Hello everybody, it's Sam from Financial Samurai. And in this episode, I want to talk about being an elite. Because being an elite sounds great. You're at the top of your profession. Maybe you're the top politician. You're the top player. You're at the top whatever. So if you're in the top 0.1%, 99.9% of the people aren't there.

So you feel special. And who doesn't want to feel special? I know I do. I know my kids do. We all want to feel special. But as I was writing a new post about the New York Times workers going on strike, I realized something very important. And that is none of us really should want to be identified as an elite.

Because to be an elite means to be exclusionary instead of inclusionary. Any grade school student and every single parent understands the importance of being inclusive. We want to include people from different backgrounds, different sexes, cultures, races, and so forth. Because we want our kids to grow up to be kind, thoughtful, empathetic, not assholes, not racist, not bigots, not sexist, none of that stuff.

Because we want them to be helpful to society, make friends, not be lonely, and just be good people overall. Makes sense. So if you are considered an elite, that means you are exclusionary. The more well-qualified people you can reject, the more elite your institution or you might seem to be.

A great example of being exclusionary, yet telling the world that you want to help more people is the way top private universities have kept their enrollment the same. Very little movement over the decades despite demand surging higher and higher. And at the same time, the tuition rates are also rising faster than the rate of inflation.

So as an elite university, you gain more elite status by rejecting more people. You keep the enrollment the same despite having 10, 20, $50 billion endowment, which could easily grow your class size and let more people in. But because we all want to feel elite or be elite, if you're an alumni or if you're a wealthy professor who can buy $16 million mega mansions in the Bahamas, you might want to keep the status quo.

You might want to pull that ladder up from behind you so not as many people can gain the same amount of access and power. So do you really want to be identified as an elite when you're excluding other people once you've got to where you've gotten by the help of other elite people?

I would say no. I would much rather be identified as a peasant, as someone who is intellectually inferior, but who can do what they want and who is actively helping other people. I've been talking about this topic regarding status, prestige for many, many years. And one of the reasons why is because I worked in investment banking and this industry, you got paid relatively well.

So you had a lot of people who really chased status and prestige and who really couldn't quit the money even though they were miserable. It was just hang on for one more year and you'd make another several hundred thousand dollars or millions of dollars. And so this is a topic that's near and dear to my heart because it's very hard to quit the money.

It's very hard to let go of the desire for prestige status. But at some point you've got to decide how much prestige and how much status is enough to take care of yourself and your family and whether all this stuff is really worth it. Because if you end up doing what society wants instead of what you want, you're gonna look back on your life with regret for not pursuing your passions and your dreams.

I promise you this. So let's talk about the New York Times strike. People who write for the New York Times, who work for the New York Times are considered part of the elite. It is one of the largest publications, one of the oldest publications, and it commands the attention of millions and millions of readers.

And so you might be wondering, if you are part of the elite, you've got all the money, power, and access in the world, and your kids are gonna have all the connections and access to the great schools and great jobs, why would you ever go on strike? You've got the best of the best that society has to offer.

Well, it turns out, like most strikes, the main contention point is wanting or needing more money. The employees want more money and the company doesn't wanna give more money because the company, a publicly traded company like the New York Times, wants to minimize costs so it can maximize profits.

Makes sense. So another epiphany that I realized from writing this article was that, hmm, no matter how much money, power, and access you have, you might always want more. So it goes back to the theme of how much is enough. You've gotta understand yourself to think how much is enough because we all run out of time.

You know, I'm at 45 years old right now and I'm thinking, hmm, man, really? I could be dead in 25, 30 years. That, life went by quick. You wanna really figure out how much is enough so you can use your money to live the life that you want. So about 14 members of the New York Times Guild went on strike because they wanted a pay raise of 5.25%.

Apparently, the New York Times offered half that, so 2.625%, and the Guild said, forget that. We're on strike. We're not gonna write. We're not gonna edit. We're not gonna do anything. And it's somewhat surprising to see that New York Times management isn't willing to offer a 5.25% pay raise.

Supposedly, the writers haven't had a raise since early 2021, and they're looking for some assurances. And we all know that inflation is rising faster than 5.25%, so paying 5.25% increase for the next three, four, or five years doesn't seem that unreasonable. It seems kind of fair. You're still not keeping up with inflation, but at least nominally, you're making more money.

So I totally understand where the Guild is coming from and from where management is coming from because they wanna keep costs low as the Fed-induced recession is likely coming. You know, the yield curve is majorly inverted. The 10-year bond yield is at 3.6%, and the one-year bond yield is at 4.7%.

That's a major inversion. 90% chance a recession is coming within the next 12 to 16 months. At the same time, at the same time, would you really go on strike if you were an elite for a 5.25% pay raise? The company's offering 2.625%, so you're really going on strike for that delta, that difference of 2.625%.

In other words, let's say you make $100,000 a year. Are you really gonna go on strike for an extra $2,625? That's tough. That seems kinda strange if you're an elite, if you're truly an elite. At the same time, if you're making, let's say, under $50,000 a year and you live in New York City, well, every single dollar counts because New York City is, in my opinion, the most expensive city in America and one of the most expensive cities in the world.

So you wanna fight and you wanna show solidarity to your other 1,400 union members. I'm gonna side, I would say, 90-plus percent of the time with the employee because company loyalty to employees is dead. The world is just way too competitive for companies to offer pensions and take care of employees on the good times and the bad times, right?

But it is also interesting that in investment banking, it's completely different from media. When we don't bring in the business, our compensation gets cut, and sometimes really drastically, 20% to 70%. I remember in 2011, I did very well with my clients, top three with most of my largest clients, and yet my compensation was still cut because management said I had to subsidize, subsidize the fixed income department, which was losing money at the time.

And I was bummed, but I didn't complain. I certainly didn't go on strike because if I went on strike, they would have let me go or cut my compensation even further for the following year. So instead, I devised a way to get out, to get out and not complain at the water cooler, to just get out by negotiating a severance to be free to do what I wanted to do.

There's another thing that I realized about the New York Times strike. So in 2011, there was an article that came out called "How a Financial Pro Lost His House" by Carl Richards. And the gist of the article is, Carl bought too much house, was underwater by more than $200,000, and decided to do a short sale.

A short sale is an offer of a property at an asking price that is less than the amount due on the current owner's mortgage. Carl argued that while he had a contractual obligation with the bank, he had a moral obligation to his family. That makes sense. Therefore, he stopped paying his mortgage and handed back the property to the bank.

But at the time, it was a really difficult time. I remember thinking to myself, ah, so here's a well-paid guy who is causing hardship for the rest of us who decided to continue paying our mortgages. Are we really the fools here? Are we the dummies? Are we the idiots for continuing to pay our mortgages when the economy was collapsing?

Because if everybody kept paying their mortgages, the devastating financial crisis would not have occurred to the extent that it did. So I just, I remember in 2011, very tough because we were going still through like two or three rounds of layoffs a year after six to seven rounds of layoffs in 2009 and 2010.

I also had a huge primary mortgage. I was like a million dollars still. And then my Lake Tahoe property, which I erroneously bought in 2007, was also underwater by several hundred thousand dollars. So compensation was rightly getting slashed. And I also wanted out. So it was tough. In Asian cultures, breaking a contract is dishonorable.

So to see Carl's story get celebrated on a large platform felt off. And the more people who broke their mortgage contracts, the more the economy would suffer. And the article just made me feel dumb for doing the right thing. But I couldn't break my promise. So instead of being punished for not paying his mortgage, Carl Richards was rewarded by the New York Times with a regular financial advice column.

Once he got that regular column, he got more exposure for his financial planning business, which meant more money. Then Carl was able to land lucrative book deals. This is a great example of heads you win, tails you also win. And I think it's part of being the elite. And kudos to him.

No rational person would turn down such opportunities. And I am thankful for Carl Richards and the New York Times because they enabled me to believe that anything was possible. I didn't have to be perfect on my financial journey. I just had to be honest. And if I really messed up, I might even get handsomely rewarded.

Think about that. If you do well, you'll likely get rewarded. If you do poorly, you might get rewarded even further. How do you not get pumped up with those odds, right? So the very next year, I left my job and I haven't been back. Finally, I wanted to share some inside baseball regarding the book publishing industry and getting on bestsellers lists.

When "Buy This, Not That" came out, it became an instant Wall Street Journal bestseller. And I was pumped because the Wall Street Journal was the newspaper that I had been reading every single day since I started in the finance industry in 1999. And the bestseller list is based on a meritocracy.

It's based on how many books you sell during a one-week period. However, "Buy This, Not That" didn't make the New York Times bestseller list, even though based on the number of sales, it should have. As it was explained to me by those in the publishing industry the New York Times bestseller list is not 100% based on meritocracy.

Instead, there is an editorial committee that decides which books get on the list. And so the industry insiders went on to reveal several realities. One, the New York Times can do whatever they want because they are editorial. Two, if you work and write for the New York Times, you will most likely have your book reviewed by them.

And if you write for the New York Times and sell enough copies in a week to make the list, you will most certainly be on their list. Four, first-time authors seldom get on the list. Five, finance is a harder genre to get on the list. And then lastly, I'm not a preferred minority as an Asian-American the publication fights for.

It's just the way it is in America as the elites decide who gets an extra cookie or an extra helping hand. I wanna be rewarded based on the quality of my work. That's it, not based on my identity. In fact, it is partially due to my self-belief and the quality of my work that I decided to go out on my own.

No longer could I ride on another institution's coattails. So if you have the self-belief, go out on your own and show the world what you got as well. There is nothing more satisfying and gratifying than creating something from nothing because of your efforts. Just know this, nobody really cares how you got there, only that you made it.

So don't let honor and pride keep you on hard mode forever. Figure out the system. Maybe you've got the game, the system, so long as you don't do anything illegally to get ahead. Because once you become part of the elite, I think you get multiple second free passes. You can screw up many, many times and you can just try again.

It's kind of almost like starting a business if you're rich. If you're rich and you fail, you can just try again. There's no devastation. But if you're poor and you try to start a business, you might only have one shot, maybe two shots, but likely only one shot until it's back to the salt mines.

Yes, it's nice to feel special. However, you will ruin your life if you go too far in pursuing prestige. We all want some, we all need some for ourselves and our family. But like everything, there's a balance. Instead of doing something you like, you might end up doing something you hate because society deems it's worthy.

And when you look back on your life, you might end up feeling full of regret for not pursuing your dreams. And all for what? So you can be part of an exclusive club that shuts most people out? I say forget about it. Instead, celebrate your middle class, average status.

I think it's the best class in the world. And if we really wanna be an elite, be elite at giving away your time and money to help other people. Because the more inclusive you are, the better you will also feel. Financial Samurai will never have a paywall to listen to this podcast or read the articles on financialsamurai.com because I don't wanna shut out a poor kid or a poor family who wants to learn about personal finance.

I'm not gonna create some ridiculous $2,000 e-course. That's just never gonna happen. It's so unaffordable. I'd much rather try to get an institution I believe in that's synergistic in supporting my work. So I say congratulations to all the elites out there for achieving great goals. It's not easy getting to the top of your profession.

Don't let anybody discredit your hard work and talent. However, if you have to go on strike to make ends meet, perhaps the definition of being an elite needs to change. After all, what's the point of being so good at something if you can't even be properly compensated? If we are lucky enough to be at the top of our profession, the only thing I ask is for all of us to give others a chance to ascend as well.

Let's not pull the ladder up from behind us. If we do, we might not have enough support to prevent us from when we eventually fall over. Thanks so much everyone for listening. If you enjoyed this episode, I'd love a positive five-star review. If you wanna support my work, check out Buy This, Not That at financialsamurai.com/btnt.

I'll talk to everybody later.