#3 - Sandy Leeds: Student-Debt, Is College Worth It, Investing, Loving What You Do

The Smart Alec Show

Sanford Leeds is Distinguished Senior Lecturer at the University of Texas at Austin's premier business school where he lectures on topics in finance, is a lawyer & former prosecutor, an MBA, & aside from being a finance & economics wizard, he's an incredibly funny & great person who cares about making the world a better & more equitable place. Connect with Sandy & follow his market updates at:

OUTLINE:

0:00 Intro

2:10 Sandy’s journey from law school, getting his MBA, working in finance , to teaching at UT

3:38 Sandy’s biggest lesson = most of us have no idea where we’re going to end up

5:00 How important is finding the right thing?; What are the benefits & advantages of liking what you’re doing?

9:09 Does the prosecution lifestyle leak into other parts of your life when you’re a lawyer? He prosecuted the case for the movie “Boiler Room”

13:00 What does it take to work in wealth management

16:19 What do the common people need to be aware of economically & financially to know what to do with their hard-earned money?

1. Stocks grow as economy grows over time

2. Most managers don’t beat the market; just invest in the overall market

3. You shouldn’t time the market or guess when the market is gonna go up or down (Talks about this & the stock market amidst the pandemic); lessons learned throughout this time

23:47 The Wallstreet Bets saga & digital revolution in finance — retail investors vs hedge funds, smart money vs the common people

27:41 What is does it mean to short- sell a stock?

31:00 What is a gamma squeeze?

31:36 Unfairness & collusion in the financial markets; Is it a disingenuous argument of hypocrisy for hedge funds to say that the common retail investor can’t come together via social media platforms to invest in a stock?

35:42 New ways of valuation that have grey areas — extreme bullishness, SPACs, social media

38:06 Timing the market is a fools game; When the Consumer Price Index (CPI) = 4% inflation or is over 4% = That’s a dangerous sign when the fed says it’s time to slow shit down; More Fed inflation talk

41:09 The student debt crisis; is college worth it with today’s prices? Fool's game or necessary for success?

- Best insurance policy to guarantee a middle class lifestyle at least

- College is a winning bet for most people but not as much of a winning bet as it used to be because its more expensive

- Signaling effect

- We want people to go into fields with lower pay because they have value so how do we balance all that?

- 18 year olds are faced with daunting decisions that will influence their careers & lives for years to come

48:15 Pressure from external figures causing someone to go down a certain path (i.e. guidance counselor says you’re good at math so be an engineer, or dad says do this)

51:42 Why the cost of college has gone up so much

57:48 How debt obligations create limitations & an inability to take bigger risks; brain power being missed & inability for people to go be entrepreneurs because of things like student debt = killer for society because this kills innovation

59:29 Variables & considerations before taking debt to go to college that one must understand

* True total costs

* Perceived benefits

* Intrinsic value of being educated

* Impact on future lifestyle

“Public universities = best bargain & bang for your buck”

1:07:19 What’s going to happen with all of this student debt?

* = 3% of gov. debt

1:09:11 Socioeconomics of college being so expensive that people think “oh well it ain’t for me”; the problems with kids counting themselves out too early

1:11:41 How to not only be financially successful but be fulfilled & happy

1:17:14 Pursuit of extrinsic motivators such as status aren’t fulfilling long term

1:18:25 Groupthink, competitiveness, & toxicity at top business schools, narrow perspectives of only certain types of people in the world (consultants, bankers, losers) for students of certain majors (finance, etc.)

* School wants ppl to make highest starting salary so they can make more money & students get more money

* Top 1% of smart kids being made to compete against one another

* “Focus on learning, not grades!”

1:21:38 Where you can find Sandy’s content

Podcast info:

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Recorded in May 2021