What You Need To Know (AND the Fascinating History of Banking w/ Paolo Zannoni) (SB1529) » The Stacking Benjamins Show

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Paolo Zannoni

Big thanks to Paolo Zannoni for joining us today. To learn more about Paolo, visit Board of Directors – Prada Group. Grab yourself a copy of the book Money and Promises: Seven Deals That Changed the World

Doug’s Trivia

• In today’s dollars, how much did the United States pay for Alaska?

Better call Saul…Sehy & OG

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Written by: Kevin Bailey

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Episode transcript

[00:00:00] Joe: It’s Monday morning. NOGI bet you had a party of a weekend.  [00:00:03] OG: I  [00:00:03] OG: need to detox for my weekends is what I need to do. I about  [00:00:06] Joe: have to detox for an hour with us and have some financial fun. Sound like a good time?  [00:00:10] OG: Maybe  [00:00:11] Joe: retox sober  [00:00:12] OG: you up real fast. Maybe it’s a retox.  [00:00:15] Joe: It’s time to get the motor running again. [00:00:17] Joe: Hair the dog baby. Yes. Let’s do this. Right? So raise your mug of generic drink inside of it and let’s, uh, do what we do every Monday.  [00:00:27] OG: Babu it on  [00:00:28] Joe: behalf of. I don’t like their coffee on behalf of. Uh, and by the way, for people that are listening on the audio side, he just held up the, well, I think they got that. [00:00:36] Joe: He did play the part. I think we, yeah,  [00:00:39] OG: I think they got it.  [00:00:41] Joe: On behalf of the men and women, uh, making podcast in mom’s basement and the men and women serving our service people, our veterans, our DOD and their families at Navy Federal Credit Union, big shout out to our troops to start the week. So I’ll go stack and Benjamins together. [00:00:58] bit: My God, Dukes are going to corner the entire frozen orange juice market [00:01:08] OG: live from Joe’s mom’s basement. It’s the Stacking Benjamin Show. [00:01:23] OG: I am Joe’s mom’s neighbor, Doug. And where does your bank come from? You know, if your bank did an ancestry DNA test. Today we’re diving into the history of money and banks with renowned banker and scholar, and currently the executive deputy chairman of the Board of Prada. Yeah, that Prada, Paulo Zoni. Plus FinTech customers left an lurch after a key provider collapsed. [00:01:48] OG: We’ll share the story and our commentary in today’s headline. Plus. Plus. We’ll answer a question from one stacker who thought, you know, I better call Saul, see hi and og, and then I’ll share some chilly trivia. And now two guys who I have to deal with every day. Every day. It’s Joe and O. [00:02:21] Joe: Hey everybody, welcome to the Doug is pinching himself podcast ’cause he gets to deal with us every day pinching something. It’s a super Monday here in mom’s basement. You know why? It’s super. ’cause not only do we have Doug here, I. But also because we have Mr. OG across the card table. Good morning. Well, I should say, ’cause we don’t know when people are listening to this good, generic time of day, Mr. [00:02:41] Joe: og.  [00:02:42] OG: Super duper day. It is a super, just a super day.  [00:02:45] Joe: Super day.  [00:02:45] OG: Super duper.  [00:02:46] Joe: You know what? Super, I love these historical episodes. Historical, historical, historical histrionic. Yes. E episodes where we dive into how we got here. How the heck did we get here with banking? And uh, and polo is, uh, such Aef a great guy to talk to. [00:03:02] OG: Rockefellers. What’s that? I said Rockefellers.  [00:03:05] Joe: There it is. We know who needs polo. We got OG Rockefellers game over done. But we’ve got a great headline too. But before this, you know what, guys? This podcast is free to you because we have some awesome sponsors who’ve stepped up to say, you know what we’ll pay and, uh, so support us by supporting our sponsors. [00:03:25] Joe: And here are two, don’t  [00:03:26] OG: you  [00:03:27] Joe: mean  [00:03:27] OG: Rothchild instead of Rockefeller?  [00:03:30] OG: Rockefellers. Rothchilds Morgans, who cares? Rich people Hollow will straighten us all out here in a second.  [00:03:37] Joe: He’s got it before that, while he’s upstairs talking to mom, we got a disturbing headline guys.  [00:03:42] Speaker 5: Hello Doling. And now it’s Time for Your Favor. [00:03:46] Speaker 5: Part of the show I was Stacking Benjamins headlines. Our  [00:03:49] Joe: headline comes to us from CNBC and, uh, this is not one that we like to share. Uh, savings app, CEO says 85,000 accounts locked in FinTech Meltdown. Quote, we never imagined a scenario like this when Adam Moles, co-founder of a FinTech startup named Yoda, Y-O-T-T-A, isn’t that yada? [00:04:12] Joe: Like yada, use our app. Yada, it probably is or yada yada. Yeah. I can mispronounce anyth Doug as, as you already know, we can mispronounce anything on this show. We are so good at it. Uh, named Yada. When he co-founded that in 2019, he wanted to give Americans a new way to save money, to help them cushion the ups and downs in life. [00:04:30] Joe: Instead, his company is inadvertently been a source of deep pain for thousands of customers who relied on yada accounts to receive paychecks, pay bills, and save for emergencies. This whole thing began by the way, on, uh, May 11th when the dispute between two of Yadas banking partners, FinTech, middleman, synapse, and Tennessee based evolve bank and trust led to the lockup of accounts at Yada, and at least two dozen other startups. [00:04:54] Joe: Synapse ended up declaring bankruptcy early this year. After several key clients abandoned the firm amid disagreements over the tracking of customer funds. So here’s the issue, OG past three weeks, 85,000 yacht of customers with a combined $112 million in savings have been locked outta their accounts. [00:05:12] Joe: MLI says that they partner with FDIC insured banks. So the banks behind this money all have FDIC insured accounts. MLI says the stories are heartbreaking. We never imagined something like this could happen. We work with banks or members of the FDIC. We never imagined a scenario like this could play out and that no regulator would step in and help. [00:05:32] Joe: But right now we got a bunch of people with their money tied up in a FinTech firm with, uh, with really no end inci about when they’re getting their money.  [00:05:40] OG: Well, it sounds like the good news is that all of these customer dollars are at FDIC insured banks though, right?  [00:05:48] Joe: Yeah. It appears that most of these accounts are a bank called Evolve Bank, which is a bank that has FDIC insurance. [00:05:57] Joe: So because of that, we’re looking at the money hopefully not being locked up for longer initially. By the way, when this first came out with the ap, the conundrum was who’s responsible because of kind what you’re alluding to, OG. You know, the FinTech itself is not a bank and this company Synapse, that’s kind of the middleman here, is also not a bank. [00:06:18] Joe: So in an AP piece, uh, way back when this stuff first started, AP wrote, it’s not clear what role US banking regulators can play in the chaos because synapse isn’t a bank. So it’s regulation is not handled by the Federal Reserve. And because none of the banks that Synapse has worked for have failed. [00:06:34] Joe: There’s no eligibility for FDIC deposit insurance to be paid out. So Evolv has not collapsed. They are just locked up in this, Hey, the accounting on this is all messed up because of Synapse. But to your point, everybody’s gonna be made whole. And I think maybe this is, this is the key thing. We saw this when we had our special episode around, uh, Silicon Valley Bank, which is that when a baking collapse happens, and I think you’ve said this on many occasions, baking collapses happen many, many times a year. [00:07:04] Joe: We just don’t see a headline that they’re happening far more often than we think they are. When they happen. That doesn’t mean though, that you’re gonna get your money tomorrow. It means that your money is guaranteed. But if you’ve got bills between now and then, it’s gonna be up to you to figure out how to get that taken care of. [00:07:21] OG: I’m on this, uh, yada thing too. Am I on the wrong thing? I mean, it was the website that was linked to it from CNBC. It’s like a video game playing thing, like a contest sweepstakes, like it just said, like the, the headline says Today’s winning numbers are this, and here’s how much money you win. It’s like, oh, a million people playing and winning. [00:07:46] OG: It says, it’s like, it says gaming lab certified. This doesn’t seem like a, a place that matches up in my brain with, I’m trying to save money safely and I’m also playing in the casino. I, I mean, I don’t, I I guess I don’t understand what the, well, this,  [00:08:01] Joe: this, uh, I think they linked to the wrong site. They must have, ’cause this is not, I  [00:08:05] OG: don’t know. [00:08:06] OG: It says something about. Saving and winning with yada. I don’t know. I mean, it says at the bottom your, you know, your banks with Evolve and so on and so forth. Like you said, I think the, the interesting thing here is, you know, as you look at where you’re keeping your money, and there’s a lot of FinTech companies out there that do stuff like this. [00:08:27] OG: We do business with a company who aggregates cash and deposits it in another bank with a similar relationship style of like, here’s the name of the company, but you’re doing business at, at, you know, at a bank with these other banks. But that organization is also regulated by the feds in terms of, you know, the SEC in banking and things like that. [00:08:49] OG: It’s, it’s, while it’s a quote FinTech company, it’s still regulated in the financial space. And it sounds like another one of the struggles with this was they had a lot of, you know, at least one of their other middle. People were also not regulated. So maybe some opportunity for some chicanery or whatever. [00:09:10] OG: I don’t know. I mean, it’s a good idea to go like try to find better rates and all that sort of stuff. And it’s okay to even have companies I think, that are helping facilitate that. Just you have to kinda figure out what your money really is doing. I think.  [00:09:24] Joe: Well, and I think if you’re not asking any questions and it turns out that you’re on a game site, ’cause you’re right, this is it. [00:09:30] OG: This really looked, am I crazy? This looks like this. Is it what users are saying? The third person is like a guy in a, one of those anonymous masks with a pentagram on his head.  [00:09:41] Joe: A a new way to save money by playing games and winning big.  [00:09:45] OG: Yeah, I don’t know. It looks kind of funky  [00:09:49] Joe: from their own site. Yara is out to change people’s opinion about personal finance. [00:09:53] Joe: Exciting, responsible, rewarding. Who knew saving could be so fun. You’re playing personal finance games with, with yada, so you’re learning about personal finance while at the same time you are earning rewards until about 10 days ago. 10 days ago, believe it or not. I mean, shocking the timing on this, right? [00:10:16] Joe: Yada, unfortunately has to discontinue paying rewards on savings, balances, paychecks and card spend. The rest of the yada app, including your yada cash as well as all of our games and prizes will continue to run as normal. You’re just not going to get additional rewards. I think that’s probably until they, they figure out what the heck is is going on, because it’s, it’s been very difficult for people to, uh, to take their money out. [00:10:40] Joe: But I think especially when you’ve got some of these, some of these apps, so what you’re saying OG, is that there’s a company that’s maybe comparing interest rates and then, and then working with different banks to do that. Different than a, than I think a FinTech company that’s gamifying the experience and paying you extra money, like the question is. [00:10:58] Joe: You kind of gotta follow the trail. Where’s the extra money actually coming from? How is this extra money actually actually being paid to me? Where’s this at? I mean, if, if what you’re talking about is an account, kind of an aggregator that monitors these different accounts and finds out which ones the high one or where the high ones are,  [00:11:17] OG: then I think that’s a little, I mean, I’ll give you an example of this. [00:11:20] OG: Schwab, fidelity, all these big organizations, big financial organizations, if you deposit, let’s say you have a million dollars, right? You have a brokerage account, you get bonus, you sell the company, whatever, you put a million dollars in your investment account, you haven’t invested yet. We all know investment accounts aren’t FDIC insured. [00:11:38] OG: They’re insured against fraud and that sort of thing, but, but not FDIC insured. Most of these organizations, I’ll take Schwab for example, will have a. A cash option. So you’re gonna earn interest on your million bucks while it sits there while you decide how to invest it. But the million bucks is not FDIC insured. [00:11:54] OG: What Schwab does behind the scenes is they deposit it in four different banks for you in $250,000 increments. You don’t see that. You don’t see that. They took your million and split it up in four places and said, okay, we’re helping OG out. We’re helping Joe out right now. ’cause otherwise this money’s not insured. [00:12:12] OG: So we’re gonna take this million, we’re gonna put, you know, two 50 and four different accounts on your behalf. We’ll still show one line item on your statement of a million bucks. But that way, you know, until you decide what to do with it, you’re, you’re protected. That’s a different thing. And there’s companies that do that. [00:12:28] OG: Lots of companies, that’s a different thing than what this is where there’s a middleman, right? Yeah. In, in my example, Schwab’s got regulations, banks they’re dealing business with, have regulations, you know, like everybody is on the same page basically. And it sounds like maybe this wasn’t that way. So there are some opportunity for some issues there. [00:12:48] OG: But if your money is at a partner institution at an FDI insured bank, you’re gonna be okay. It’s just from a timing standpoint.  [00:12:56] Joe: FinTech co-founders said he believes this is from the CNBC piece, the relatively limited scope of the issue, and the fact that most of those affected art wealthy has given regulators clearance to let the situation play out. [00:13:07] Joe: Last year, regulator swiftly intervened in the regional banking crisis that threatened uninsured deposits of startups and rich families. He noted. So he’s, he’s playing this game Rich versus, uh, playing  [00:13:17] OG: that card. Yeah.  [00:13:18] Joe: Rich versus not rich. And then, uh, but later on last week, former FDIC chair, uh, ano McWilliams was named Trustee over Synapse. [00:13:26] Joe: The company that failed her job is to develop a plan to maintain synapse systems and craft a solution quote that allows funds to be returned to end users, to the rightful owners of those funds as soon as humanly possible. So there is a, uh, there’s an end in sight here. I mean, to  [00:13:40] OG: his point though, right? [00:13:41] OG: A hundred million dollars over 85,000 accounts is like. Thousand bucks a person. 1500 bucks a person, right? Yeah. Not that that’s not zero. Sure. Because that’s money. But I, maybe I put this in the same category as like an Acorns account. Did you guys ever use Acorns? Well,  [00:13:55] Joe: and and Acorns, it’s funny, is even way bigger than this. [00:13:58] Joe: They say earlier on here. Acorns  [00:14:00] OG: is huge. Yeah. But the average account balance is about the same.  [00:14:03] Joe: Is is very small.  [00:14:04] OG: Yeah. You know, that’s their whole, it’s their whole shtick, right? Acorns little teeny tiny. Oh,  [00:14:09] Joe: is that, is that how they got the name? Large FinTech players, including Mercury and Dave fled the Synapse platform in the past year because, uh, they could see problems beginning to bubble there, you know, and it’s,  [00:14:20] OG: mercury was a insurance company. [00:14:21] OG: I think  [00:14:21] Joe: it’s difficult when you’re working though, with these FinTech companies. I mean, who, who had money at Yada that knew anything about Synapse, you know? Oh, you’re working, oh, I see. You’ve got this, this synapse issue. I dunno. Maybe stick with bigger FinTech companies.  [00:14:36] OG: I mean, you just gotta kind of peel away the layers of onion, I think. [00:14:39] OG: I mean, I see a lot of commercials for a chime. Sure. You know, I don’t just happen to show up a lot on YouTube it says, right. It’s really funny. ’cause right at the very bottom it says Chime is not a bank, but the whole commercial is use our debit card, da da da. You use all of our banking  [00:14:54] Joe: products. Yeah. [00:14:55] OG: Use all of our banking products. Chimes out a bank.  [00:14:57] Joe: I think this carries over to the you. You know the health insurance issue. You see people, I see bloggers all the time talk about how these healthcare collectives, usually religious healthcare collectives are a great way to go. And you know what? It doesn’t mean that they’re not. [00:15:13] Joe: And I know some people that have had a great experience, but right across the bottom of those websites, OG it says the same thing. This is not actuarily sound. They tell you right there, Hey, things could work out great with Chime. Things could work out great with your healthcare collective. This is not actuarily Sound means. [00:15:30] Joe: Bad things could happen. Although  [00:15:31] OG: having hit my max deductible three years in a row, I can might argue that uh, my health insurance is not actuarial sound either. Actuarily sound.  [00:15:39] Joe: I think OG being with any healthcare firm would make that healthcare firm not actuarily sound could totally do it. We’ll dive even more into this in the, our newsletter, the 2 0 1 that comes out tomorrow and Thursday. [00:15:54] Joe: Uh, but definitely tomorrow’s issue is gonna be all about FDIC insurance, how it works, and we will go more into that coming up next. Paulo Zenni is a force of nature. He is a long time banker, had a long career in banking. Paulo currently, of course, as you said so eloquently earlier. Doug is the executive director, chairman of the Board of Prada and the president of Prada Holdings in his spare time. [00:16:18] Joe: He’s also international advisor at Goldman Sachs since 2019, and he was with, uh, Goldman Sachs since 1994, named managing director in. 1997, a partner in 2000 and chairman of the Italian investment banking business also spent a period of as co-Chief Executive Officer of Goldman Sachs, Russia. We’re gonna talk about, uh, the beginnings of banking and how banking has, in some cases, bankers have been able to create something out of nothing. [00:16:49] Joe: Been able to create money from thin air. And also maybe as we talked about a cautionary tale in our headline, guys, maybe a cautionary tale or two, about what happens when you become over leveraged. But before that, a guy who is sufficiently leveraged, I. His seat. Ready to go. Mr. Uh, Doug has some trivia for us. [00:17:12] OG: Hey there, stackers. I’m Joe’s mom’s neighbor, Doug. Since we’re talking about deal making today, let’s chat about one of my favorite deals in history, the United States purchase of Alaska in 1867. Talk about a good get. Where do you think they’d advertise something like that, like the Penny Saver at the grocery store? [00:17:31] OG: I bet the listing said something like, for sale by owner, gently used plot of land, bajillion or so acres, gigatons of snow, millions of deadly animals, and possibly precious natural resources included at no electric charge. Serious offers only. The Alaska purchase was already a sweet deal, and it became even sweeter when gold was found 13 years later. [00:17:52] OG: I mean, imagine how mad the Russians must have been when when we found gold and then later on oil. Kind of reminds me of the time I bought this gorgeous vase of the garage sale. The guy gave me a great deal on it. When I got home, I opened the lid, found out it was filled with this really fine, amazing gray sand jokes on that guy, ’cause the vase had a couple of dates on it, so it looks like they were collecting this rare sand for like 75 years. [00:18:20] OG: Today’s trivia question is how much did the United States pay for Alaska? Was it $75 million, $732 million, or $7.2 million? I’ll be back right after I see if there’s anything hidden in the ottoman. I picked up on Facebook Marketplace. [00:18:49] OG: Hey there, stackers. I’m Wheeler and dealer, Joe’s mom’s neighbor, Doug. After mentioning that beautiful sand I found in a vase I bought at an estate sale, I realized I should have it in a clear container so people can actually see how beautiful the sand is. Hopefully, I’ll be able to verify its origin someday. [00:19:08] OG: Today’s trivia question is in today’s dollars, how much did the United States pay for Alaska? Was it $75 million, $732 million, or $7.2 million? The answer with over butt loads of diverse terrain. Alaska is the largest state in the union by a country mile, heck by two country miles. With all it contains, the United States landed one of the best deals in history when it purchased the last frontier for a mere. [00:19:38] OG: $7.2 million or roughly 130 million in 2020 $4. That’s just enough money to live in New York City for like two or three years. And now here to help us dive into the ad-free second half of this podcast and the history of banking. It’s today’s mentor Paolo Zoni, [00:20:03] Joe: and I’m so honored to have him here with us. Paolo Zoni joins us. How are you? Fine, thank you. Before we get into history, Paulo, I would like to dive into a little bit of current events because you have worked extensively in Moscow. Yes. And there is a piece of this Ukrainian conflict that I wonder whenever there is a world crisis like we’re having right now, how is Russia affording this campaign? [00:20:27] Joe: Is there a way for a state to manipulate a banking system to make it affordable or wars more affordable than we think? I mean, you’re the guy that just went through history looking at a lot of different conflicts.  [00:20:38] bit: Modern money is mostly debt and among the various type of debt is bank debt. If you start from that point of view, you can see immediately then very often, uh, what a banking system does and the way the banking system helps the state and the government in power. [00:21:06] bit: Is to turn public debt into immediate purchasing power. Because what a banking system does is, uh, it’ll put public debt on the asset side of the bank and, uh, on the liability side, it’ll match it or exceed it, but let’s say match it on the liability side. But what is on the liability side of a bank is money is instantly available purchasing power. [00:21:40] bit: And so probably the first state that significantly and massively use this kind trick to turn public debt into money, money to be spent among other things in a major confrontation with, uh, an hostile empire or the Republic of Venice. Republic, uh, that had about, uh, mainland, uh, probably the city of Venice, the capital city. [00:22:12] bit: That was by far the center of the empire, 200,000 people. And, uh, when it was opposed, it was opposed for five, 600 people to the Ottoman Empire, an empire of 30 million people in incredible amount of resources. But they fought over and over and over for, uh, more than, let’s say more than 500 years, just to be, just to be conservative. [00:22:40] bit: And so we’re just,  [00:22:41] Joe: we’re just starting then, Paul, if, if they’re fighting that long,  [00:22:45] bit: I studied around the 12, 1300. Yeah. The first, uh, the second, the third and the fourth, Sade, one of the sources of income of, uh, Venice, uh, was to transport the SERS to the holy. And, uh, to transport the crusader to the holy land. [00:23:07] bit: They got paid sometime. They got paid in silver and gold sometime. They were paid into what warriors do, into fighting on behalf of Venice. So when Venice said the rebellious cities, they just asked, the crusader in the ser didn’t have enough money, they just asked them to fight for them. So that’s the way they subdued. [00:23:30] bit: Uh, I’m making a complex story very short, so you have to excuse me, but they subdued, uh, part of the Croatian coast this way, and they occupied, uh, Constantinos, the Zeda occupied Constantino on behalf of Venice, uh, uh, as a pay for the transport to pay for the transport from Venice or from France, uh, to, to holy land. [00:23:56] Joe: The number of years that Venice was able to keep doing this leads me to believe, and, and this is what I wanted to impress upon people. Based on your work, you can see how Russia could keep going and going and going and going and going. There  [00:24:08] bit: is the limit if you look at history, but that’s not a part that I ever research a lot. [00:24:13] bit: If you look at history, that’s how Germany, Imperial Germany funded the First World War, the central bank and the banking system was very cognizant of what they were doing, and they, they turn public debt into money on behalf, uh, of, uh, the Imperial administration. That’s how they fought and they finance. [00:24:44] bit: Most of the war production and everything they needed to fight, uh, the first, uh, world War for four years. Totally different from what, uh, the English, the French, the Italian, and later on the American did because they had access to the international market. And so they find it by selling bonds on the international market, which Germany could not do. [00:25:08] bit: And the inflation they came afterward was all the money that had been minted, let’s say, minted by having, uh, on the asset side of the banking system, public debt and money on the liability side.  [00:25:23] Joe: I’m glad that you brought up the mint because the mint factors heavily into history. In fact, you begin in Pisa, I think of the leaning tower. [00:25:33] Joe: When I think of Pisa, I think of of of it being the birthplace of Galileo. But I don’t, yep. I didn’t especially think about banking before I read your book, Paulo.  [00:25:41] bit: No, I,  [00:25:42] Joe: but the mint figures vary prominently here. Yes. Why do you begin with the mint in piza?  [00:25:47] bit: Mm-Hmm. It’s interesting to understand the way the public mint were turning, uh, gold or silver, let’s say gold and silver. [00:26:00] bit: Let’s, let’s forget, uh, the other metals into money because what they did, it was a system that was largely market based. So when a private individual or an entrepreneur or a merchant needed money, they went to the min. And this is very interesting. And so it’s one, people should be very careful because it’s, there is a passage that is exceedingly interesting. [00:26:34] bit: Your merchant that needed money went to the mint with either an ingot or a jewel. He sold it to the mint at a price that was established by the state and the mint paid him back with the coins. Minted from that gold, from the gold that he gave him, minus at the price that was established by the government. [00:27:11] bit: Minus minting expenses and a tax called senior ash that didn’t, sometime it, not everybody applied the senior ash, but PISA did, and that went to the state that went to the republic. So you turned your gold into state sanction purchasing power at a special rate established by the state. So that’s how the means worked. [00:27:43] bit: What is interesting is that it said one, one of the thing in which Visa had finance most of its expansion, was because early on in their history, they conquered some areas where there were silver mines. And those silver mines were owned by the state. So actually the state brought in the silver. And coined silver, beautiful silver coins, beautiful silver coin, marvelous among the nicest looking silver coin ever minted. [00:28:18] bit: And so that’s how they enlarged the money supply. At one point, they lost the colonies in the fight against, uh, Genoa. They lost the coins and they lost the mines. And so the meat was turning out less and less of the coin that were needed to increase the money supply. But the economy of the city didn’t, didn’t suffer. [00:28:43] bit: It started, it went down, but it picked up immediately. And so one of the big question has always been how could the economy pick up is there was no money because the only money was the only official money, or el money, or. Proper money is canes or say money proper. The one that comes out the min is money proper. [00:29:05] bit: If you look at the books, uh, and if you look at the records for the city of Pi, you can see that a city that had around, let’s say 20,000 people had 50 private bankers.  [00:29:16] Joe: Yeah. Wow.  [00:29:17] bit: We are talking about 1400, 1300 let’s say. I look at one of the accounts, which was very fascinating, was the account of the equivalent of a wine bar. [00:29:32] bit: And, you know, they had the bank account and they paid for the wine that they bought regularly. They paid in, uh, banking liability.  [00:29:44] Joe: Well, and it was fascinating to me, Paulo, that the whole reason this banking system existed and really, truly began in the first place that we use extensively today. Is because the mint needed to work overtime. [00:29:58] Joe: They’re moving so fast, but they’re chronically behind. There’s never enough money, Paulo to go round. Exactly. That’s it. And people still needed a currency, which is how this banking system came around. So instead of money, people would, would take their money. They give it to the mint. And a banker, I guess, would, I think the equivalent of almost like insurance. [00:30:18] Joe: I can assure you that these people have money. It’s a  [00:30:21] bit: promise. It is a promise. It’s a promise. Yeah. No, because if you look at the, I’m sorry to come back to the book, but No, it’s great. In the, no, in the book, I even wanted to put a drawing because the way this happen sometime gets little confused. And the reason why I use PI was because the records for this early bank from 1372 are incredibly nice for one reason. [00:30:55] bit: The banker was act was probably very lucid and he owed very well. And so if you look at the ledger at the main ledger, he spells it out in detail what he does. And so the way the banker was making money is he had the client per is to pay him. Most of the time there was no deposit. There was no deposit. [00:31:24] bit: So the client per is to pay the banker for the benefit of another client. And the banker Peres to pay the other client. The two debts, the debts of the client and the debt of the banker cancel each other. And so you have created, I, I look at one transaction. There are 32 or no, 36 Gold Florence. There are 36 gold flowing, being promised by the banker to the banker. [00:32:00] bit: And there are 36, uh, uh, gold flowing, being promised by the banker to the beneficiary. And those that one arrange is the other. So what the interest for the bank, the interest for the banker, is that his promises were so valuable that the client or receive them is willing to pay 10% to receive them.  [00:32:23] Joe: It’s fascinating because I think today, Paulo, we look at things like crypto as a new Yeah. [00:32:27] Joe: Works the same way as a new thing. Yeah. And really we look at crypto, it’s basis is back in Pisa,  [00:32:33] bit: uh, you could argue I use Pisa for two reasons. I use Pisa one because of the incredible clarity with whom this ledger was written. Uh, very seldom you have ledgers of the same age written with this claret. [00:32:53] bit: That was the first reason. And the second reason was, uh, that the means was unable to print enough money to supply the domestic and economy. And so the two things go well together. And there is another aspect, which is the building of the to dp and the cathedral and the baptistry were all done with debt by a special corporation that was partly the city and was partly the church. [00:33:26] bit: And so the church, uh, found a way to violate its own condemnation of  [00:33:33] Joe: why did they, by the way, why did the church, I was wondering this, why did they not like debt with interest? Uh, they condemned it. You weren’t allowed to, to owe interest to anybody.  [00:33:43] bit: I think that the argument goes back to the evangelist, but, uh, I am not, uh, very well versed in that. [00:33:50] bit: It, it escapes me.  [00:33:51] Joe: Maybe similar to in, um, in Muslim culture.  [00:33:54] bit: Similar. I think it’s similar. Okay. But what is different is the Catholic church found a way to ade it. I took condemn on one side and to evade, uh, the condemnation of the user by using, uh, sale and, uh, leaseback transaction, which is exactly the same thing as borrowing and, uh, paying an interest. [00:34:17] bit: It’s, in my opinion, is one of the sharpest analytical ways to evade the elegant evade, a condemnation that I have, that I have ever seen.  [00:34:31] Joe: They do it, my understanding through reading your text, they do it through a series of really sales back and forth. Uh, the city sells the land to the,  [00:34:42] bit: exactly. Let’s take for instance, the foundry. [00:34:45] bit: Okay? The foundry is the corporation. It is a public corporation, eh, I mean, it is a corporate body. We are talking about 1,150. There is a corporate body that is not a person or a group of person is a corporate body. So the corporate body buys the land from an individual, and let’s say that they pay a thousand Florence, okay? [00:35:16] bit: They buy the land for a thousand Florence, and they pay him a thousand Florence. Okay? So he has received a thousand Florence, let’s say, in cash to make things simple. But the foundry owns the land owning the land. The foundry benefits. Let’s say that the land they bought is a farm. Okay? The foundry owns the benefit of the farm while it’s the owner of the land. [00:35:53] bit: So let’s say it owns it for one year, and so it has corn, uh, lambs, uh, and all the producer of the land goes to the foundry. Then one year later, the foundry sells the land back to the original landowner for the same figure, a thousand floor. If you look at it from the cash flow, that’s a loan because they have paid, that’s a loan. [00:36:23] bit: Financially it’s a loan, but legally it’s a sale. These, these are two sales. What’s the benefit for the foundry? The foundry escape the produce of the land for 12 months.  [00:36:35] Joe: And this happened, by the way, everybody, Paulo, you explained that this, this went back and forth for four, five or six times and it looks like a zero sum game. [00:36:43] Joe: Yep. Like it’s just there’s nothing happening. But as you write, there’s tons happening. It is  [00:36:47] bit: not because the foundry, not only, but there is one advantage that the foundry is a public corporation, and so it’s partly the state and partly the church. And so the risk of lending to the foundry of selling to the foundry is very low. [00:37:06] bit: And so the foundry is doing exactly what modern banks are doing, and so it pays little when it borrows and gets a lot when it lands.  [00:37:16] Joe: whi, which also by the way, reminded me of just a little precursor to the modern credit system, right? Because they’re a good credit risk. This all worked, and which goes back to your. [00:37:26] Joe: The original statement earlier on about promises, and I wanna bridge Pisa with the next area that you talk about. Venice. Again, St. Mark Square canals. I don’t think a lot about banking when it comes, comes to, to Venice, one  [00:37:41] bit: of the strongest, more innovative banking system. Be extreme and say that Venice probably, I wouldn’t say invented, but definitely generalize the use of bank money, which is bank liabilities and bank debt as money. [00:37:58] bit: The whole, uh, the whole economic system of Venice and the whole state and the ability of the state to function was based on bank money.  [00:38:10] Joe: Well, and getting into this idea of, of bank money and back to promises, both in Pisa and in Venice. It isn’t lost on me that this is all based on the promise, which means. [00:38:22] Joe: If a banker is crooked, Paulo, this whole thing could go, could go south. How often did we encounter a banker cooking the books?  [00:38:30] bit: Not too much in Venice, but I say that in 150 years, probably only two. That’s incredible. They had a special magistrate that was just watching the bank, and I remember Venice was not tolerant on cooking the books and told it was most of the time it was death. [00:38:54] bit: And they executed people. They didn’t, they is not that. They hesitated. And so cooking the books, you were controlled by a very powerful magistrate and if you were caught, death, death, torture, and so on. So it’s uh, it’s, it was a pretty, anyway, the banks went belly up anyway. They went belly up very often. Um, some of the time the reason why they won’t belly up was because they lend too much to the state lending because they accepted public debt on the asset side of the balance sheet. [00:39:32] bit: And the debt was, uh, sometime it went down in value or not, was not exceedingly liquid, not totally different from the Silicon Valley bank,  [00:39:42] Joe: but there were no protections then. Like there is FDIC with Silicon Valley Bank, I would imagine.  [00:39:46] bit: No. The only protection was the ability of the state to prosecute you ruthlessly. [00:39:53] bit: That was the only protection there was. Yeah. But the state was also intervening in certain situation to back bankers. To bail them out when they were going to fail A fair number of bank. I, I quote one example that is very similar to what my old boss, uh, Hank Polson did in 2008. Very, very similar.  [00:40:16] Joe: I was wondering about that as I was reading, if that was gonna come up, the similarity between the two in 2007, 2008, where’s the parallel with that? [00:40:26] Joe: And the banking failures in Venice,  [00:40:28] bit: the particular banking, non failures banking bailout that I look in, Venice was one bank, one private banker, Gerald, who was operate, see the bankers in Venice were operating out of benches that day in one square, not far from Rialto benches that they rented from the Republic. [00:40:54] bit: Those bankers were public property and they leased them to bankers. So bankers did their business right there. They went in the morning. They, they came there with their ledger and uh, they also came there with the supply of gold and silver coins and they transacted business. At one point on this day, J Oli that had issued a lot of liabilities, a lot of liabilities, had a queue of people that have heard that his situation was not great, that wanted the money that the bank owned of them, paid out immediately in gold or silver coins. [00:41:38] bit: And so Germo is smart and is sharp, and he knows that he doesn’t have enough current, neither with him, nor in the coffers back at his home. And so what he does, he’s send a messenger to the Council of 10, which at the time was the most important, uh, executive body of the Republic. And the Council of 10 knows what’s going to happen. [00:42:02] bit: The bank fails even because the state itself has accounts with almo poli and is using the liabilities of almo poli as money. And so they send the flag of the council of 10, the official flag, they send it and the standard bear puts himself next to Jmo Oli behind the bench with the standard flying, uh, in the wind. [00:42:32] bit: And the message is loud and clear, which is the republic will stand by the oli and the queue that is there. Trying to get, uh, their coins back, not their money back, their coins back. It’s different trying to get their coins back. They spread out and the bank is saved. That’s not much different from what Hank did when he forced  [00:42:55] Speaker 6: no. [00:42:55] bit: The 10 largest institution to accept an equity infusion by the state. That’s,  [00:43:01] Joe: that’s wild. ‘ [00:43:03] bit: cause that’s the problem is by the state. That is, I will stand by you with equity. And that’s what the flag of the Council of 10 stands for. It didn’t last for longer. Oli went bust about a year and a half later.  [00:43:18] Joe: So they should have stayed in line and gotten their money out then  [00:43:20] bit: maybe it would’ve been wise. [00:43:24] Joe: I wanna shine a light on one more character in the book, which is his name, uh, if I pronounce this correctly, is, uh, is Zane Ramond Vander?  [00:43:34] bit: Yes. Yes. Zwan. Derman, yeah.  [00:43:36] Joe: And he is a, a Boolean trader. So he will take these raw metals. He will sell them to the mint in exchange Then, then for the minted coins, what I found fascinating about him, Paolo, was just the idea that. [00:43:50] Joe: He figured out a way to speed up money. So when he gave the money to the mint, lemme just see if I have this right. When he gave the money to the mint,  [00:43:59] bit: when he gave it the bullion to the mint, he gave the bullion the bull. Thank you.  [00:44:03] Joe: When he gave the bullion to the mint, he wouldn’t have that money back for a while. [00:44:07] Joe: But he was able to extend this promise to say, well, the mint is making my money, so in a few weeks I’ll have it. And he was able to essentially get credit today. Is that, is that how that works?  [00:44:19] bit: No, no, no. Wait, wait. The way it works is vendor iin gives the bullion to the bank. Okay?  [00:44:25] Speaker 6: Yeah.  [00:44:26] bit: And the bullion is going to be part of the bullion is going to be a return to him as coins. [00:44:33] bit: But what Vander Amin says is, I have a lot of silver that I can sell the mint, but I am willing to be flexible on the way the mint will pay me back. They will pay me back 50% of the value of the silver. They will pay me back in gold. The remaining 50%, they will pay me back with debt from a special bank. [00:45:04] bit: And so in the moment in which Mr. Vanderman gives the silver bullion to the bank, the same day he gets back bullion gold Bull gold coins for 50% and 50%. He gets the debt of a special bank. And so for him, the purchasing power is 100% of what is given. But for the min, in terms of precious metal is only 50%. [00:45:36] bit: The remaining 50% is the debt of a special bank. And how was that special bank created? The special bank is state owned, state control, and all the bank has on the asset side is the promise by the mean that they will pay. And on the basis of the promise, they issue the liability amount that Mr. Van Amin can spend because everybody in Venice will accept bank debt. [00:46:14] bit: The mins received 300,000 in silver that will become coins, and in exchange, they’re given a promise by 300,000 to the bank. And the bank has given a promise to render me and so defacto, defacto in front of, uh, 600,000 D cuts of gold, there are 900,000 DOAs of money supply. When I check the account of the first six months, that particular bank created 780,000 of do cuts in bank debt simply by ensuring liquidity for 120 due cut in, uh, out from the mint. [00:47:02] bit: And so it actually created out of thin air 650,000 of spending money. Not bad, they were the first one to figure it out. 1690. It was  [00:47:15] Joe: genius. It was absolutely fascinated. You can also see the beginnings of what we now in a, in, in the US look at as a Federal Reserve or many of the state banks around the world. [00:47:25] Joe: You can see this coming right then I have, I have just two more questions before we say goodbye. Go ahead. One is there is a famous banking family that you did not talk about, and I’m just wondering if it was on purpose or not. Of course. Uh, the Fuer family in, in Germany.  [00:47:42] bit: Yes. No, I didn’t.  [00:47:42] Joe: Huge banking family. [00:47:44] Joe: Why did they not figure into your work?  [00:47:46] bit: Uh, because I had to put limits to the amount I saw the seven cases where it was a lot of work. It took me eight or nine years to write the book. Oh, it’s  [00:47:55] Joe: fascinating. And, and the depth of research that you do is, is amazing. I  [00:47:59] bit: enjoyed it. You know, I’m a banker. My life is doing transaction is executing transaction. [00:48:06] bit: And that I think is what gave me a particular perspective because the way I build this story is by looking at transactions. I disassemble transactions in order to find out exactly what the parties wanted and how they went about getting it. And that gives you a totally different perspective. And so, for instance, the idea of looking at the. [00:48:29] bit: Let’s take an example, or the first trade ever done by the Bank of England.  [00:48:32] Speaker 6: Mm-Hmm.  [00:48:33] bit: With the ex checker on the other side. Even if I had to spend a few days in the archives, which is not, I can’t imagine, it’s not my life. I can’t, and I don’t think it’s fun on this. But on the other hand, it was exceedingly interesting because you disassemble the real trans and you saw the public debt going into the Bank of England and the promises of the Bank of England coming out and being spent by the exec. [00:49:00] bit: By the way, if you want to push your extreme, if you, your Russian story to the extreme that was done to finance, uh, to finance the war on the continent. Mm  [00:49:14] Speaker 6: mm-Hmm.  [00:49:15] bit: And in fact, if you look at the first transaction, which is the one that I disassembled all the money created by the manko of England goes to the military. [00:49:25] bit: Some goes to the navy. Some goes to the trope on the continent, to the army, on the continent. Some goes to the gun makers and some goes to the iOS army. 100% of the first transaction of the money created by the first transaction of the Bank of England goes to the Army or the Navy or the, or the military industry. [00:49:50] bit: That tells you something that is 100%. The first transaction is 125,000 pounds, right? They all go to the military industrial complex, if you want to call it this way, so,  [00:50:02] Joe: well, here’s what it tells me if we zoom out a little bit, Paula. What it tells me is often we go through a crisis and we think this is the first time this has happened. [00:50:10] Joe: And it’s not the first time it’s happened there, it’s roots. This has happened again and again and again. And as always, if we can learn from history, hopefully we, we might at some point stop repeating it. Uh,  [00:50:20] bit: I don’t know if we avoid mistakes, but at least we understand why we do certain things.  [00:50:28] Joe: Good point. [00:50:29] Joe: Uh, my last question, 92% of our listeners are in the USA. Yes. Uh, near the end of the book, you look at the USA and the creation of the democracy. What, what was one thing that surprised you? Uh, writing that chapter?  [00:50:42] bit: What surprised me was, uh, the incredible innovation and the incredible spirit. This combination of, uh, personal interest and public spirit and creativity and willingness to run risk that you find in the Continental Congress. [00:51:10] bit: I think the willingness and the ability to use the tricks that most of the people in the Continental Congress have used to become rich, to use them to build the state and to fight the English, like the uses of the bills of exchange, of bills of exchange in excess of what, uh, the French banks have promised. [00:51:43] bit: I think that I found that in, I found it a unique in history, the ability to turn the, the tricks that you have learned to become rich and to put those tricks to the service of the state or the republic that you are trying to build. I think it’s, I don’t think there is a, I don’t think there is another example in history. [00:52:11] bit: And they all did it. And you know, it’s amazing. It’s amazing  [00:52:16] Joe: what’s, what’s the quote? We’ll all hang together or hang separately, right? Yes,  [00:52:20] bit: yes. But the willingness to do it, uh, first the fact that you have learned the tricks. And second that you say, now I became rich by doing that. I became rich by being financed by the British, the British banks. [00:52:33] bit: Now I will use the system to fight them. And that system is not in order to become rich, it’s just in order to build the United States. I think it’s, I think it’s amazing. I think you don’t find it anywhere else.  [00:52:47] Joe: Well, what it brings me back to is where we started with the current, uh, Ukraine crisis, which is that, uh, all the battles isn’t going on in the battlefield. [00:52:56] Joe: It’s going on in banks, uh, everywhere. The book is called Money and Promises seven Deals that Change the World. This is going to come out, uh, well the day before the book comes, book comes out tomorrow. Thank you so much for joining us, Paulo.  [00:53:11] bit: Excellent. It was a pleasure. I enjoyed it.  [00:53:15] OG: Hey, it’s Matt from Gainesville, Georgia, and when I’m not delivering on this consumerism and a big brown packaged car, I’m Stacking Benjamins. [00:53:23] Joe: Big thanks to Paulo for educating us on banks. You, you know, uh, this idea og of getting overextended not new from the very beginning, banks have been getting overextended and people have been overextended. Don’t do  [00:53:35] Speaker 6: that.  [00:53:36] Joe: Yeah. Imagine being cut without any silver in your pocket. So you had to go to your local banker. [00:53:40] Joe: I don’t have any silver, so I, I gotta go talk to this dude on the corner. It’s wild how this is, this is much like those rent to home furniture stores are now. Right. Go ahead and take your stuff now, but, uh, but we’ll have it later.  [00:53:53] OG: We gladly pay you first. Two cheeseburgers tomorrow for one cheeseburger today. [00:53:57] Joe: What did you call it? As, as we were listening, the affirm of the Middle Ages. Yeah.  [00:54:03] OG: Is that what it seems like?  [00:54:04] Joe: So wild. How what comes around? You know, this is all the new, new stuff, right? And none of it’s new been happening. ’cause it’s the very, very, very beginning human nature. What’s old is new again. [00:54:12] Joe: It’s never changed. Hey, it’s time for the segment of the show where somebody goes, you know, I better call Saul. See hi and OG in this case. They wrote us, our friend Lori wrote us a nice long note we actually wrote back to Lori and go, Lori, if we hear the sound of your voice, you know what? We can give you some swag, but, uh, Lori decided she’d much rather write in, which is fine by us because this is a heck of a question. [00:54:32] Joe: Guys, if you wanna write to us, it’s just, uh, we have a contact form on the site or email me, Joe Stacking Benjamins. But truly, if you are brave and you call in Stacking Benjamins dot com slash voicemail and we will give you some Stacking Benjamin swag for being brave. Lori says, Hey, OG Joe and Neighbor Doug. [00:54:51] Joe: I’ve been having some great money conversations with my 20-year-old daughter since she came home from school to start her internship. She started contributing to their 401k when she started with the company last summer. And if she continues there through school, she’ll be fully vested within a year of graduation. [00:55:08] Joe: What’s cool, by the way, Lori, I’m gonna finish the rest of your note in a second. On Wednesday, we’re going to talk a lot about vesting and about how that works. That’ll be our headline, uh, in just a couple days. So hang out. Anyway, back to Lori’s letter. She also started a weekly deposit into her Roth IRA. [00:55:23] Joe: That’s so badass. So as we talked about her paycheck and how she wanted to divide it, we started looking at the buckets in her high yield savings account. Her college expenses are covered by scholarship roll tide.  [00:55:36] Speaker 6: Hmm.  [00:55:37] Joe: And so she’s trying to, that one, paying you a little bit to say, I might have choked on that a, a smidge. [00:55:42] Joe: And so she’s trying to figure out what things she should be saving for. Her car fund’s growing nicely. She’s got a small vacation fund and now she’s having a hard time even thinking of any specific bucket she can save for. The only thing she came up with was a $500,000 goal in a house fund, to which I told her she should never have 5,000, a hundred thousand dollars in cash. [00:56:00] Joe: To get to my question, what suggestions she have for a 20-year-old is goal she should be saving for just looking for some brainstorming. Thanks for that question, Lori, and congratulations, by the way, on these conversations early on at 20 years old with your daughter, are just absolutely huge and they so rarely happen. [00:56:19] Joe: Oh gee. I’m just super excited that they’re, you know, they’re talking about this stuff so she can get off on the right foot.  [00:56:25] OG: Well, even having access to a 401k plan at 20 bam is pretty much unheard of. Usually most companies don’t even allow you to start until you’re 21, so the fact that she’s got access to it, Roth IRA is great too. [00:56:38] OG: I always find it interesting talking to people about their financial goals, and sometimes people feel frustrated about not having anything in particular, almost like. Almost like you have to be obligated to have some sort of thing, goal in the future.  [00:56:51] OG: A name on it.  [00:56:52] OG: Yeah. Well, it’s like, I don’t know. I mean, I, I guess I could save money to go to Europe, I suppose. [00:56:57] OG: And you just feel like there’s no energy around that. Yeah. Like, well, that’s not gonna stick, so let’s not use that one. And this is very common for people that are early on in the workforce. We work with clients that are 30 and we work with people that are 70 and you know, this, 50 and 60 year olds have a pretty good idea when they wanna retire. [00:57:17] OG: You know, it’s like, oh yeah, tomorrow afternoon if possible, please. In, in lieu of that, I will take some time. Anytime. Anytime at, honestly, in the next five to 10 years would be great. But you talk to somebody who’s like, just getting started in their work career, just getting outta college. And, uh, you say, well, what, you know, what financial goals do you have? [00:57:34] OG: When do you wanna retire? And they’re like, retire. I’m like 28, man. I just. I just started, I, I, I don’t even know what that looks like, and that’s really fair. Part of the problem that I have with the whole fire concept is people start thinking about that when they’re, you know, 25 or 28 and have no idea what life is gonna be like when they’re 40 or 45 or 50, and what they’re gonna want to do and spend time on and, you know, have interest in. [00:57:58] OG: So, all that to say, I don’t think that it’s important to have any particular thing. Goals to tie your, you know, investment or savings to, for our college student, cash is king. I really think so, because there’s a lot of stuff coming up, whether it’s, uh, higher, uh, college cost than what you projected an overseas trip because you decided you wanted to do the study abroad for a, for the summer or for a half a semester. [00:58:26] OG: You know what that, whatever that looks like, there’s some extra costs there. You get done with school and then you’re gonna pack your stuff and you gotta move to. Insert town here, and you’ve gotta put a security deposit down on a new apartment, and maybe you’re gonna buy a, uh, you know, a new TU car or you know, whatever. [00:58:42] OG: And you have to get furnishings. You know, there’s a lot of outflow that’s coming up over the next three to five years, probably. You don’t have to force it, I guess, is what I’m saying.  [00:58:52] OG: I like the phrase you used a second ago, which was, it doesn’t have to have a thing name. It doesn’t, it can have a state of mind name. [00:58:59] OG: Right. That peace of mind. Yeah. I,  [00:59:01] OG: it’s good to have you, you will have certainly more motivation around saving for the, the fun trip or saving for whatever, because you’ve got a timeframe and a, and something in your mind that that’s wrapped around. But I don’t think that you have to feel obligated to do it, you know? [00:59:16] OG: And like you said, Doug, whether it’s like, I just wanna be financially secure and, and what that looks like is. Three to six months of my spending in cash that just sits there and does nothing so that I can invest aggressively outside of that, you know, for the long term, for whatever that is. Like, I don’t even know what the long term is yet. [00:59:35] OG: When I’m 22 or 25 or 28, I don’t, I don’t know. But there’s a lot of life that happens between 20 and 40, and you won’t be disappointed if you, if you start, start your working career with a fully funded emergency fund, let’s say as an example,  [00:59:50] OG: I wonder, e, even if it’s not an emergency fund, I wonder what different choices any of us would’ve made with our careers if we had the freedom to make those choices. [01:00:00] OG: Because we had more than a rainy day fund. We had two years of runway on, you know, living expenses.  [01:00:08] Joe: You’re saying you could spend more time, you could spend more time saying no.  [01:00:11] OG: Yeah, exactly. Spend time saying no to just taking the first job offer you get because you need something and waiting for the right one, either in the industry you want or in a totally different thing. [01:00:22] OG: But that’s a, that’s a bucket of money that most people, uh, only can dream of at that age. You know, in your twenties when you’re just getting your career started, you can really have a freedom of choice on your career.  [01:00:34] Joe: It’s funny because while I definitely think that having a, having a goal, to your point, uh, makes it stickier. [01:00:42] Joe: Being able to work backwards when I know the timeframe and I know the amount of money, it makes it easier also to pick the right investment. I also know, as you do og, that that’s what people freak out about. Is this the right investment? Am I in the right investment? Am I, and so finding that purpose for the money makes it stickier. [01:01:00] Joe: But what I love when you’re just starting out is having that freedom to just put the money in. And this is why we like the total stock market. It’s why we like just putting it in a, a good passive index fund until you get that thing. I, I also like the idea of not brainstorming it. I think answering Lori’s question of, I’m hoping for some brainstorming with, yeah, don’t need to do that is the perfect answer. [01:01:25] Joe: It just is the, the, now here’s the downside. Beyond that emergency fund, if a goal sneaks up on you and all of a sudden you want the money today and it’s in one of these long-term indexes and they happen to be down at this point, well then we might have an issue. But overall, just sticking it someplace where it will grow to buy that flexibility later, that Doug you’re talking about, I think is a huge win. [01:01:48] OG: I just pictured Lori having this conversation with her daughter. And her daughter’s like, so what’d they say? What’d they say? Well, basically it boils down to you should save because I said so like the classic parent reason.  [01:02:01] Joe: Just  [01:02:01] OG: do it if you  [01:02:01] Joe: don’t do, because I said so do it because OG said so. You don’t want OG coming over here? [01:02:07] Joe: Tell it you to  [01:02:08] OG: don’t make it. Fool over this car  [01:02:10] Joe: if you really wanna have a discussion. I think Lori, with your daughter about what really lights her up. I love this conversation we had with John Acuff at the beginning of this year where he said, don’t look off into the Abyss og. ’cause it freaks you out. [01:02:23] Joe: You know, people going, what do you wanna do with the rest of your life? Oh my God, I’m 20. You kidding me? Mm-Hmm. Don’t do that. What John talked about, and I would go back to the interview and listen to it for context, but John talked about look in the rear view mirror and go, you know, to this point, what is it that you’ve had fun with? [01:02:38] Joe: And while that might not be the same stuff you’re having fun with at 35, 40, 45 years old, it leads you down a path that more likely is going to be fulfilling. And I definitely like that, like that approach better. But love your answer, og. No need to brainstorm.  [01:02:52] OG: Let it come to you. Be the ball. Be be the ball. [01:02:58] OG: Be the ball. Danny, thanks  [01:02:59] Joe: for the question, Lori. Again, if you’ve got a question for us, stacky Benjamins dot com slash voicemail uh, gets you there. Time to meander into the fun part of the show. Well, today’s not so fun, Doug, but we’ve got a, we’ve got a big announcement on the back porch today.  [01:03:13] OG: You know, what I want to wanna do today on the back porch is let’s just, let’s just kick back, crack open the cooler, grab a couple of beers and chat about a great team member named Karen Rein. [01:03:24] OG: I. Can we do that?  [01:03:25] Joe: I would so love to do that. Karen is, uh, a person who is, um, you know, listeners to the show. Rarely heard. They heard, they heard Karen on our April Fools episode when Karen and Tina took over the show. Yeah. Karen’s our showrunner, our producer, she’s been with us a long time. And you know, we always talk about this, this quote job of doing what we do. [01:03:48] Joe: Put job in air quotes is about getting what you want for yourself and your family. And Karen’s uh, kids are at an age, she’s like, you know what? I wanna spend the summer with them and I had a great time doing this, and now it’s time for my next adventure. And we are so pleased that she is, is going to do that. [01:04:04] Joe: But og, when Karen started this job, before Karen was in this role, remember we were working with just a few part-time, college kids helping us a little bit on the side, and Karen was a full-time engineer before she took this role and really made the train run on time. To pull back the curtain. We’ve got a five week production line about these shows. [01:04:26] Joe: We’ve been talking about Polo as an example for a good long time, maybe, maybe three, four months. We’ve been talking about trying to get him on the show today. But Karen makes sure that she secures great guest. She went and found Daniel Lamar from Cirque de Soleil. She found, uh, a major general Mary eater about the girls who stepped outta line, which was, I think her favorite, definitely one of my favorite episodes. [01:04:49] Joe: Oscar Munoz from, uh, United Airlines. These are not people who pitched us about coming on. These are people. Karen went and found for David Gerin, who served many US Presidents, both Republicans and Democrats. She landed all those guests, made sure people were ready, dealt with my BS on a daily basis. Karen really a badass who were going to miss, just cheers to Karen, Repine for a hell of a job, and, uh, for making our stackers lives, I think better during the long time she spent with us. [01:05:19] OG: Dealing with your nonsense has probably elevated her status at the Purley gates. Yeah, that’s  [01:05:24] OG: a, I mean, honestly, she’s doing two jobs. She’s gonna show up  [01:05:27] OG: and St. Peter’s gonna be like, oh, oh, you are that Karen. You’re finally here. Oh, right this way ma’am. Right this way. Excuse me. VIP line here, please.  [01:05:37] OG: Yeah. [01:05:38] OG: You had to deal with that.  [01:05:39] Joe: Yeah. She’s got a fast pass. Is that what you’re saying? Fast pass. She’s got uh, TSA precheck, she a  [01:05:44] OG: fast pass.  [01:05:44] OG: TSA precheck to heaven.  [01:05:46] OG: Yes.  [01:05:46] OG: Clear. Yeah. And Karen, now that you’re here, you get to just take a nap for a year and a half after dealing with Joe.  [01:05:52] OG: But before that, God’s gonna go on vacation for six weeks. [01:05:55] OG: So we’re gonna have to write some new stuff. So if you could just kinda trust me, this is the last trip.  [01:06:03] OG: Yeah. It’s not always like this.  [01:06:05] OG: This is definitely the last trip that this is supposed to be about  [01:06:08] Joe: Karen. Let’s keep it about Karen instead of passive aggressive hour. What  [01:06:16] OG: you saw through that. I don’t think  [01:06:18] OG: it is impossible for any of our listeners to truly. [01:06:21] OG: Grasp what she put up with dealing with God’s travel schedule. Oh, well, we have a, we have a, it’s running like a well-oiled machine. We’ve got a five week production schedule. Things just happen the same way every week. We have a five  [01:06:36] OG: week schedule that all gets jammed into 18, eight different days because somebody’s going to the dry tortugas on Tuesday. [01:06:44] OG: I think Karen’s actually really enjoying this passive aggressive lashing out at God. They’re beating up, they’re beating me up. Karen, come save me. Karen, please come save me.  [01:06:53] Joe: She is the nice Karen. She even, I think she’s got, oh,  [01:06:55] OG: she’s like, do  [01:06:56] Joe: you remember that Doug when that first went down? When they started calling them Karen and we were having our team meeting and she’s like, really? [01:07:03] Joe: Really? Yeah.  [01:07:04] OG: Out of all the names? Yeah, because what was the other, there was another name that she was gunning for. Was it Sharon? Like when that whole thing first started, there was another female name that was getting used equally before the world somehow just decided Karen’s the thing we’re gonna use. [01:07:18] OG: I don’t remember what that other name was. I think it might have been Sharon. But anyway. Yep. Sorry. Karen. But you  [01:07:24] Joe: got, hold Cheryl, my spouse who you know, pays zero attention to any of this. I remember she first heard that, she’s like, I keep hearing the name Karen and all I can think of is Karen Reid and how damn nice she is. [01:07:35] Joe: So I, I think about this woman, the neighborhood watch woman. You know about your dog. It’s so pretty. It’s so nice.  [01:07:42] OG: Your mailbox is two and a half inches too tall, but I love it. It’s okay. I’m just trying to give you a warning. Those  [01:07:50] Joe: bad people down the street. Yeah. So here’s to Karen, repo, Karen. Good luck in your next adventure. [01:07:57] Joe: And uh, you know what? Spending time with the kids this summer. You guys know you’ve got older kids. Oh gee, you’ve got one who’s gonna be a senior in high school. Doug. You’re like me. They’re gone. They’re gone. Like, well, what the hell happened to those days? Hug those boys. Hug those boys. Karen, we’re gonna miss you on that happy note. [01:08:18] Joe: Doug, besides hug those boys, what should be on our to-do list today?  [01:08:22] OG: So what’s stacked up on our to-Do list for today? First, take some advice from Paolo Z’s history lesson. While knowing the history of banks may be something you need in your quiver, the fact that even banks became over leveraged and collapsed should be a warning to use debt at your own risk and beware becoming overextended. [01:08:43] OG: Second, working with fintechs, if it’s a small firm. First ask about FDIC insurance, just like I mentioned above. Beware becoming overextended. So what’s the biggest to do? I gotta give a little of this cool sand at Joe’s mom. I’ve been rubbing it through my fingers. The whole second half of the show. Wait a minute, that’s not a shark’s tooth. [01:09:07] OG: Since when did shark’s teeth have fillings? Oh my God, I think I gotta go wash up and probably hurl. [01:09:19] OG: Thanks to Apollo Zoni for joining us today. You can find his book, money and Promises seven Deals that Change the World Wherever Books are Sold. We’ll also include links in our show notes at Stacking Benjamins dot com. This show is the Property of SB Podcasts LC copyright 2024, and is created by Joe Saul-Sehy. [01:09:40] OG: Our producer is Karen Rein. Karen and Joe. Get help from a few of our neighborhood friends. You’ll find out about our awesome team at Stacking Benjamins dot com, along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello. Oh yeah. And before I go, not only should you not take advice from these nerds, don’t take advice from people you don’t know. [01:10:04] OG: This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor. I’m Joe’s Mom’s Neighbor, Duggan. We’ll see you next time back here at the Stacking Benjamin Show.