Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This week on the
Speaker 1: podcast My Somewhat Special Guest, Jack Rains is a venture
Speaker 1: capitalist and author. I've been reading a substack for a
Speaker 1: couple of years and always found it quite entertaining and interesting.
Speaker 1: His new book Young Money, A field Guide to Wealth
Speaker 1: and Purpose in your twenties, is really interesting and wise
Speaker 1: beyond its years. I wish I had access to a
Speaker 1: book like this one hundred years ago when I was
Speaker 1: in my twenties. I thought this conversation was fascinating. I
Speaker 1: think you will also, with no further ado, my interview
Speaker 1: of Jack Rains. Jack Rains, Welcome to Bloomberg.
Speaker 2: I mean, the extra special guest is way too kind,
Speaker 2: but so my special guest, my normally special guest.
Speaker 1: I wouldn't want to call him like my young guest.
Speaker 1: My you know, I painted myself into the corner with
Speaker 1: extra special guests. Why once you go that way, you
Speaker 1: can never go back.
Speaker 2: I'll take it.
Speaker 1: Here's my special guest. Really, what's wrong with Jack? He's
Speaker 1: a special were a cowboy hat? That's right. Well we'll
Speaker 1: get into that a little bit. So let's roll back
Speaker 1: so many years ago to when you're undergraduate studying finance
Speaker 1: in Spanish while playing football and mercer. That was before
Speaker 1: you got your MBA from Columbia. Was there ever a
Speaker 1: career plan?
Speaker 2: Like, not really, it was just I don't know. I
Speaker 2: feel like basically every white dude ends up studying finance
Speaker 2: unless they're dead set on going to like med school,
Speaker 2: law school, or like computer science. So it was study finance,
Speaker 2: and then I was set to graduate in two and
Speaker 2: a half years because we had to take summer classes
Speaker 2: with football, and I was like, I should double major
Speaker 2: finance and marketing is stupid. I don't like computer science.
Speaker 2: Let's pick up Spanish because it feels like that could
Speaker 2: be marginally used living in the South. Spanish is very
Speaker 2: assiassi right now, but it's like sufficient. There was no
Speaker 2: real career path other than figure it out from there.
Speaker 1: That's intriguing. I'm cracking up because they have so many
Speaker 1: different ways to go with this. First gig out of
Speaker 1: school was a corporate finance at UPS, which you described
Speaker 1: as mostly moving a mouse around the screen and trying
Speaker 1: to look busy. Correct tell us about your experience in
Speaker 1: corporate finance.
Speaker 2: Yeah, I mean to set the stage a little bit.
Speaker 2: I graduated in December twenty nineteen, which was probably the
Speaker 2: worst possible date to graduate, given that COVID started like
Speaker 2: three weeks after that. So I moved to Atlanta in
Speaker 2: January or February of twenty twenty start working for UPS.
Speaker 2: I'm in the office for three days, my computer isn't
Speaker 2: even fully online yet, and then we're told that we're
Speaker 2: going remote for one week and then one month, and
Speaker 2: then everybody had the same experience where a year and
Speaker 2: a half later you're still remote. So I don't think
Speaker 2: it's great to be a twenty two year old who's
Speaker 2: never had a real job who's then told you're going
Speaker 2: to work from home while you have like your Xbox
Speaker 2: and all of your friends like doing the same thing.
Speaker 2: And it was actually like a terrible environment to like
Speaker 2: start learning how to be a worker. And yeah, it
Speaker 2: was just zoom calls, Excel sheets like modeling out fuel
Speaker 2: cost projections and forecast for UPS for like twenty twenty two. Yeah,
Speaker 2: I was honestly bored the whole time. And to build
Speaker 2: on top of that, I had gotten to business school
Speaker 2: out of undergrad so like Columbia, I went to business
Speaker 2: school at Columbia, and they have a deferred enrollment program
Speaker 2: where when you're a senior in college, you apply and
Speaker 2: then you work a few years and go to business school.
Speaker 2: So I knew that I was going to go to
Speaker 2: grad school in like three years. Covid hit. I was
Speaker 2: super bored working remote, just doing basically nothing, and it
Speaker 2: just kind of felt like I was in a work
Speaker 2: from home purgatory for about eighteen months.
Speaker 1: So having that window where, hey, I know where I'm
Speaker 1: going to be eighteen months from now in September of
Speaker 1: twenty twenty blank, what led you to say, I think
Speaker 1: I'm going to quit and just buy a one way
Speaker 1: ticket to Barcelona and travel the world. Like that's a
Speaker 1: giant leap, which not a lot of people have the
Speaker 1: nerve to make. What led to that decision?
Speaker 2: So, Like, when I was a kid, I always loved
Speaker 2: to travel, and my grandparents would take me everywhere.
Speaker 1: Your grandma took you on a crazy trip you described
Speaker 1: in the book to Savannah in Africa.
Speaker 2: Yeah. Yeah, when I was eleven, my grandma Mama roof,
Speaker 2: she I'm the oldest grandkid in the family, and she
Speaker 2: hit me with the idea that she wanted to take
Speaker 2: me on a trip like anywhere in the world I
Speaker 2: wanted to go. I actually didn't know if she literally
Speaker 2: met anywhere. I wanted to go, somewhere crazy, like Africa
Speaker 2: or Asia. And we lived in South Georgia. Initially I
Speaker 2: pitched Costa Rica and she said, too, you can. Yeah,
Speaker 2: she said, like, that's like a three hour flight. I
Speaker 2: was like, okay, Like I thought the like I had
Speaker 2: a big map in my room as a kid, I
Speaker 2: thought it'd be cool to go to the Ngoragora Crater
Speaker 2: and see Mount Kilimanjarro and all this stuff. So she
Speaker 2: took me and we went, and we went on a
Speaker 2: two week safari and it was awesome. And then in
Speaker 2: college I studied abroad in Spain. One summer, I went
Speaker 2: to France. One summer with my best friend from college,
Speaker 2: I did a service trip to Ecuador. Like I always
Speaker 2: loved leaving the US, and it was kind of a
Speaker 2: thing in the back of my head where I knew,
Speaker 2: at some point in my twenties it would be really
Speaker 2: fun to do like a multi month trip abroad with
Speaker 2: like no itinerary other than just see other stuff. And
Speaker 2: I was sitting there, It's like you have this, You're
Speaker 2: working remote for eighteen months on your board, and then I,
Speaker 2: for better or worse, had a fortuitous run trading spacks
Speaker 2: and spack warrants during the pandemic, which gave me enough.
Speaker 2: It gave me more money than I expected to have
Speaker 2: at twenty three or twenty four, where I was like,
Speaker 2: I mean, I I don't it wouldn't cost that much
Speaker 2: to just go hostile hop Europe in Latin America for
Speaker 2: a year.
Speaker 1: Yeah, I'm glad you were up. You're not a trust
Speaker 1: fund budd it, but baby, in any stretch of the imagination, no,
Speaker 1: you scrape together some money, you fly coach, you staying
Speaker 1: in hostels. You have ten roommates in these.
Speaker 2: Places, eating like McDonald's or Euros or whatever. Every day.
Speaker 2: It was the best. I mean, I got food poisoning oneside,
Speaker 2: It was fun. It was fun.
Speaker 1: The more recently, you wrote a story about going to
Speaker 1: someone's winning and I think it was India and a
Speaker 1: bunch of people got food poisoning and it was hilarious.
Speaker 2: It feels a little bit like India right now in
Speaker 2: New York. It's like the air quality today as of
Speaker 2: recording is pretty similar.
Speaker 1: To those Canadian fires. Are you walk out, it smells
Speaker 1: like a bar because it's yellow.
Speaker 2: It's like for microdosing New Deli era. Right now, it's great,
Speaker 2: it's good stuff.
Speaker 1: Only without the e coli that you described. But let's
Speaker 1: bring it back to your career. So, so you do
Speaker 1: this trip, you go through a couple of dozen countries,
Speaker 1: you meet people that you're still friendly with. It was
Speaker 1: really fascinating, and you get to business school. How do
Speaker 1: you adjust? How do you make that transition?
Speaker 2: Yeah? It was. It was interesting. Like I in the
Speaker 2: back of my head, I kind of knew I had
Speaker 2: this start date moving to New York in August twenty
Speaker 2: twenty two. So I eventually quit my previous job, first
Speaker 2: job out of college in August twenty one. It was
Speaker 2: kind of like, all right, let's spend a year and
Speaker 2: just have as much fun as physically possible, knowing that
Speaker 2: then we're gonna go to grad school. Then we'll do
Speaker 2: our career in New York and YadA, YadA, YadA. It
Speaker 2: was funny because it was at first weird, like being
Speaker 2: like I spent basically a full year out of the country,
Speaker 2: jumping around a lot, and then you're in New York
Speaker 2: and you have like a home base and you have
Speaker 2: a business school. Is not a particularly strenuous thing, but
Speaker 2: you do have a set schedule where you have classes
Speaker 2: and stuff. I loved it though, I mean, I love Columbia, honestly,
Speaker 2: I love New York in general, best city in the world,
Speaker 2: particularly in your twenties. And it took a couple of
Speaker 2: months to really get in the flow of like living
Speaker 2: here and then also like you're meeting hundreds of new
Speaker 2: people like that, but actually getting integrated not hard. It
Speaker 2: felt like a perfect.
Speaker 1: Fit, really really interesting. So I'm curious. You learn a
Speaker 1: lot of things in both your office career or remote
Speaker 1: work from home career and business school. What did you
Speaker 1: learn about finance, money time while you were traveling.
Speaker 2: I mean, the biggest thing that really jumped out was
Speaker 2: It's something I write about a lot in the book,
Speaker 2: like the I call it the stage specificity of life.
Speaker 2: But by that I mean that it's pretty easy to
Speaker 2: conceptualize money, like what you're taught from like in high school,
Speaker 2: how money compounds over time if you invest in and
Speaker 2: it's you know, you should be frugal and save up money,
Speaker 2: but what you miss is like what's the optimal time
Speaker 2: to spend that money on different things? And the example
Speaker 2: that I give a lot is like I was twenty
Speaker 2: four and like sleeping in a bunk bed in the
Speaker 2: hostel with twelve roommates or whatever, and it was actually
Speaker 2: just a hilarious setup. Like it's just a bunch of nonsense.
Speaker 2: You have a French guy here and then like a
Speaker 2: Mexican girl here, and it's like half the a lot
Speaker 2: of the dorms are co ed, and it's like it's
Speaker 2: like summer camp for like young adults. But then occasionally
Speaker 2: you meet somebody in their like early thirties staying in
Speaker 2: the same hostel and it's like you can almost tell
Speaker 2: that they noticed they're like probably six or seven years
Speaker 2: too late to have done that type of trip. And
Speaker 2: like the biggest takeaway from traveling was like if I
Speaker 2: really wanted to do this trip, this was the like
Speaker 2: this was the right window to do this. Like I
Speaker 2: optimized like that phase of my life correctly for somebody
Speaker 2: who wanted to do that type of thing. And that's
Speaker 2: kind of what stuck with me the most after is
Speaker 2: not just being aware of what you want to get
Speaker 2: out of life, but like what things have deadlines, where
Speaker 2: like if that window of opportunity closes, you're just not
Speaker 2: gonna be able to maximize your like fulfillment or enjoyment
Speaker 2: or utility from that experience. Like every basically everything you
Speaker 2: do in life has an expiration date for when you
Speaker 2: would enjoy the most you can.
Speaker 1: You can go cheap and cheerful in your twenties, maybe
Speaker 1: even early thirties, but not much past. Correct, So you
Speaker 1: were also writing before the trip and during the trip.
Speaker 1: Tell us a little bit about your experience, what you
Speaker 1: discovered about yourself as you're writing, and why you thought
Speaker 1: that might be a career path.
Speaker 2: So like, Hilariously, when I was doing the whole spac
Speaker 2: trading thing in twenty twenty and twenty twenty one, I
Speaker 2: had a burner Reddit account called Barmelo's Anthony. It's a
Speaker 2: play on words on Barmelo, Carmelo, Anthony, and xanax bars.
Speaker 2: It was my name of my college group me. We
Speaker 2: all had edgy like drug related famous person combination names.
Speaker 2: I was writing so much stuff about, Like, oh, like
Speaker 2: Apollo changed the background header of their website from oil
Speaker 2: rigs to windmills. I think they're going to take an
Speaker 2: ev company public through a spack And then they announced
Speaker 2: a deal with Fiscarado motive. Three weeks later it was
Speaker 2: like borderline conspiracy theory stuff, but it worked a lot
Speaker 2: of it worked. Yeah, So I like always liked just
Speaker 2: writing about like stuff I was seeing going on in markets.
Speaker 2: And then when I was when I was traveling, I
Speaker 2: tried to get hired by The Morning Brew, the Hustle,
Speaker 2: a few different like kind of upstart ish media companies.
Speaker 2: Nobody would hire me for lack of like professional writing experience.
Speaker 2: So I just started writing, like I just launched a
Speaker 2: sub stack and started writing a newsletter. And it was
Speaker 2: like half investing in finance and half travel blog, like
Speaker 2: detailing everything I was doing day to day, who I
Speaker 2: was meeting, and I just enjoyed it, Like it's writing
Speaker 2: something I've always found fun. I've always found it a
Speaker 2: bit cathartic, like putting your thoughts on paper, and it's
Speaker 2: a good I don't know, I think it's like a
Speaker 2: good exercise for anybody to really like distill what you
Speaker 2: think about a thing is try to sit down and
Speaker 2: put pin on paper.
Speaker 1: So Daniel Borston, the Librarian to Congress is famous quote,
Speaker 1: I write to figure out what I think.
Speaker 2: Yep.
Speaker 1: And besides, at that hour, the bars were all closed.
Speaker 2: Yep.
Speaker 1: So you know, until you put it down, until you
Speaker 1: put pen to paper, a finger to keyboard, it's sort
Speaker 1: of nebulous and not distinct. Once you write it there
Speaker 1: it is black and white. Yeah. Yeah, so for sure.
Speaker 1: So you come out of Columbia, what's the first gig
Speaker 1: you're doing while you're while you're a new grad.
Speaker 2: So, so to step back a little bit, when I
Speaker 2: was still in business school, I kind of had this like,
Speaker 2: I think investing in financial markets are interesting. I really
Speaker 2: like writing. I had like monetize my newsletter fairly well
Speaker 2: selling ads, and I was kind of trying to figure
Speaker 2: out which way I wanted to lean with it. And
Speaker 2: then I had some publishers who were like loosely interested
Speaker 2: in me maybe writing a book. So I wanted to
Speaker 2: leave the book writing door open. And I interned for
Speaker 2: a venture capital fund called Red Point Ventures my first year,
Speaker 2: helping them with like building up a newsletter and like
Speaker 2: editorial strategy and all that stuff. It was like love
Speaker 2: the team there, it was great. My takeaway from that
Speaker 2: was I should either like go do media or I
Speaker 2: should like push you get in like investing seat somewhere,
Speaker 2: not split the middle and do like the marketing arm
Speaker 2: of an investment group. So going into my second year,
Speaker 2: Sam Row, you know, Front of the Show. He was
Speaker 2: like contracted by Robin Hood to help them with the
Speaker 2: hiring for they were building out a media subsidiary called
Speaker 2: Sherwood News. We grabbed coffee and he was like, I
Speaker 2: don't know what your plan is after business school. I
Speaker 2: think you'd be a good fit with what they're building here.
Speaker 2: And he started telling me about it, and it checked
Speaker 2: a lot of boxes of like, on one hand, it
Speaker 2: was kind of an upstart new media thing with like
Speaker 2: I would have a lot of autonomy. On the other hand,
Speaker 2: we were surrounded by the structure of like a big
Speaker 2: fintech company, so, like media is a tough business these days,
Speaker 2: and there was a lot more stability there from like
Speaker 2: financial backing.
Speaker 1: Tell me about having a media outlet attached to a
Speaker 1: large fintech or data services company.
Speaker 2: The entire pitch was just trying to like basically make
Speaker 2: a new Age Bloomberg tell you the truth.
Speaker 1: Did you guys get any hood stock?
Speaker 2: Yeah? Yeah, yeah, so not.
Speaker 1: Terrible, not terrible.
Speaker 2: I mean the issue was I only worked there for
Speaker 2: a year, so it's not like I got that much
Speaker 2: but like it. Yeah, like I wish I would have
Speaker 2: I wish I would have gotten more, and I wish
Speaker 2: I would have stayed longer had I gotten more, is
Speaker 2: the takeaway from that. But yeah, I ended up ended
Speaker 2: up joining them during my second year. I signed the
Speaker 2: book deal for that book the summer after I graduated.
Speaker 2: It's about two years ago now, and then I was
Speaker 2: sitting there and I just like everything was fine. But
Speaker 2: I realized after working in a like more structured media environment,
Speaker 2: I actually like like I like writing a blog. I
Speaker 2: like kind of free range putting stuff on the internet,
Speaker 2: but like I didn't like the actual like like call
Speaker 2: it nine to five employed version of like financial media,
Speaker 2: and my like it kind of clicked to my head
Speaker 2: that when I was at that point of investing thing
Speaker 2: versus like media, I actually probably should have gone investing track,
Speaker 2: but I was so hyper focused on like I don't
Speaker 2: want to kill a potential book deal momentum and this
Speaker 2: and that that I took the other one and I
Speaker 2: had like a total career panic, like to almost too
Speaker 2: most two years ago, like fall twenty four.
Speaker 1: And there is something to be said about the daily
Speaker 1: beast that must be fed when you're on a regular deadline,
Speaker 1: Like that's tough. Yeah, no, it's brutal. And it's why
Speaker 1: there's so much content that's so useless, because hey, there
Speaker 1: are minutes and hours to fill in column inches and
Speaker 1: the infinite more of the Internet. I mean, it just
Speaker 1: never stops. So that's why we have this fire hose. So,
Speaker 1: so you had done Young Money as a sub stack,
Speaker 1: you had done Sherwood for Robinhood. I'm kind of fast
Speaker 1: anybody in an essay you did how I lost one
Speaker 1: hundred and fifty thousand dollars in a day trading SPACs
Speaker 1: yep way back in twenty one. Tell us about your
Speaker 1: ramp up in the spac world and then the blow up.
Speaker 2: Oh it was, I mean it was awesome, like like
Speaker 2: I like I was. I don't know if you would
Speaker 2: have checked my pulse or stress levels at that point
Speaker 2: they were through the roof, but like it was crazy.
Speaker 2: So it's like, right when the pandemic hit, I thought
Speaker 2: I was like the next Michael Burry. I had like
Speaker 2: ten thousand dollars in my checking account, threw it all
Speaker 2: in spy puts. They tripled because obviously the market was
Speaker 2: going to take and I was like, yeah, I'm him,
Speaker 2: and then you know Bill Ackman. A week later, it
Speaker 2: was like crying on CNBC say the world's going to hell,
Speaker 2: and I was like, SMP's going to like a thousand,
Speaker 2: let's do it again, let's buy more puts. You know,
Speaker 2: I actually, having not really been an adult during eight
Speaker 2: I completely underestimated like the FED and quantitative easy.
Speaker 1: And how that could work and how fast that turn is.
Speaker 2: Like I my face got melted off. I shortened the
Speaker 2: actual bottom and then I basically round tripped ten thousand
Speaker 2: dollars to thirty back to ten. I have my tailtop
Speaker 2: between my legs and I was like, I'm never trading
Speaker 2: a stock.
Speaker 1: Did you ever feel the need to reach over to
Speaker 1: the waste paper basket and throw up? No?
Speaker 2: But like if it had been bigger numbers, maybe, so
Speaker 2: I'm like, I'm never going to trade stocks again. I
Speaker 2: put six thousand dollars in. I opened like a roth
Speaker 2: Ira do my one contribution first years a you know,
Speaker 2: adult working, and I don't look at it for a month.
Speaker 2: And then in May my friend Jake Buddy from undergrad
Speaker 2: was like, do you know what a spack is? I
Speaker 2: say no, and he's like, well, if you buy this
Speaker 2: Desert Eagle spack, It'll turn into DraftKings stock in like
Speaker 2: two months. And I was like, it's like like an ipo,
Speaker 2: and he's like, I don't know, dude, I just saw
Speaker 2: on the internet. If I buy this, you owned Draft Kings.
Speaker 2: And I was like, okay, I went now the rabbit
Speaker 2: hole was looking at it, and it's like.
Speaker 1: And it's a pars. It's before it comes out. It
Speaker 1: was it trading? It was it did trade up.
Speaker 2: It was trading because so the par on most spacks
Speaker 2: is like ten dollars, and it was trading at like
Speaker 2: twelve or thirteen. Oh really maybe fifteen. But the warrants
Speaker 2: had like doubled or tripled, right, because all the warrants
Speaker 2: have a strike price of eleven fifty. So then I
Speaker 2: had like traded options enough. I understood like strike prices,
Speaker 2: expiration dates, whatever. And the thing that jumps out was
Speaker 2: that warrants don't expire for five years and they have
Speaker 2: an eleven fifty strike price. So I was doing the
Speaker 2: math and I watched DraftKings. After the merger happened, it
Speaker 2: ran out to the warrants ran up to eight or
Speaker 2: nine dollars. You would have doubled on the stock. We
Speaker 2: would have made like nine x on the warrants if
Speaker 2: you bought them at a dollar, like at peak pandemic collapse.
Speaker 1: So I was like, okay, if like this is easy, well,
Speaker 1: I was.
Speaker 2: Just like spacks obviously kind of seemed like a bubble
Speaker 2: right now, because there'd been like Nikolai Motors had announce
Speaker 2: a Spack and there were a couple of others, and
Speaker 2: I was just like, I bet that this thing is
Speaker 2: gonna like this is just gonna be a game for
Speaker 2: a little while. And if I can just pick the
Speaker 2: spack warrants early, I bet I can make money. So
Speaker 2: Nicola warrants to trade at three dollars, I bought six
Speaker 2: thousand dollars worth. I made like twelve grand a couple
Speaker 2: weeks later, and then I just kept rinting and repeating
Speaker 2: spack warrants, and like six months later, I got from
Speaker 2: six grand to one hundred and fifty grand, and I
Speaker 2: was like, this is so easy.
Speaker 1: So then I, by the way, oh that that should
Speaker 1: immediately set bells off.
Speaker 2: I doubled down, though it didn't set off any bells,
Speaker 2: because then I was like, okay, it did set off
Speaker 2: one bell. I was like, warrants are risky, and if
Speaker 2: any of these deals collapses, the warrants go to zero,
Speaker 2: I should start buying the shares close to NAV as possible.
Speaker 2: So I was in like an online discord chat with
Speaker 2: a lot of other anonymous people. We built some web
Speaker 2: scrapers that will pull every spac SEC filing, so as
Speaker 2: soon as the filing hit the press, like trading halts,
Speaker 2: when news comes out for a spec, I would get
Speaker 2: a push notification, open up the deck, skim it. If
Speaker 2: it was electric vehicles, marijuana, outer space, sports, betting, or
Speaker 2: renewable energy, I would go all in unless the unless
Speaker 2: the like valuation of the deal was just egregious, I
Speaker 2: would go all in. And I knew that the stock
Speaker 2: would probably pop like at least thirty or forty percent,
Speaker 2: because they just did every time. So you get in
Speaker 2: an eleven, your max loss is probably like five percent
Speaker 2: on any trade, and you sell it fourteen or fifteen,
Speaker 2: so you're basically risking five percent to make forty percent.
Speaker 1: Of asymmetrical risk reward. That's what you want.
Speaker 2: And I did that like seven times in a row,
Speaker 2: and then I went from one fifty to four hundred
Speaker 2: and like I'd only risked on any given trade, like
Speaker 2: five percent of my portfolio, and they didn't all hit,
Speaker 2: but like enough did that it didn't matter. And my dad, obviously,
Speaker 2: I kept telling him what I was doing, and I
Speaker 2: hit like it was February twenty twenty one, and he
Speaker 2: called me and he was like, you should probably just
Speaker 2: sell and just put it in like an index fund.
Speaker 2: And I was like, I knew this two more times,
Speaker 2: I'll have a million dollars at twenty four. I'm pretty
Speaker 2: sure I can get there. That should have been the.
Speaker 1: Screen is the bell ringing that?
Speaker 2: And then when he and his brother were talking to
Speaker 2: me about potentially managing some of our family's money. You
Speaker 2: shouldn't have your twenty four year old kid, he just
Speaker 2: made six thousand percent trading spacks, touching your grandparents like
Speaker 2: retirement money. I did not, thankfully. I said, I don't
Speaker 2: feel comfortable doing that. I'm okay. I was self aware
Speaker 2: enough to know that would have been a bad idea.
Speaker 2: So getting to how I lose the money at this point,
Speaker 2: way too many spacks. Shaquille O'Neil has a spack, Paul
Speaker 2: Ryan has a spack. Like everybody and their mother has
Speaker 2: a spack and the bubble didn't pop. It just stopped
Speaker 2: bubbling because there there was kind of this pool of
Speaker 2: money that was chasing every hot spack and then there's
Speaker 2: like one hundred of them on the market. Somebody announce
Speaker 2: is a deal, the terms are getting worse and worse,
Speaker 2: and the value.
Speaker 1: You're watching this to k in real time.
Speaker 2: Yeah, And it was like by April May of that year,
Speaker 2: it's getting tougher and like a deal would get announced
Speaker 2: might jump ten percent. You're just I was like I
Speaker 2: was addicted to the rush. So there was a buy now,
Speaker 2: pay later company called Catapult. Eighty percent of the revenue
Speaker 2: came from Wayfair, obviously a pandemic darling. And this is
Speaker 2: at the time when Square bought After Pay for like
Speaker 2: thirty billion dollars crazy price. A firm went public at
Speaker 2: like a thirty billion dollar valuation, and like these companies
Speaker 2: were growing slower than Catapult because Catapult was just a
Speaker 2: derivative of Wayfair, which is a pandemic darling. They were
Speaker 2: less profitable and I was just like, Catapult's gonna have
Speaker 2: their earnings in August. They've had no cell side coverage.
Speaker 2: I just need like one analyst from like Morgan Stanley
Speaker 2: or whatever to initiate like a buy the stock's gonna double,
Speaker 2: I'm gonna buy a bunch of warrants at like a
Speaker 2: dollar fifty they're gonna rip. And then this thing, like
Speaker 2: I'm gonna make a million dollars on this trade. This
Speaker 2: thing had already gone public through a spac, Like there
Speaker 2: was no floor, that deal was closed. It's just a
Speaker 2: normal company.
Speaker 1: So not your traditional spac trades that you've been doing.
Speaker 2: It had gone public through a spack and it's just
Speaker 2: like a normal company at this point. And I I
Speaker 2: just aped into it with like three hundred I think
Speaker 2: I had like three hundred and thirty thousand dollars at
Speaker 2: that point. Just went all in and it started like
Speaker 2: inching down and spike back up leading up to earnings,
Speaker 2: like I had four different times I could have gone
Speaker 2: out with like a ten percent loss, and I was
Speaker 2: just like I was just pot committed to, like this
Speaker 2: is gonna be the millionaire trade. They missed earning so
Speaker 2: badly that the stock fell. I think the stock fell
Speaker 2: twenty percent before market opened on like August eleventh, and
Speaker 2: the warrants immediately got cut in half by like fifty.
Speaker 1: Percent and that's one hundred and fifty grand.
Speaker 2: Yeah, and I'm just I'm looking at it. I'm looking
Speaker 2: at the like level two trading data, and there's there's
Speaker 2: a big buy for like like one hundred thousand warrants
Speaker 2: at a dollar or whatever, and then there's the floor
Speaker 2: collapses under and I was like, huh, I'm just gonna like,
Speaker 2: I'm just gonna sell to that entire bit and just
Speaker 2: eat it, and like I'm getting out before like the
Speaker 2: whole thing that's rug pulled, which was the right move
Speaker 2: because I basically liquidated my position pre market from like
Speaker 2: three hundred thousand dollars like one hundred and fifty or whatever.
Speaker 2: And I was just like, man, that sucks, put in
Speaker 2: the SMP, and then just went to the gym and
Speaker 2: worked out for like real self loathing workout for three hours.
Speaker 1: You know that that sort of big wackage is a
Speaker 1: rite of passage of anybody that's ever worked on a
Speaker 1: trading desk. I don't care if you're at you're at
Speaker 1: Jane Street or if you're day trading from home. Those
Speaker 1: losses are just so seminal and so instructive and focus
Speaker 1: you on, Hey, what's my risk management. What's my edge here?
Speaker 1: What am I really doing? Swing for the fences? Am
Speaker 1: I really putting fifty or one hundred percent of my
Speaker 1: portfolio into one trade? That seems kind of like you
Speaker 1: you you could read that in a book, but until
Speaker 1: you've lived it, it's really challenging.
Speaker 2: The issue for me was like the plan I had
Speaker 2: initially of like buy spacks near navs, sell when they pomp,
Speaker 2: was like a good strategy. And if I'd stuck with that,
Speaker 2: even if it stopped working, it's like, Okay.
Speaker 1: The down side is the minimus, we made.
Speaker 2: A bunch of money, this trade doesn't work, just like
Speaker 2: parking index fund until any right, yeah, and then like
Speaker 2: either come up with something new or just stop. The
Speaker 2: issue was I was so used to number going up.
Speaker 2: I was kind of willing to bet the house I'm
Speaker 2: doing it one more time, then I'm confident I hit
Speaker 2: a million. I would have walked away like that was
Speaker 2: just like a benchmark numbers.
Speaker 1: Oh you should know that when you hit, you would
Speaker 1: not have whiked away. Junkies don't say one more hit,
Speaker 1: and gamblers don't say, I just need this parlay to
Speaker 1: come in and then I'm good because you're always looking
Speaker 1: for the for the dopamine, hit for the adrenaline.
Speaker 2: I would have found something else to speculate on. But
Speaker 2: I think I would have stopped trading SPACs had that happened.
Speaker 1: Coming up, we continue our conversation with Jack Rains, discussing
Speaker 1: Slow Ventures and investing in creators. I'm Barry rid Halts.
Speaker 1: You're listening to Masters in Business on Bloomberg Radio. I'm
Speaker 1: Barry Ridults. You're listening to Masters in Business on Bloomberg Radio.
Speaker 1: My uh, somewhat special guests. Is that how you want
Speaker 1: to be? Is that how you described it? Said?
Speaker 2: Marginally special?
Speaker 1: My marginally special guest, Jack Rains is here. He is
Speaker 1: an associate at the venture capital firm Slow Ventures and
Speaker 1: the author of the book Young Money, which we'll get
Speaker 1: to in a few minutes. So I'm kind of fascinated
Speaker 1: how you pivoted into VC work. You joined Slow Ventures
Speaker 1: in San Francisco from New York. Did you relocate to
Speaker 1: San Francisco and then come back to New York? So
Speaker 1: I kind of get this venture by coastal.
Speaker 2: I try to. I try to. I try to make
Speaker 2: it look by coastal occasionally on Twitter. No, I mean
Speaker 2: The funny thing was they were hiring in New York
Speaker 2: and San Francisco, and I applied for the New York job,
Speaker 2: and met was the partner in New York first, and
Speaker 2: then the one of the gps in San Francisco, Sam Lesson.
Speaker 2: I get introduced to him by the guy in New
Speaker 2: York and we're on a zoom call. He'd like, just
Speaker 2: come from the gym, super sweaty and like shoveled looking,
Speaker 2: and five minutes you all to say that.
Speaker 1: I'm okay with that.
Speaker 2: I think he would agree with it. Five minutes, five
Speaker 2: minutes out of the call, he's like, what do you
Speaker 2: think of San Francisco? And I said fentannel and homeless people,
Speaker 2: and he was like, it's a crazy ass for somebody
Speaker 2: applying to a job in San Francisco. And I was
Speaker 2: just like, I didn't like I applied for the job
Speaker 2: in New York and he was just kind of like, well,
Speaker 2: I thought I was interviewing you for an SF seat,
Speaker 2: and I was just like he told me to like
Speaker 2: take a beat and like think about it. And I
Speaker 2: can't rememer if I told him on the collar. Just
Speaker 2: texted him right after, but I was like honestly, dude,
Speaker 2: I mean, I want the job, so I didn't know
Speaker 2: this is what I was applying for. But if you
Speaker 2: hire me, I'll move to San Francisco. And he was like,
Speaker 2: have you ever visited? And I said no, so.
Speaker 1: But I've been to twenty five other countries in fifty
Speaker 1: other cities. I'm sure I can figure it out.
Speaker 2: Yeah. The only difference to San Francisco has so many
Speaker 2: more AI startup advertisements on the billboards and the way mos,
Speaker 2: which are awesome. But yeah, like I I mean I.
Speaker 1: And they are everywhere. We were just San Francisco a
Speaker 1: few months ago.
Speaker 2: They're so sick.
Speaker 1: They they're like yellow cabs in New York.
Speaker 2: Yeah, yeah, they're They're incredible. I mean the worst thing
Speaker 2: about New York is that we keep trying to like
Speaker 2: block way Moos. Let it happen. I'm I'm so pro Weemo.
Speaker 2: I'm like Waymo's biggest fanboy. But yeah, like, going back
Speaker 2: to Fall twenty twenty four, I was in this real
Speaker 2: like kind of career panic. I want to get out
Speaker 2: of media, and like I was like I should have
Speaker 2: gone down the investing route, and then you know it's
Speaker 2: like a step back and I had like signed that
Speaker 2: book deal. I was like, Okay, I'm gonna have to
Speaker 2: write a book. I'm gonna have to be able to
Speaker 2: market it. So that means I need to look at
Speaker 2: jobs where I could still have like bandwidth and flexibility
Speaker 2: to do so, which like eliminates a lot of investing
Speaker 2: ease stuff where there's compliance issues.
Speaker 1: No investment banking, no no trading on a desk, and
Speaker 1: no portfolio management or even CFA analysts where whatever you
Speaker 1: do is disclosable and requires approval and it's complex.
Speaker 2: But venture capital is like the biggest, like build your
Speaker 2: personal brand, like content helps you source deals. So I
Speaker 2: kind of honed in on and I didn't have like
Speaker 2: an investment banking back ground. VC is more open to
Speaker 2: non traditional investing backgrounds. It just kind of made sense.
Speaker 2: And I had a decent network in that space from
Speaker 2: like Twitter and riding and all this stuff. So I
Speaker 2: just kind of started pounding the pavement, like reaching out
Speaker 2: to vcs. I knew of my network that may or
Speaker 2: may not be hiring, and Slow happened to be hiring,
Speaker 2: and I messaged hilariously. I messaged Yoni, the partner of
Speaker 2: New York on Blue Sky, that was back when everybody
Speaker 2: I thought Twitter was going to die and blue Sky
Speaker 2: was Blue.
Speaker 1: Sky didn't take off. But it does feel like Twitter
Speaker 1: is kind of ground to a shell.
Speaker 2: Of what it. I think it's starting to come back
Speaker 2: as of like a month ago. Oh really, it feels
Speaker 2: like they changed the algorithm where you can like see
Speaker 2: your mutuals again, so people literally last week Nikita Beer tweeted,
Speaker 2: they tweet the algo so like you're seeing your mutual
Speaker 2: followers and I was like, dude, that's what it should
Speaker 2: have been the whole time. But anyway, I basically got
Speaker 2: hired from a Twitter DM and then a last second
Speaker 2: flight to San Francisco six weeks.
Speaker 1: From application to starting in SF.
Speaker 2: Basically like I didn't know where to live. Facebook Marketplace,
Speaker 2: found some dude with an open room and just hopped
Speaker 2: on a FaceTime with him, and I was just like, yeah, like,
Speaker 2: I guess I'll just take the other half of your apartment.
Speaker 2: And then I moved there. That was I just put
Speaker 2: my stuff in a in a suitcase and just flew out.
Speaker 1: So are you New York based?
Speaker 2: I live in New York now. I moved back here
Speaker 2: a few months ago, all.
Speaker 1: Right, And and how do you how do you work
Speaker 1: that out if your core office is San Francisco.
Speaker 2: So we have an office in New York too, Flat Iron,
Speaker 2: so twentieth and fifth. It was one of those things
Speaker 2: where we were pretty a sync in San Francisco, like
Speaker 2: we have an office in downtown SF. I was going
Speaker 2: in probably four days a week, so like some people
Speaker 2: were going in a lot. My boss lived in the
Speaker 2: suburbs a little bit. He would come up sometimes, but
Speaker 2: I would like take the cowtrain down to like the
Speaker 2: Hillsbo area and like go to his place. So I
Speaker 2: work from his poolhouse with him. It was a funny setup,
Speaker 2: but it was like we were a sync enough. And
Speaker 2: I also knew that like long term, I was gonna
Speaker 2: want to live in New York. I just pitched them
Speaker 2: on moving back and then flying out to San Francisco
Speaker 2: like every three weeks or so, and that it's the
Speaker 2: setup I have now.
Speaker 1: That New York has a pretty robust technology sets there.
Speaker 1: I mean, we all think of San Francisco for AI
Speaker 1: computer mobile tech and Boston for healthcare teche. Where does
Speaker 1: New York land in that in that list?
Speaker 2: It's it's increasing I would I would put in New
Speaker 2: York is the.
Speaker 1: Like pretty fast rising right on for.
Speaker 2: Like consumer tech. I would argue it's like number one
Speaker 2: or close to it.
Speaker 1: And then you've got a big Google office here, You've
Speaker 1: got a big Microsoft office here. You've got a giant
Speaker 1: Amazon office here.
Speaker 2: Well, and like Anthropics opening like a sixteen thousand square
Speaker 2: foot like they're opening a massive office in Hudson Square.
Speaker 1: Like you there's some space there.
Speaker 2: A lot of like a lot of a lot of
Speaker 2: what keeps happening is like all these AI companies start
Speaker 2: there and then as they move into like bigger and bigger,
Speaker 2: like enterprise commercial business, they expand to the East coast,
Speaker 2: and like there's a lot of like sales teams on
Speaker 2: the East coast and engineering town on the west coast.
Speaker 2: New York's also like a more social, outgoing city where
Speaker 2: a lot of the like like sales and go to
Speaker 2: market people would prefer to live here. San Francisco is
Speaker 2: more insular, and it's like, uh, there's just engineering talent
Speaker 2: from like Stanford, Berkeley, whatever. It aggregates around the Bay.
Speaker 2: So it's it's honestly a big part of like engineers
Speaker 2: end up on the West coast, and then a lot
Speaker 2: of the sales people end up on the East coast.
Speaker 2: A lot of the customers are also on the East coast.
Speaker 1: So really interesting. All right, So I got to start
Speaker 1: with a few quotes of yours and we'll plow through
Speaker 1: a lot of that. One of the things though, that
Speaker 1: that you said a quote of yours, junior investing jobs
Speaker 1: at VC megafunds are really just cold calling. Yeah, I
Speaker 1: don't think of VC in those terms. Explain are you
Speaker 1: really just smiling and dialing.
Speaker 2: Like a little bit. It's funny, Like I don't know
Speaker 2: if you read Bill Gurley's new book, Run It Out
Speaker 2: of Dream, so he said something similar with a venture
Speaker 2: capital is ninety percent sales, and it really is.
Speaker 1: Like, but that's true about everything in fine Yeah, it's
Speaker 1: really and I don't know about outside, but everything in
Speaker 1: this space is you're ultimately asking someone to trust you
Speaker 1: and give you their business.
Speaker 2: Yep, yep, yep. VC, especially at the big like it's
Speaker 2: like Slow is a fairly small fund, right, Like we
Speaker 2: have like total teams like fifteen or sixteen people, investment
Speaker 2: teams like nine or ten people. But like some of
Speaker 2: the bigger funds, like I have some bodies that have
Speaker 2: worked at the like call it some combination of like
Speaker 2: the general catalyst type A sixteen Z type whatever. It's
Speaker 2: just a machine or like inside is like this too,
Speaker 2: or like you are managing just like tens of billions
Speaker 2: of dollars or whatever, and there's so much coverage that
Speaker 2: it's I was a little tongue in cheek saying that
Speaker 2: it's like cold calling, but it is very much like
Speaker 2: you need to be talking to like X number of people,
Speaker 2: and there's like metric hurdles on like touch points and stuff.
Speaker 2: It's like it's not that there's no discernment or anything
Speaker 2: like that, but it's a volume game and.
Speaker 1: They try and quantify it and turn it into.
Speaker 2: Yeah, it's like you the name of the game is
Speaker 2: you don't want to miss anything that could be something. Therefore,
Speaker 2: like people should be pounding the pavement making touch points
Speaker 2: with anybody who could be starting an early stage tech company.
Speaker 1: Now, Slow Ventures kind of famously avoids the trendy hot stuff.
Speaker 1: No robots, no AI foundation models, What are you looking
Speaker 1: at at work? That's kind of interesting. What do you
Speaker 1: guys get to see that most people are overlooking?
Speaker 2: So it's funny. We actually we actually just announced one
Speaker 2: that's like robot e doing like like warehouses and fulfillment
Speaker 2: for e commerce companies called Sutronic, So we do occasionally
Speaker 2: touch they don't make You'm right right, We're not doing
Speaker 2: any of the stuff that it's cloud on Twitter because
Speaker 2: we can't fold, close or do dishes, right. I mean
Speaker 2: it's we're like broadly generalists. We've done everything from like
Speaker 2: we've done just to name some companies over the last
Speaker 2: ten or twelve years, like Robinhood, Slack, all Birds before
Speaker 2: they pivoted to being an AI GPU company back when
Speaker 2: they sold footwear. I mean, we have like a hilarious
Speaker 2: one meme, Lord's Technology where it's basically a software platform.
Speaker 2: It's like a basically marketing tool platform, but for creating memes.
Speaker 2: I mean, we'll do a little bit of everything we've done.
Speaker 2: Crypto stuff we've done. We have done some like vertical
Speaker 2: AI stuff. We just like making our calling card. We're
Speaker 2: not chasing the AI hype. The way that we broadly
Speaker 2: think about it is there's a lot of VC deals
Speaker 2: that are trades that are now marked up a lot,
Speaker 2: but like do they have terminal value in what they
Speaker 2: get supported in public markets? You don't know? And a
Speaker 2: lot of early stage investors that have played those and
Speaker 2: then sold when bigger funds come in at the multi
Speaker 2: billion dollar evaluations. It made a lot of money. So
Speaker 2: like you could argue we should have played that trading game.
Speaker 2: The bet that we're making is like, go for the
Speaker 2: stuff that's going to compound long term value, that could
Speaker 2: be like a standalone valuable entity.
Speaker 1: How does the sort of dearth of IPOs, although we're
Speaker 1: in the middle of a period where there are suddenly
Speaker 1: a spate of them coming out and more more companies
Speaker 1: choosing to stay private for longer, how does that figure
Speaker 1: into the VC calculus of Hey, we eventually want an
Speaker 1: exit and we can't rely on someone else, either from
Speaker 1: a big affirm taking this over or some M and
Speaker 1: A to give us an exit.
Speaker 2: It's interesting. I almost think you have to put VC
Speaker 2: in two buckets at this point, where you have like
Speaker 2: we play at the really early stage, which also gives
Speaker 2: you like a lot more opportunities for exits, whether you
Speaker 2: sell steakes to like a later stage bigger growth like
Speaker 2: a bigger growth investor once they're in the unicorn status,
Speaker 2: or you get the acquisition or IPO if you're getting
Speaker 2: at a company that's worth twenty or thirty million dollars.
Speaker 2: There's just like a lot of ways you can get
Speaker 2: paid on that. Versus you have companies like like Thrive
Speaker 2: is probably the most famous one where they manage like
Speaker 2: fifty billion dollars now they own a massive slug of
Speaker 2: open ai, Like they take really big bets in companies
Speaker 2: that are like it's worth ten billion or one hundred billion,
Speaker 2: we think it can be worth a hundred billion or
Speaker 2: a trillion. So for us, we have a lot more
Speaker 2: flexibility on exits, which is like good because we can
Speaker 2: be more nimble.
Speaker 1: You're primarily seed in A rounds, but you're not doing
Speaker 1: B rounds, or.
Speaker 2: We occasionally will with follow on capital, but it's like
Speaker 2: ninety five percent seed in A So that's like that's
Speaker 2: our sweet spot. And then so I think for funds
Speaker 2: like that, I think people like a lot of early
Speaker 2: stage funds should get more creative. Where can you exit
Speaker 2: into a big growth fund coming in at like a
Speaker 2: five billion dollar valuation from portfolio construction? Maybe you should
Speaker 2: With the megafunds, it's like, okay, if you're going to
Speaker 2: do that, you can't really index all of the like
Speaker 2: five or ten billion dollar unicorns because a lot of
Speaker 2: those those paper marks would never get support in the
Speaker 2: public markets. But like Thrive going really deep on open
Speaker 2: Ai or Spark Capital going really deep on Anthropic, those
Speaker 2: are going to go out at potentially trillion dollar valuations.
Speaker 2: Like the math works. If you invest forty billion dollars
Speaker 2: across a few big funds and something at like a
Speaker 2: two hundred billion dollars valuation and you get four x
Speaker 2: or five x, you're returning like tens of billions of dollars. Right,
Speaker 2: So it's like in the early stage should probably be
Speaker 2: looking to sell, and some some of those later stage
Speaker 2: companies coming in at the later stage, it's like stock picking.
Speaker 2: You're basically running. You have to run a concentrated book
Speaker 2: of like there might be three or four private companies
Speaker 2: at any time, like a SpaceX, Open Ai and Thropic
Speaker 2: that could go out at a multi hundred billion dollar valuation.
Speaker 2: You have to be concentrated in those otherwise the math
Speaker 2: is going to work. If you get those right, you
Speaker 2: can like two x three x a fund. If you don't,
Speaker 2: you want.
Speaker 1: Really kind of interesting you come out of the creator economy.
Speaker 1: Slow Ventures has been a player in that space. How
Speaker 1: does how does your experience help you as a VC
Speaker 1: and what does slow venture see in that space that
Speaker 1: you know the traditional venture capitalists overlook.
Speaker 2: So to give like a little more color on that
Speaker 2: we have we have a separate fund we raised a
Speaker 2: year ago called our Creator Fund, where sixty four million
Speaker 2: dollars we invest directly in creators, meaning like YouTubers, podcasters,
Speaker 2: could be newsletter writers. Our bet on that is that
Speaker 2: like distribution compared to like technical abilities is getting increasingly valuable.
Speaker 2: Where two things One, it's easier to build stuff like
Speaker 2: software because of AI coding assistance. Too, the Internet is
Speaker 2: so loud now that having like a cylinder of trust
Speaker 2: from your audience gives you a massive selling advantage because
Speaker 2: it's so much harder to get attention with like paid
Speaker 2: ads and growth hacks and all this. That we have
Speaker 2: this and like sam My Boss was kind of came
Speaker 2: up with this idea a few years ago that like
Speaker 2: he calls it almost investing in cults. But people who
Speaker 2: have a true like cult of personality and are a
Speaker 2: subject matter expert in a particular theme or vertical have
Speaker 2: a massive advantage on like marketing and selling. So we
Speaker 2: raised a fund where we literally invest in creators like
Speaker 2: holding companies where any businesses they build like off their platform,
Speaker 2: that leverage their brand and platform and all this stuff.
Speaker 1: These are three sixty deals covers everything that person does.
Speaker 2: Yeah.
Speaker 1: Yeah, we basically be a podcast, could be substack, could
Speaker 1: be all of those.
Speaker 2: Yeah, and like we aren't really that interested in like
Speaker 2: how money they make from like ad revenue or like
Speaker 2: platform revenue or whatever. It's more so. For example, the
Speaker 2: first deal we did was with this woodworking creator named
Speaker 2: Jonathan Katz Moses, and he has a like he has
Speaker 2: a massive YouTube channel.
Speaker 1: He's basically I know that just show it is shockingly
Speaker 1: intriguing watching this guy build stuff from scratch. Yeah, he's
Speaker 1: like relaxing too.
Speaker 2: Yeah, he's a super compelling guy, incredibly talented, and he's
Speaker 2: equally good as both a content creator and as an entrepreneur.
Speaker 2: Like he has a business it's like making like millions
Speaker 2: of dollars in revenue, and.
Speaker 1: He builds various things and sells them, so he also
Speaker 1: generates revenue from the YouTube.
Speaker 2: Right, And it's like a specifically has like a tool
Speaker 2: line called km Tools, and like we invested money into
Speaker 2: like his holding company, and that can go toward like
Speaker 2: hiring people to help with like the content development, editing,
Speaker 2: content creation, so we can like increase velocity of putting
Speaker 2: out YouTube videos. Also like more people to help rolling
Speaker 2: out new products and a wider product suite of tools.
Speaker 2: So the bet is that like you put money in
Speaker 2: that and maybe like the tool business really blows up
Speaker 2: and then a like Black and Decker type of company
Speaker 2: acquires it, or maybe he launches like another business vertical
Speaker 2: office platform that we have exposure to. So it's but
Speaker 2: his whole thing is like woodworking, woodworkers. He'll go to
Speaker 2: like a woodworking festival in Texas, people will come out,
Speaker 2: like to come like get him to like sign their autographs.
Speaker 2: Like he he just has a lot of clout in
Speaker 2: that space. So finding people like that in different verticals
Speaker 2: that we think have like really compelling opportunities to scale
Speaker 2: big businesses through that vertical in that audience is like interesting.
Speaker 2: And historically people have been very hesitant to back creators
Speaker 2: or they back like one business like mister Beast has
Speaker 2: a bunch of different businesses. If you back Beast Burgers
Speaker 2: didn't really work that well. If you were backing mister
Speaker 2: Beasts as a whole, Like the entire empire is worth
Speaker 2: like a billion dollars or whatever. So you want to
Speaker 2: be like a line where if they want to change
Speaker 2: their focus, like are capital is still aligned with that?
Speaker 2: Like you don't think this this experiment's working.
Speaker 1: Moved to this one and I think it's called CDC.
Speaker 1: If you haven't seen these computer controlled woodworking lathes and carves,
Speaker 1: and they're just astonishing with people Like you think of
Speaker 1: carpentry as kind of old school, it is not. It's
Speaker 1: really fascinating. Coming up, we continue our conversation with Jack
Speaker 1: Rains discussing his new book Young Money, a field guide
Speaker 1: to wealth and purpose in your twenties. I'm Bury Ridults.
Speaker 1: You're listening to Masters in Business on Bloomberg Radio. I'm
Speaker 1: Barry Ridults. You're listening to Masters in Business on Bloomberg Radio.
Speaker 1: My pretty special guest, my kind of.
Speaker 2: Special, somewhat special.
Speaker 1: Somewhat special guests. I'm want to write that down. My
Speaker 1: somewhat special guest is Jack Reins. He is a associate
Speaker 1: at a venture capital firm and a author. I've been
Speaker 1: subscribed to his sub stack Young Money for I don't
Speaker 1: know how many years.
Speaker 2: Has that been, around four or five years?
Speaker 1: Let me know when you get to thirty and you'll
Speaker 1: be onto something. But his new book Young Money, A
Speaker 1: Field Guide to Wealth and Purpose in your twenties, I
Speaker 1: was really taken by it. Not only was it a
Speaker 1: fun read, but I just I not only laughed throughout
Speaker 1: because I just recognized, oh, I did that dumb thing,
Speaker 1: but it also is so wise beyond its years. It's
Speaker 1: hard to imagine that the guy who wrote this was
Speaker 1: twenty six twenty seven when he wrote it twenty seven,
Speaker 1: twenty seven, eight last year of your twenties. So I
Speaker 1: really found it a fun, enjoyable read about a space
Speaker 1: that I normally don't play in Young Money. And there's
Speaker 1: so many things to talk about with this, starting with
Speaker 1: quote I had considered the opportunity cost of how I
Speaker 1: was spending my time, and I adjusted my life accordingly.
Speaker 1: So you're giving the whole game away on page thirteen. Yep,
Speaker 1: you basically say, hey, time is finite, and how and
Speaker 1: when you spend it is really important. Tell us a
Speaker 1: little bit about how you reach that insight back when
Speaker 1: you were in your early in the mid twenties.
Speaker 2: Yes, so, I mean we talked about the spactrading thing earlier,
Speaker 2: but like when I was twenty three, mainly twenty three,
Speaker 2: in a little bit twenty four, my life basically looked
Speaker 2: like this. It was you roll out of bed, throw
Speaker 2: on some sweatpats, grab Chick fil A for breakfast, and
Speaker 2: then you're just like kind of responding to like slack messages.
Speaker 2: You're on zoom calls, spreadsheets, powerpoints, and you're doing all
Speaker 2: of your bedroom. And it had been like that for
Speaker 2: well over a year. And then on the side, like
Speaker 2: you were over here, like you know, training options before
Speaker 2: we jump on this, I had like my work laptop here,
Speaker 2: and then I'm my personal laptop here, and it's like,
Speaker 2: huh interesting, like this spat just got an ounce. So
Speaker 2: I was I was spending like I was like basically
Speaker 2: fake working while just trading stocks all day. And then
Speaker 2: like in the evenings, I you know, you have like
Speaker 2: your entire net worth and some speculative spack and you're
Speaker 2: you can't even sleep straights if futures take you think
Speaker 2: you might lose one hundred thousand dollars. And so I
Speaker 2: was almost in this like self a news holding cell
Speaker 2: of like I couldn't go anywhere really because of COVID,
Speaker 2: and I was stuck at home, and then I was
Speaker 2: just watching screens all day, and thankfully I made some
Speaker 2: money from it. But I just became really aware around
Speaker 2: the time I was about to turn twenty four that
Speaker 2: I had just spent the whole last year of my
Speaker 2: life not really doing anything, especially like call it like
Speaker 2: personal relationships whatever. I was probably a pretty terrible like boyfriend, friend,
Speaker 2: checked out, son, grandson, like I just wasn't like I
Speaker 2: was not in control of ho I was spending my
Speaker 2: time at all. I was kind of like a prisoner
Speaker 2: to like work and COVID and stock market.
Speaker 1: Which is kind of crazy because during the pandemic, you're
Speaker 1: no longer commuting, you're no longer on the same schedule.
Speaker 1: If any of us had a little more prescience, we
Speaker 1: really could have taken full control of our day. Nobody's
Speaker 1: looking over your shoulder at what you're doing. You could
Speaker 1: come and go as you want as long as you
Speaker 1: got your work done whenever. However, everybody was.
Speaker 2: Fine, which is so I mean to the stock trading
Speaker 2: thing I did, like that would not have been happening
Speaker 2: if I was in the office, probably at least not
Speaker 2: as much.
Speaker 1: But what was fascinating as I was reading this because
Speaker 1: I started out trading is you. You nailed the phrase
Speaker 1: you're a prisoner to the screen. You really can't leave
Speaker 1: your desktop. If you're on a desk, at least someone
Speaker 1: could watch a position for you. Hey, I gotta go
Speaker 1: leave for ten minutes. Can you make sure this doesn't
Speaker 1: blow up on me? If it hits this, get me out?
Speaker 1: You could do that. But if you're doing this from
Speaker 1: your bedroom and you have a lot of positions on you,
Speaker 1: you're you have no other bandwidth for anything else.
Speaker 2: It's just push notifications on for everything. You go to
Speaker 2: the gym, you're checking your phone every two minutes. It
Speaker 2: was just like a little bit nauseating, right, and.
Speaker 1: Uh and exhausting.
Speaker 2: Yeah, And like I I honestly just felt pretty like
Speaker 2: mentally exhausted from the like always being on and I
Speaker 2: just kind of had enough. And I also found my
Speaker 2: job pretty unfulfilling, and I knew I was going to
Speaker 2: leave it in a year, And it was just like
Speaker 2: all of these things came to a head and I
Speaker 2: was like, Okay, let's be really intentional here about like
Speaker 2: how do I want to spend Like if I know
Speaker 2: I'm going to grad school in a year, like, how
Speaker 2: do I actually want to spend the next year? Is
Speaker 2: it keep going in the motions of the job that
Speaker 2: I know I'm going to leave to go do something else?
Speaker 2: Is that like like try to like trade back the
Speaker 2: money I just lost lost on that trade gone wrong?
Speaker 2: The thing I kind of wanted to do is like, honestly,
Speaker 2: just go have an adventure having just been cooped up
Speaker 2: for a year and a half. And yeah, so that
Speaker 2: like it was just like all of that came to
Speaker 2: ahead and I was like I should just I mean,
Speaker 2: it's like the opening line of the book, just blow
Speaker 2: up my life and go do something crazy. And that's
Speaker 2: kind of what I did, and I went to Barcelona.
Speaker 1: You hit the eject button. The concept of time comes
Speaker 1: up over and over throughout the book, both generally and specifically.
Speaker 1: One of the things you write about is defining decades differently,
Speaker 1: and about the opportunity cost of your twenties. A lot
Speaker 1: of people who just buckle down and grind it out
Speaker 1: through their twenties. You say that for many people that's
Speaker 1: a trap. Smart twenty something's fall into to discuss that.
Speaker 2: So I and I think this is especially true in
Speaker 2: the like call it hyper competitive, like New York, San Francisco,
Speaker 2: maybe like Chicago, DC areas where you're surrounded by very
Speaker 2: smart people who went to really good schools and they
Speaker 2: go into like at least for like an early twenty
Speaker 2: something high paying job, but you're also objectively pretty, but
Speaker 2: you don't know anything you like, don't like No twenty
Speaker 2: two especially guys like yeah.
Speaker 1: And tell me when I get to grow out of that.
Speaker 2: I don't know. I mean you tell me. You're sitting
Speaker 2: there and it's like, okay, like what do I optimize for?
Speaker 2: And the obvious thing is money, and the like derivative
Speaker 2: of that is status, right where high paying jobs are
Speaker 2: typically higher status jobs. And I think it's when you
Speaker 2: don't have anything else. It's like like a north Star.
Speaker 2: You kind of go for like the like ambitious thing
Speaker 2: that will pay you well, that sounds impressive over and
Speaker 2: over again, and like, to be totally clear, there's nothing
Speaker 2: wrong with that, and that's also much better than like
Speaker 2: being a bomb and not doing anything. But you almost
Speaker 2: if you fall into that trap of like having some
Speaker 2: expectation of what you should do without it actually being
Speaker 2: like your own original thought like oh I want to
Speaker 2: go do this, you almost become instead of being like
Speaker 2: the protagonist of your own life, you're just kind of
Speaker 2: like filling a preordain role, Like you're almost like an actor, right,
Speaker 2: is how I think about.
Speaker 1: It, and in someone else's play, right.
Speaker 2: And I think the thing like I think the implicit
Speaker 2: bat people are making when they do that is I
Speaker 2: will like earn enough money and hit a level of
Speaker 2: stability where I can head eject, which you can do,
Speaker 2: but you can't buy back the opportunities that you would
Speaker 2: have had in your twenties when you're in your like
Speaker 2: mid thirties.
Speaker 1: So another quote, there's no saving time, there's no investing time.
Speaker 1: There is only spending time. And sentences like that is
Speaker 1: why I say this book is wise beyond its years,
Speaker 1: because I know people who figure that out in their fifties, sixties, seventies,
Speaker 1: not in their twenties. So kudos to you forgetting there
Speaker 1: to tell us what led you to that conclusion and
Speaker 1: how much did the pandemic lockdown accidentally lead to these insights.
Speaker 2: I think I became much more introspective much younger, because,
Speaker 2: like you just, I mean, I had roommates them, like
Speaker 2: I just wasn't spending like that much time in a
Speaker 2: normal day to day and I'm a very like sociable
Speaker 2: guy who like likes to hang out with people during
Speaker 2: the day. That gets removed and you're just in your
Speaker 2: head a lot, and you become really reflective of like
Speaker 2: how you're spending your time, what you're motivated by. So
Speaker 2: it was just like this again, I don't like this
Speaker 2: book probably wouldn't have happened if COVID didn't happen, because
Speaker 2: most of these like reflections were downstream of this hole
Speaker 2: just being like kind of in like an isolated stage
Speaker 2: of life at a point where like you should really
Speaker 2: just be like in an office grinding. So I think
Speaker 2: that was a big part of it. Hilariously, I like
Speaker 2: I mentioned, like the second chapter of the book, I
Speaker 2: used to be terrified of flying, and U like, like
Speaker 2: I'd fly all the time down I don't care. But
Speaker 2: for some reason, turbulence just like kicked my When I
Speaker 2: was younger and I was on a flight to Colorado
Speaker 2: about a year and a pandemic for ski trip, plame
Speaker 2: was basically empty. It was awesome. We had a super
Speaker 2: super turbulent takeoff and it was just bumpy from Atlanta
Speaker 2: basically all the way to like Kansas City, and I
Speaker 2: was just sitting there thinking the whole time, we're tolling
Speaker 2: to do die. Those thing's going now we're gonna die.
Speaker 2: Like it's I'm twenty three, it's over, I'm dead. And
Speaker 2: we obviously landed. I didn't die, but like some again
Speaker 2: totally random, but just something about that put that thought
Speaker 2: back my mind, like like at some point you are
Speaker 2: going to die, and it's not like up until that,
Speaker 2: I just thought I was gonna live forever, Like that's
Speaker 2: a not stupid, but.
Speaker 1: You don't really think about that in your twenties. When
Speaker 1: most people are in their twenties, they're immortal. You're not
Speaker 1: thinking about, well, one day I'm gonna die.
Speaker 2: Yeah, And that became like a forcing function for like, okay,
Speaker 2: let's work backwards from I finally got over the fear
Speaker 2: of flying. But it's like, all right, like we are,
Speaker 2: you know, we're on the clock, and what do I
Speaker 2: want to do with it? And so it was like
Speaker 2: a complete fluke from a turbulent flight kind of forced
Speaker 2: a lot of introspection that have been bubbling under the
Speaker 2: surface for probably the prior year. I was like, all right,
Speaker 2: like I should be doing what I want with my
Speaker 2: time rather than just letting inertia kind of do its thing.
Speaker 2: And it was that like call it like awareness of
Speaker 2: mortality that became like a forcing function for basically what
Speaker 2: I've done in the last four and a half years
Speaker 2: since then, like, be in control of your time. Don't
Speaker 2: don't be a don't be like a passive participant in
Speaker 2: your own life.
Speaker 1: The difference between money and time is that money is
Speaker 1: both infinite and fungible. Time is neither. This this is
Speaker 1: a philosophical concept.
Speaker 2: I consider myself a bit of a philosopher.
Speaker 1: Okay, I'm with you, I'm there with you. What's your
Speaker 1: conclusion when you realize that money is both infinite and fungible.
Speaker 2: I think you like need to be really aware of
Speaker 2: how much money it takes to get what you want
Speaker 2: out of life at various life stages. To your point, earlier,
Speaker 2: you can kind of scrape by in your twenties maybe
Speaker 2: early thirties and like still enjoy yourself. And the older
Speaker 2: you get, the more expensive it gets. Ideally you're making
Speaker 2: more and more money over the course of your life
Speaker 2: as well. So like my conclusion on that is it's
Speaker 2: like counter to a financial device. But like young people
Speaker 2: shouldn't penny pinch so much if they have like fun,
Speaker 2: interesting stuff they want to spend the money on. The
Speaker 2: caveat to that is like you should put yourself in
Speaker 2: a position where there are like high income outcomes from
Speaker 2: that over time. But like it's okay to be twenty
Speaker 2: five and not be rich if it means like spending
Speaker 2: money on fun stuff with your friends. Right.
Speaker 1: So, you're not a fan of the fire movement, the
Speaker 1: early retirement movement.
Speaker 2: Not when it's taken to the extreme. I think that
Speaker 2: the core idea of like having enough money saved up
Speaker 2: where like you control your own destiny is healthy and
Speaker 2: good and admirable. I think when you make the accumulation
Speaker 2: of capital to like escape the labor force as like
Speaker 2: an end goal, you just set yourself up to be
Speaker 2: bored and almost beyond that, when you're like overoptimize for
Speaker 2: fire and your whole thing is like I want to
Speaker 2: opt out of work, you're probably gonna hit that in
Speaker 2: your like early forties, when all of your peers are
Speaker 2: peak work. You're not gonna be able to relate to
Speaker 2: anybody after everal years. Against there's a lot of I
Speaker 2: think when you take the fire movement too far. There's
Speaker 2: like social costs to that that are harder to see
Speaker 2: when you're looking at a spreadsheet. But it's just like,
Speaker 2: and you have to forgo so many things you would
Speaker 2: probably prefer to spend money on in your twenties and
Speaker 2: thirties to hit that. It's just not I don't think
Speaker 2: you should like go into crazy debt and you should
Speaker 2: max out your four one K if you can and
Speaker 2: all this stuff, But like you just you shouldn't pass
Speaker 2: up on life to accumulate cash to be able to
Speaker 2: opt out of another part of life being work. Is
Speaker 2: kind of my take on it.
Speaker 1: No, that makes a lot of sense. I love this quote.
Speaker 1: Many of life's adventures are adventures only because you're twenty
Speaker 1: two and broken stupid and you're surrounded by other broke,
Speaker 1: stupid twenty two year olds. This is a feature, not
Speaker 1: a flaw of being young. Lean into it, yep, tell
Speaker 1: us about how you saw that. What is it about
Speaker 1: being twenty two and broken stupid that has to be embraced?
Speaker 2: So like I, I mean, I spent that whole year
Speaker 2: of being I guess I was technically twenty four, but
Speaker 2: I was with a lot of twenty two year olds
Speaker 2: who are like this whole like hostel hopping things hilarious, right,
Speaker 2: because it's basically a bunch of kids, like studying abroad.
Speaker 2: It's a bunch of people fresh out of college. It's
Speaker 2: a bunch of Europeans taking a gap year, a bunch
Speaker 2: of Americans fresh out of college, and then a bunch
Speaker 2: of like call twenty three to twenty six year olds
Speaker 2: who worked for a couple of years and took a break,
Speaker 2: and you're all just like in bunk beds. Everybody has
Speaker 2: a shared goal of like, I'm just trying to have
Speaker 2: cheap fun for a little while, and it makes every
Speaker 2: situation really really funny. Like some guys want to go
Speaker 2: from Sevilla, Spain to Paris and they're trying to game
Speaker 2: out like it's two hundred dollars to fly, but if
Speaker 2: we take a train ticket and then sleep in a
Speaker 2: train station for six hours, we can there for twelve dollars.
Speaker 1: And or and avoid a hotel room, right, and.
Speaker 2: Avoid a hotel room and extend our European trip like
Speaker 2: eight more days. Right, So or you have life?
Speaker 1: Did that right? You went from Barcelona to where in Europe?
Speaker 2: I mean I I covered I was there from August
Speaker 2: cit December, and then I went to Latin America a
Speaker 2: month later for a few months, and back to Europe
Speaker 2: and that August Citycember thing. I think I went to
Speaker 2: like nineteen different countries in four months, and it was
Speaker 2: just there was no itinerary. I would just go somewhere
Speaker 2: and then I would meet some people and they would say, hey, dude,
Speaker 2: we're going to Prog next. Do you want to come?
Speaker 2: And I was like sure, sure, And I meet this
Speaker 2: guy in Prague He's like, yo, I heard Budapest is great.
Speaker 2: I'm like all right, And then I was like, we're
Speaker 2: going to crack al Poland next I met a kid
Speaker 2: at a hostel in Crackowl who pitched me on his
Speaker 2: startup in San Francisco a year ago, like talking about
Speaker 2: weird yeah, small world stuff. But it was just like
Speaker 2: I went like pure optionality for a year and it
Speaker 2: was just like anybody I meet interesting was doing something cool.
Speaker 2: I'm going to go with them, like oh I heard
Speaker 2: Tromso Norway. You can see the northern lights. Let's go
Speaker 2: dog sledding up there, and like you do that. So
Speaker 2: the ability to just like cast a really wide net
Speaker 2: because when like cheap thrills are fighting, like having to
Speaker 2: sleep on a train or I have a buck bed
Speaker 2: with a stranger. It's just like it's fine, like when
Speaker 2: you're when you're a kid, you just don't care. I like,
Speaker 2: I'm still in my twenties now, but that would just
Speaker 2: sound awful, Like I don't want to be in a
Speaker 2: room with like twelve strangers and worry about my stuff
Speaker 2: getting stolen.
Speaker 1: That sounds terrible, but like twenty four, you got nothing
Speaker 1: to get stolen anyway.
Speaker 2: Yeah, it's like where they gonna take my backpack? We
Speaker 2: had a couple of like Czara T shirts and flip flops,
Speaker 2: sick Like I'll go play poker and win twenty bucks
Speaker 2: and go buy another one. It's fine. So and there's
Speaker 2: versions of that to play out and everything, right, Like
Speaker 2: I'm I don't think everybody has to go backpack Europe.
Speaker 2: But like you got to San Francisco and there's like
Speaker 2: twenty four year old startup founders that are sleeping in
Speaker 2: the office with a bunch of their buddies and they
Speaker 2: are having a blast. Like they're in objectively like horrid
Speaker 2: living conditions. They don't even notice because they're like twenty
Speaker 2: three or twenty two or whatever, like you can you
Speaker 2: can just really lean into like adverse living conditions and
Speaker 2: find them enjoyable rather than like they don't like take
Speaker 2: away from your life. They create really funny stories.
Speaker 1: I'm always fascinated by the pursue your passion recommendation that
Speaker 1: so many people make. You say, pursue your passion is
Speaker 1: terrible career advice. Yeah, give us some color on that. So, like,
Speaker 1: and you're giving this from someone who is pursuing their passion.
Speaker 2: So my my like more specific take on that is
Speaker 2: you shouldn't bank your income on a thing you're passionate about.
Speaker 2: The example that I give is, like, I love writing.
Speaker 2: It's a it's a thing that like I've enjoyed, I'll
Speaker 2: do the rest of my life, whether it's books, blogs,
Speaker 2: it's something I'll always incorporate. My initial job out of
Speaker 2: business school was columnist, podcast or media guy like effectively
Speaker 2: a media startup, and I actually found it stressful, where
Speaker 2: like every single day I had to like put something
Speaker 2: out and then I also was sitting there thinking this
Speaker 2: is draining the fun of like writing. Like I wasn't
Speaker 2: monetized as in my blog. It was just a thing
Speaker 2: that I like doing, and all of a sudden, now
Speaker 2: I don't have energy to work on that fun thing
Speaker 2: because I spend all that energy on the thing I'm
Speaker 2: paid to do. So the issue with like chasing your
Speaker 2: passion is one, a lot of passions aren't that lucrative.
Speaker 2: Two the second that your paycheck is dependent on you
Speaker 2: doing that thing over and over and over again, it
Speaker 2: can start feeling more like a chore than like fun.
Speaker 2: So the actual advice I have is, like, pursue stuff
Speaker 2: that you're pretty interested in that can pay you, whether
Speaker 2: or not you're like most jobs are boring for a
Speaker 2: lot of the time, so whether or not you're passionate
Speaker 2: about it, a thing that you're like interested in and
Speaker 2: like have an inclination for and have some skills at,
Speaker 2: go do that for a career, and then use that
Speaker 2: to like subsidize your ability to work on the fun stuff.
Speaker 2: Like I, you know, like writing writing books and blogs
Speaker 2: is like a thing I want to do independent of
Speaker 2: the financial outcomes from it. I'm pivoted from media to
Speaker 2: venture capital because, like, I like the offshoot opportunities of
Speaker 2: investing in tech companies, and that's just like a better
Speaker 2: world to be in for a career path.
Speaker 1: Last question before we get to our favorite questions that
Speaker 1: we ask all of our somewhat special guests.
Speaker 2: What special guests?
Speaker 1: How do I know I'm making the most of my time?
Speaker 2: So the last chapter of the book is called are
Speaker 2: You having Fun Yet? Which I think is like, I
Speaker 2: think fun is an underrated barometer that you're actually doing
Speaker 2: the right stuff with your life. And it sounds silly
Speaker 2: at like first glance, but my take on it is,
Speaker 2: I think the definition of fun and what you find
Speaker 2: to be fun changes as you go through life different stages.
Speaker 2: Where when I was like twenty three or twenty four,
Speaker 2: it was just doing dumb, hostile hopping stuff and like
Speaker 2: getting drunk all the time or whatever, and it was great.
Speaker 2: Now I get drunk a lot less of the time.
Speaker 2: It's still slightly a little bit more refined though, but
Speaker 2: like you know, once you get a little further in
Speaker 2: your career, like having real career success and making strides
Speaker 2: is like a source of like joy and personal achievement.
Speaker 2: When I was in college and playing football, like football
Speaker 2: objectively sucked, but like I like, playing college football really sucks,
Speaker 2: and anybody who's played it will tell you that.
Speaker 1: But it's like a by the way, the description of
Speaker 1: the work at routines in the six am wind sprints
Speaker 1: and but but when you know deep into the season
Speaker 1: the coach tap rains we get in there.
Speaker 2: Yeah, it's like it's like an incredibly like fulfilled Like
Speaker 2: it's like going from a walk on to be putting
Speaker 2: on scholarship and then like getting made team captain my
Speaker 2: senior year, Like that was a much cooler fulfilling moment
Speaker 2: than like anything I did before or after it. Like
Speaker 2: I think it was because it was really really hard, right.
Speaker 1: So in a real sense of achievement.
Speaker 2: Yeah, like it was a it was a hard thing
Speaker 2: and I'd like executed on it, so but it was fun.
Speaker 2: So my kind of definition of fun is if you
Speaker 2: like find joy in the suck, then you're probably doing
Speaker 2: the right thing. And like that could be being like
Speaker 2: groggy and hungover like on a park mentioned Spain, but
Speaker 2: you feel like you're living out an adventure, or it
Speaker 2: could be like going after like a really ambitious career
Speaker 2: and like excelling in it. And it's you know, I
Speaker 2: think a lot of people as they get firs they're
Speaker 2: in their careers, they keep chasing that ambition high off
Speaker 2: of that to the detriment of like their family or
Speaker 2: other parts of their life. I think a lot of
Speaker 2: young people like just start like I think the biggest
Speaker 2: mistake you can make is like keeping a prior version
Speaker 2: of u's like benchmark or idea of what they should
Speaker 2: be doing with their time and trying to like force
Speaker 2: apply that to a future version, or trying to pull
Speaker 2: forward a future version too early in your life at
Speaker 2: the expense of the fun stuff you want to do now.
Speaker 2: And I think just having a very very strong sense of, like,
Speaker 2: what are the most important things right now that bring
Speaker 2: me fulfillment and then going after those is the recipe
Speaker 2: to a good life.
Speaker 1: And the sequel to this fine joy in the suck
Speaker 1: is a great.
Speaker 2: Could be title. I just call it like middle aged money.
Speaker 2: Once I get my thirties.
Speaker 1: Well, you can do something every decade. You have a
Speaker 1: built in model your money, slightly older money and money.
Speaker 1: You got a whole run of things. All right, Let's
Speaker 1: jump to our favorite questions that I ask even my
Speaker 1: somewhat special guests, starting with you're still young, tell us
Speaker 1: about your mentors? Did anybody really help shape your career?
Speaker 2: Yeah? I mean the early mentors would have been football
Speaker 2: coaches in high school and college defensive line coach Harold Brantley,
Speaker 2: he was the man like he was. He was actually
Speaker 2: whe who pushed me to the point that I could
Speaker 2: play in college in the first place. And then my
Speaker 2: college defensive line coach Kenny Baker was like I was.
Speaker 2: I came into college playing in a small private high
Speaker 2: school and thought I was And then I got to
Speaker 2: college and just got wrecked for like a good year
Speaker 2: and I was like really.
Speaker 1: Good, faster, stronger, or you just didn't know the game
Speaker 1: as well and didn't have the skills or some combination.
Speaker 2: Like it was like I just had to get better.
Speaker 1: It was like better shape, better skills.
Speaker 2: I needed to get stronger and just be able to
Speaker 2: react to the game on the field way faster. And
Speaker 2: I just wasn't The processing speed and the just size
Speaker 2: weren't there.
Speaker 1: People don't realize that the quality of play at the
Speaker 1: college level, it's astounding.
Speaker 2: We played so we played Alabama, Little Mercy University. We
Speaker 2: played Alabama and Auburn in the same year. I like
Speaker 2: you want to talk about seeing like like like us.
Speaker 2: We almost beat Auburn. We were down seven in the
Speaker 2: fourth quarter, but Alabama Jalen Hurts to uh Mac Jones
Speaker 2: smoked us. They had Calvin Ridley, all Pro receiver who
Speaker 2: briefly had a gambling problem, but he's back as their
Speaker 2: punt returner. Guess who started on the punt team was
Speaker 2: getting juked out of his shoes like twenty times because
Speaker 2: we punted so much. Me But defensive line coach Kenny
Speaker 2: Baker was like, he I worked really hard, and he
Speaker 2: could tell I did, and he was very encouraging and
Speaker 2: that like keep the work ethic up and like you
Speaker 2: will develop, like you will catch up to the point
Speaker 2: that like, if you keep that work ethic, you'll be
Speaker 2: able to play. And he was right. By my third season,
Speaker 2: I was decent, and by my last season, I was
Speaker 2: objectively good. Like I was never going to be an
Speaker 2: All American, but I was like a starter and was
Speaker 2: like a very solid player. But I could easily quit
Speaker 2: and transferred to Georgia and like, you know, done the
Speaker 2: fraternity thing at SEC school, which would have been short
Speaker 2: term more fun, but long term less fulfilling. So football
Speaker 2: coaches post post school, it's funny, like especially with COVID,
Speaker 2: my early mentors were like kind of people I found
Speaker 2: through Twitter. Like I remember when I read The Psychology
Speaker 2: of Money. I thought it was like a very profound
Speaker 2: book and I just like digested everything Morgan house Will published.
Speaker 2: And then a year after that, like I remember when
Speaker 2: he followed me back on Twitter. I was flying from Sevilla,
Speaker 2: Spain to Manchester, England, and I looked at my phone.
Speaker 2: I was like, Oh, this is really cool. This is
Speaker 2: really cool. And then when I moved to New York,
Speaker 2: we like hung out in person at Collob Fund's office
Speaker 2: and like, like great guy, but I would say like
Speaker 2: as a somewhat career slash just aspirational. Him and Tim
Speaker 2: Urban were like my two favorite bloggers from the kind of.
Speaker 1: Like you referenced Tim Urban in the book, but I
Speaker 1: think you referenced a piece of his and I was
Speaker 1: pro you didn't reference the piece on optionality, the so
Speaker 1: to chart with the black lines.
Speaker 2: Yeah, everybody steals it on Twitter.
Speaker 1: I find that piece to be so interesting because you know,
Speaker 1: one of the things about getting old is some of
Speaker 1: your optionality goes away because you don't have Hey, this
Speaker 1: is a twenty five year project. Do I really have
Speaker 1: twenty five years?
Speaker 2: Like?
Speaker 1: What am I going to be doing at age? Ninety.
Speaker 1: All right, maybe a twenty five year project isn't the
Speaker 1: best thing for me or at age eighty best thing
Speaker 1: for me to start. But I laughed at a lot
Speaker 1: of your references because I'm familiar with many of them.
Speaker 1: They were really really good. So so you mentioned Morgan,
Speaker 1: any other post college mentors you want to bring up?
Speaker 2: Yeah, I mean, like i'd say my current boss, Sam Lesson,
Speaker 2: great guy. I mean he's a He's had a very
Speaker 2: cool career, right, Like he like started a company in
Speaker 2: his twenties in Brooklyn, ends up getting acquired by Facebook,
Speaker 2: like had a successful career at Facebook, and then like
Speaker 2: co founded the venture fund I work out now, right,
Speaker 2: and like he's like, it's it's funny. I feel like
Speaker 2: a lot of people in my bubble of like the
Speaker 2: late twenties have this like is this what I want
Speaker 2: to do with my career? You kind of hit this
Speaker 2: inflection point of like you should pick a thing that
Speaker 2: starts compounding, and like his take has always been like
Speaker 2: you should just want to work with like really interesting,
Speaker 2: smart people you respect and like work on interesting problems.
Speaker 2: And that's a pretty good recipe for finding career fulfillment.
Speaker 2: And you know, if a couple of things go right,
Speaker 2: like financial success, but like it's I don't know. He
Speaker 2: he's done like a few different things and now like
Speaker 2: has like an objectively like I like if my lifestyle
Speaker 2: and like life is set up kind of like his
Speaker 2: in my forties, I'll be very cool with that. Like
Speaker 2: so he crushes.
Speaker 1: So you mentioned Morgan's books. Tell us what you're reading now?
Speaker 1: What are some of your favorites.
Speaker 2: So, I I just started reading this book called eighteen
Speaker 2: seventy three. It's I think it came out pretty Yes.
Speaker 1: Who won the Pulitzer for I forgot the name of
Speaker 1: the four central bankers that his first book was about.
Speaker 1: That is literally at the top of my queue, ready
Speaker 1: to get.
Speaker 2: It's how it's I'm about halfway through, and it's it's
Speaker 2: like very good and interesting. I mean the thing I've
Speaker 2: I've done this from time to time, Like I hadn't
Speaker 2: read much over the last year while I was working
Speaker 2: on that.
Speaker 1: Yeah, now I'm writing is a kill you.
Speaker 2: As someone who's written books, I had so underestimated, Like
Speaker 2: I have much more respect for other authors after going
Speaker 2: through that.
Speaker 1: Exactly, can't you read books? You can't blog? You can't
Speaker 1: It just sucks up so much.
Speaker 2: Time with Yeah, it's like all your free time goes
Speaker 2: to that. But something I've always liked is I've always
Speaker 2: been a big biography guy or like certain moments or
Speaker 2: events in history because you can get the chat, GPT whatever.
Speaker 2: People can pull a story together in three hundred pages
Speaker 2: of a thing is so fascinating, and with like eighteen
Speaker 2: seventy three, like reading about the stock market speculation in
Speaker 2: the like Vienna, Austria stock market in the eighteen seventies,
Speaker 2: and then you're just pattern matching that again, it's like
Speaker 2: what I saw with retail investing in twenty twenty, twenty
Speaker 2: twenty one. It's you just see like human behavior playing
Speaker 2: out cyclically one hundred and fifty years ago. Is just
Speaker 2: really really interesting in like a you know, totally different
Speaker 2: time and market and paradigm, but it's the exact same thing.
Speaker 1: Lords of Finance was his first book that won the Pulitzer.
Speaker 1: I'm excited about that book. Any of the books you
Speaker 1: want to mention.
Speaker 2: The Infinity Machine, the one about the DeepMind founders, it
Speaker 2: was by Sebastian Mallaby. I think anyway, it's like as
Speaker 2: far as Ai is now the thing everybody cares about.
Speaker 2: He did a really good job of like like how
Speaker 2: llms even became a thing in the first place, and
Speaker 2: how like this is just group of like British researchers
Speaker 2: who've been holed up in London the whole time kind
Speaker 2: of kickstarted this whole AI boom. And even though Sam
Speaker 2: Altman Elon Musk they aren't like main characters at all,
Speaker 2: You're getting these interesting anecdotes of how like open AI
Speaker 2: came to gather and how there was like a bit
Speaker 2: of a coup with an open AI and then Elon leaves.
Speaker 2: It just did a really good job of framing like
Speaker 2: the current moment in time and how we got here.
Speaker 2: But those are like I read both of those, who
Speaker 2: have been reading both of those in the last month
Speaker 2: and a half.
Speaker 1: They're great interesting. What about streaming? What are you watching
Speaker 1: or listening to give us your.
Speaker 2: Favorite hilariously on the like on the On the podcast front,
Speaker 2: I don't have any shows I listen to regularly, but
Speaker 2: I will selectively if there's like a guest that I
Speaker 2: find interesting for whatever reason. I've like it's everything from
Speaker 2: tuning into like like Josh and Michael on the Compound
Speaker 2: and Friends or like Tim Ferris's show or some Scott
Speaker 2: Galloway stuff. It's I'm so much of a I have
Speaker 2: people who I think are good interviewers. I don't care
Speaker 2: about half the people they talked to, But occasionally they'll
Speaker 2: have someone where I really want to hear that because
Speaker 2: I think they'll pull out good questions, like I don't know,
Speaker 2: Michael Lewis on Tim Ferris really good episode, or it's
Speaker 2: there's nothing I listened to specifically streaming. I did like
Speaker 2: that movie Obsession. I thought it was phenomenal. It was
Speaker 2: the one that like when Megavi out of indie film
Speaker 2: that when Mega viral out of nowhere in it? Who
Speaker 2: directed it? It's the I can't even think of the
Speaker 2: guy's name. He was got to start on YouTube. He
Speaker 2: does a lot of short form comedy. But it like
Speaker 2: blew up and it was the one about the guy
Speaker 2: who like breaks the stick to make the girl like
Speaker 2: he makes a wish that the girl falls in love
Speaker 2: with him and then she goes full psycho. Anyway, it
Speaker 2: went like nuclear on Twitter, Instagram, TikTok whatever, pretty good
Speaker 2: horror film thriller. I liked it.
Speaker 1: Final two questions, what sort of advice would you give
Speaker 1: to a recent college grad interest in the career in
Speaker 1: either writing, content creation or venture capital.
Speaker 2: So my my take on all the career stuff for
Speaker 2: that is, like, I think it's really I think that
Speaker 2: one of the higher leverage things you can do is
Speaker 2: just start a blog and put your thoughts out there,
Speaker 2: even if you have five people reading it, fifty people
Speaker 2: reading it. I think that especially with AI becoming more
Speaker 2: and more of a thing, it's easy to like, like,
Speaker 2: resumes are becoming incre something meaningless, both from like the
Speaker 2: odds of somebody actually looking at your job application when
Speaker 2: you send it in cold or very low, and the
Speaker 2: ability to like lie, like you can make one hundred
Speaker 2: different resumes with LMS based on the job you're applying
Speaker 2: to now versus when I was, Like when I was
Speaker 2: in college, you always tweak your cover letter or resume
Speaker 2: per job, and it's pretty tedious to do that when
Speaker 2: you're doing it by hand. You can make a million once, right,
Speaker 2: So having some like like proof of your thoughts on thing,
Speaker 2: or you've articulated ideas online that show how you think,
Speaker 2: I think, carry a lot more. They've always been important,
Speaker 2: but like stand out a lot more now with AI
Speaker 2: or if you like AI coding assystems are really good,
Speaker 2: like anybody can access them to build stuff. So just
Speaker 2: having a portfolio of like written work or stuff you've
Speaker 2: built online that shows that you took interest and initiative
Speaker 2: and a thing and like put yourself out there super useful.
Speaker 2: I mean. My my take on career stuff in general
Speaker 2: is like if you can go into investment banking or
Speaker 2: consulting right out of on you, it's still probably the
Speaker 2: right move, just from like getting trained on how to
Speaker 2: work hard. People who work at Goldman from twenty two
Speaker 2: to twenty four are typically more competent than other people.
Speaker 2: And for all my stuff about like you should go
Speaker 2: take risk in your twenties, the caveat on that is
Speaker 2: like you should have a couple of prestige STAPs first,
Speaker 2: Like Columbia Business School was a prestige stap for me.
Speaker 2: I enjoyed it, I learned a lot. The main reason
Speaker 2: I went was like I went to a somewhat no
Speaker 2: name undergrad. It's not like I worked at a marquee
Speaker 2: firm out of undergrad. Like you want to get a
Speaker 2: couple of like I have, like somebody's de risked me
Speaker 2: as an individual. Then you go take the shots that
Speaker 2: you want to, so like I it's like have a
Speaker 2: collection of like independent work and thoughts like you can
Speaker 2: share like in real time. And then I think it's
Speaker 2: important to get one or two prestige STAPs before you
Speaker 2: go jump off and do your own thing.
Speaker 1: And yet in the book you talk about what a
Speaker 1: what a misfocus it is hyping on status and why
Speaker 1: that whole game is so cheah.
Speaker 2: So the status thing's so nuanced. I think that if
Speaker 2: you treat status as an ends to itself, you're going
Speaker 2: to be incredibly disappointed. I think if you treat status
Speaker 2: as a thing that you can acquire and leverage to
Speaker 2: actually do ease to an end. Yes, like if the
Speaker 2: trade is I'm going to go to an incredibly competitive
Speaker 2: school and spend two to four years working in some
Speaker 2: version of like Goldman, Blackstone, McKenzie, whatever, and I can
Speaker 2: come out of that and do anything that's very much
Speaker 2: worth it. But you don't want to be the person who,
Speaker 2: like ten or fifteen years into their career never really
Speaker 2: figured out their things. So kept chasing status is like
Speaker 2: a vanity projects. It's like I say, status as diminishing
Speaker 2: returns or like once you have enough of it, it
Speaker 2: gets marginal. After that, you're good.
Speaker 1: And our final question, what do you know about the
Speaker 1: world of investing today? Might have been useful back when
Speaker 1: you were locked in your bedroom trading specs.
Speaker 2: I underestimated how much retail investing is like a permanent
Speaker 2: fixture in the market today. I think it compounds from
Speaker 2: like and this is all like public market stuff, but
Speaker 2: like pod shops, trading, quarterback, quarter are like more and
Speaker 2: more of a thing. Passive investing is more and more
Speaker 2: of a thing. You could argue that true, like price
Speaker 2: setters being like fundamental long short funds or and like
Speaker 2: long only mutual funds are less of a thing. So
Speaker 2: it's created this thing where you have like a lot
Speaker 2: of like very short term trading on like whatever, alternative data,
Speaker 2: quarterback quarter data, and then you have a lot of
Speaker 2: passive stuff and then a really big active group is
Speaker 2: like retail investing is a thing like game stop. I
Speaker 2: thought was a one off fluke. It wasn't like open
Speaker 2: door short squeeze out of nowhere. You're seeing like random
Speaker 2: companies will just pop off like five percent, which makes
Speaker 2: it like Dan Sundheim was on a podcast with the
Speaker 2: Collison Brothers, the Stripe founders. A couple months ago, he
Speaker 2: was talking about how they changed, like how they position
Speaker 2: their shorts now d one capitals, because you just you
Speaker 2: could be fundamentally right, but guess what, fundamentals don't matter
Speaker 2: if the borrow rates through the roof and the stock
Speaker 2: like eight and you get blown up right, like like
Speaker 2: ask the game the Melvin Capitol guy about fundamentals when
Speaker 2: his fun got blown up right like it. At the
Speaker 2: end of the day, the only thing that matters is
Speaker 2: making money. And I really thought a lot of that
Speaker 2: was a twenty twenty twenty twenty one thing and it
Speaker 2: was COVID and people were at home. We're seeing so
Speaker 2: much stuff with like random speculative like nuclear reactor. Like
Speaker 2: a company Akalo went public through a spack. It was
Speaker 2: like a Sam Altman backed company. It was worth like
Speaker 2: forty billion dollars. I don't think they have a functional reactor.
Speaker 1: Yet, Like, are you suggesting that sites like Reddit, Wall
Speaker 1: Street debts still carry the influence they used to or
Speaker 1: has that attenuated and then it's spread out to die?
Speaker 2: I would argue that they almost carry more weight because
Speaker 2: I think that, like really, I think there's this is
Speaker 2: pure speculation, but I think that they're now increasingly a
Speaker 2: thing that like call it like institutional traders, quant funds, whatever,
Speaker 2: we'll like look at as a data source where if
Speaker 2: something spikes on one of these sites, they'll play the
Speaker 2: momentum and like it makes these bubbles go even further
Speaker 2: than they used to. And everything happens so fast now
Speaker 2: because like the speed that information moves on the Internet
Speaker 2: is just instantaneous. That like a bubble that might take
Speaker 2: like months to build up and then collapse could happen
Speaker 2: within a week both ways. So it's just like the
Speaker 2: whole like internet spread of information faster and faster. It's
Speaker 2: all all derivatives, like retail investors getting in the market
Speaker 2: and then yapping about stuff online. That's just never gonna stop, right.
Speaker 1: And it's so funny because everything old is new again.
Speaker 1: Back in the day of the Yahoo message boards, like yeah,
Speaker 1: like iomega and and that sort of stuff, nothing has changed.
Speaker 1: It's just how much faster were.
Speaker 2: And it's like zero commissions. Now it's like the there's.
Speaker 1: And it's in your pocket, you know how let me
Speaker 1: go home and call my broker does it?
Speaker 2: And now there's like, oh we have prediction markets and
Speaker 2: sports batting on your phone. We have removed all friction
Speaker 2: from people putting money at risk to do stuff, and
Speaker 2: we've made.
Speaker 1: Regardless of how dumb or speculative it might.
Speaker 2: Be, and the speed of which you can communicate what
Speaker 2: you're doing is now all so instantaneous and free. So
Speaker 2: you just have people constantly going risk on on whatever
Speaker 2: for whatever reason, and then everybody else knows it. That's
Speaker 2: just that's only going to keep accelerating.
Speaker 1: Under except it kind of sounds like a very late
Speaker 1: stage bullmarket.
Speaker 2: Could have said that in twenty one and we were right,
Speaker 2: twenty two is kind of a bear market. Then AI happened,
Speaker 2: So it's like I think that. I just think market
Speaker 2: cycles in general will keep happening faster and faster because
Speaker 2: it'll collapse, people get blown up, and then somebody starts
Speaker 2: running another thing. I just think it's going to get
Speaker 2: more and more violent.
Speaker 1: I have a pet thesis that the giant reset, the
Speaker 1: giant fiscal stimulus and crash and recovery in twenty twenty
Speaker 1: was like a reset and extent of the bullmark, and
Speaker 1: another I agree with that ten years it's but anyway, Jack,
Speaker 1: you you were more than a somewhat special guest.
Speaker 2: Thanks.
Speaker 1: This was really great. Thank you for being so generous
Speaker 1: with your time. We have been speaking with Jack Rain's.
Speaker 1: He is the author of Young Money, a field guide
Speaker 1: to wealth and purpose in your twenties. If you enjoy
Speaker 1: this conversation, well check out any of the six hundred
Speaker 1: and fifty three we've done over the previous twelve years.
Speaker 1: You can find those at iTunes, Spotify, YouTube, Bloomberg, or
Speaker 1: wherever you find your favorite podcast. I would be remiss
Speaker 1: if I didn't thank the crack team that helps us
Speaker 1: put these conversations together each week. Alexis Noriega is my
Speaker 1: video producer. Sean Russo is my researcher. Anna Luke is
Speaker 1: my podcast producer. I'm Barry Rutoults. You've been listening to
Speaker 1: Masters in Business on Bloomberg Radio.