The Algebra of Wealth: 10 Lessons from Scott Galloway’s New Book

Scott Galloway is a professor of marketing at NYU Stern School of Business and a prominent public speaker, author, and entrepreneur. He is known for his insights on technology, business, and societal issues, frequently sharing his perspectives through books, podcasts, and media appearances. His new book, The Algebra of Wealth: A Simple Formula for Financial Security, offers his insights into how to maximize wealth.

the algebra of wealth

You probably already know most of the real insight from this book and the ideal reader might be a recent college graduate. However, within each chapter there are new ways of thinking that are relevant to anyone at any age. The book is easy to read, provocative, and interesting.

Here are 10 of the big and also somewhat hidden ideas and lessons from the book.

1. “Wealth is the Absence of Economic Anxiety”

Galloway defines wealth as the “absence of economic anxiety.” Wealth is not a dollar amount or a retirement date, it is the sense that you are in control over both your money and your well being.

This is a somewhat surprising definition from a business professor. And, yet it is profoundly true. If you are able to cover your current and future financial obligations, then wealth is a mindset.

Explore other ways to define wealth.

2. Your Retirement Date is Not the Right Measure of Economic Security

Galloway believes that too many people focus on getting to a secure retirement as the measure of financial success. And, it is true, most personal finance advice is around getting you to and through retirement. However, he believes that you should achieve economic security before you stop working and the sooner the better.

And, economic security isn’t just the value of your assets, it is also the choices you make about how you want to spend your time.

How can you structure your life so that you are economically secure while also prioritizing the lifestyle choices that make you happy?

  • Do you want to be free of all responsibility by 40?
  • Would you be happy working well into your 70s (just maybe not in your current job)?
  • What lifestyle changes could you prioritize to get to the life you really want to live sooner?

3. There is a Formula for Economic Security

According to Galloway, there is a formula for economic security and it is:

Economic Security = Focus + (Stoicism x Time x Diversification)

Let’s take a look at each part of the formula:


Focus in Galloway’s formula primarily refers to your career development. He maintains that you should me incredibly mindful about your work and purpose and make deliberate rational choices about work and how you spend your time overall.

He writes, “Intelligence and talent are correlated with success, but the strongest signal of future success is your perseverance and resilience.” Stay focused on what is important to you and to getting to the financial position you want to be in.


According to Galloway, stoicism is about “living an intentional, temperate life in and out of work.” Courage, wisdom, justice, and temperance can guide you to make disciplined financial choices while resisting temptations of spending outside of your value system.

Learn more about the lessons and merits of Stoicism in personal finance.


Time is arguably more important than money. And, time is what can really help you build wealth. If you can start saving and investing as young as possible, then time can work for you to build wealth. Small amounts of money invested over a long period of time can grow significantly.

Learn more about:


Diversification means allocating a portion of your assets to investment vehicles that have the potential to generate significant returns over the long term. By diversifying your portfolio and investing in a mix of stocks, bonds, and other assets, you can maximize your chances of capital appreciation.

As Galloway writes, “Investing over the long-term pays out, but there are always dips along the way. Diversification is the kevlar that protects you — with it, bad decisions will still hurt, but they won’t prove fatal. Diversification, in other words, is your bulletproof vest.”  

4. Don’t Trust Your Emotions

By letting emotions drive financial decisions, individuals are more likely to deviate from disciplined, strategic approaches that consider risk management, diversification, and objective assessment of financial goals, ultimately jeopardizing their financial stability and future security.

Learn more:

5. Understand Your Values

Knowing what motivates you and what you value in the world are powerful drivers to getting to economic security. If you understand yourself and can be true to who you really are, then you can let everything else fall away and it is likely that you’ll get to economic security sooner rather than later.

6. Move (Relocate If it Makes Sense)

Where you live is really important. It drives your lifestyle and the lion’s share of your costs. Galloway believes that you should be open to moving at different stages of your life in order to gain greater economic freedom and potentially greater overall well being.

7. Use Capitalism to Your Advantage and Resist the Downsides of a Capitalist Society

Through saving, investing, innovation, hard work, focus, diversification, earning, making smart financial choices, and more, you are using capitalism to build wealth. It is not always easy to get ahead, but there are clear capitalist habits and practices to get you there.

However, our capitalist society sure does make it difficult to resist the temptation to spend. Galloway writes, “‘The easiest way to make a dollar is to save a dollar’ is good advice. Yet every day, hundreds of times a day, we are confronted with messages, arguments, and encouragement to spend. Capitalism harnesses the ingenuity and energy of an entire society toward a singular purpose–to persuade you to spend money.”

A key to wealth is to resist spending on things that aren’t truly important to you.

8. You Don’t Have to Follow Your Passion (Just Find What You Are Good At)

Because of Galloway’s emphasis on time, values, character, and prioritization, it may sound like he would implore you to follow your passions. However, the reality is the opposite. Galloway encourages people to simply find something they are good at and become great at it.

He argues that once you are great at something, the rewards of being great will make you passionate about it.

9. Focus on What is Proven to Make People Happy

There are clear paths to happiness. Research suggests that happiness is the result of a few basic things: great relationships, regular exercise, and being mindful and grateful.

Explore 15 habits for a happy and long life.

10. You Will Never Have Enough Money

Galloway makes the point that people can never have enough money, they will always want more. It is incredibly easy to get used to ever increasing levels of spending. And, it turns out that this is a truth that mankind has seen throughout history. To make his point, Galloway quotes historian Yuval Noah Harari, author of Sapiens, who wrote, “One of history’s few iron laws is that luxuries tend to become necessities and to spawn new obligations.”

How much is enough?

How Much or What is Enough for You?

Use the NewRetirement Planner to help you take control over your money and plot your path to the future you want, be that retirement, fulfilling work, or some combination there of.

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