Maya Lau is the creator, host and executive producer of the podcast, Other People’s Pockets, produced by Pushkin Industries and Little Everywhere. She's an award-winning former investigative reporter for The…
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Adam Davidson co-founded NPR’s hit podcast Planet Money, wrote The Passion Economy, and was an economics writer for The New Yorker and The New York Times Magazine. So of course this money nerd has his finances in order… or does he?
I think there's an employee mindset that many people have naturally, that I had for many years, which is like money is a thing a boss gives you and you get it from that boss, and then at some point you might decide to quit and then you'll have a new boss. And I now don't have that mindset.
Think about someone you might know who is a total nerd about the economy. They could explain to you how inflation works, but does all their knowledge about money mean their own finances are in order? My guest,
Adam Davidson, might be the perfect case study. He co-founded and co-hosted NPR's Planet Money and wrote about the economy for the New Yorker and the New York Times magazine where we used to work together. He's also the author of The Passion Economy, about how running with your niche entrepreneurial ideas can allow you to make more money.
Adam broke down his finances for me, and I was a bit surprised and I guess inspired to hear how much money he makes. He was also honest about where he's come up short in managing his money and he had a quite interesting thing to say about why he finds it exciting to make trade-offs. I'm Maya Lau, and this is Other People's Pockets, the show where I ask people about their money so that the questions we all have about how much other people make and how their finances work can be a little bit less of a mystery. Could I just have you ID yourself?
Sure. I'm Adam Davidson. I was a business and economics journalist for a long time at Marketplace, the public radio show. Then NPR where I created Planet Money with a friend of mine, and then I went to the New York Times magazine as economics writer, where I met you. Then I went to the New Yorker as economics writer and I wrote a book called The Passion Economy. As I turned 50, I decided I don't want a job, I don't want a boss. I just do a lot of different things now. TV stuff, not TV stuff, books. I do a bunch of different things.
I'm really curious to hear just what your upbringing was like and how money figured into that.
I grew up in Greenwich Village in this building that I grew up in called West Beth. It was the old Bell Laboratories building, but in the year I was born, 1970, it was turned into artist housing. It's a full city block in Manhattan, and it had been abandoned for, at that point almost 20 years. It had been Bell Labs and it was turned into artist housing, so it was subsidized housing for artists. Back then it was you pay what you can. If you were a poet or a painter who made no money, your rent was zero or $20 a month or whatever.
My dad is an actor. My mom has had many roles in the arts world. It's a building, about a thousand people lived there. It's kind of like growing up in a small town and basically all the grownups I knew were artists. It was an environment where everything was open for discussion. It really was that feeling that we're kind of redeveloping society. Even as a kid, parents would freely talk about sex and drugs. Everyone was smoking pot, all the grownups were, but no one would talk about money. It was just not an accepted conversation other than as this horrible force that was making it hard for artists. At least that's how I remember it and how I remember people talking about it.
I don't remember knowing grownups who had jobs and wore suits and ties, and that was this other world. And when you're a kid, even if you grow up in a fairly radical world, you sort of think that is the whole world. It took me a long time to realize that there's a world out there where people have paychecks and mortgages and think about money in a very different way. That took me a long time, but as a kid, it was sort of the taboo topic, the topic that boring, evil people cared about.
Okay. Do you think there was a judgment around money-
Oh, my God. It was-
... or why it was that-
... total judgment.
... no one would talk about it?
I mean, it was kind of growing up in a religious cult, the cult of arts, and I don't mean that in a negative way. It was a great place to grow up. It was fascinating. The world was made up of creative people who followed their passion and expressed themselves creatively, and then boring people who chose the safe route, who chose the boring route, who chose money and cared about money. There was no question those people were smaller, less moral, less interesting, less everything. I mean, there was nothing more objectionable than, "He's a businessman" kind of thing. Yeah, it was total judgment. Now that being said, everyone was broke and thinking about money all the time because they didn't have any.
Right. And I mean, it seems like it's almost a defense mechanism. You're fearful of A, the unknown, but also you're preemptively warding off judgment to yourself by judging others. "No, I don't have any money, but I don't even want money. I don't want to be part of that."
Yeah, and later, like many, many, many, like decades later, I came to see that some business is definitely super boring and lame, but some business is extremely creative. And if you're a broke artist, you are making sacrifices. Your life is harder in a lot of ways. But the view was, "Oh, you wear a suit and tie, you get to work at a certain hour. You do what you're told by your stupid boss."
I didn't grow up quite in the same environment you did, but definitely with the idea of money should not be your goal and you should just want to try to change the world and use your talents wisely. Then now I'm like, "Wait, I'd like to make some money." I definitely know what you're talking about, that there's like when you grow up with this judgment toward people with money or people who care about money, it can be a shift to break out of that.
Yeah, I mean, the way I see it now is that it is not a binary thing that either your life is all about money or your life is all not about money. And that if you don't understand money and you sort of preemptively think the very idea of trying to understand money is in and of itself sort of morally and emotionally suspect, then your life is going to be really constrained in ways that are damaging. I'm not advocating like, "Oh, everyone should go from not caring about money to only caring about money." But I do think that for a lot of people, having more mastery over their financial lives will bring them more freedom, more passion, more control over their decisions, and that it's not that hard.
You mentioned a few times the word broke. What did being broke look like for you growing up?
In my personal case, I don't think we were ever super broke, but my dad's an actor, which means he could get a commercial or role in a movie or a TV show and there'd be a lot of money, and then there could be a very long period of time with very little money or no work at all, or some off Broadway play that paid a few hundred bucks a week. The way I remember it is the instability. There was this random force that would determine, can we take a nice vacation? Can I get new sneakers or not? There were other people in the building who really were like for year after year after year, just really in bad financial shape. If they did not live in this building where their rent was essentially free, I think they'd be near homelessness, really making very little money.
For the most part, this was poverty of choice, people making a decision to live their lives a certain way that could lead to less money. I remember I went to the local public school, and then in seventh grade I went to St. Anne's, which is a fancy private school, and I just never encountered real New York wealth before. I mean, it's funny because now where I live, the Far West Village is probably one of the richest places in the world, but at the time, this was 1970s New York. New York was bankrupt. There was crime. I was mugged several times in the neighborhood. It was a very different city back then. And I remember meeting real rich kids who'd take ski vacations and have fancy clothes and a limo would drive them to school and who had multiple homes and all this stuff that I just didn't even know about as a kid. I didn't even know that existed.
Your parents were still able to send you to a private school?
With, I mean, a major scholarship. They could not have afforded.
Yeah, yeah. Did growing up in this artist's village and with the economic situation your parents were in, did that affect what you thought you could do in life? Did they sit you down and say, "We don't know if we can send you to college, or if you do go to college, you're going to have to figure it out?" Did those conversations happen?
I mean, I worked all through college and I definitely had to help pay for my college, but I'd say for the building I grew up in, they were on the better off side of things. I would guess my dad's income averaged out to, in today's terms, 80 grand a year, something like that. I mean, with some years being better, some years being worse. I don't think there was any year where we would've qualified as falling below the poverty line, or later as an economics reporter, I learned a lot about poverty, and we were not in poverty, but in college for sure, I was aware that I had to work throughout college. I had to bring a lot of money in. I mean, I had to take out a lot of loans and my parents helped, no question, but it was a different thing than some of the kids I knew who just got checks from their parents and didn't need jobs. And I found it rather annoying.
Being an economics reporter and columnist and being somebody who has written about money, it's certainly not the only thing you've done, but it is one of the things you're known for, and it's hard not to wonder if your upbringing around money played a role in that.
Oh, no, a hundred percent. Yeah. My wife always says, "Your entire career is just that you grew up in West Beth."
At what age then did you feel like, "I want to figure out money?"
I don't think I really did truly figure out money until I was well into my 30s, but I would kind of dip my toe in and I just couldn't understand it. I mean, I think economics and money really is a language. It really took me a long time to get my head around it.
How did you make some shift where you could command more money and ask for it?
When I was 30, I moved to LA with a girlfriend who got a job there, and I got a call from someone at Marketplace Radio. I had done a lot of radio, and at that time I was like economics seemed interesting because that was kind of big and how do entire economies work? But business still felt like, "Who cares?" But I was broke, so I said, "All right, I'll take the job.: But it really was when I went to Iraq as a journalist for Marketplace and spent a lot of time covering economics and business in the Middle East in general, and Iraq in particular. And I started to see, 'Oh, this really helps you understand how the world works." I had studied history of religion in college. I had a basic understanding of Sunni and Shia Islam, and I thought, "Oh, that's going to really help me."
And I did not find that as helpful as understanding how money flows, how resources are allocated, how power works. This is really interesting, from Jordan and Iraq and Kuwait and Syria and Lebanon. These are very different economies. And I started to see in Iraq, I mean, really through the lens of pretty cynical business people, but looking at a crisis say through the lens of business may not be the best way to do it. How do I get rich off of a war and a collapsing state? But it does give you unique insights that just covering general politics or religion, so emerged from Iraq with a real belief that this isn't just some boring sideshow.
This is actually how the world works. This is currency-
This is actually how the world works.
... how the world runs on. Yeah. Yeah. I never got to be a business journalist, but I always was drifting in that direction. Then now, one of the things I do that's not this podcast is like I do financial investigation in the investment world, and it feels like scratching that same itch of I have to actually understand SEC filings and understand how investments work and why.
I mean, I have to say I now feel that, to put it bluntly, journalists should feel ashamed. It's so common for journalists, even really super prominent journalists to just say, "Oh, I don't understand business at all," and it feels like it's almost a point of pride. And I'm like, that shouldn't be allowed. How do you cover Congress? How do you cover the White House? How do you cover poverty? How do you cover politics in any state? I'm not saying everyone needs to only cover business, but you should know there's a rule book. Part of it is the law, and part of it is the money. And if a journalist said, "Oh, I never figured out how many branches of government are there? I don't know that stuff. Is it five or two?" That'd be embarrassing. That person would not get promoted, would not succeed. The other thing is, it's such a gift to journalists and other people who want to understand the world.
It is a BS detector. If a business person is making a claim, "We're going to do this and it's going to have this effect." It's like you can find out if that's true or not. You can at least know directionally when a politician says something, does that make any sense at all? And very often, politicians are saying things that are like, "I'm going to drop this ball and it's going to float up." And it's like, "No, no. I know about gravity. I know how gravity works." And journalists should know how, everyone like citizens should know how to see through that. It shouldn't be so easy to say utter nonsense, but that's like 90% of politicians. Anyway, yeah, I'm obviously pretty passionate about it.
How much money do you make?
I'm kind of like my dad in that I do a lot of different things and they bring in different amounts of money. For my first two years at the New York Times, I sort of had this weird deal where I both worked at the New York Times and NPR, so I kind of got a combined salary and I made 200 a year. And I've never made that little since, and I've made many multiples of it. Well, I've made, let's just say one to several multiples of it every year since.
How much money will you have made by the end of this year?
One thing that's interesting is when you start businesses, it becomes a little harder to answer because you don't have a salary, you have a business and you're making lots of decisions about reinvesting. And so it's a different answer. But I mean, I'd say all in, I brought in, I don't know, 680, something like that. Although I didn't take that home because I'm trying to build a business. I used a fair chunk of that to invest in the business.
How much would you say you'll probably take home this year?
Maybe like 340, something like that. I'm not sure.
What's the most money you've ever made in a year?
Seven something, I think. This is my worst year of take Home pay in many, many years. I mean, I've made over 500 almost every year since I think 2015.
But I mean, I think that's interesting because you're in part known for public radio and journalism in general, and so hearing minimum 500k a year seems like, "Wait, what?" Can you talk about what are the other things that you've done to bring in that money? Because I think most people in journalism, unless they're a superstar on TV, are not making 500k a year.
Well, I sold a book for over seven figures, although I split that with my agent, so it was 1.1 million.
And this is for The Passion Economy?
Yeah. That's one big ticket item, although that comes in over ... You get a quarter on signing, a quarter when you turn in your draft, a quarter on hardcover publication, a quarter on paperback. But that was really good. I've done a lot of TV and film consulting and producing, and worked on the movie The Big Short. I worked on some projects that paid me well, but then never happened because that's what happens in Hollywood. All in with Hollywood stuff, a few hundred grand, I don't know exactly.
Few hundred grand per year?
No, no, in total. That's not a major source. Speeches. I give speeches. That's probably 50, 60 grand a year, something like that. I think my rate is 15,000, but I just don't like traveling that much, and I haven't really pursued that as much. I ran a company for several years, a Sony joint venture. I don't think I'm allowed to say how much I made, but it was a good salary. Oh, I created a podcast with Adam McKay for Gimlet. I don't know how much I got out of that, but it was six figures. But the thing that stands out for me is not the money, it's the fun and the freedom and the autonomy and control.
I feel like that's something people say, people who have money say something like that. "It's not about the money, it's that I get to do things I care about" but-
... it also is about the money, because if you didn't make that much money, you wouldn't be able to ...
Yeah, but I don't mean the freedom the money gives me. I mean, the freedom of my career. I had jobs from college until my mid 40s, and I had bosses and I had a set salary, and my core job, even if these were prestigious jobs sometimes, was sort of pleasing a boss and like anyone with a job, and I got to do amazing stuff. I'm very proud of Planet Money, I'm proud of the stuff I did at the Times and the New Yorker. But at the end of the day, on any given day, there was someone deciding what I was doing. I had a fair bit of autonomy at Planet Money on any given day, but overall, I was part of this very bureaucratic organization called NPR. And since then I kind of just think of things that would be fun, and then I do them, and sometimes they work out really well, and sometimes they work out poorly, but it's better. The money is one of the things that are better.
But I truly, I swear, can tell you that if someone came to me and said, "All right, you can make $700,000 a year, but you're going to have a boss and you're going to be part of this company, and you got to be a team player, or you can make 150,000 a year and you get to do what you're doing now, you just get to try out different things, you get to start podcasts, start Substack newsletters, start companies, start whatever you want, write books, but your income will be tapped out at 150," I would one million percent choose freedom and 150, but it's actually so much better because you get both. The more autonomy you demand for yourself, the more freedom you actually end up having. It's amazing.
What's your net worth?
It's a lot less than it should be. Well, I have a house, but it's less than a million. And that I do, I'm actually genuinely embarrassed about that. If you look at how much I've made, I should have a lot more than that. And have you heard the phrase HENRY?
High Earning, Not Rich Yet. And that I am kind of embarrassed about. I mean, we're fine. We're totally fine, but we're not like ... Yeah. If you look at my income over the last few years, that's a guy who should have a lot more money than I do.
Well, so where did the money go? I'm not judging you because it's hard to save. I'm just curious if you can tell us.
Travel is definitely a big one. Just ordering dinner more times a month than you need to. It's pretty much the boring stuff that everyone who doesn't have discipline does. There's no big secret. I didn't ...
It's not like you bought a boat.
I didn't buy a boat. I did buy a lot of fountain pens. I really do, that's like my hobby, but I only have two that are crazy expensive. I mean, I think that's what anyone learns is if you're not careful, your lifestyle immediately bounces up to your income. That's just what happens.
Yeah. Do you have any debt other than your home?
No. No. That I don't have.
If someone said that you're rich, how would that strike you?
I mean, emotionally for sure, I would say no, I'm not rich. I'd say most of the last several years I've made top 1% of income. I definitely am not top 1% of wealth. Amartya Sen, the Nobel Prize winning economist had a book, Development as Freedom, and talked about what do you get for money? And it's inability to do the things you want to do. And I'd say from that standpoint, I do feel extremely rich.
I mean, I'm curious because it sounds like you really are just doing what you enjoy and the money is coming in and you kind of have gotten to experience the elite side of journalism in terms of really making a name for yourself and working on high profile projects, and you kind of have your own brand. And I'm curious if for whatever reason that weren't the case, but you were still able to do journalism, would you still do it if the pay experience were more like what it is for most journalists, if you were making 80k?
A few things. One is you said, I'm doing what I enjoy and the money comes, but part of that is because part of what I enjoy is figuring out how to make the money come.
Yes, yes, yes.
It's not like I just have a bunch of hobbies and somehow they randomly make money. I'm choosing to do things that meet a set of criteria. It's like I kind of have a little rule for myself that everything I do, is it fun? Is it lucrative? Does it bring me some glory? Which I define as does it open up more opportunities or support future opportunities, and does it have some kind of mission to the world? And very few things are all four, but things should be at least one or two or three of those. And I find it's exciting to do trade-offs. I think the way I used to see the world and the way a lot of my friends I notice see the world is like, "Oh, if I start making money, I have to violate all my ethics." And it's like, no, that's just part of the decision making.
But I really like researching things. I like learning about new things. I like interviewing people. I like writing things that people like to read. I like everything about journalism. And I think if I were suddenly completely so wealthy that I truly never needed another penny, I would still do that. All of that. What I just came to not be able to do, literally could not be able to do, is do all that for a boss or an editor who makes decisions I don't agree with. I mean, for many, many, many years, that's all I did.
If you're running a publication or you're running a desk at a publication, you got an important job to do. And you can't have the New Yorker or the New York Times or NPR, just like what we do is whatever the writers and reporters feel like doing. Obviously that's ridiculous. And I'm not upset that I did spend several years working for bosses and working for editors. I think I learned a ton. I think I probably didn't have great ideas, but I've just reached a point where I don't want to do that, full stop. I think there's an employee mindset that many people have naturally that I had for many years, which is like money is a thing a boss gives you, and you get it from that boss, and then at some point you might decide to quit and then you'll have a new boss. And I now don't have that mindset.
My mindset is money is a byproduct of creating value, and there's lots and lots of ways to create value. Money can also be a byproduct of trying and failing to create value. Many of the things that have paid me well were failures ultimately. Leaving the New Yorker out of it, I think broadly speaking, one of the reasons media is going through a very hard time, or at least traditional media, legacy media, established media, is that I think as a rule, they're not really good at figuring out the business case, figuring out how money works. That to me is part of it. Like, "Wait, I got to rewrite this whole piece because you guys haven't figured out a business model for high value news? Maybe you should figure that out, or maybe I'll figure that out, or at least I'll try something." Those are the thoughts that go through my head when I even think about writing for a publication. It's like you're not just writing for that person, that editor, or that audience. You're writing for that business model. And I'm not a big fan of those business models.
How you feel about the labor movement in journalism?
I mean, on the one hand, of course people have every right to organize and collectively bargain, and definitely there's incredible taking advantage in journalism like in many other industries. If you are going to be a staff person at a publication and that publication's going to have a lot of staff people, I think a labor union makes sense. But for me, fundamentally, I'm a business person. I'm a company. It's just not a model that applies. In fact, it's illegal. The National Labor Relations Act applies to employees. It doesn't apply to businesses.
But as I understand it, when you were at the New Yorker, you were not in favor of the unionization drive there.
No, no. There's been a lot that was misreported. There was a unionization drive of the staff, people in the office, assistant editors and fact checkers, and totally supportive if that's what they wanted. Separately, writers were not employees, and so we weren't unionizable. From a legal standpoint, 1099 contract employees or just a bunch of corporations. The labor union that organized the office workers wanted us to reclassify as employees so that we could be unionized. And for a while I thought that was a good idea, but the more I learned about it, the more I realized that for me personally, it would be very constraining, that I did not want to be a staff person anywhere. I'll also say I felt that the union misrepresented itself with the writers, and I'm definitely not alone in that. And so I just lost a lot of confidence in that particular union drive.
If someone's going to be a staffer at a publication, unionization can be a very good way to go. Personally, I never, ever, ever want to be a staffer anywhere. And I feel like that gives me way more bargaining power, although not collective bargaining power, but I never said someone else shouldn't unionize or that I'm against other people unionizing. And it wasn't just me. I mean, the writers did not unionize, full stop. I had no power. I had no ability to make anyone else do anything. I think that the whole move towards taking autonomy over your career and your financial life, I think necessitates essentially being a free agent. It's a lot like the world Adam Smith describes in The Wealth of Nations, you're able to enter and exit contracts, business deals fairly fluidly and easily, and there's hustling involved, there's constantly monitoring and being sensitive to how are you creating value and what are better ways or worse ways? And so it's definitely not for everybody. And it can be exhausting. It can be risky, it can be all sorts of things that having a trusted union or non-union staff job doesn't have.
When I started in journalism in the early 1990s, it was still reasonable to think, "I'm going to jump through a few hoops, and by the time I'm 28, I'm just going to be on this career track, and I could do super well and eventually make 180,000 a year. I could kind of stay at more regional local places and make 80 or 90 grand a year." But it's fairly constrained and it's fairly reliable, and there's kind of a give and take. You give up some income in exchange for certainty, and I think anyone who's paying attention should understand that big institutional places, to me, that is the riskiest thing of all.
Yeah, to tie your fate to this brand. Yeah. Well, and I want to talk about your book, The Passion Economy, really quickly, because I would be sad if we left that out. Basically, one of the things you argue in the book is that it's never been a better time to make money off of your passions, that because of the internet, because of the way the economy works now, you can be your own brand and you can uniquely provide value in a way that you couldn't before when work was more oriented toward working for a boss.
Yeah, and it's not that you just get to do whatever you feel like and you'll make money, but there are tools that can allow you if you ask the right questions and have some discipline and some experimental. Yeah, I think it's clearly true, and there's lots and lots of people doing it. There are lots and lots of ways. I mean, for most of human history, people generally did what their parents did. There was very narrow range of options, and that's even true for the very wealthy and powerful.
Their wealth and power was tied to playing very specific roles, and anything that even looks like entrepreneurship was pretty rare in the ancient world. It existed, but pretty rare. Then we had a 20th century where we had this massive rigidity that meant the best economic opportunity came from joining yourself to a large organization, playing a very specific role within it, and a very small number of people are making big choices. You just look at the mix of products in the 20th century, the mix of organizations like there's such slow change. Now there's so much you can do.
Yeah, and one of the examples that is still in my brain from your book is this brush company that made a bunch of different kinds of brushes, I'm guessing like brushes for hair and for horses, and I don't even know, like toothbrushes. And with globalization, that company could have faced a lot of threat from Chinese manufacturers or any number of other companies that could just come in and make brushes more cheaply. But this company pivoted at some point and realized they had certain clients that they could make these brushes for this specific equipment that would clean this machinery in this specific way that would allow them to sell their brushes for a lot more because the value they were providing was worth millions of dollars. If a certain piece of equipment weren't cleaned correctly, there could be a fire or an explosion. And so then this company was able to sell their brushes for thousands of dollars, which sounds crazy in one sense because it's just a brush. But basically the idea of hyper specialization can actually unlock this whole new industry for yourself. And that, I guess they would say brushes are their passion.
But it fundamentally shifted how they were adding and capturing values. Before they were taking raw material, wood and nylon and glue and whatever, and making brushes. The added value was that they assembled these brushes, and the more they could assemble and the faster they could assemble them, the more money they'd make, and they shifted it to the value they're adding is thinking about brushes. The actual physical object was not the value. It was the ideas around the brushes, the specification, the quality. And that I think is similar to journalism, where is the value that you wrote 800 words, and if you didn't write the 800 words, someone else would write 800 words? Or is the value that you have a unique perspective?
Other People's Pockets is written and hosted by me, Maya Lau. It's produced by me, Joy Sanford, and Dann Gallucci, production help by Angela Vang. Our executive producers are me, Maya Lau, along with Jane Marie and Dann Gallucci. Special thanks to Artist Housing. Other People's Pockets is a production of Pushkin Industries. If you love this show, consider subscribing to Pushkin Plus, offering bonus content and ad free listening across our network for $4.99 a month. Look for the Pushkin Plus channel on Apple Podcast or at Pushkin.fm. To find more Pushkin podcasts, listen to the iHeartRadio app or Apple Podcast, or wherever you listen. You can sign up for Pushkin newsletters at Pushkin.fm.