John Hope Bryant on Financial Literacy

He has written five books with more coming. Really a fascinating person who operates in a realm that I think a lot of people in finance overlook, and he's really moving the needle in terms of having people take control of their own financial life in a way that benefits not just them, but the entire economy, in all of society.

I found on our conversation to be just compelling and fascinating, and I think you will also so, with no further ado, my conversation with Operation Hope's John Hope Bryant.

I had aha about how the world really works. I figured out how to keep my friends from getting murdered in the streets because when I was nine years old, a year before this class, actually the same years as class, my best friend George was murdered on a street in Compton with my next door neighbor tweet selling drugs. Even though he was a student, he hung out with the wrong character, the wrong kids. And character is not the most important thing in business or whatever. It's the only

thing really and culture. Culture then informs characters. So culture my neighborhood was a thug culture that you were respected if you were you know, hard, a tough guy. And so my friend, my best friend, who was very, very smart, did not have good parents like I had, who told me I could do anything I wanted to do, and who loved me and told me. My mother she told me she loved me every day of my life. So

there's a difference barrier between being broken being poor. Being brokens economic, but being poor as a disabling frame of mind, a depressed condition of your spirit. You must vow never to be poor again. So because I had this self esteem based on my mother, and I had self love, just not self confidence. My next door neighbor, oh well, my best friend had self confidence but did not have self esteem, so he was influenced by those around him.

He was murdered then when I was seven years old, the guy who saved my life because long story short, my mother moved away from my father arguments over money, domestic abuse involving money. When I was five years old, they fought, she moved. We were staying with her relative to save some money for her first home. The guy who was dating, oh see, dating my mother's cousin saved my life on the front porch when I was swallowing

my tongue, and I just idolized this guy. What I didn't realize was he was ashamed to admit that he could not afford to float the expenses of his immediate family and hours. So he went to go sell drugs, also part time, and he was murdered by the drug dealers, for whom this was their territory. They came around the corner in a truck, Barry. I'm sitting on the porch waiting for him to come home. I'm seven years old. This is my idol. He saved my life. They hit

him in the truck on a bicycle. I can see it in my mind's eye. Wow. They drag him down the street in front of me until he was dead. They did it in front of our house to send a message. And so here was You know, these are two stories, maybe three before I'm nine years old, of bad economics, bad culture, and a bad business plan. So now I'm nine years old, Berry and this banker comes in my classroom. It's home economics class doesn't exist anymore.

you do for a living? And how'd you get rich? Legally? And Barry I was dead serious, like I was, just completely It was to me it was a common sense question because everybody in my neighborhood was a thug, a drug dealer, or a criminal. I mean, nobody had legit wealth.

to school, one more thing, what's a banker? And how many of them are you? And you did you say one more time that your job is to lend people like me to be an entrepreneur money. I said, I need to get this whole script straight, because here my friends were getting murdered and jailed and shot and all this kind of you know, over economics, over some you know, trying to sell drugs or sell TV said or whatever it is in the hood.

I mean he was a very important guy back in those days. But it was pretty rare occurrence. So one, I was shocked that there was an industry that was whose job it was to lend a risk taker money. Two, I was shocked that it was legal. Three I shocked that it was an actual occupation for a guy who was a legitimate hessler. And my whole life changed and I left there. I went, as I said, open the dictionary.

I started seeing the muffler shop as a business. By the way, the different between an entrepreneur and a business man as a or a businesswoman. Those are those things are different, different risk tolerance and different business plan. But I started seeing the nail salon as a business. I started seeing the I think a barbershop. All these things were businesses. I never seen it that way before, and I went back to school bery, sir, your business card?

Can I have one? Okay? What's the sixteenth floor thing? You know? There's no floor above the sixth floor in Compton and that's the courthouse. What's in the sixteen floor? And where is that at? And by the way, how can you show the coming here in the middle of the day. My mother is an hourly job at mcdonaldalla's Aircraft. She's got two fifteen minute breaks in lunch. How is this you here in the middle of the day. It's called a salary. You have a white shirt. My father

wore a blue shirt. How do you keep the shirt clean? Oh? You just do work with mathematics and intellectual activities. You don't do any dirty work, you know. And how's it that you? What's this car? This in the parking lot. It's got plates on it and and a tag and it's brand new. Translation is not hot? Right? I mean? And it's beautiful. What do you do? And this world opened up to me man, and I was done. And so mister Mac Max liquor Store six to two and

also six two black man own Max Liquor store. And I realized for the first time, Barry, this was a businessman. And I went to mister Mac. First of all, I didn't know there was a black businessman in comptence. So congratulations, mister Mac. You're selling the wrong kind of candy, he said, excuse me, I said, you have a liquor store. You're probably good at liquor, but you have a candy rack in the liquor store and you're selling wrong kind of candy.

Go away, a little boy. I've got a college degree, that's nice. I've got cavities. You're selling wrong kind of candy. I'm nine at that point. That's ten. So he said, look, you've got a lot of hootsba. I'll hire you. I'm gonna put you at the counter.

And if you are a great performer, no matter what your industry is, you'll get paid a lot. You may not build wealth, but you'll get a lot of income. I didn't realize what I was doing back then, but I was making a choice. I was like, I don't want to be a performer. I don't want to be your performer. You're the owner and I get to perform. I don't want that. Tell you what I want. Make me a box boy. Excuse me, Yeah, I want to do stocking, he says, the worst job I got. That's

what I want. I worked there for three weeks and quit because then I knew what the wholesale rate was, in the retail rate, I knew what the markup was, I knew what supplying the man looked like, what things were moving, what wasn't. I quit once I knew where he bought his inventory. He was on the side of the box. I went home, got my mother, sold my mother on making a forty dollars investment. She made me pay her back by the way, and my new business, and went to Smart and Final and Irish food store.

Was why about his inventory, and got put in business. And I actually put him out of the candy business not soon after that. I mean, three hundred dollars a week on a forty dollars investment.

They didn't like white people, they didn't trust white people, didn't want to talk to white people. My experience was this banker who basically opened my head up to a whole new world. And so I wasn't intimidated by him. I actually found an affinity with him. I didn't want to be him, on to be me, but I was not both reposed. I was ne either rapost or you know, I wasn't. I wasn't trying to be him, nor was I trying to avoid him. I thought he was useful and he had a place in my world. So that

then relates to self esteem. If I don't like me, I'm not gonna like you. If I don't feel good about me, I'm not gonna feel good about you. If I don't respect me, then how can I ever respect you. If I don't have a purpose in my life, I'll make your life a living hell. Whatever goes around comes around. That's self esteem. Self confidence is confidence put in action. So I'm confident and I execute on that, then then I have confidence. And that is where my hustle comes from.

That's where my resiliency comes from that self esteem applied through a with a skill in the marketplace. Over time, you start taking no for vitamins, you start becoming incredibly resilient. Hard to hit. It's hard to hit a moving target, as I said earlier, And if I don't give up, you can't beat me. When you're sleep, I'm working. When you get up, I'm already. I'm already prepared for the day. When you go to when you were going to children

in the evening, I'm ready. I'm preparing my next business plan. I didn't have compounded capital. I had compounded hustle, and and so I had time. I didn't have money, and I decided to use that time in a way that made me bulletproof or or harder to compete with, because I was going to be smarter than anybody else in the room, and I was gonna work harder. So I think that resiliency piece never giving up, never give again. Redefining Barry success as going from failure to failure without

loss of enthusiasm. Mm hmm, I think that's everything.

Why is the African American experience different. It was how we were treated, and that treatment messed up our head, our psyche, which is where real wealth sits.

looking at the glass. So when you tell people for two hundred, when you enslave them for two hundred and seventy years, you destroy their family structures so they have nothing to believe in. You destroy the ability to protect their mate from harm, to destroy their self esteem and their sense of independent you know, agency, There you go. You don't give them education, so they don't know any They can't only have a skill set. You don't teach

them about the free enterprise system. You basically want to use their body, in their mind, the body because they're agricultural geniuses from Africa. They want them to work that's land in the south. But you don't want them thinking, and you certainly don't want them believing. And you do that for three hundred years plus, really two thirds of

American experience. It doesn't You can't help but have a group of people who have low faith, low confidence, low trust, who are cynical, not skeptical, and as a result of that, and who have crappy role models. And if you hang around nine bro people, you'll be the tenth. So now you have a group of people who don't know, who are smart, brilliant, amazing. With the rules of published and

the playing fielder's level, they excel. Think about the arts, think about professional sports, think about politics, rules of published playing fielders level. African Americans in this example kill it. But in capitalism and free enterprise, there is no rule book, and we were denied that whole lesson and the best we were taught was how to make the dollar, not

to how to build it. And so this hopelessness you talk about comes easily from the population that it has that experience, and who has descendants who are now looking at parents unsuccessful at commercially or economically, who did not get a chance or a shot, whose mother was not called missus, who's dad who was called mister or doctor or whatever. And so you have these kids who wake up on on a scale of one to ten on

anxiety nine and they're on they're on edge. And you do something to that kid, tap them on the shoulder, he may swing on you. Now now the kid's in jail, okay, And so the energy is used for all the wrong stuff. And now you start becoming expert at things are going to get you locked up drug dealing and underground. So you have genius, you have brilliant. I mean, what's that a drug dealer, Barry? If not, I mean it's an illegal,

unethical entrepreneur, business person. You understand import, exports, finance, marketing, wholesale, retail, customer service, security, territory logistics. These are not dumb people. They have a dumb business plan. They're an underground economy because they don't trust the mainstream economy. So this hopelessness that you just mentioned is everything for repressing the human spirit.

We've got to turn that around. My whole life's work is really summarizing one sentence to unleash untapped human potential at scale. And you think about if this issue is racism real, of course it is.

who are segregated from wealthy whites economically. You would not have African Caribbeans and Africans from Africa who actually do better in some ways than African Americans on ownership issues. If she was just race, all whites would be immensely successful, all blacks would be immensely repressed. You have the sub sectors because mindset has it provided a differentiated path. So what I am saying is you can level the playing field with a business plan based on Hope.

They're a check writing organization. They give you criteria at the state and local level, and they give you money. They incentivize you with grant payments from the from the federal government to meet that criteria. The school. There's no there's no funding base for financial literacy. I got President Bush, George W. Bush, to make financial literacy the policy of

the US federal government. I was naive Berry because I thought I didn't realize that when he inserted the word federal government that just meant government employees, that that meant the federal government. I also was naive by thinking that if I wrote a letter, which he allowed me to do with Charles Schwab, we wrote a letter. He was Charles Schwab was chairman, I was vice chairman to every one of the fourteen thousand school district superintendents that was

around in two thousand. I think it was nine or ten that they school districts would just see the White House letterhead and understand the nobleness of this work, and oh, my god, of course crickets I got. We got. We got not one response, really, not.

school board members, city council people, members of congress. People are most people have too much month at the end of their money.

everybody is struggling with cash flow. But they want to look good, they want to look successful, they want to go on a vacation, they want to go shopping. So people think, they'd like to think that credit cards are cash and they don't want anybody disavowed them. With that belief, I can't be broken still have checks left. The one was that they want to be able to say yes to their children, yes to their wives or spouse. That insecurity if you will of wanting to say yes and

live the life. Conflicts with a budget, conflicts with a limit, conflicts with having to sit down and understand if your outflow exees your inflow, then your overhead it'll be your downfall. This was my dad's problem. My dad thought the cash flow was profit. He had a construction company and he'd bid a job at a thousand dollars. It costs five hundred, but he'd outbid the other guy who's bidding a job

or fourteen hundred. He thought he was successful. Well, the more you if you live that way you make a dollar spend a dollar fifty, the more money make the broker you get. So by the end of my dad's life, I was taking care of a man who had a gas station, an eight unit apartment building, our own home and nursery business, semien contracting business. I probably missed a couple but he lost it all, all of our generational wealth because when you don't know better, you can't do better.

And my dad didn't know what he didn't know. Goes back to what I was saying earlier about that slave experience. My dad's dad was a sharecropper, probably born in a slavery in eighteen seventy one in Mississippi. Was certainly a sharecropper. My dad was a businessman. I'm an entrepreneur. I'm obsessed with financial literacy because I think it's the civil rights issue of this generation.

been tricked, We've been fooled. You can say, you know what Andrew Jung said, who is doctor King's right arm? That to live in the system of free enterprise and not to understand the rules of free enterprise must be the very definition of slavery. So if you're in a system and you don't understand how it works, and you think the cash flow is profit or getting that bag, getting that dollar, getting that money's actually going to advance and shoe when in reality inflation is out running your

ability to even compete on a wage basis. You're not going to build wealth. You have a lifestyle, but you build wealth in your sleep. In your sleep. That's compounding. But forty one percent of black folks own a home, seventy five percent of white folks own a home. There's a delta thirty five thirty thirty five percent of natural home ownership. The black folks are missing. But no one taught gave us a memo on money and wealth creation.

We don't own stocks, we don't own bonds, we're not starting businesses with employees and technology ninety six percent of black businesses don't have an employee. I mean, and how do you build a business in how do you build wealth in America business? How do you buil wealth in their business? Creation is a primary portost So my Jewish friends did it, by the way, it is the level of playing field in an unleveled world is it became owners and that gave them a different version of social justice.

And I think there's a model, by the way, for African Americans and other groups trying to come up from nothing. To me, the color is not white or black, it's not red or blue. It's green actually, as in the color of US currency. Barry, It's always been green, is my point. But we just never got the memo. That's my book, the third book, I think.

surviving mentality where your life is ready fire aim. And now the world's got you distracted with your survival and you're surviving. Now you're not competing with the capitalists. And what this does is get people at the bottom of the wrong competing with the capitalists, which is, by the way, what this country needs every one hundred years is a new Henry Ford. This country needs a new Steve Jobs, or a new Tony wrestler, or a new you know whoever your hero, Shiro is this country needs every big

business wants a small one. Goldman Sachs. There is a guy named Goldman and a guy named Sax, like financial services, door to door. Where's the black version of that? Where's the Latino version of that? Where's the Indian version? Where's the poor white version of that? By the way, NASCAR came from moonshine runner in the Appalachian Mountains. These guys realize, I can't keep running from the police and selling moonshine, but I drive really well. That's Nascar. We have to legitimize the hustle.

the person that we're trying to emulate. Right, So you need that banker or that entrepreneur or that business person or a barrier or John to come in at least, you know, three or four times during the coursework, t the endorphins in this guy's this kid's male or female's head about Wow, by the ways, role modeling, this is who I could be because because in you're in my household, my guess is there's somebody in the household who we could emulate. But most of these kids, seventy percent of

black households don't have a man at home. So your mother is working two jobs, so you don't see her. She's trying to keep the lights on. You don't see a positive role model who's male. So where's your role models in the streets? I mean, it makes perfect sense. So why are you being a rap? Why do you want to be a rap star, an athlete or a drug dealer in the hood because that's what you see. So we've got to give kids dumpling different to see.

This could literally reset everything. And I believe you do this right. In urban black and brown neighborhoods, white poor, rural neighborhoods, struggling actually working class neighborhoods, you add two to three percent of GDP in five to ten years for America as a country. Because the bottom of the pyramid gets rehabilitated, you get them back in the game

of economic value creation. Get the credit score up through our coaching at Operation Hope, which is we're raising credit scores at Hope fifty four points in six months, one hundred and twenty points in twenty four months. Nothing changes your life more than God or love than moving your credit score one hundred and twenty points. We're reducing debt

by thirty five hundred bucks in a year. We're increasing savings five hundred and fifteen hundred dollars in that same year for somebody making forty eight thousand dollars a year.

Now this is sad. Here I have. I don't have like a you know, in this example, I don't have a Bloomberg as my role model who's a businessman, or a Tony rest Or whoever you're or Michael Raghetty, whoever your you know, mindset is, Henry Cravits or whatever. I had, you know, a entertainment uh genius Quincy Jones, and I had a civil rights icon Andrew Young. So here here you go again. I'm starving role models. I went with

what I had. But the only two international people I knew at that time who were black were these two.

from Andrew Young, who shows you. I mean, he's built the He built the tenth largest economy in the country, the only international city in the South, Atlanta, Georgia, on the bones of diversity and inclusion as an economic model. Uh and and and of course you know we can see today that the moral capital in America, which is Atlanta, is also the largest economic engine in the South, built on like New York, diversity of inclusion and good common sense. So I moved to Atlanta for a number of reasons.

But I remember one conversation in particular, Barry. Uh. There was a city of there was a mayor I don't mention his name, but there was a mayor in la who saw me as a threat by my age, and he asked me to schedule a meeting with Andrew Youngs. He knew that Andrew Andrew youngs my mentor. I did that. There was a meeting in LA and I was sitting on the floor because this particular mayor was sending a message to me. There was no seat for me, so I sat on the floor. Fine with me. I didn't care.

And by the way, I should say for the audience this was so they don't want to try to guess this. This was twenty years ago, so nobody thinks it was recent. And after the meeting, Andrew Young was at the airport and he said to me, you know, you got to move out LA. Either they see you as a threat and think you want to become mayor, or they're going to treat you like a child for the rest of your life because you grew up here. And he said, John,

a prophet is only without honor in his hometown. That's biblical. And he said, in Atlanta they called doctor King in Atlanta Marty M. L. Michael his original name. They were digging at him. That's why staff called him doctor King to give him gravitas, and had twenty eight thirty years old. It was only five to seven Doctor King was five seven hundred sixty pounds, so he was like, we had to give him some gravitas. You got to move out of this city and come back as an honored citizen.

Later on he was completely right. And the other thing was, you know, history in la is two years old. I don't mean the as a diss I mean la is a place where you reinvent yourself, constantly reinvention. So it's a great for an entrepreneur who's trying to make it. Well, I had already made it to a certain degree. What I was looking for in now was purpose, and Atlanta was steeped in purpose in civil rights history. So I went there and created civil rights, from civil rights in

the streets to civil rights in the c suites. This is an extension of doctor King and Andrew Young's unfinished work, an extension of what Abraham Lincoln and Frederick Douglass were doing in the eighteen sixty five with the Freedman's Bank. It was. It was an extension from the streets to the suites, a discussion about green, free enterprise capitalism and economics, ownership in wealth creation at scale to set people free using the free enterprise system.

poor whites in this country. You have one hundred and thirty million people who are financially bruised in this country, including working class, middle class people. My goal is to become America's Angel coach. My goal has become the Starbucks of financial inclusion, the Walmart of financial literacy at scale, the Federal Reserve of the hood. I have two hundred and forty five locations today. Barry two hundred and forty five locations in forty six states, how.

ninety thousand of their employees. So much so that Delta CEO has given one thousand dollars emergency saviors account to everybody goes through our financial coaching work, all of his ninety thousand employees. That's how much he believes. I can't go to a Delta terminal without people talking about their financial coaching in the thousand dollar savings account that they've gotten. I can't go through an airport without a TSA agent screaming out their credit score, what you've.

the country is just signed up with us. So we're in banks, whether it's Truest or Wells Fargo or Bank of America, and they're ordered over one hundred branches from US. You know, that's business. One hundred branches is a business decision, not a charity decision. We're getting the bank out of the no business barry and back into the yes business. In other words, if I can get your criteria sort it, get your savings account up, get your debt down, get your credit score up, the bank and say yes.

twenty five percent unemployment, unemployments through the roof. It's all predictable. Right, you go into a seven hundred credit score neighborhood of any race.

They're going into college. You have two parent households. Vioding crimes are non existent. It's a complete world. So here's what you see in a five any credit score neighborhood. Right check casher next to a payday loan lender, next to a rent to own store, next to a title lender, next to a liquor store next to a pawn shop. And by the way, Berry, this is not just black and brown urban neighborhoods. It's poor, white, rural See you got me, You finished the sentence for me.

have an opinion. That's a melody hops in quote. And if I can replace the emotion with a science, with a mathematical equation or a credit score, okay, and that credit score changes is dynamic, It changes you know, every week, that keeps your attention, that keeps you it's an individual scorecard. I can't Here's what's beautiful. If you're an underserved person or somebody who's used to being used to racism dogging you or sexism dogging you, I can't get in your

heart and change how you feel about me. I can get into my own head and change my credit score. It's control of my own destiny. And the credit score is a trending indicator for all other things hope, faith, belief, confidence, well being, trust. These things you need to access banking, financial services of market economy investors. So I believe we found a burning bush. You move, I'm gonna say something on your podcast that I rarely said to anybody. You

move credit scores one hundred points in this country. You stabilize this country.

to be immensely successful. You have four of those things, you're going to be very successful. You have three of those things, you will pop your head over failure. You have less than three of those things, You're stuck. Who has less than three of those five things? Poor whites, African Americans, Native American Indians.

for having this conversation with mainstream power structure. When you have these recognitions, it allows you, It gives you entree into a door or doors in the c suites where you can have a conversation as a peer, as an equal. So I'm not talking at people anymore. I'm talking with people, and they understand they have value, and they have credibility and success, but they also value in a different way my credibility and success. And I've had enough private sector

success also in growing and building enterprises. They know I'm a legit capitalist. I mean I've clipped a coupon on Wall Street. I've done I've run a balance sheet in an income statement, etc. Etc. So there's respect in consideration, not just for my beliefs, but for what have I guess what we have built in how we performed, which allows us to have a conversation that's different, that allows us to create a coalition of the willing of leaders,

which we're building now. I mean CEO of Walmart and I are co chairing Financial Literacy for All dougriat Millin. Our goal is to get eighty percent of the fortune five hundred by twenty twenty five to embed financial literacy into its business plan, not to its philanthropy plan. It's business plan, just like healthcare was forty years ago. So our mission in schools is to get financial literacy funded by Congress K through college so they answer that question

you mentioned earlier. I'm vice chairman of No Labels now as of two months ago, my mission there is to be the voice of the underserved and the voice of the voice. Let's try to get public, get fifty eight, to be very practical, get fifty eight US Senators to agree on a bipartisan basis to pass the civil rights bill of this generation. Financial literacy. Then that I'll get us into schools. And I've got a plan for the banking and financial services system. I mentioned that hope inside.

I've got a plan for workplace, which I've just discussed, but hoping with financial literacy for all, it's really about building this culture amongst Fortune five hundred companies, which is where you spend most of your time working, well living if you're you know you spend most of your time at work if you're employee, and changing the culture and the places that change America.

a lot of things. Single family residential rentals was a business I thought I could be in that had no conflict with my philanthropy. It also, oddly enough, Barry was a business that Frederick Douglass was in.

free slaves about money. So he was both a financial literacy champion, pioneer pioneer, and he was an asset owner and in many ways I am literally replicating his business model, but it wasn't intentional. This is just sort of tripped on to this same narrative.

this to the human experience. And they probably shouldn't be in the business of owning homes and low wealth neighborhoods unless they are fully committed beyond a balance sheet investment. You'll get your return, but but really should you be should this be the business that you're in If you don't really care, we care, and maybe go back a little bit story because the rig Orgon story is a little interesting. I went to Tony Wrestler of Arias Management

and micael Oaghetti had this idea. I had this idea. So Michael said he's going to put up a few million bucks to partner with me. I went to go see Tony about supporting Operation Hope and I get asked him for fifty thousand dollars. He said, yah, yah, yeah, yeah, what's in your other pocket? Excuse me? He said, look, you got fifty thousand dollars out of me philanthropically, but you're a smart guy. What do you make in the other pocket? Because you just took money out of my

out of my left pocket out here. So I said, I got this business idea. He said, I'm in just like that. Yeah, I'm in.

Why do thirty mini when you can do one hundred and thirty men, Let's do one hundred and thirty million. And we built this company over five years, from zero to one hundred and twenty million. And I paid all the bankers off, all the Ferty Max City National Bank, these other bank first for a public bank, I paid Tony and michaeloff plus their coupon. I was so proud to be a black man in America who came from nothing.

And I paid all of my debts off dollar for dollar under agreement, and I owned the company and I as teaching and we did this honorably because I was doing financial literacy for the residents. Free financial literacy. If you major payments on time, re rewarded you. If you had a credit score of six hundred or five eighty, you had to go into financial counseling and coaching with

my organization, Operation Hope. If you raise your credit score to seven hundred, I would reduce your rent by ten percent. And as long as you kept the credit score above seven hundred, we made sure that the vendors that did the work on maintenance plumbing, heating, lighting, landscaping, roofing, etc. That they that we gave a shot to minority in women owned businesses. So fifty five percent of all of

my merchants, my vendors were minority in women. If I was not a black guy owning this company, I don't think anybody else would have done that. I was sensitive to it because of course I am it. And then we gave a path to home ownership from rent to own for people who said I loved this experience and been paying rent on time? Can you help me become a homeowner. That caught the attention of the media, and so media starts saying, well, is this a model of

going from rent to own? And can you actually treat people like residents and not just renters? And can this business be also a catalyst for social justice through living wage jobs and contracts? The answer to those questions were all yes. That also, those three things allowed me to access different kinds of capital pools than Wall Street were accessing that were cheaper. So, without getting in a bunch of detail, I found another capital stack that was multiples

less expensive than the hot money on Wall Street. And there's two ways to make money. You make more, you spend less. I was spending less. That allowed me to sell my business at a prime rate. And then I then became an advisor to KKR and their Global real Estate group because of the philosophy that I had a Promise Homes company. And now I've sold that company into

a partnership. I'm growing that company now with the new partners Seawan Horowitz and Clayton Wyatt, We're going to now scale this company from seven hundred homes to ten thousand. And I want to own all of these affordable housing homes that are in the institutional portfolios. I want them to sell those homes to me. Let me treat them as a priority, as these are the communities that I love, and I think you can do well and do good too.

In fact, I know you can. So here we have a philanthropic model with Operation and Hope financial coaching, and you have a wealth creation and a job creation and home ownership model, affordable choice model with Promise Homes Company. And at some point I'll get into access to capital. That's another conversation for another day. But this is my mechanism to uplift the bottom of the economic pyramid.

I mean is only half. It's about five hundred thousand homes that are owned institutionally out of seventeen thousand rental homes. So the concept that institutions are wall streets owning main street is in and of itself a fallacy. But is it true that most of the sales in the last few years have been from institutions. That is true in these underserved neighborhoods. So what I want to do is buy the homes that have less than two thousand dollars

a month rent from these institutions. I want to own them, and I want to buy or build homes in other neighborhoods that have, you know, sub two thousand dollars rents.

We're done. I was at the door in twenty sixteen, knocking on the door, saying good timing, and I bought some of these assets at a decent rate when they were trying to exit. And even if they didn't want to exit their whole portfolio, the one part that they were willing to get rid of was this bottom section. I think we're at that point again, I think with where the economy is right now, the next two years, there'll be a pruning, a refinement, a tightening of institutions,

business plans focusing on their sweet spot. The sweet spot, to be blunt and Berry, is somebody like you and me who has multiples of income over their expenses. They're looking for that renter. They don't want a renter who has three times rent, which is a low income, low wealth renterer. They don't want somebody who's a doctor, doctor, a Walmart manager, or the you know, McDonald's manager, or the police officer. But I do I want them. I want I love these communities. I love these residents as

my you know, occupants. I love these neighborhoods that are untapped, underserved, and unseen. And I think my passion for these neighborhoods matches with the strategic interests of institutions who hit their bogie. They've hit their number, and the homes are not deferred, they've been rehabbed, but it's headline risk maybe for somebody to own it other than me. Let me own it, do well and do good.

because they know me. They've seen me there for thirty plus years. So I'm not selling wolf tickets as they say, And.

own it. If you're the property management company, you don't own it. So you're not going to have the same care for these residents as as I would as the owner of the prop of the property. It's myself. And so you may let that resident call you six or eight or ten times and not go out to them you made it. You may overcharge on maintenance because you can, so they're the property management company. Is really a key part of delivering and keeping the promise to these communities.

And if you get lucky, you get a great property manager. If not, you need to do it yourself, so I will roll out in areas. When I've got that, I can keep the promise to my communities, in my residents, and we have a formula for that.

minutes from jobs. But who lives there? We put inner city poor stroming people because because in the fifties and sixties and forties, people want to get away from these folks. They built suburbs when traffic was not onerous and moved away. Now traffic is paying the Kazanga beans, and young people are not afraid of minorities. So young people are moving into inner cities at low rates, rehabbing these properties, building businesses,

and creating new neighborhoods and communities. And what I want to make sure that happens is, if there's going to be gentrifications, let it be diverse and inclusive gentrification the folks who actually live in these neighborhoods, and not just those who can afford to be in these neighborhoods. So basically, you have every inner city in America, with exception of Manhattan, is a gold mine waiting to be tapped. Every these are all these neighborhoods, Inner City Detroit. I mean, you

pick one. It's right near jobs and or at least economic opportunity and energy waiting to be explored. I see opportunity everywhere. It's the guy who went to Africa selling shoes. He wired back three weeks later, Boss, please send me home. No one here wears shoes. Then they bring Barry and John out there and we get lost in the bush, and no one hears from us. Because we're exploring the culture and all that stuff. And then three weeks later,

there you go, barry everybody in every shoe. You've got No one here wears shoes.

either show up for work or don't know? You know, there's no there's no direction of what the leadership wants to do or not to do, and so you're sort of on your own. So everybody needs a memo, and everybody needs a business plan. For their life. And what we found is that after slavery, we were told after Americans we were free, but nobody gave us a memo on the rules of freedom in a free enterprise democracy

and free enterprise system. And so it's what you don't know that you don't know that's killing you and a blind tout on one eyed man's king. And when you don't know better, you can't do better. So we just found that you had to literally go back to the drawing board and deliver the business plan for a free enterprise success story to successive generations of people who were

not giving direction or guidance. And my goal at Operation Hope was to do that through coaching, but also my goal in the books was to provide literal training grounds, if you want to call it that, so that there was no guess work anymore around success. And each of the books are a bit of touch tones and maybe obvious, but common sense is not so common.

you're using your human capital. So let's stop playing a game. Let's understand that our freedoms aren't free, and we live in a free enterprise democracy. So that's Number one, is you live in a free enterprise system. Embraceist. Let's not

playing the stupid game that somehow we don't. Number two, and are these kids who are railing against capitalism at fre enterprises, rich kids who are only able to do that on a college campus because their parents are capitalists and could send them the best colleges in the World's absolutely fascinating to me. Number two. So it's not just poor people or under a misnomer, it's rich kids too. Number two. Your mind set makes you lose money or

build wealth, you choose. Number Three, Relationships are investments, build relationship capital with yourself first. That's that self esteem. Piece Number four, be entrepreneurial. Don't just get a job, maybe create one so you can write that check, not just cash. And number four spiritual capital is a start of true wealth on your power. So I would say that we're not living, we're not human beings having a spiritual experience.

Where spiritual beings having a human experience, energy matters, and the most important thing in life probably is becoming reasonably comfortable in your own When I met you, instantly I could tell that Barry was cool with Barry. Well, if you're cool with you, then you'll be cool with me.

you have a tower that says Goldman Sacks. Well, one hundred plus years ago, there was a guy who was an immigrant named Goldman and another guy who was the imigant name of Sacks, and they literally were walking door to door selling financial services out of a briefcase because they couldn't get a job in the office towers of that day because of discrimination. So they had to go create their own job because no one would hire them

for an existing job. And that created an institution today that people think is hotty, toddy and hard to access, called Goldman Sacks. But whether it's ups and I think his name was Kelly, I think it's his name who founded the ups On with the bicycle messenger service, or whether it's Coca Cola, which was a pharmacist and his son who created that business and they were dead broke sold it for five hundred bucks. By the way, so the pharmers the pharmacy formula. You can go on and

on and on. You know, black enterprise was created by a heart scrabble black entrepreneur Ebony magazine. The guy bro a few books from his mother. So he's black entrepreneurs, Latino entrepreneurs, white entrepreneurs. It doesn't matter. All legitimate wealth came from nothing, who built something into something. And these are big companies where once small ones. And uh, that's just a historical fact.

engaging in the economy. So rich people cannot on their own sustain the Lard's economy on the planet. We literally need each other. So whether you're a consumer or whether you're a stakeholder and a builder, you have a role to play. And I'll say something else is maybe shocking to me, it's common sense. Demographics are destiny. The reason I believe in this business plan today that it's about

mission and money and morals. Today there's not enough college educated white men to grow the economy for the next thirty or forty years. It's just mathematically impossible. So you need minorities, you need women. We need other people to grow into the economy in a sustainable way in order to keep this thing, this party, in this beautiful story

of America going, and so that China does not. It is way of illegitimately becoming the leader of the world by cheating at capitalism and free enterprise with their partner Russia, which is by the way, rounding air economically and a bunch of thugs who can't do anything illegitimately. But China and Russia together want our way of life. They want to be us, and they can't do it with a fair fight. We if we realize we're better together, probably

my next book by the way, this topic. If we realize we're better together and that two plus two has to equal more than four, mean, that's every good marriage. Is that two plus two equals six, eight or ten. You're better together, then you can realize that you can't succeed if there's a hole in my end of our boat. We're in the same boat. So we need the bottom of the pyramid to be here, rehabilitated and engaged in the economy to grow GDP by an extra two to

three percent sustainably. And black folks are a one point five trillion dollars consumer spending for us, Barry, that's one of the largest economies in the world. But we don't own anything we spend. We've got to move from just being a consumer to a wealth creator.

else's life is not constant an emergency in yours. And just because you don't respect me doesn't mean I don't respect myself. And your interpretation of my value is not my reality of my value. And when we start understanding that we are unique in this world, and we are and we are powerful in that uniqueness, and that egles don't fly in packs. Berry, You've never seen a flock of eagles, but buzzers love packs, and turkey's got wings

and can't fly. And if you're not careful, you'll get so offended by what turkey, what buzzards say about you, or you'll be so distracted by what turkeys are laughing at you and saying about you and your family, that you will get distracted. Come out, get out of your ego, your ego, altitude, and you'll go down to try to show that uh, that that bird a lesson, and the pig will find you out in the pig pen and throw some mud on your wing and get that ego

down into the mud pit. And now the turkey and the buzzard and the pig look at you and say, now we got you right where we've always wanted you, down here with us. You got to step over messing, not in it. You got to stay above the fray. You got to understand that that that the philosophy for success is talk without being offensive, listen without being defensive, and always leave even your adversary with their dignity, because if you don't, they'll spend the rest of their life

trying to make you miserable. It becomes personal. It is not their interpretation of you that matters. It is your interpretation of you that matters. Not one ounce of my self esteem is dependent upon your acceptance of me. It just not so. So why am I spending all my time trying to impress somebody who I do not know, with money I do not have in the places they do not want me, with philosophies and things that there that don't work. They're broke, they're they're unhappy, they're miserable,

and I want to be like them. What I want to impress them? Why are we spending our time trying to impress somebody we actually even don't want to be like like all these lessons of wasting time. I don't mind wasting money every now and then. I don't want

you to abuse and waste my time. I'm trying in this book to short circuit time wasting and energy wasting and depression inducing activity and give you legitimate hope that you can come up from nothing in the greatest economy and I think the greatest creation of democracy, open source democracy, in the world, which is America. We're not perfect, but she's a country. She's an idea, not a country. We can make her anything we want, and we can be part of that remaking process up from nothing. I could

never be me in Germany or France or China or Japan. Culturally, I just would not have gone from the bottom to the top.

What's your response to people who say the American dream isn't as robust as.

that job? You know? Do I need to go back and be a again and have people coughing on me, and I don't have health care, and I'm not getting good tips and the owner doesn't really care about me. Do I really need to go to that dead edd job? Do I need to go to that boss that doesn't care. Maybe I'll create my be my own boss. Maybe I'll create my own way. And so now you have this surge, this super surge of the of the thing that made America different from Europe in the first place, Barry, which

was business creation. I mean, the reason we have celebrity in America is because it was our answer to bling. In Europe had royalty, that was their bling. You didn't have royalty, and we didn't want it. But celebrity was our desire to has something that sparkled the real marrow of this country was the first corporation, sorry, the first the first entity creating this country was a corporation. It was a trading corporation that then created democracy, not the

other way around. Municipalities came out of trading corporations. So we are in our bones traders, financiers, business people, ar newers, hustlers. That is in our DNA and every I think twenty thirty to fifty certainly every one hundred years you need a generation of strivers who own something, own, create something, and by the way, create jobs. So have we become over dependent upon less than a thousand companies that employ

ten thousand people or more fortune five hundred. Yes, you have all these folks going through college wanting to go work at at Google or whatever the thing is. Who's not hiring or will fire you at the moment that there is an economic glitch where most of the businesses, sir, most of the jobs this country come from employers with less than one hundred employees. Most businesses in LA ninety five percent of all businesses have less than one hundred employees.

Let's drive down Manhattan and look at these skyscrapers. That's the dentist's office for people. That's an architect, eight people. That's a law firm, twenty people. That's a you know, an analyst firm. These are small businesses. I called a chiropractor yesterday. He's got him and the secretary. I mean, this is what's driving the economy is. So you're either gonna become the business person or are you going to work for that small business owner who probably is going

to pay you more. You have more social mobility in that place than you will in some huge corporation. I'm not saying I think, don't go work for the big company. I'm saying that that's not way to made America.

to fight. You had to force him to fight. Now, he'd whip your rear in if you if you if you force them, but he never wanted to fight. When you have the power, you don't need to use it. I spend a lot of time late at night on a sort of a mental vacation, I will turn on something online and have my brain completely fantasized. There's an F one. There's a series on Netflix that that that drives there you go it unpacks F one Racing, That

is Genie. My sport is auto racing. Actually I have a professional and I'm sorry, a competitive auto racing license. So that is my one of my passions. A very great movie by Paul Newman that Paul Newman did, uh call driving It actually that he was a great actor, but his passion was auto racing. He's the only sport he was elegant at, he said, So anyway that I can sell. I talked about things I would love to watch all day and all night.

many heroes and she ros that have that. I actually had to go sort of like find the roadmap because it didn't exist for me where I grew up. So I had these saragate far and mothers, surrogate family that I have literally put around me so I can map out what success looked like. I probably have fifty of these mentors and mentees, sorry, heroes and she wrotes who are mentors that have guided my path forward. A few of the names I just share with my mother wanted to smith amongst them.

read it. By the way, edn't ask me this, but there's a it's a documentary that could be a great book called Easy Money that just came out. I believe it. Actually it's even a PBS documentary. You can find it on Amazon's platform. But it is fascinating and as much as I think I understand money, it really unpacked what happened in the last twenty years and that I just saw that. Sometimes you got to watch things two or three times. The Men Who Build America an eight part series.

Everybody needs to watch that. One problem I have with it is there's no blacks or browns or there's just a bunch of, you know, industrious white people. And that's just a misnomer that only white men built this country. That's a whole another podcast for another time. You know, we can't get it. You can't get an elevator in this building without a black man's invention. Who built the elevator? So we all had a place. But these are sources of inspiration for me.

understand your path. So, particularly if you're a person of color, in listening to this podcast, you're going to need to hyper focus because your white friend with a trust fund can make all kind of mistakes and still land on their feet. You know, you may have to burn the ships behind you and hit that beach and like a laser beam and never give up. I am consciously oblivious of all things around me that don't matter. I am

very focused on what I think is super relevant. If you're hyper focused, you're resilient, and you never give up. You actually don't have to be the smartest guy in the room. You just outrun failure, and at some point you will succeed because failure is lazy, and the devil's lazy, and frosters are lazy, and if you're just not lazy, you'll succeed. Be curious, God gave you two ears in one mouth, or listen twice as much as you talk.

Be fascinated, Be super nosy, Be respectful, be kind. You never know the toe you step on maybe conect to the rear, and you got kiss tomorrow. Just be gracious if you want to have a little grace, show a little mercy.

church needs needs donation. Catholic Church is one of the largest owners of land, by the way and financial services in the world. This is not a criticism, is a critique. I'm just saying my observation is that whatever you want requires money and or an understanding of same in order to live a life is free. Freedom today is self determination. You cannot have self determination unless you unless you have some level of economic If all money is his freedom,

That's what I'm saying. That's all all. So you shouldn't pursue money to control other people's freedom slavery, but you should understand that if you have money, then no one can control yours.

at rituelts dot com. Follow me on Twitter at Ritholtz follow all of the Bloomberg Family of podcasts at Podcasts, I would be remiss if I did not thank the correct team that helps with these conversations together each week. Pariswold is my producer. A Teak of Albrun is my project manager. Sean Russo is my researcher. My audio engineer is Sebastian Escobar. I'm Barry Ritt. Adults, you've been listening to Masters in Business on Bloomberg Radio.