You see it survey after survey, anecdote after anecdote. 00:40:12 Speaker 10: But younger people today, especially in Gen Z, they just don't really believe in that classic American dream. 00:40:17 Speaker 8: And the American dream is being, you know, running past us. 00:40:20 Speaker 5: We do and have had a K-shaped economy for some time. 00:40:24 Speaker 9: But the branches of the K have been diverging more widely in the last six or seven decades. 00:40:29 Speaker 12: Forty-seven percent of Americans, according to our research, saw real wage declines over the last four years because of inflation. So, this is why consumer sentiment is dismal. 00:40:42 Speaker 11: Trump's tariffs, the war in Iran, both of which have jacked prices up for consumers. Cities like New York, in states like California, where housing's become, you know, impossibly unaffordable. 00:40:53 Speaker 6: And we have the midterms coming up, and people are thinking about the economy. 00:40:57 Speaker 8: But every politician should be talking about housing affordability. 00:41:01 Speaker 12: These health care is climbing, and whether you shift it to the work or you, you know, assume it as a small business, they still have to be dealt with. And a lot of people work just for benefits. It's not just about the paycheck. 00:41:13 Speaker 9: It may not be true in the world that we live in, but for the majority of people retiring, they cannot afford to give up 10 or 20 percent of their Social Security. 00:41:23 Speaker 1: So let's look ahead now to the weekend and next week. Bloomberg This Weekend anchor David Gurra joins us. And it's all about getting ready for the midterm elections. I know you went out and already voted because you're going to be working 24-7. I'll have no time otherwise. 00:41:35 Speaker 7: Exactly. 00:41:36 Speaker 1: Affordability is something that's obviously a talking point. But is anyone addressing it really head on? 00:41:41 Speaker 2: I think it's the talking point. 00:41:43 Speaker 13:

If you look at what's played out here over the last week, you have a lot of candidates on the Republican side who are acknowledging the fact that this is an issue. There's very little the president can do that he can talk about with regard to it here between now and Election Day. So we've seen him cancel these rallies, put them back on. 00:41:57 Speaker 2: I think that there is a sense. 00:41:59 Speaker 13: Here that he has created a lot of this, galvanized a lot of it, catalyzed a lot of it. And Republicans don't really know what to do with that. So I think there has been a level of discipline among Democrats talking about this issue, which is so front of mind for so many people. 00:42:11 Speaker 5: You're going to talk to the congressman from JFK this weekend, Mr. 00:42:14 Speaker 4: Meeks. 00:42:14 Speaker 3: I mean, the guy I've interviewed many times, wonderful guy, grew up in a housing project. I mean, really seat of the pants narcotics prosecutor and such. How does that Democratic Party and Mr. Jeffries talk to the new conservative Democrats across America? 00:42:30 Speaker 5: This is Gregory Meeks. 00:42:31 Speaker 13: He's the ranking member of the Foreign Affairs Committee. He sits on financial services and stands to be a very powerful person here in the new Congress if Democrats get the majority. Look, he has that background. It's informed his career in Congress. This would be his 14th term should he be reelected, reelected as he's expected to be here. I'm going to ask him about how they stitch together a caucus in light of the fact that we've seen so many disparate fibers here over the course of this campaign. I think a huge question is how much do they focus on this issue of affordability, cost of living, while all the while there is this pressure from a significant flank of the party on them to investigate and hold hearings into this administration, what it's done so far. 00:43:04 Speaker 1: It's too bad we can't elect technocrats because technocrats can't win elections. 00:43:07 Speaker 5: Oh, listen to you. 00:43:09 Speaker 1: No, but seriously, they are very pragmatic about things. They can commit themselves to politically painful choices. 00:43:13 Speaker 5: Are we having a Mario Draghi moment? 00:43:17 Speaker 1: Mario Draghi, a technocrat, yeah, who got things in order. I mean, our political system doesn't have that kind of mechanism. 00:43:22 Speaker 13: Yes, it looks like we're very far from that. And I think that the primary process we've been through in this general election shows us how far we are from having a system like that in this country. 00:43:29 Speaker 4: All right. 00:43:29 Speaker 1: David Gurra, thank you so much. He's going to be working hard the next couple of days. 00:43:33 Speaker 2: You'll be here, too. 00:43:33 Speaker 1: That's right. Make sure to watch Bloomberg this weekend. I'm going to be here covering the election on Tuesday. 00:43:39 Speaker 5: Why didn't they ask me? 00:43:40 Speaker 1: You have to get up the next day to cover surveillance. 00:43:42 Speaker 3: Are you missing flag football this weekend? 00:43:45 Speaker 5: I will. You're okay. Thank you. A special edition of Bloomberg Money. 00:43:55 Speaker 3: This is the Bloomberg Money Podcast, bringing you a smart look at the forces shaping your financial life. I'm Tom Keen with Scarlett Fu. You can watch the show live on Bloomberg TV every Friday at noon Wall Street time. Subscribe to the podcast on Apple, Spotify, or wherever you listen. And as always, on the Bloomberg Terminal and the Bloomberg Business app. 00:44:22 Speaker 12: Thank you.