Joseph Moore: The Investments That Matter Most May Not Be in Your Portfolio

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Our guest on the podcast today is Joseph Moore, a historian and author of the bestselling book, How to Get Rich in American History: 300 Years of Financial Advice That Worked & Didn’t, where he chronicles all of the various things Americans have tried to do to get ahead over three centuries. He’s also an investor who went from being an academic to funding a tech startup, buying land on the moon, founding a cryptocurrency, and owning dozens of investment properties. This was a really fun conversation where we covered a lot of ground about the history of financial advice in the US as well as Joseph’s own adventures in investing and money-making ventures. One of the really interesting things he said was that who you marry can be a strong indicator of financial success. We also enjoyed his discussion of the often overlooked role of women in household financial decision-making and found his take on what he calls the “despair industrial complex” especially thought-provoking.

Episode Highlights

• Financial History and America’s ‘Go-Ahead’ Culture
• Wealth, Mobility, and the American Dream
• Fast Time, Career Risk, and Building Wealth
• The Rise of Financial Advising as a Profession
• Startups, Shorting Stocks, and Beating the Market
• When Bonds Historically Beat Stocks
• Marriage, Money, and Financial Success
• Failing Upward in Real Estate

If you have a comment or a guest idea, please email us at TheLongView@Morningstar.com.

Transcript

Amy Arnott: Hi, and welcome to The Long View. I’m Amy Arnott, portfolio strategist for Morningstar.

Christine Benz: And I’m Christine Benz, director of personal finance and retirement planning for Morningstar.

Arnott: Our guest on the podcast today is Joseph Moore, a historian and author of the bestselling book, How to Get Rich in American History: 300 Years of Financial Advice That Worked & Didn’t, where he chronicles all of the various things Americans have tried to do to get ahead over three centuries. He’s also an investor who went from being an academic to funding a tech startup, buying land on the moon, founding a cryptocurrency, and owning dozens of investment properties.

Christine, this was a really fun conversation where we covered a lot of ground about the history of financial advice in the US as well as Joseph’s own adventures in investing and money-making ventures. One of the really interesting things he said, I thought, was that who you marry is actually a really strong indicator of financial success.

Benz: I really liked that part of the conversation too, Amy, as well as his discussion of the secret role of women in household financial decision-making. I also thought Joseph’s conversation of what he calls the despair industrial complex was incredibly thought-provoking.

Arnott: Yeah, those were all highlights for me too. All right, so let’s roll the tape. Joseph, welcome to The Long View.

Joseph Moore: I am so excited to be here. Thank you for having me.

Financial History and America’s ‘Go-Ahead’ Culture

Arnott: Well, we’re excited to have you. You started out as a college professor, and I wanted to ask: How did you first get involved in real estate investing and writing about financial history, and what gave you the idea to write this book?

Moore: Dodging a bullet is the answer to that question. So, it’s 2006, I think. My wife and I were graduate students, and back then the lesson of history supposedly was clear. Everybody told you the lesson of history was that renting was throwing your money away. And instead of thinking about that like a historian, because I was literally getting a PhD in history as a graduate student, I nodded my head like everybody else did. We’re both graduate students, and we got a no-income, no-verification loan to buy a townhouse, which sounds as ridiculous today as it was then, but nobody thought it was ridiculous then.

Fast forward to 2008, a friend at our church offers a personal finance class for families. We went. They made us fill a budget; we go home. My wife goes to sleep. I did not sleep a wink. I literally paced the house all night because I was thinking, who gave us a mortgage? We have no business owning anything. We’re graduate students. And so, we put our house on the market. It sold on a Saturday. The reason I remember the Saturday is because the following Saturday, our neighbor put her house on the market and it never sold. So, the 2008 Titanic had sunk, and we were the last two people off of it. I just kind of woke up intellectually and thought, why did I not think like a historian? I had no business training whatsoever, but I wanted to come at this topic as a historian would to ask: What were people told to do? Did it work? And if so, what can we learn from that?

That began over a decadelong journey of trying to find absolutely every scrap of financial advice I could discover in American history. As it turns out, what everyone thought always worked was always changing. In every generation, people finally feel like, well, we finally figured out finance and what to do to actually get ahead, and then it changes. And generation by generation, people have to adapt. One of the things that you kind of take away from studying the past is we think the past is this stable thing and we are what moves through time, but the mean is moving behind you. We can learn a lot by seeing how much change other generations had to endure. I got lucky and endured that change on the right side of the ’08 financial crisis.

Benz: We want to delve into some of the lessons that we can all learn from history, but we wanted to stick with your background a little bit. You decided to use what you know about history to make a million dollars, and you actually succeeded at that. Did you always have a more practical bent than the typical academic? And I’m curious what people in your circle, your academic circle, thought about your moneymaking efforts.

Moore: Oh no. They thought I was crazy, bluntly. Look, I have a lot of dear academic friends who kind of cross all ideological spectrums, but there is a tendency in academia, especially in the humanities where I reside, to think and talk very grandly about the working class. Very few of the people who make such statements are actually from themselves the working class. I was raised in rural South Carolina. I come from where the money was not found. Nobody in my family had money. I didn’t know a single person in my entire life until I probably was in my 30s who went to an Ivy League school.

This was a world apart from most academic backgrounds. I have a fun game I play with myself when I’m in academic conferences. We’re sitting around shooting the breeze, drinking a beer or something. I’ll ask people, “Where’d you go to high school?” Because they’re not ready for that question. They are thinking, “Where’d you go to grad school? Where’d you do your undergrad?” And so they’ll just tell you, and I’ll go look it up, and almost inevitably it’s like the most elite public education school or a preparatory academy somewhere. And I’m like, “Don’t you write books about the working class?” But my father used to climb underneath mobile homes and inspect electrical wire. That was his job. He made $14,000 a year for a long time. I was just raised around the trades. I was raised around guys who did working-class jobs, and we had a working-class life. It didn’t occur to me to not have those values.

I remember when I got into academia, I was shocked because it was the first time I met people who would tell me without thinking about it that something was beneath them. Like, “I wouldn’t do that, that’s beneath me.” It had never occurred to me that something was beneath me to do. And so yes, I do have a more practical bent, I think, than the average, especially humanities, academic. That led me to see things differently. I think one of the things that’s been a joy of this book tour is that, in the world of finance, the reason my book is so different is that I didn’t take any of the financial assumptions for granted that everyone just assumes are there. I asked different questions. From the academic perspective, it never occurred to me that those questions weren’t worth asking. And hopefully that’s led to a unique book, certainly. It’s been a crazy ride for me.

Arnott: Yeah, it definitely is unique and also very funny. I really enjoyed reading it.

Moore: Thank you. That was intentional. I really wanted it to be a fun read. I mean, I told somebody I wanted to write a history of everyday people’s finances that everyday people would enjoy reading. That’s been one of the most rewarding things is to hear people say they enjoyed it, that it’s fun to read because I remember when it was fun to read, so we need more books that are fun to read.

Arnott: Yeah, especially about finance. One of the very first ideas you introduce in the book is the phrase “go ahead.” You write that this was sort of like a 19th-century internet meme that meant moving to a better place than you began. Can you expand a little bit on what that phrase means and what makes this idea of “going ahead” uniquely American?

Moore: Yeah. The subtitle of the book is 300 Years of Financial Advice That Worked (& Didn’t). Very few people have picked up on that, but the reason I did 300 years was that it predates the American Revolution. To some extent, what is the first uniquely American financial advice? And that advice is basically this. If you look around you in the poverty-stricken town in which you live—England, Scotland, later Italy, parts of China, Japan—if you will get on this rickety boat for roughly two months, then you can actually have a chance to get on the property ladder and move up with your life and go ahead from where you are to a better place, and your children will have a chance to do the same. Now, that sounds inspiring on our side of the boat, but if you’re on the other side of the boat, that’s a risk/reward proposition.

It’s not entirely clear it will work out. To be clear, there are some people for whom it does not work out; some of those boats didn’t land in places that worked out. But the idea that you could take a risk to move your family from a place that you would never get ahead to one where your family could actually see a better life at the end of yours was a uniquely American proposition at the time. You had to actually get on the boat and do it. That idea pervades the 19th century especially. People would talk about this in newspapers, in books, in bars; men, women, people said it’s a go-ahead culture. They commented on this over and over. We’re a go-ahead, not get ahead. We talk about getting ahead like it happens to you, but their assumption was that go ahead was something you had to get up and go do.

This crossed decades and the whole of the 1800s. It was a white idea, a Black idea. I mean, Frederick Douglass, the famous abolitionist, we remember him mostly for his speech, “What to the Slave Is the 4th of July,” which is an incredible speech. We teach it in schools. I’ve taught it. We should continue to teach it. But in his lifetime, that was even close to his most famous speech. Far and away, his most famous speech was called “Self-Made Men.” In that speech—now, the gendered term there is just the term of the time; he means men and women—but the idea of that speech, the crescendo line is: “Maybe I cannot be president,” he says, as a Black man in the 1870s, “but I can be prosperous.” You have to think about, everywhere he went, white audiences and Black audiences were calling out for that speech. After he says, “I can be prosperous,” he says, “Our motto is go ahead.” And that idea was pervasive and one that we’ve largely lost. We think getting ahead happens to you. They thought that you happened to it.

Benz: So, a central idea of the book is that getting ahead, or maybe going ahead, is easier than ever, but we constantly see headlines about student debt, housing, affordability, economic decline. I would say that statistics I’ve seen on economic mobility in the US are pretty persuasive; it’s not really what it once was. But maybe you can talk about that issue, why the media narrative is so negative and often at odds with historical evidence.

Moore: There are kind of two ways we can take that conversation. One is the rhetorical conversation, and one is the statistic. So, let’s do the rhetorical first. Rhetorically, I can find people telling you the American dream is dead probably 300 years before I can find the actual phrase American dream, which comes up in the 1930s. In the 1670s—this is hundreds of years before Hamilton is going to wrap on Broadway—in the 1670s, the colonists of Virginia burned their own capital to the ground in anger because no one could get ahead anymore. It’s like from the very beginning, there’s been rhetoric around no one getting ahead. You arrive too late. There are big speeches in the 1800s saying this.

One of my prized possessions is a 1984 bestselling book, sold nearly a hundred thousand copies, that said that the baby boomers would never be able to afford to retire. The rhetoric is very old. I call this “Big Woe,” a kind of despair industrial complex because there’s no clicks for a journalist; there’s no votes for a politician; heck, there’s no tenure for an academic like me if I just get up and tell everybody that the world is getting better, but I can have all of those things if I tell you it’s getting worse. The people who are giving that message out are actually being empowered by that message to implement their solutions or to monetize their traffic or whatever it is. You actually end up getting penalized for listening because if you believe no one gets ahead, then you will not take the actions necessary to get ahead. So, there’s the rhetorical part of it.

Let’s move to the statistical part of it. There’s two buckets of those mobility statistics. One of them is wrong, and the other one I will take and use and flip on its head and show that it actually shows it’s a lot better than you think it does. The first set of statistics that came out about mobility showed that the 1800s had this wildly rapid upward mobility in America, and it’s declined ever since. The problem with those statistics is they were almost all taken from Iowa. The thing about Iowa is that it’s not really representative of the whole of the United States. It just happened to have a particularly good dataset. A lot of the early mobility stats that celebrated how fast people could get ahead in the 1800s and early 20th century, and then at the decline of it, basically had forgotten about a lot of poor people, especially minorities who just aren’t in the data.

When you combine the actual different demographic datasets, you find that mobility has gotten faster, not slower. Well, we forget how impoverished early Americans really were. Then you look at something like the Raj Chetty famous paper in science that talks about, basically, mobility of Americans peaked for the generation born right after World War II, that they got ahead of their parents faster than any generation, and then it slows down after 1980. OK. First of all, what they’re really measuring is moving from the bottom to the middle class, and for the chance to go from the bottom to the middle, that is probably true. However, their parents were living through the Great Depression. So, this is a kind of skewed dataset; this idea that, like, “Well, my parents lived through the worst economic collapse in history and I’m doing pretty well,” isn’t necessarily … The reality is the quality of life that we’re living today absolutely dwarfs the quality of life of the early baby boomers.

When I look at that stat, I say, OK, what do we see? This is the Chetty data that I’m using. If you look at people born in the bottom fifth, six in 10 will get out in their own lifetime. That is not perfect mobility, which would be eight in 10, but it’s not that far off. Four in 10 make it to the middle class, one in 10 go all the way from the bottom all the way to the top. That is, compared to the rest of human history, mind-blowing upward mobility. The flip side of that is downward mobility. Of children born in the top fifth, six in 10 will fall out in their own lifetime, which is the exact same as Denmark. We have a rhetoric around mobility that is kind of skewed to the idea of one generation’s experience, but when you pan the camera back out, you look over 300 years of history, Americans are getting ahead faster than our ancestors could have ever dreamed we could have.

Wealth, Mobility, and the American Dream

Arnott: You also note that your father hated rich people—

Moore: And still does!

Arnott: And it seems like that’s sort of a growing attitude in the country now. We see lots of resentment toward the wealthy and interest in taxing billionaires, things like that. Why has hostility toward wealth remained such a persistent part of American culture?

Moore: I mean, that’s a great question, by the way. I don’t want to pretend that I’m going to unlock that mystery in a couple of minutes, but I’d probably take it in two kind of general ideas. One is the kind of upward mobility motif that is the American dream, or go ahead, as I used to say. There was an empowerment of people at the bottom that was very unusual compared to any other place in the world at the time. That gave people a voice to decry anything. The free press may be honestly part of the answer; just the idea that you lived in a nation where such opinions could be freely expressed without fear of retribution from said elites and rich people was somewhat unique. The ability to print those ideas and those complaints—there may have been those complaints for all of history, but you can’t read them very often. I mean, you got the Levellers in England and these, but it’s not common.

But I think the other thing, the reason that we seem to think it’s getting more loud today, I think, we probably misjudge how local life used to be and how national our media landscape has become, in the sense that most people’s experience with the rich was local. It was the local elites that they knew. They may know the Rockefellers exist, but they’ve never met one. They’ve never walked past their Park Avenue homes and had to gawk at them and wonder why they have to live in a tiny apartment. Some New Yorkers might, but most people in the country are living a very local life. Now, we have a very nationalized media.

And so, if you go to the previous time that we have an explosion of kind of critiques of wealth from a kind of socialist perspective, the way we’re seeing now, the last time was around the [presidential candidacy] of Eugene Debs and kind of started with the populist angst about the railroads. Well, what was happening with railroads and radio is an era in which we’re nationalizing our economy and our media. Anytime local people are suddenly confronted with narratives about national elites that they’ll, I’ve never met Elon Musk and probably never will, probably won’t see him with my own eyes, but I’m very aware of him in a way I would not be if my media consumption and my life was entirely local. Most people’s lives generally were.

Fast Time, Career Risk, and Building Wealth

Benz: One of the book’s main ideas is, “You live most of your life in Slow Time,” and that’s a quote, “and you get rich in Fast Time.” Maybe you could talk a bit more about what that means.

Moore: Most of us don’t think a lot about financial history. It’s not top of mind for most of us when we wake up in the morning. If we ever think about financial history at all, almost certainly it’s what I call Fast Time history. That’s when everything is changing everywhere all at once, to quote the movie, and a handful of smart people saw it coming, but everybody else got wiped out, and you just don’t want to be the dumb people. It’s always 1929. It’s always 2008.

The problem with those histories, it’s not that they’re not good and fun. They are, but they’re not written to teach you what to do with your money. They are written to entertain you, and they’re very good at that. You are supposed to flip the page or look at the movie screen and scream, “He’s behind you! The subprime mortgage lender is behind you! Run away from the mortgage.” That’s what you’re supposed to do with those histories, and they’re very good at that, but they’re not there to teach you what to actually do with your money because most of financial history is not Fast Time. Most change is slow and imperceptible. By the way, that doesn’t mean it’s quiet. It can be very loud in Fast Time.

One of my favorite things to do when I’m giving public talks, I go around, I give talks in different organizations or whatever, and I will put on the screen two quotes from The New York Times. And one essentially says, “A depression is right around the corner,” and one says, “A booming economy is right around the corner.” And I tell people these are less than three months apart, headlines of The New York Times. Now, guess the year. And people will—hands go up—1939, 2007, 2008, 1929, 1930. I tell them it’s 1948. And then I ask if anyone can remember anything that happened in 1948. Usually, most people cannot because it was a very boring historical year, especially for markets, and yet people were screaming in the headlines that boom or bust was right around the corner.

So, Slow Time can be very loud, but most of your life is lived with people being loud and volatility kind of staying within a normal range. That’s where most of your financial life will be lived. That’s where most of your financial decisions will be made. It’s the decisions you make in slow time that can be stress-tested in Fast Time. People usually leap ahead in Fast Time. Any business owner knows this. They’ll have a phrase, something like, you work, and you work, and you work, and nothing happens, and then out of nowhere, everything breaks. And that’s most of financial life.

Arnott: You also argue that people should take more risks. What kind of risks are actually worth taking?

Moore: Yeah. First of all, let’s define risk because some people can hear that and think, put out a heloc on the house and put it all on Bitcoin, which is gambling. The difference between gambling and risk could be summarized simply as: Do you have some measurable impact on the outcome? I can’t affect the price of Bitcoin. Nothing I’m going to do will shake it, but I can have some measurable impact on a whole lot of other risks that I take, whether it’s an investment property that I’m going to turn around, whether it’s an investment in a small business that I’m going to run better, whether it’s a rearrangement of my investment portfolio so that I’m putting away more money than I otherwise would. But if I have some control over what’s happening, then at least it’s a risk, not a gamble.

I think most risks, if you go back through history, the idea that most of your risks worth taking were all in the market would have not made any sense to anyone. Even business leaders would not have understood that. Most of your risks were going to be in your business or your career. One of the things I think people can misread in much of the literature, including in my book, you got to be careful, is I’m not saying quit your job and go start a small business and risk it all there. There are ways to risk in business, and there are ways to risk inside of another business, like taking a salary from somebody else’s business. But what I think has happened in the course of the last four to five decades is, because the baby boomers have had such a wildly successful run of having their retirement savings make them rich, we have assumed that the way you get rich is by slowly, steadily putting money away in low-risk assets. That usually did not work in history.

So, the risks we’re taking, the first one is in your career. I’ll talk to young people, and they’ll say, “Should I be putting $100, $200 a month away in the stock market?” Sure. Sounds like a great idea, but just a quick question. Is there a credential that you could go get that would help you in the next five years double your salary? Put your money on that. I mean, I met a guy [while] researching the book who’s never been to college. He makes a fabulous salary because he’s gotten every credential in the industry for airline mechanics, and you literally can’t take the plane apart and put it back together, which you have to do every so many miles, unless he signs off on it. He’s doing great because he invested in his career. There’s a big difference in the income of an entry-level nurse and a nurse anesthetist. First and foremost, invest in your career, investigating better and better so that your income can grow by an exponent.

But then there’s small business. I mean, that really is one of the ways most decamillionaires and above got to that point was by owning and investing in a small business. We have more such decamillionaires and above than we’ve ever had in American history, even adjusted for inflation, by the way. Most of those people are doing very unsexy jobs in industries you’ve never thought of. The Wall Street Journal ran a thing on these men and women who are doing this, one of whom has a carpet removal company specializing in over-the-summer carpet removal because schools, when they need new carpet, they’ve got like 60 days max to pull that off, and you’ve got a whole school. He’s just specialized in removing carpet for schools, and he’s worth $10 million. I’ve interviewed so many people like this in researching the book who are doing things you would’ve never thought to do. Take the risk in your own career, in small business. I think those are risks worth taking.

Benz: If most wealth is created in occasional bursts rather than a steady march upward, how should investors position themselves for those Fast Time moments?

Moore: That’s a great question, too. I’m working on an essay on this for my Substack right now. I have it wrestled down, but I want to make it interesting and fun to read. So, that’s the part. How do you make social sciences equations fun to read? It’s not always an easy circle to square, but it basically boils down to this. The equation is going to look something like this. You’re going to have volatility, which you can’t predict. You’re going to have concentration of assets, which you control. You decide how concentrated your risk profile is.

The other things you can control outside of that is how much liquidity do you have against how urgent are your debt deadlines? Not the amount of debt you have, but the payment schedule for that debt. People who are in different industries know that debt works very differently in different industries. If you have a lot of debt, but it’s all in 3.5% mortgages on rental properties, your debt deadlines are pretty easy to manage. If you’ve got a balloon note coming due in 18 months, that is much harder to manage. If Fast Time hits when you have a low liquidity and a looming debt deadline, you can get wiped out quickly. Needing to manage the liquidity versus the deadlines for your debt is one part of that.

But the other part is the concentration. Fast Time rewards and punishes concentration. When Fast Time comes, when everything shifts, the people who are concentrated in the areas that it’s in are the ones who outperform everyone else because of the concentration when everything shifted. Of course, same thing to the downside. You have to think very strategically about where do I want to be concentrated when change comes? When that change comes, especially if it comes the way I wasn’t expecting, can I survive it by looking at the relationship between my liquidity and the debt deadlines that I have to carry? Again, you can see why it’s a struggle to make that essay fun to read, but you just have to understand that financial time and regular time don’t work on the same speed.

Imagine I put on your wrist a regular, perfectly timed wristwatch, and then I take another clock, and I take it to the floor of the New York Stock Exchange. The one on your wrist is going to tick with everyone else’s time, but the one on the stock exchange is going to tick for every normal second of financial activity. On the average month, the clock on your wrist and the clock on the stock exchange are going to roughly, they’re going to align pretty well because there’s an average month with an average amount of up and down, and so they’re going to stay aligned. But every now and again, that clock on the stock exchange speeds up incredibly or goes backwards. Financial time can operate at a different speed than the time of the life you’re living. You want to be concentrated in the right places when that happens, and you want to be able to survive it if you’re concentrated in the wrong places.

The Rise of Financial Advising as a Profession

Arnott: We also wanted to ask you a couple of questions about the history of financial advice, which you also cover in the book. You argue that financial advice as a profession emerged almost accidentally. There was no job title of financial advisor before 1969. Can you talk about how the profession of financial advice first got started?

Moore: Yeah. Let’s go before the dawn of modern financial industry. Where was most financial advice found? This surprised me because the trail went cold for me as a historian. I’m basically a detective. I’m reading dead people’s mail trying to figure out what happened. The trail went cold right around 1910, 1912. Where I ended up finding most financial advice before then was in housewife manuals because the average housewife has to manage the whole family’s income and outgo. Women’s magazines are replete with financial advertisements for mortgage companies or investment opportunities. Women were really active in forming financial ideas and executing them. That’s a part of history that’s been completely lost.

Then something happened in 1912. All financial advice before 1912 was kind of easy to understand. Everyone knew what to do, and that basically boiled down to: If you were going to have paper investments, you wanted to invest in bonds or dividend-yielding stocks at about 5% because there was 0% inflation. And then in 1912, when there’s 0% inflation, everything changes. Inflation goes from 0%—so, in 1912, a gallon of milk costs 24 cents a gallon. If I go back in time to 1812, think about 1812 to 1912. In 1812, Napoleon rules France, and men wear hose. That’s a different world than 1912. In 1912, inflation goes from 0% to the next year, it goes to 8%, which is double where we are right now: 8%, 18%, 17%, 17%, 15% in five years. Prices doubled. There was not a mother, a grandmother, or a great-grandmother who knew what to do. Everything that used to work stopped working, and all the things that you used to be told not to do, like invest in stocks, started to work.

There’s this explosion of financial literature in the 19-teens and ’20s about how to understand this new world and what to do. But there’s really not anybody to turn to who has mastered this and kind of codified it into a job description where they help you. You can go to your banker, and they can help you execute some things; you can go to a broker, but most people don’t have brokers, and most people don’t buy stocks. That starts to shift in the 1960s. Most people’s financial purchases were one of two things if it was a market or put aside real estate, which was actually what most people spent their money on or invested their money with.

But let’s go to the paper investments. It was mutual funds and insurance. That’s what most people did. In the late 1960s, there were all kinds of scandals about just how egregious some of the sales techniques were for basically selling insurance products that were mostly good for the insurance company and selling mutual funds with huge fees. I mean, fees that would make mutual fund advisors today feel embarrassed if they got. While that was great for the industry, it was bad for the average consumer, and a group of mutual fund salesmen and insurance salesmen agreed to have a meeting at the Chicago O’Hare Airport. I can’t remember exactly how many, it’s not many, it’s maybe a dozen or so people fly in. These are like the top-selling mutual fund and insurance salesmen in the country. They all feel like this industry is kind of getting rotten, and they don’t want to be associated with that.

They fly in, they have a meeting, and they decide we’re going to found a new entity, a nonprofit that’s going to be financial advising. They fly in as insurance salesmen and mutual fund salesmen—and they never leave O’Hare, by the way—they fly out, and they’re financial advisors. They changed their title in that meeting. Going forward, that idea spreads that you could have Certified Financial Planners or financial advisors; different groups spring up to do it. But that’s a new thing in the ’60s. In a way, I argue it’s actually a really good thing because prior to that, you couldn’t really find anybody in your local community who could help you understand all of these different financial investments all at the same time. It’s a new profession because it’s an entirely new investing world.

Benz: You write in the book that Dave Ramsey has changed more people’s personal finances than maybe anyone in history. Why do academics and financial experts tend to look down on figures like Ramsey?

Moore: Well, I’ve always loved Morningstar, so something tells me that the Morningstar audience is not going to like that because you’ve got some very sophisticated financial listeners out there. Let me make my case for why gurus get a bad rap, especially among professionals. Finance professors have incredible equations that work very well on spreadsheets. What gurus have is the awareness that Super Bowl ads work, birthday sex leads to baby number three, and I have yet to see a finance equation that models accurately a midlife crisis or a child with special needs. When you live in the real world, and it’s dynamic and changing, you need some rules of thumb. What you find when you look at studies of what people who read personal finance gurus actually remember, it’s not what’s in the book. It’s what do you remember from the book?

If I go to the average person who read a finance guru, let’s just pick one off the shelf that’s particularly egregious: Rich Dad Poor Dad, which I think we can all agree is an eye-roll-level book. The average person only remembers that they should buy assets and that assets are defined very simply as things that make you money instead of cost you money. That’s what they actually remember. Now, as a thing to remember, that’s not such a bad thing. If you look at the way people read gurus versus what gurus say, there’s a disparity, and that disparity really matters.

Let’s look at Dave Ramsey, and every single academic discipline has a paper somewhere in a journal—and I’m not making this hypothetically; I have read these papers—that condemns Dave Ramsey: sociology, women’s and gender studies, history, finance, economics. They all have an anti-Dave Ramsey paper somewhere. And sure, there are plenty of things that Dave Ramsey says that I could disagree with, but a German economics student who did not have a dog in the fight, who was just looking for an interesting thesis to write—I think it was his Ph.D. thesis—had the idea to overlay credit card balances with where The Ramsey Show, which was an AM radio show through the ’90s and 2000s, would show up in a new market. In other words, when a new radio station would pick the show up, did it change anything? Lo and behold, credit card spending went down in that metro 1.3%.

Well, how do you know correlation is not causation or all those things? He has the idea to realize AM radio waves cannot penetrate mountains. Therefore, the ZIP codes on the other side of mountain ranges won’t get the show; they won’t get the signal. Sure enough, the credit card spending data there stays the same. If you do the math on that, which I have, that means that over the course of his life, Dave Ramsey has saved the American economy the GDP of a midsize nation-state just by yelling at people to sell the car.

Now you can agree or disagree with the finer points of his ideas, but I challenge you to prove that you could save the American economy, the GDP of a midsize nation-state, and then concentrate most of those benefits to average working-class Americans. That’s a pretty hard trick to pull off. If you step back and ask what is the effect of these folks versus what is the image of them as TikTok gurus selling scammy courses, they’ve actually had quite a big impact for the good. Now, I tell people, don’t buy their seminars. Just everything they say that’s good is usually for free. You don’t need to do much more than take what’s for free.

Startups, Shorting Stocks, and Beating the Market

Arnott: You talked at the beginning about your first experience buying real estate and getting a loan right before the financial crisis. We also wanted to touch on some of your other adventures in investing. You once invested in a West Coast startup that developed technology to help ALS patients communicate, but you ended up losing your entire investment. What lesson did you take away from that experience?

Moore: Well, from that one in particular, and I just have so much admiration for the young people who started that business, but what I took away was it’s really hard to have a successful business. Successful business is hard. Anyone listening to this who’s run a business understands that. I was joking with somebody recently, they said, “What turns you from a lefty humanities professor to a kind of moderate-conservative kind of procapitalism guy?” And I said, “Making payroll.” If you’ve ever had to make payroll, if you’ve ever actually had to sell enough of a product of any kind or provide a service of any kind that you are paid for, knowing that you have to put that in the bank because other people are going to pay their bills, the people who work for you are going to pay their bills from that, you get real aware of how hard it is to run a business. Those young people did an incredible thing, made an incredible product. But as it turns out, making an incredible product is not enough. You actually have to make an incredible product that the market will reward and do it on a sustained basis, and that’s much more difficult.

Now, I did a lot of self-experimentation for the book. The whole idea that I had about maybe five years in, four years in was, OK, I realized I was kind of making a recipe book of all the things Americans had whipped up to try to get ahead, not just become middle class, but go from where they were to where they dreamed of being. And so, all right, well, if it’s going to be a recipe book, I need to eat the cooking. Everything I could find in the past that people did, I would try in the present. The only line that was drawn was my wife saying under no circumstances. But everything below that line, I tried. One of them was angel investing because that was obviously a big part of how we imagine the ’90s and 2000s is kind of these angel investors finding these startups, investing in them before anyone else could and making tons of money. As it turns out, picking the angels is harder than it looks.

Benz: You also tried shorting stocks recommended by Jim Cramer. Can you talk about that experiment and whether it was educational, profitable, or just kind of good for laughs?

Moore: It was all three. There’s an economics paper, and I can’t remember exactly what year it came out, that showed that Jim Cramer showed Mad Money under a very strict set of criteria. I need to emphasize that point because I don’t want anybody to hear this and just go shorting everything Jim Cramer says, but under a very strict set of criteria, when Jim Cramer, on his show Mad Money, would recommend a buy on a stock, you could short that stock because it would bounce for 50 to 55 days and come back to earth. In those 50 to 55 days, you could short it. Well, because I was trying everything else I was finding, I decided to try that. For three months of my life, I sat glued to a television waiting for all of those factors to align, which it occasionally did. And then I would rush over to the computer and try to short the stock.

Believe it or not, I actually beat the market. Now, net of fees, because you got to remember, I had a history professor salary. I don’t know if anybody’s ever told you this, but we don’t make a lot of money. History professors get paid in prestige, or all professors really. I’m taking my small professor salary money, and actually it was some of my daughter’s college money, and putting it on this gamble. What I learned in that is I actually did beat the market; net of fees I lost. But while Cramer was yelling at me like I was a child and setting off alarm sirens that were bothering my wife and family, I heard my wife holler from the downstairs, “Come quick. She’s doing it.” I missed my daughter’s first steps.

So, I beat the market. Was it worth it? And the point that I tried to make in the book, but it being educational, is actually there’s all this rhetoric around you can’t beat the market, so don’t try. I actually find that literature to be pretty paper-thin. I know there’s a lot of those studies. What they’re actually measuring is professional money managers’ ability to beat the market, which is a very different thing than saying you can’t because professional money managers are operating in a very constrained environment. Bluntly, if you couldn’t beat the market, then Warren Buffett doesn’t exist. There’s another study that shows that certain money managers, especially managing $600 million or more, do tend to beat the market by about one-half of 1%, which, if you multiply that by $600 million, is a ton of money.

But if you take the average 401(k) balance and you tried to do what that money manager does—which, by the way, you can’t, but let’s just imagine—which is you got to go to Yale for four years and pay tuition, you’ve got to work a grueling internship, and then you need to work 70- to 80-hour work weeks, you would eke out an additional $500 a year for the average American’s 401(k) balance. Not the gains that you make; the extra $500 is what you get for all the 80-hour work weeks. Well, that’s one night in a hotel in Miami in hurricane season. It’s not worth it. I try to tell people, can you beat the market? Sure. Do you want to? Probably not. You probably want to use the market to beat your own personal goals, and that’s good enough for most people.

When Bonds Historically Beat Stocks

Arnott: Another interesting point in the book is that stocks haven’t always been good long-term investments. If you look at history up until about 1862, there were some extended periods when stocks actually had negative returns and bonds outperformed. Why is that part of market history largely ignored?

Moore: Yeah. I think it’s largely ignored because it’s not a very good story. We have a story that we want to be true, so that’s the story we tell. And Jeremy Siegel came out with his book, Stocks for the Long Run, and that was a story everyone wanted to hear. Look, I’m not trying to throw shade on Siegel’s book at all, but the reality is it was a very good book for the dataset he used, but the dataset he used was not complete. Why was it not complete? Because it’s actually really hard to know what all the stocks and the returns were for all of American history.

Let’s start with the fact that Wall Street wasn’t the Wall Street we think of today. There were probably a dozen-plus stock markets that were actively trading stocks, and not all the stocks in one traded on all the others. There was a stock market in Connecticut. Obviously, there was one on Chestnut Street in Philadelphia. There’s one in South Carolina. One of the most active was Natchez, Mississippi, but no one goes back and looks at the Natchez, Mississippi stock market to see what the returns were because, in the long run, they were pretty abysmal. When you actually piece together all the stocks you could buy for all of American history, it turns out bonds beat stocks for most of the 1800s. They were tied until about World War II and stocks have been beating bonds ever since, except for a few 15-plus year periods when a few moments when bonds outperformed.

What does that mean? It means that stocks for the long run is true, but only as old as our last two presidents. That is not a universal law of history. I’m a historian. In my line of work, we call that a rounding error. Eighty years is a lot of time, but it’s not enough time to know exactly how things will always work going forward. Now, I’m not trying to say invest in bonds over stocks. That’s not what I’m saying. I’m just pointing out people have an illusion of history that is an illusion, and we would do better just be frank about the fact that every historical era is different. What worked in different historical eras was different. Let’s not try to learn the lessons of 1850 as if that’s a stock market strategy we can employ today because they lived in a very different world than you live in.

Marriage, Money, and Financial Success

Benz: One of your strongest findings is that marriage has historically been one of the best predictors of financial success. Can you talk about how you arrived at that and what characteristics make for a financially successful marriage?

Moore: Great question. I arrived at that because you couldn’t avoid it when you looked. If you actually look at the financial advice people were receiving for most of history, a lot of it was intertwined as marriage advice. This is true for men and women, by the way. And I actually think this holds all the way to the present day. In fact, there’s some wonderful … oh, and the book title just escaped me, so I will be kicking myself that I can’t remember the title, but there’s this wonderful book that looks at some of the modern billionaires, the lesser-known billionaires, the really successful Wall Street investors, and kind of asked them about their life and says, “What’s the through line? What are the real lessons you take away?”

Almost every one of them says their spouse. Spouse, to this day, is a strong indicator of financial success. If you go to the history books, it’s everywhere. People are talking about the financial wisdom of the right kind of marriage. If you go to the 1840s, there’s this card game. I have kids, and one of the things that’s a great joy of parenting is forcing your kids to play a game they don’t want to play because you, as a parent, have something you want to teach them. There’s this card game in the 1840s where you would play as a family at night, and you’re trying to draw the cards that will give—the winner is the person who has the best spouse, and you’re drawing characteristics of a spouse as you go. Parents are making their kids play this game because they’re trying to teach them that maybe the bad breath card is not so bad if you also are holding the work ethic card. It was so important to parents to teach young people this.

If you go into the novels of the late 1800s, there’s a whole genre of novels in which young women are having to make decisions about some rapacious man who’s after her in some way, usually tied to money and inheritance. You know how Zach Galifianakis is kind of the universal sidekick in our movies today, or Shrek’s Donkey? There’s always this sidekick character who’s always, in our era, male. In their era, it was a female. It was the female best friend of the woman who was the center of the novel. Her best friend always ends up marrying just for love and not thinking about the financial issues, and she always ends up in a terrible situation. That was the kind of running joke of novels of that period. Not thinking about the finances of your marriage could get you, and that’s what people wanted you to understand. Now, it did not just mean marrying up and into more money. It meant marrying into the kind of person who you could build something with over the course of your lifetime, because at the end of the day, you’re two people sitting over the kitchen table with a yellow legal pad, running a small nonprofit, and you have to figure out how you’re going to manage this. By the way, this still holds today.

To this day, marriage is one of the strongest predictors. The quality of a marriage is one of the strongest predictors of financial outcomes that we have, and it confounds things you would not expect it to confound. Married Black men earn more than single white men. Married women at the age of 55 are earning 2 times what single women at the age of 55 are earning. Married men’s net worth at retirement wildly outperforms single men’s net worth at retirement. Same-sex married couples outearn heterosexuals who are single in the same age cohort. It confounds everything you would think it wouldn’t confound.

There’s just something about marriage that, you don’t choose the family you start with, so the family you end up starting is one of the biggest things under your control. As it turns out, marriage is a superpower because capitalism is a team sport, and you just win more games playing in two-player mode. This kind of makes sense when you think about it. There are risks that each of you can take that you can only take because the other one is there to cover the risks, right? There’s like, you stay late at night, I’ll take the kids to … they may eat Chick-fil-A. I told my wife many times, “They may not eat what you would want them to eat, but you stay late and do what you need to do to advance your career, and I’ll handle this.” If you compound that over the lifetime of a career, there are promotions in there you don’t otherwise get. You can just see this over and over and over for men and for women. Marriage is one of the biggest predictors of financial success.

Failing Upward in Real Estate

Arnott: Another adventure you had was investing in real estate, owning and renting out homes, and you, as a landlord, had to deal with hoarders, human traffickers, squatters, the FBI. Does the real estate industry kind of undersell how difficult owning real estate and being a landlord really is?

Moore: Oh, of course, because otherwise who would show up to the seminars? My book is not an advertisement for real estate investing, although it worked out well for me. One of the many things—I mean, I tried so many self-experiments in this book. I Airbnb’d all the rooms in my house because, believe it or not, that was how Americans paid off their mortgage. That was the primary financial advice about how to pay off your mortgage early, was to rent out rooms in your house for a long, long time. One in three Americans at any given time was a landlord for most of history because they were trying to pay off their house. All kinds of crazy stuff. I bought land on the moon because that was a big rage in the early space era, people trying to claim they owned the moon.

But one of the things that comes out of World War II is you get a housing shortage. Housing shortages, believe it or not, it’s hard to believe today, especially, but believe it or not, housing shortages were pretty rare in American history because you could build it pretty fast. But coming out of World War II, there was a housing shortage, and because of that, people who had housing, especially rental properties, did really well. And so then the first one of these to write a book about it in the 1950s, called How I Became a Millionaire in My Spare Time, became a bestseller. People start teaching courses on real estate investing, how to get into it.

That’s a pretty low inflationary environment in the ’50s and ’60s, but then in the late ’60s and ’70s, inflation just explodes upward, and so does real estate investing. People are rushing to try to buy a house with as little money down as possible and to teach other people how to do it. By doing that, the logic is, well, if the house is going to go up by 10% just because of inflation and you put down very little, you get the entire gain on that house, and the return on your actual invested capital is huge.

There’s this race to the bottom on this that becomes almost, not almost, becomes darkly humorous so that by the early 1980s, there’s actually a book that sold pretty well that told people to not only buy a house with no money down, buy it when you actually have no money in your checking account. But as long as you can take the … at the closing table, they’ll hand you the security deposits for the renters, the tenants, and you can rush to the bank. Keep in mind, this is the ’80s; you’re not doing this on your phone, you could rush to the bank and deposit it before your check clears and then you basically kited the check, put the money in. It’s, by the way, illegal. Can’t do that. It was illegal then; it’s illegal now.

Well, anyway, in this idea of I’m going to try out everything they tried then, I decided I would try little money down real estate investing again to try to show people what is it like to try to do what they did now. I tried this, of course, in the post-2008 crash. In the early twenty-teens, going around in real estate investing, if you look at it back today, people were like, “Well, duh, of course you made money.” I promise you it was not as easy as it sounded. You could find houses for really cheap. You couldn’t find people to lend you the money. The people living in those houses, especially working-class houses, were people who had their own issues that they were dealing with.

I went out to buy a house, went looking in a corridor outside of Charlotte, North Carolina, and I ended up buying a house and a four-unit apartment building. I came home, and my wife was like, “I said you could buy one.” I was like, “Well, it was a good deal.” I don’t know, they talked me into it. We renovated the house, and a woman came out of the woodwork and said, “I’d love to rent it. I already own a home. I just have to move for work for a few years.” I was like, “Oh, this is great.” We never saw her again. It turns out she worked for a temp agency that was managing the lithium mines of North Carolina where they were importing illegal labor. Before I knew it, 40-something Haitian immigrants were living in my one three-bedroom house.

I went to the cops, who went to the FBI, and they said, “Look, this is a human trafficking ring. You can evict them if you want, but we’d really appreciate it if you’d let us sit on it so we could stake it out and kind of track it.” I grit my teeth and said, “That sounds like what I should do.” Before I know it, I’m on a conference call with the FBI, and they’re raiding my rental property. By the way, all of those renovations were destroyed because you just can’t have 40 people living in a house with three bedrooms. But in the apartment building, I had hoarders, which then meant we had rats, which meant that the rats from the hoarders were getting into the other apartments. I had to go, and I politely informed them, “You can’t do that here. Your neighbors are suffering because of what you’re doing.” They promptly pulled a shotgun on me. I distinctly remember leaping off the steps, trying to run to my car with a shotgun pointed at my back that had just a second ago been pointed at my belly. Instead of thinking about my life and my children, all I could remember was this old rock song: “Give me three steps, give me three steps, mister.” I’m just running for dear life, thinking about this old rock song my dad used to listen to.

As I’m driving away, I finally thought, I may have made a mistake. This might not be for me. But I sat down, and I thought, well, this is probably as bad as real estate investing can get. So, what if I run this like a business and see what’s the upside? Over time, I just got really good at it. It helped that I was raised by a dad who was an electrician, and therefore I knew that what I owned was not homes, but what I owned was 2x4s and electrical wire and pipes. I kind of understood intuitively what to do when things went wrong, but I also just kind of decided to eat my own cooking. What was the one lesson of history to get ahead? Concentration, and then diversify. You diversify at the end of your life, not the beginning. I decided I’m going to go all in. I’m going to concentrate and see if I can make a million dollars. And to my great surprise, I overshot and one day looked up, and I was like, “Honey, I think we’re millionaires.” It kept going and kept going, and eventually I was able to just say, “All right, I can just sit at home and write.” It was an interesting experience. I have failed upward as an academic into a place where I never thought I’d be.

Benz: Well, Amy and I have a million more questions for you, but I’m curious to find out how you see your career evolve going forward. Do you view yourself primarily as an academic, a journalist and writer, real estate investor? What do you think you’ll be doing in the future?

Moore: Well, thank you for having the time to have this conversation. I think going forward, I am at some level who I’ve always been, which is a kid from the rural South who fell in love with history and wanted to teach other people about it. And so I really think of myself, everything I’m doing is in some degree trying to educate and inspire people to get excited about something. Because I promise you, if you teach the 8 a.m. US History Survey for five years of your life, you have to figure out how to make history really exciting to those kids who do not want to be there in this slot, most of whom are on the football team because they have practice this afternoon. That’s kind of what I do with my life is I’m trying to make history fun, exciting, enjoyable, but also useful.

Whether I’m writing on my Substack, which I try to do once a month, an essay on how history can teach you about finances and markets and these kinds of things, or whether it’s giving—I go around, I give talks, presentations, writing other books in the future. I do love being a writer. Writing is one of my great passions, but at the end of the day, it’s all kind of bundled together by the desire to make all of this fun, interesting, and useful. Whether that’s writing it down or speaking it, that’s it. Yeah.

Arnott: Yeah. Thank you so much, Joseph, for joining us, and we really enjoyed talking with you.

Moore: I really enjoyed the conversation. Thank you so much, and we look forward to more conversations in the future. Really appreciate it.

Benz: Thanks so much, Joseph.

Arnott: Thank you for joining us on The Long View. If you could, please take a moment to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts. You can follow me on social media at Amy Arnott on LinkedIn.

Benz: And at Christine Benz on LinkedIn or @christine_benz on X.

Arnott: George Castady is our engineer for the podcast. Jessica Bebel produces the show notes each week, and Jennifer Gierat copy edits our transcripts. Finally, we’d love to get your feedback. If you have a comment or a guest idea, please email us at thelongview@morningstar.com. Until next time, thanks for joining us.