The Liquidity Event Podcast: Episode 35

 

Episode 35: America's Got Startups

Another week, another lifeless IPO market. Come on tech bros! Get it together. Our hosts are back on their soapbox and ranting and raving about clients who won’t sell their dang stock just because they don’t like the price. There’s the awful news that romance scams reached a 5-year high, made even more popular by the devious Tinder Swindler. Folks, never send a wire to someone you don’t know. Speaking of wire transfers and therefore banks, Wells Fargo is in hot water for a damning report that shows they denied mortgages to black borrowers at a much higher rate than other lenders. And finally, we’ve got Forbes’ list of the 500 best startup employers. If you’re not offering remote work, what are you even doing. This one is highly motivated.

Read the Full Transcript:

Speaker 1:

This podcast is for informational purposes only and should not be considered tax or investment advice. Welcome to The Liquidity Event, a show about all things personal finance with a laser focus on equity compensation. Hosted by AJ and Shane of Brooklyn FI, each episode will take you through the week's news on FinTech, IPOs, SPACs, founder wins and fails, crypto, and whatever else these nerds think is interesting. Learn more and subscribe today, at brooklynfi.com.

AJ:

Hello, and welcome to The Liquidity Event. I've got my sweatshirt on today, check it out.

John Owens:

Classy, classy.

AJ:

Classy.

John Owens:

Love it.

AJ:

I'm your host, AJ.

John Owens:

And I am your substitute co-host for Mr. Shane Mason, John Owens.

AJ:

Your sometimes host.

John Owens:

Again, welcome to episode 35 of The Liquidity Event, recording here on March 23rd, airing on Friday, March 25th. It's the end of March already. Holy shit.

AJ:

Indeed. Mr. Shane is not with us today because it is tax season and as the director of our tax department, every hour of his, this time of year, is quite precious. So it's not to say that you and mine's time is not also quite precious, but...

John Owens:

We are not as precious as Mr. Mason, and I think it's a hair thing, to be honest.

AJ:

That's true, but that's true. Well, John [crosstalk 00:01:27], it's always great to have you here. What are you...

John Owens:

Yeah.

AJ:

Are you reading anything good this week?

John Owens:

Well, I started this book called What Happened to You? It's by Dr. Bruce Perry and Oprah Winfrey.

AJ:

Okay.

John Owens:

It's about talking to people about traumatic events or things that happened in their lives, but you don't say like, "What's wrong with you?" You say, "What happened to you?" As inviting the question. But it's a little heavy, so I've been nursing it a little bit at a time. Yes, it's interesting. Kind of like a spin on self-help, but yeah, not one that you can necessarily pick up and storm through. At least I can't. What about you?

AJ:

Well, I've been complaining for the past couple weeks that I've just been too busy and stressed out to even pick up a book, and I am pleased say...

John Owens:

I've heard that.

AJ:

... that I have finally picked up a book and I'm very excited. It's called The Grace of Kings by Ken Liu and it's book one of The Dandelion Dynasty. It's classic, world building fantasy. My cup of tea. I'm about 50 pages in. I've been reading it to wind down at night and I love it so far. So that's a hard recommend for me.

John Owens:

Nice, nice.

AJ:

We have another fantasy...

John Owens:

I've been watching...

AJ:

What?

John Owens:

Okay. I was going to say, I've been watching reruns of Everybody Loves Raymond to calm down at night, but I appreciate the fact that you read instead.

AJ:

And you're just drinking water because you have a client meeting after this.

John Owens:

Right after this. Yeah.

AJ:

I do not. Actually, I do have a client meeting after this, but it's a friendly dinner, so I'm drinking.

John Owens:

Social.

AJ:

It's a social event. I'm drinking what's called a pineapple drift, which I invented, which is whiskey and a Pineapple Spindrift and an ice cube. Because as we all know, during tax season, there's not time to make cocktails. It's quite delicious.

John Owens:

Didn't you crank out a bunch of tax extensions earlier, so shouldn't you be allowed to have, how many fingers of gin in your drink...

AJ:

It's true.

John Owens:

... because of that?

AJ:

I do have a few fingers of whiskey in my drink.

John Owens:

There we are.

AJ:

And yes, I did file a few extensions. No IPOs that are worth talking about this week. It's dry out there, folks. It's a sad story. Hoping for a rainy day of lots of IPOs.

John Owens:

Yes, yes.

AJ:

We're in this moment right now, where a lot of tech stocks are off their 2021 highs and a lot of our clients are coming to us and saying, "I don't want to sell. Last year, I sold my stock at $160 this year. Now, it's trading at $70. I don't want to sell." And John, you wrote this great post for our blog last week. I was wondering if you could let us know your thoughts on that. Why does selling equity at a lower price than you're used to, or you're anchored to, make sense? What's going on?

John Owens:

Yeah. Yeah and I mean, it's like the old, "What did grandpa teach you about stocks? Buy low, sell high. That's how it works." That's great in theory and I'm all for it and I think you should sell your equity when it's high, don't get me wrong, but you should also consider selling your equity when it's low. This isn't just me saying this because I need clients in particular trading plans and want them to achieve their goals, although that's very important, but it's also saying that when you look at some of the numbers behind it and we get to some of the core concepts of finance. There's two main themes that we need to think about here. One is opportunity cost, or as I like to think about it, FOMO is the best way to think about opportunity cost. "What am I missing out on if I do not sell this? If I sell this equity, what can I do with it? What are all the different options?"

John Owens:

And so opportunity cost I like to equate to invest in FOMO, and, "I can invest this money anywhere I want. It doesn't need to just be in my company's stock. So are there other investments that could potentially make me more money?" That's one part of the calculation or that have better prospects going forward. Because if you look at it...

AJ:

One thing that we just can't forget with opportunity cost is also, "Or can we invest that money in something that's not going to make us crazy?" We have this all concentrated in one position. Let's remove some of that nonsense and that emotional rollercoaster from our lives. That's what I have to say.

John Owens:

And that's where we get to the next piece.

AJ:

Yeah, okay. Sorry.

John Owens:

Which is risk adjusted returns. No, AJ's bearing the lead here. But no, that's okay. Risk adjusted returns, which are really saying, if I can own Spotify stock or I can own the Vanguard Total Stock Market Index, and they get the same return, let's say over a period of time, I would much rather own the Stock Market Index over Spotify. Because in one respect, it's more diversified, it's less volatile. And if Spotify goes bankrupt, which I don't necessarily think that's going to happen or anything like that, and you only own Spotify stock, then that's worth zero. If you own the Vanguard Total Stock Market Index, just one stock in your Vanguard Total Stock Market Index has gone bankrupt and so you're still fine. So we come back to core concepts of finance, but I think so many times we just anchor to, but it was worth so much more a little while ago and we don't anchor to the fact that there are other investment opportunities and there's different levels of risk with different investments.

John Owens:

That's kind of what I go into in the blog. It's a little bit nerdy. It's a little into some of the investment Tweets.

AJ:

I'm surprised by that.

John Owens:

Yes, coming from me of all people. As I wrote it, I wrote it on a train, on the Amtrak train, nerding out on tax stuff. Yeah, it's my favorite place to write.

AJ:

So obviously, single companies have the possibility of the stock literally going to zero. A company can go bankrupt, it can get absorbed. We have these things called penny stocks. We have seen that in throughout history over and over again. What happens if the Vanguard Total Stock Market Index fund goes to zero?

John Owens:

We've been through nuclear war.

AJ:

OK, excellent.

John Owens:

It's over. Yes, we've got bigger problems.

AJ:

Indeed.

John Owens:

Cheerful note here.

AJ:

You know.

John Owens:

Given the state of the world at the moment, but yes, that's the most likely scenario to drive that to zero.

AJ:

While we're on the subject of equity that was worth something last year and is worth significantly less this year.

John Owens:

Yeah.

AJ:

Something that has come up on quite a few tax returns, it's tax season, folks, for those who are listening who are not...

John Owens:

Who aren't aware.

AJ:

... abundantly...

John Owens:

You just woke up from hibernation.

AJ:

... aware by our dower moods and rude emails, I apologize. We get very little sleep during this time. Thank you to the government for making [crosstalk 00:07:46].

John Owens:

In normal times as well, but especially this time of year for AJ and I.

AJ:

Yeah.

John Owens:

The insomniacs on the team.

AJ:

Just to remind everybody that the way that tax preparation works is that we have to do all of the work that we could do all year in a six week period of time, so we are all quite stressed out. Anyways, this is coming up over and over again, where last year, someone made a decision to exercise an incentive stock option or exercise, mostly incentive stock options, with the idea that they would hold it, they would try to hold it for a year, and then they would pay a lower tax rate. They get the long term capital gains rate, significantly lower than the ordinary income rate. That was the strategy, but because of their incentive stock options, they had to pay something extra called the alternative minimum tax. Now it's a year later, it's time to sell. We've held for 365 days and we're selling at a lower price than the price of that stock on the day we exercised and that sucks. That sucks for the client. It sucks for the tax return.

AJ:

Because, typically with our AMT, we'd pay that AMT, but we'd be able to get it back faster. But now, we're waiting a lot longer because that stock unfortunately fell in value. So that's a downside to having incentive stock options and waiting to exercise them once a company is public. Just, that's something that we're noticing and it's nasty.

John Owens:

And really, it again, comes back to this conversation about, which risk do you want to take? You can exercise, oftentimes, those options right when you are granted them or a year after you're granted them, when that spread is really tight, but your company might be in Series A and you might be 23 years old and have student loans and be like, "Yes, it's $10,000 to exercise, but I have $8,000 in my checking account, because I'm just out of school," if you're lucky and so you have to wait. And then what happens, the risk with waiting is that it is worth something and then you have a big tax [inaudible 00:09:41]. That's a great situation to have, but all we do, I feel like is just manage these different sorts of risks from a tax perspective, from an equity perspective, and help folks understand what are the trade offs.

AJ:

Yeah and there's also the possibility that we just disqualify it. The idea of, "Incentive stock options are so amazing. They have this amazing tax benefit." Once your company's public and we've got a volatile stock, not always. And we have a hard time convincing clients sometimes to disqualify to say like, "Let's just exercise, pay the regular tax and move on with our lives." Sometimes we're playing these long term games with AMT. I'm exhausted by it, clients are exhausted by it, but we continue to play the game.

John Owens:

Yeah.

AJ:

I always think about, and we hear this story all the time, "Well, of course I would've exercised my incentive stock options when I got them granted when I was 23, but I didn't have cash. I didn't have the money. And I don't..."

John Owens:

"I didn't know."

AJ:

"I didn't know."

John Owens:

"I didn't know what they were."

AJ:

Every time I went to the ATM, I would take out $10 instead of $20, because that's all I thought I had in my checking account. I didn't have money to exercise in my eyes. I was like, "Are you kidding me?" Anyway.

John Owens:

When I was 23, I used to grocery shop at Aldi and I'd spend like $25 a week on groceries somehow.

AJ:

Yep.

John Owens:

Which is kind of crazy, and feed myself for a week, which was basically as we called it in my childhood, noodle steak for dinner, which is just noodles by the way. Pasta. I like to call them noodles, but yeah.

AJ:

Noodle steaks. I love that. I'm going to use that.

John Owens:

That's what 23 was, and then occasionally, let's mix in some tri-colored rotini to keep it real. But yeah, I mean, I think when you think about that and you think about these startups, these employers are interestingly enough, getting evaluated, especially as lots of people are taking startup jobs at employers during COVID. While there's a little bit of a weak transition there to our next article about [crosstalk 00:11:40].

AJ:

I was like, "Is this a segue or a point?" As a segue, it was [crosstalk 00:11:43] a weak ass...

John Owens:

This is a segue. I was struggling to land the plane. I'm sorry. It's been a long week.

AJ:

Well, some other people have been struggling to land planes. Anyway. Oh, too soon.

John Owens:

Jesus.

AJ:

Anyways. Yeah, you've got this article in here, America's Best Startup Employees of 2022, which is not fair because we're only three months into 2022. So those employers could turn around fast.

John Owens:

Not really sure how I feel about 2022, or actually the 2020s in general so far. I know we're only about a quarter of the way through, but the jury is still out.

AJ:

So John, what makes a great employer? I want to know.

John Owens:

Oh boy. Shit, this is being recorded. No, it's interesting. In the article, they say it's being a more inclusive work environment, having flexibility, hybrid, all that. And I think those are all really important factors when you think about what makes a good employer. But I think for me, when I think about work and having a good employer, and you and I are wired like this. I know not everybody's wired like this, is having really cool, fun problems to solve and new challenges and that's, for me, what makes a great work environment. That I'm not fixing the same thing constantly. I'm interacting with new people, I'm figuring out new things, I'm helping build something. That's really cool and I think that's the wonderful thing about a startup, and one of the things in the article was that you start out at a startup and you're one of the early employees, it's like you get to be this Jack of all trades and work on different projects and then you get to participate in that growth.

John Owens:

And then you eventually get to think about your career as a funnel and hone in on the thing you really want to focus on, which is so much different than the big corporate environment. My first employer out of college had 60,000 employees at the time, probably has about 120,000 now. It's like you do this one thing and then you send it off to 40 different people who touch on one line of it. So you'll get 39 emails, because I'd typically mess up that report, and you get all these emails telling you, from all the different people like, "This line's wrong, this line's wrong. You've got my hospital reported incorrectly." And it's like, "Oh, crap." Where it's like...

AJ:

Yikes. Yeah, I mean this...

John Owens:

Anyway.

AJ:

These lists are, the methodology, it's a Forbes list, the methodology is that they hired this research company. They evaluated 2,500 US businesses with at least 50 employees and three criteria, employer reputation, employee satisfaction, and growth, and they considered any company founded between 2012 and 2019 that has at least 50 employees to be a startup. Then they're naming the best 500 of these companies, and there's a song article about all the different characteristics that ranked some of these companies a little bit higher. Some of the highlights were that remote work is key, equitable work and having an environment where... What do we see here? "It's about creating a culture of transparency and openness and teamwork," one of the people interviewed said.

John Owens:

I like that.

AJ:

Yeah, transparency is one of our core values.

John Owens:

Transparency is one of our core values.

AJ:

Here at Brooklyn FI.

John Owens:

Don't ask me to name all eight on this. Please don't test me.

AJ:

I wrote them and I don't even know all eight of them. But yeah, I mean, I've sort of seriously... You said having a challenge, having creative projects to work on, I agree with that. I think it's also just, and this is also on the employee, which is having that perfect balance of independence.

John Owens:

Typical founder comment.

AJ:

Yeah, exactly.

John Owens:

Typical boss comment here.

AJ:

Yeah, but it's true.

John Owens:

[inaudible 00:15:08], AJ?

AJ:

Yeah, it's true. It's that great balance of independence and great management, which is you are given the agency and the independence to do your job. You are trusted to be the right hire for the right job. You've got a job description, you do your job, and then when you get stuck, you have great management that can be there to support you and is always looking out to ask you, "Do you have everything you need to do your job," rather than, "Here's the 17 boxes you need to check to do your job today."

John Owens:

Exactly, exactly. Not a bureaucracy. And I think one of the things that makes me proud of our team very often is that we give them somewhat of a box to work within, in terms of how we recommend things, how we work with clients. But also, I love it when they come to us like, "Hey, this is what I did for this client, how I solve this unique problem that they have." I'm like, "Great. Let's save that because you're going to help your colleague who's going to encounter this later on and down the line." But no, and we're fully remote, which also helps in terms of getting ourselves on this list here soon.

AJ:

That's the plan. Yeah. We're crushing, crunching, slouching towards 50. Yeah, remote work is key. I mean, every person that I meet in social circles, now that COVID is hopefully relaxing a little bit, I'm going out a little bit more, is like, "I'm not going back to work. I'm quitting my job. They're sending us back. We're supposed to be there three days a week. I don't want to do it. I can find a better job."

John Owens:

Yeah. Yeah, I'm never going back to an office. This is great. It's great. Yeah, mortgage rates. Wow, that was not a good segue.

AJ:

Yeah.

John Owens:

Geez. I've got to work on my skills. But there were headlines because mortgage rates are above 4% and people are freaking out. AJ, you are closer to the housing market than I am. What do you think about this?

AJ:

I think they should rate. I mean, we can't have this historical low borrowing rate forever. It's madness. We have these people who have made a living out of flipping these houses because they can get these ridiculously low mortgage rates and I think it's bad for communities. I'm happy that our clients can borrow $3 million at 2.5%, which is what happened last...

John Owens:

At 2.85%. yeah.

AJ:

Which is what happened last year. Like, "Yay. I'm happy for you, but that is not good for the economy. That is not how this is supposed to work. You have that money, you shouldn't need to borrow it." I don't know. I'm sick of talking about this. Honestly, mortgage rates are going up. Deal with it. There's a housing crisis. There's no end in sight according to the New York Times.

John Owens:

Well, I mean with rates going up, that might be the thing that slows this down a little bit. I mean, the real estate market's been absolutely berserk. It got torpedoed in the beginning of 2020 because COVID happened and everything shut down, people took their houses off the market and people couldn't sell, and then all of a sudden it flipped because so many people who are renting were like, "I need a place to interior design now, because it's COVID and I'm cooped up and so therefore, I'm either going to break up with my partner or I'm going to spend all our time together, painting the walls and doing DIY projects and watching This Old House on PBS." But I think it's important to look at this with some perspective, which is when we were younger, in our childhoods mortgage rates of the aughts were in the mid to upper single digits, and in the '90s were even higher than that. And in the '80s, when my parents bought their first house in 1982, the rates were in the teens.

John Owens:

They were getting federally subsidized mortgages at 15%, because inflation was running rampant back then. So I'm not overly convinced that oh, 4% or even 4.5% mortgage rates are this end all be all, the sky is crashing down. It's just that we've been lulled into this sense of rates should be from 3% to 4% for the last 12 years basically.

AJ:

Yeah. We all have short term memories, which is my friend told me they got 2.1%. I'm going to my mortgage broker saying, "I need 2.1%," and they're going, "I can only get you 4%. I'm sorry. That's the way things are." Speaking of your parents, you mentioned the anecdote of them getting a mortgage in the '80s, maybe was 12%. Now, remember the flip side of that is that their savings at the bank, they were probably getting what, 8% to 10% on their cash?

John Owens:

Oh, yeah. You were getting a bunch...

AJ:

Yeah.

John Owens:

Yeah, you were getting so much on your savings and stuff, as opposed to now. I mean, we've also been low in the sense of, you just don't get paid anything for your cash, unless you're buying I bonds, of course.

AJ:

Shut up with your I bonds. But look, so there's this other article we have in here, which is shocking. It's a great read. It's a Bloomberg article and it's statistically based. The article title is, Wells Fargo Rejected Half its Black Applicants in Mortgage Refinancing. Boom. This article basically points to Wells Fargo and says, "Look," and there is blatant discrimination amongst mortgage lenders who are looking at a White borrower and a Black borrower, and the statistics show that more often than not, all things being equal, the White borrower gets approved where the Black borrower does not. Obviously, the mortgage companies will come out and say, "Well, no. It's all algorithms and credit scores and yada-yada, yada." But one of the things in this article that I found very interesting, which is your parents' situation, is that a lot of these second generation homeowners are looking to their parents and their parents actually have these mortgages from the '80s, and they're like, "Mom, why don't you refinance?" And mom just never was approached by the banker. They're just completely shut out of the system.

John Owens:

Yeah.

AJ:

Mom is paying 13%, 14% on her mortgage. She could easily refinance tomorrow for, right now, 4% or 5%.

John Owens:

Well, I think the other thing is, is that, do you trust the bank? You know what I mean? I think generations and subsets of the population have been screwed over so much that they don't trust the banks, so they don't care about the fact that the mortgages are 10%. They're not going to go sign another set of paperwork, because they just don't, they don't trust them. And I think one of the things that stood out to me in the article is that low income White applicants had nearly the same approval rate as high income Black applicants when you look at the data and this is crazy, this is redlining. There was a lot of focus on taking out redlining and some of the financial regulations of the '90s, but it's still happening and I think the flaw that we need to keep in mind is that these algorithms are still built by people.

AJ:

Yeah.

John Owens:

And people are inherently biased, and so if you put biased data and have biased people into building algorithms, it doesn't necessarily make the process better. It's just that the guy at the bank in communities and community banking back in the day who would've been able to say to you, as maybe a lesser attractive applicant, like, "Hey, but I know you and I know you work at the factory down the street and all this and so I am going to help you out." He gets overruled by the algorithm and so you aren't able to help out some people. But you are continuing, basically screwing over historically oppressed folks in the first place, which is obviously very fucked up.

AJ:

Yeah. It's super fucked up. And there's just so many like tidbits in here. So first of all, there's this great book about housing discrimination throughout the 20th century and into the 21st century, it's called The Color of Law: A Forgotten History of How Our Government Segregated America, by Richard Rothstein. I've read it. It's one of my favorite books. We know all these things. We didn't learn them in school because we learned them later in life, when we learned that American history was not so rosy. It's a great book. Anyway, there's a little bit of positive lining in this article in that there are slow changes to the system and one of them is that having a past history of on time rent payments is now considered for some credit scores. Not quite FICO, which is the main one that matters for most mortgages, but we're starting to see like, "Hey, you might not have a credit card. You might not have credit history, but you've made on time payments for the past two years to your landlord. That should count for something that should show the bank that you're a responsible borrower."

AJ:

Maybe you don't have the traditional Wite family down the street whose dad took out a credit card for the kid in high school and has 10 years of credit history, good for them. It's just, we have to look at different factors. We have to be able to empower people to be homeowners in this amazing, low interest rate environment that we're experiencing still.

John Owens:

But while we're on the topic, still team rent...

AJ:

Still, don't buy a house.

John Owens:

Still don't buy a house necessarily, but there shouldn't be these roadblocks and there shouldn't be this discrimination in that space. On a lighter note, romance scams are at a five year high and 56,000 Americans [crosstalk 00:23:30].

AJ:

This is not lighter.

John Owens:

... were reported losing $547 million in love [inaudible 00:23:35] ploys in 2021, up from $17,000 in 2017. So the Tinder Swindler is out there and scamming people. This is crazy. 56,000 people, mostly through online dating it seems.

AJ:

This is one of those articles, which is why I hate the internet in 2022. It's like I clicked on this article to be like, "I'm ready to read all these stories." This article is 300 words. It's just like, "Here's the facts."

John Owens:

It's [crosstalk 00:24:02]. That's how they work, AJ.

AJ:

I know, I know. But where is the 3000 word piece deep dive from The New Yorker?

John Owens:

Yeah.

AJ:

Or Harper's? Hello, journalists if you're listening [crosstalk 00:24:11].

John Owens:

You're looking for The Atlantic here.

AJ:

Yeah.

John Owens:

And you're reading Axios. It's tax season, I don't have time for 3,000 words.

AJ:

Yeah, that's true.

John Owens:

Okay? Give me a Tweet. But yeah. Yeah, obviously we just need to go back to the old fashioned way of dating, which is obviously speed dating, and that's how you meet folks and know that they're genuine, because you gaze into their eyes.

AJ:

Hey, nice to meet you. I'm going to need $50,000 to fix the [inaudible 00:24:36]. I mean, look, you said lighter note. I think this is awful. I think this is sad. I don't know the stories behind these numbers, but I would imagine it's lot of elderly, lonely people who just want someone that they can trust and they get swindled.

John Owens:

Yeah. No, it is. It is. I agree.

AJ:

And for anyone who's ever been scammed, at some point I would imagine all of us have been scammed in our lives. When you get scammed and you realize it, you feel shame and you don't want to tell anyone. And that's, a lot of these I imagine go unreported because people are just so, so ashamed. Like, "Of course, I saw all the warning signs. Of course, I saw all these things happen to me, but I just ignored them and I feel so stupid and I'm embarrassed and I'm not telling anyone. I'm not telling my son that I met a man online and we went on a vacation, I paid him for the vacation we were supposed to go on and then he disappeared on me."

John Owens:

Yeah.

AJ:

That's sucks.

John Owens:

$15,000. Yeah, yeah. And so I think the rule for online dating, or any dating, should be green flags only. Okay, no red flags here in 2022. You're looking for green flags.

AJ:

I'm full of red flags. I'm a walking red flag.

John Owens:

AJ's locked down though. Sorry to disappoint our listeners or the guy who commented on the YouTube video once.

AJ:

Oh.

John Owens:

But we've got another one in here. MacKenzie Scott.

AJ:

Dude, you are not welcome back until you clean up your segue act here. These are terrible.

John Owens:

Okay, go ahead. You do it. You do it. You get me from swindling exes to...

AJ:

Yeah. Speaking of terrible [crosstalk 00:26:10]. Yes. Speaking of swindling exes, Mackenzie Scott, former spouse of...

John Owens:

Jeff Bezos.

AJ:

The man who went to the moon in a penis.

John Owens:

The penis who went to the moon in a penis. Anyway.

AJ:

Oh my God. I just, I will never get... The rocket, the Musk-Bezos dick swinging rocket launch has to be... How was that not the plot of, what's the Mini-Me movie? Austin Powers. That's an Austin Powers plot.

John Owens:

Oh, yes. It does seem like one.

AJ:

Anyways, Mackenzie Scott, in the divorce, was married to the founder of Amazon who is worth billions and billions, she is by all estimates worth about $55 billion right now. She, amongst tech billionaires, is a notable exception in that she's very public and giving her money. Slight asterisk there, I see a lot of outrage on the internet like, "Why doesn't he give it away?" Like, "Elon and Jeff, give your money away." We have to remember that most of their money is tied up in the stock of their company. So if they do give it away, if they do sell it, they lose control. So there is that kind of like, "Oh, I do want to be charitable, but I don't want to quite give up control of my company."

John Owens:

How much money and control do you freaking need? You know what I mean?

AJ:

I know, I know.

John Owens:

That's the thing. That's the thing. When is it enough?

AJ:

I'm being devil's advocate here.

John Owens:

Yes.

AJ:

But yeah, she's a shiny beacon of hope amongst this tech billionaire set. She's very giving. She actually lists out the charities that she gives to, which I think that's really interesting to me because I find amongst our clients, you find you have sudden wealth. Like, "Oh, wow." Most of our clients don't have $55 billion, but it's just [crosstalk 00:27:59].

John Owens:

None of our clients have $55 billion, [crosstalk 00:28:01].

AJ:

To be clear.

John Owens:

... to anyone yet.

AJ:

But it's, "What do I do with this money? I want to be charitably inclined, but I actually don't know where to give. What are the charities that are going to be matched with the things that I care about?" It's like the ones that have great marketing materials, Planned Parenthood, what's the animal one? ASPCA. Yep, those are very obvious ones. Like, "Yeah, of course that's where I'm going to think." But there's also these other, lesser funded charities and she listed, it was like 465 charities that she gave to. It was a blog post. She's kind of like [crosstalk 00:28:37].

John Owens:

$3.8 billion.

AJ:

Yeah.

John Owens:

Total. And yeah, I mean...

AJ:

No, it was $12 billion.

John Owens:

She's given away $12 billion so far, since her and...

AJ:

Oh, so fat.

John Owens:

... Jeff split up.

AJ:

And $3.8 in 2021.

John Owens:

She quickly remarried as well.

AJ:

To a school teacher.

John Owens:

Yes. Yes.

AJ:

Always, always learning.

John Owens:

But yeah. Yeah. I think I looked at this, I'm like, "Why the hell isn't this normal?" Why can't we have people who make tons of money, give it a way while they're alive and make an impact now. Like, "Oh, I'll donate all this money when I'm dead in 40 years." Well, maybe the world will be over for all we know. Not to be so cheerful about it.

AJ:

Why don't they just pay tax on it in the first place?

John Owens:

If you really want to give back, yes. Sell it.

AJ:

If you really want to give back.

John Owens:

Pay the tax, and then donate it. Yeah.

AJ:

Sell your stock. Give your money to the local government. Oops, your state doesn't have state income tax. Anyways.

John Owens:

You should go live in Washington. But yeah, any riffs you want to do here on tax season? We've already done this. We've already talked about taxes.

AJ:

No I'm over tax season.

John Owens:

Get us your documents.

AJ:

Clients, what is going on? Give us your damn documents. What is the problem?

John Owens:

Just give us your documents.

AJ:

You have them. It's in your email.

John Owens:

I recognize that your company probably got it wrong in the first place. That's what we're finding out as well.

AJ:

Please, please give me your documents. We started texting you. If you get a text message from your planner, you are in big trouble. Like we are pissed. We are actively angry at you and mad. Just send them.

John Owens:

Yeah, that was such a [inaudible 00:30:04]. "Hey there it's John from Brooklyn FI. Hope you're doing well. Just give me your..."

AJ:

Give me your fucking W2.

John Owens:

Is that rage translator, is that Key & Peele thing? The rage interpreter? Like, "This is what I actually mean?"

AJ:

Yes.

John Owens:

Any no-brainers or [inaudible 00:30:18] crushes. AJ?

AJ:

No, we're out of time, man. Thanks for listening.

John Owens:

We're out of time.

AJ:

It's been The Liquidity Event. You can always email us at liquidityevent@brooklynfi.com. You can leave us a voicemail, we'll play it on the air, podinbox.com/liquidityevent. Show notes for this show. Great articles this week I have to say. brooklynfi.com/episode35. You've been great. John, you've been great. See you next week.

John Owens:

Thanks for having me, Brooklyn FI fans can leave a review if they want me to read about it.

Speaker 1:

Thanks for listening to The Liquidity Event, hosted by AJ and Shane of Brooklyn FI. Head on over to brooklynfi.com, where you can subscribe to the podcast, or YouTube channel, or if you want to learn about their full service financial planning, tax, and investment firm, specializing in tech professionals and creatives on the paths of financial independence. We'll see you next time on The Liquidity Event.