By Justin Grosslight

Serious individuals of all stripes seeking candid yet pragmatic life, career, and financial guidance will find much to savor in this book.

The Algebra of Wealth: A Simple Formula for Financial Security by Scott Galloway. Portfolio, 304 pages, $32.

In recent years, serial entrepreneur and NYU Stern School of Business professor Scott Galloway has become something of an intellectual rock star. Indeed, it is hard not to admire his versatility and accomplishments: he has founded numerous start-ups and served on the board of directors at several companies, authored five books, maintained a weekly newsletter (No Mercy / No Malice), manned podcasts (Prof G Pod and Pivot), appeared on various television shows, and delivered an admired TED talk on the ways the United States is destroying the future of its youth. Given his versatility and accomplishments, I eagerly picked up his latest book. Now widely regarded as a paragon of success, Galloway shares his pecuniary and life hacks in The Algebra of Wealth. His goal: to empower readers and help them attain wealth, or “economic security,” that allows them to choose how to live their lives free of financial constraints.

Using a mathematical formula as a guide, Galloway asserts that wealth will be attained by holding firm to the following equation: “Wealth = Focus + (Stoicism x Time x Diversification)”. Each variable on the right side of the equation gets a chapter in Galloway’s book. In the first, “Stoicism,” Galloway argues that wealth building begins with cultivating sound behaviors and habits, and looks back to ancient Greek Stoicism for inspiration (he specifically cites Epictetus, Seneca, and Marcus Aurelius, but acknowledges that any theoretical and practical philosophical framework would suffice). Galloway next moves to “Focus” in chapter two. He suggests that robust careers typically emerge from finding one’s talents, developing mastery of them, and realizing that passion will follow. Improving communication skills and moving to talent-rich cities are good plans for growth. Of course, not all career choices are obvious. One should value individuals over firms, one should know when to quit, and one should embrace (affordable) hobbies for balance.

Chapter three, “Time,” emphasizes that time squandered is irrecoverable. Focusing on this thought, Galloway asks readers to determine their waterline budget, encourages prudence with spending choices, advises to begin saving early, and proposes allocating money into daily, intermediate, and long-consumption buckets. The book’s final (and longest) chapter, “Diversification,” explains how to invest capital for long-term growth. Essentially a crash course on investing, Galloway introduces its basic principles, outlines how financial markets work, surveys various asset classes (stocks, bonds, real estate, commodities, currency, derivatives, and funds), and discusses taxation. He concludes with some sensible remarks. In textbook-style format, each chapter ends with a synopsis that places salient themes in bullet points, thereby allowing readers to skim or target topics with ease.

Part advice on habit formation, part life and career guidance, and part a primer on saving and investing, The Algebra of Wealth pulls an enormous amount of disparate information into a usefully compact narrative. This is critical, given that such pragmatic topics are, regrettably, “poorly covered in schools and glossed over in most personal finance literature.” On top of that, American parents often fail to teach their children basic economic lessons. Of course, nothing in this book is new or groundbreaking. What makes The Algebra of Wealth refreshing is Galloway’s unvarnished straight talk – both about planning a life and about himself.

Concerning the former, Galloway’s greatest accomplishment is to disabuse readers of Panglossian fantasies of accomplishment. Many young adults yearn to be professional athletes or media stars but the truth is that the market is flooded with low-paid or non-paid disposable dreamers. Acutely realistic, Galloway notes that, “[m]aking a living in most passion categories requires you to be in the top 0.1%. In other careers (anything a 5-year-old does not say they want to be when they grow up), you can make a solid living just by showing up.” Rather than wasting time chasing rainbows, Galloway encourages readers to nourish their talents, because “mastery can lead to passion.” In other words, he exhorts readers to “find something you’re good at and to spend thousands of hours of grit and sacrifice necessary to become great at it.” As for the public’s fascination with superstar tech entrepreneurs like Mark Zuckerberg or Steve Jobs, Galloway blames a media that venerates “outliers among the outliers.” Most successful entrepreneurs are not technology gurus but dominate in less sexy industries, like utilities and manufacturing.

Galloway also aims to tweak faulty American perceptions about wealth and how to obtain it. He cautions readers that nonchalance about money among the affluent is a “humble brag,” noting that “[e]very rich person I know is obsessed with money. Not necessarily with obtaining it, but with tracking, managing, and coddling it.” He also challenges American taboos about money and job switching. Rather than sheepishly discussing wealth, readers should “[n]ormalize talking about money [to]… get better at money.” And rather than lauding job security, Galloway counters by showing how (circumspectly) switching jobs results, on average, in a greater median percent change in hourly wage. Employees, therefore, should scan the market and negotiate for higher salaries if they seek to remain with their employers. He also suggests readers should question the trope that more education is always a prerequisite for career and/or salary advancement. Though a clinical professor himself, Galloway contends that graduate school is “not for everyone or necessary for everyone” – especially given its current exorbitant cost. Actual learning in higher education is “limited,” he argues, and he goes on to say that top business schools are mainly useful for “networking and signaling purposes.” Meanwhile, American society has “shamed an entire generation into believing a trades job means things didn’t work out for you.”

Author and podcaster Scott Galloway — a popular ‘thought leader’ and public intellectual.

Relationships are crucial for success, and Galloway recognizes the value of cultivating them, for “‘managing people’ is amorphous and hard to identify as a talent. But when identified and cultivated, it’s arguably the most valuable one a person can have.” This is true in both public and private life. Galloway believes that spousal engagements form “the most critical relationship in life” and that they ultimately exert “a huge impact on your economic trajectory.” And, just as picking a spouse typically facilitates wealth, a divorce often cripples it. All of this, of course, boils down to Galloway’s contention that our greatest asset is our time. How we manage it can impact tremendously our financial security and personal contentment. Wealth, for Galloway, is “just a means to an end. Specifically, the time and resources to focus on time and relationships without economic stress.”

Incorporating personal vignettes adds credence to Galloway’s claims. Beneath the veneer of a multimillionaire entrepreneur who holidays with his family in the French Alps and commutes on his own jet, readers hear a number of Galloway’s struggles. Galloway discovered that he was not an organization man after he worked as an analyst for Morgan Stanley after graduating college. Chasing “dopamine surges” of glory and gravy as an entrepreneur – along with losing money – culminated in a life reset: Galloway divorced at the age of 33 and was near broke by age 40 when his company, Red Envelope, failed. Only after the birth of his first son, when Galloway was 42, did he begin to rein in his financial behaviors and invest more deeply in relationships (this might be comforting news for older readers who have not yet regimented their lives). The moral of the story: that “progress isn’t linear, it’s lumpy.” And moving forward does not happen without hard work. It takes tenacity to appeal, and to overturn, a college rejection from UCLA, to receive an MBA from UC Berkeley Haas School of Business, to survive in the elite corporate world, and to flourish as an entrepreneur and bestselling author. There is much to admire in Galloway’s “rags-to-riches” tale, which includes rising from a financially-strapped childhood. And while most children are not precocious enough to stroll into a brokerage firm and explore their penchant for investing like Galloway, the author’s teenage relationship with Dean Witter broker Cy Cordner confirmed a reassuringly primal truth: “beneath the complexity of finance there are basic principles that a 13-year-old can grasp.”

Despite The Algebra of Wealth‘s lineup of easily accessible information, personal anecdotes, and valuable advice, the book has its problems. Most notably, Galloway’s presentation of concepts occasionally comes off as bumpy – especially for a lay readership. Basic derivative and options trading principles could have been coupled with simple examples, as the concepts are among the most sophisticated in his text. Elsewhere, readers encounter terms/concepts without having clear definitions of them: cases in point include the terms “1031 exchange” and “real asset” . Galloway also could have introduced real estate investment trusts (REITs) by placing the acronym immediately after the term instead of burying it in a sentence a few lines later. And, while Galloway introduces key terms and ideas in bold print throughout the text, it would have been helpful if readers had a glossary or summarizing list of them at the end of the book. Luckily, Galloway references plenty of popular self-help and business books; this not only conveys his erudition, but offers places for readers to go for more explanations. That said, credit to others is not always given; for example, Galloway’s discussion of luck is eerily similar to economist Robert H. Frank’s meditation on the topic in the latter’s more scholarly book, Success and Luck: Good Fortune and the Myth of Meritocracy (2016). Surprisingly, Frank is not cited in Galloway’s text.

Thematically, Galloway’s approach can, at times, feel obnoxiously hedonistic or capitalistic – perhaps ruthlessly American. Take, for example, the potential career sectors that he appraises in this second chapter. He outlines his impressions of working life in entrepreneurship, academia, media, the professions (eg, “doctors, nurses, lawyers, architects, and engineers”), management consulting, finance, real estate, airline piloting, and the main street economy. Noticeably absent are careers in public service. Does Galloway feel that working as a school teacher, policeman, fireman, city planner, politician, or social worker are unworthy livelihoods? Many public service jobs lack the high salaries of careers in private enterprise, but for some people jobs are about impacting society, not solely making money. Equally unnerving is Galloway’s admittedly controversial suggestion that readers abandon stagnating personal and professional relationships in favor of befriending “wealthy people who will give… models for obtaining and living with wealth.” Those looking for a less hedonistic and utilitarian approach to relationships could turn to billionaire hedge fund manager and investor Ray Dalio’s blockbuster book, Principles: Life and Work (2017). Like Galloway, Dalio achieved considerable success through enterprise and wrote a book to help others make rewarding life and career decisions. But rather than occasionally objectifying friends and acquaintances, Dalio consistently treasures their primacy. Dalio also values loyalty to organizations over loyalty to people while Galloway advises the opposite. Of course, Dalio is in the twilight of his career and grew his firm, Bridgewater Associates, in an era when employees were more committed to firms and communities.

The most concerning drawback of The Algebra of Wealth concerns audience. Galloway’s approach, advice, and diction all reflect that his target readership is serious-minded twentysomethings who are entering the American workforce (in fact, his financial discussions are tailored exclusively to American policies and institutions). But the text does little to explicitly attract this audience. There is no blurb on the book jacket or preface that would clue in such readers; the book’s cover design, regrettably, feels more like what one see on a tax or investment guide, not a mentorship volume for young adults. Compare this book’s cover to that of Galloway’s earlier algebra-themed study, The Algebra of Happiness: Notes on the Pursuit of Success, Love, and Meaning (2019); the latter exudes warmth by way of its colorful and relatable pictorial “equation.” And, speaking of equations, not only are they are far clearer and more abundant in The Algebra of Happiness than The Algebra of Wealth, but Galloway’s chief “equation” in his new book, “Wealth = Focus + (Stoicism x Time x Diversification),” distills less clearly into action than the actual advice he provides. Given these flaws, I cannot help but ask a few questions. First, would older adults find Galloway’s content and/or tone patronizing? More concerning, if Galloway wanted to reach out to young adults, why did he or his publisher not work harder to target this audience? Were they hoping to sell more books by profiting off of a broader readership?

Six years ago, in his book Winners Take All: The Elite Charade of Changing the World (2018), journalist and political pundit Anand Giridharadas insisted that people who joined America’s elite workforce also entered “MarketWorld,” a community whose neoliberal ethos reflected a capitalistic desire to positively impact society while also maintaining the (increasingly unequal) status quo. Galloway is a card-carrying member of this coterie. While I believe that he is well intentioned, I cannot help but wonder if he was really concerned that The Algebra of Wealth would appeal to its intended audience (Or is this volume essentially a profit-motivated spinoff of chapter ten in Galloway’s 2017 book, The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google?). Take, for example, the issue of cost. Galloway himself laments that “56% of Americans don’t even have $1000 in backup cash.” So much for readers who don’t have the disposable income to pay for the book (or even its cheaper digital format). Further, readers who can afford his work – or those who visit their public library – are probably the least likely to be in need of his sage advice. It would have been nice if Galloway had shared – or pressed his publisher to share – more of the book’s content, free, on his websites (www.profgalloway.com and www.profgmedia.com). But at the time of this review little can be found. Given this setup, the status quo will most likely be maintained: a suboptimal number of readers will be enlightened. Two things, however, are certain: Galloway has burnished his image as a “thought leader” and public intellectual via a text that will generate income for himself.

Still, despite my cynicism about the impulse behind it, The Algebra of Wealth is an impactful book, particularly for young adults hoping to thrive in America’s capitalist matrix. It is also, generally speaking, an easy read. And I fully support Galloway’s rousing call to action: that “everyone could and should cultivate this knowledge, whatever your other interests or politics.” Serious individuals of all stripes seeking candid yet pragmatic life, career, and financial guidance will find much to savor in this book.

Justin Grosslight is an academic entrepreneur interested in examining relationships between science, society, and business. He has published academic articles in mathematics and history of science, book reviews on a wide range of topics, and several vocabulary development and test preparation books. A graduate of Stanford and Harvard, Justin currently resides in Ho Chi Minh City, Vietnam, working as a consultant and mentor. He has traveled extensively throughout China and to all 11 Southeast Asian nations, as well as through parts of Africa, Asia, Europe, North America, and Oceania.