You Can't Buy Back Your 20’s — with Jack Raines

26:00Jack Raines:Yeah. When you were traveling, did you ever get stuck in like a social media spiral in some beautiful place, but stuck in a social spiral there? I wouldn't say I got stuck in a social spiral. I have this weird, like, again, my main platform is like trying to grow my newsletter and then like downstream of that kind of like it was mainly Twitter then like I wasn't really posting that much anywhere else. I was a little bit obsessed with like making newsletter subscriber account go up where like I would actually refresh like subscriber count too much. I was like pretty obsessed with open rate and click through rate and all that, which wasn't healthy either.

26:36And then I was still probably spending too much time on Twitter, but I would say that like, I was a little bit neurotic about, am I growing same amount of subscribers by week or by month as I used to? And like, is my Twitter following going up and all this stuff. So it, it wasn't like an Instagram reels rabbit hole doom scroll thing but like there was some level of probably unhealthy attention to detail on twitter newsletter growth metrics right well that sounds healthier because

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29:50Jack Raines:And that story evolves over the years. I know when I was in my 20s, I had a relationship with money that was really driven by fear and anxiety and scarcity. And one thing that really helped me was knowing my numbers, because if I had a really strong sense of all my numbers, everything coming in the door, which was not much, and then everything going out the door, that gave me a sense of control. And back then I would track it with a spreadsheet. But now there are much better tools. And the one that I like is Monarch. So Monarch is a centralized dashboard that helps you manage your money. And it's not just backwards looking.

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31:23Jack Raines:we've talked about apathy in the context of screen time and social media what are some of the other factors that play into the apathy or the malaise that afflicts a lot of people in their 20s i think there's two things and it's like what i call like the two biggest traps young people fall into one of them is apathy one of them is status i actually think that they're very very related in that everybody's seen a version of the status trap where you go to a competitive school with a lot of other people. There's a lot of wealthy kids there. And then everybody's gunning for the same jobs at the same companies.

31:55It's some subset of like finance, big tech, law, whatever. And once you're on that train, everybody's trying to one-up everybody else with like finance job, finance job, finance job, tech job, promotion, blah, blah, blah. Well, everybody's seen the version of that. Apathy is almost like a consequence or side effect of status obsession where there's a real problem now where like people start feeling hopeless and apathetic about their own circumstances or position in life because they're comparing themselves to others, which is it's a status thing. Like, I don't think my job is as good as like the people I went to college with.

32:32Therefore, like, I feel like I'm falling behind. And the issue now is because of social media, you have so much visibility and exposure into other people's lives, but it's like a fun house mirror version where like, even if you see what career somebody has, you don't actually know how much money they're making or frankly, how much money they're keeping, what their burn rate is. You don't know if they're happy in their personal life. They might be totally miserable. All you really know is maybe what they do for a living than what version of themselves they put online. And everybody's only like, nobody's actually putting out their lowlights online.

33:01It's always a highlight reel. You now have exposure to some percentage of the lives of thousands to millions of people, some that you know personally, some that you know professionally, some that you don't even know, but they look like they're around your age and went to a similar school, but you think they're doing better than you. And then you are looking at your own life like, I'm only making this much money or like, I feel behind, other people are advancing their career. 30 years ago, you kind of only knew how people were doing that were like in your immediate orbit, like in your community, in your job, in your office, whatever.

33:32Now, you know how 50 ,000 people are doing, which is just a horrible spot to be in. The two outcomes from that are, I actually think status chasing is the lesser of two evils. While the motivation is unhealthy of like, I am trying to catch status of my peers. The outcome is like, maybe you do make career progress or whatever. It's just, you're probably not going to be happy and you'll be stressed. Apathy is the other version where like, you feel like you're far behind and like can't keep up and it's hard to break that inertia and take action and you feel over time the longer you delay taking action you feel further and further behind and more and more hopeless but both sides that are so downstream of we're all just playing these like permanent comparison games now and you can't really even if it doesn't affect you as much as other people you're still aware of it like i know which people in my network are like they started a company and sold it or like they're doing really well in a hedge fund or whatever and it's and some people probably look at me like that.

34:26Like, Oh, it seems like Jack is doing all this and all that super well. And it's like, I've talked to people making way more money than me. That seems to be somewhat envious of like certain parts of my life. And then like, there's a version of me that's like, well, this guy cleared almost a million dollars this year. And everybody is comparing the parts of their life. They just don't really enjoy or appreciate to the parts of other people's lives. They deem to be better than them. And I just think it has everybody stressed out and like apathy is a like very common manifestation of that stress.

34:57Like I'm just going to doom spiral.

35:00Jack Raines:Right. When you get so stressed out by the constant comparison that you end up just kind of quiet quitting. Yeah. You freeze. You just like, I don't know what to do. Therefore, I just stop. Yeah. Right. Right. You have a freeze response. Sometimes I feel a freeze response just from inbound overwhelm. There's so many things coming at me that I cannot reasonably manage at all and either like literal messages, like literal inbound messages, or sometimes it's just like so many tasks and so many things. And I'm the bottleneck in all of it. And when all of this is rushing towards me, sometimes it just gets so overwhelmed that I have a freeze response and do nothing because there's just too much.

35:41Jack Raines:Yeah. And I hadn't thought of that as apathy, but a freeze response when chronic can become apathy. Yeah. It's a defense mechanism. Really? It's like if you just kind of numb yourself to the thing, it doesn't hurt as much or stress you out as much. And then, yeah, like you're just like totally removed from the game at that point. Right. Yeah. What are some of the best antidotes? I think for most things in life, just feeling like you have positive momentum matters. Like at rock bottom, simply like getting out of bed, making your bed, going to the gym. That's just like maintaining level of self-care and life responsibilities is a basic step one, but actually like matters a lot when you're spiraling.

36:28It's such a cop out to say, like, don't compare yourself to other people, but being able to like focus on a task at work and getting it done, stuff like that just matters. Something that I've realized in my own life is like relative position in life actually is a fleeting feeling of satisfaction. Like it's the whole hedonic treadmill, blah, blah, blah. But being at any particular level, you're still subject to like comparing yourself to people above. You just reset your baseline expectations of this is where I am now. I'm at a better place in life now than I was three years ago. But on one hand, I also almost feel like more anxiety is too strong of a word, but more sense of urgency to like I need to do more and more and more.

37:08It's like you can see more opportunities as you keep moving up. But for me, the thing that kind of helps alleviate some of that stress is just feeling like you're making progress Writing a book. It was a lot harder than I expected it to be I very much in my mind going into that was like All right, i've written probably close to a million words online. A book is a lot less than that It's basically just 20 blog posts It was much harder than that, but you get a chapter done. You're happy with it. It feels like progress okay now we need to do that again and setting difficult, but very achievable goals.

37:41And then hitting those just matters. Feeling like your momentum is going in the right direction is so much more important than being in any particular place. It feels good to feel like you're making progress. Other people can kind of detect that. Like if somebody feels like they're on an upswing, you're like energy changes. It's like a perceivable thing by other people in your environment. So you almost just have to set up tasks or goals or quest or whatever you want to call them, where you have to strive to hit thing, but it's doable. And that's also dependent on where you are in life. Like if you're just struggling to get out of bed, that thing might literally be like getting out of bed and making your, just like having your apartment put together and just like functioning normally is a massive improvement from where you were.

38:25Like you can't focus on, I want to be in the C-suite of company when you are at rock bottom, but you can put yourself in a better foundational position to like get the next step and the next step. So I think like breaking tasks and goals down into like things you have to put effort into achieve but are doable is regardless of where you are in life, kind of the only thing that matters.

38:47Jack Raines:Much of what you've described is the act of becoming. I was just talking about this the other night, actually on a Zoom call because somebody was asking the question and this is a question that a lot of early retirees grapple with, the achievement treadmill. When do you get off the achievement treadmill? And when have you racked up enough achievements? Someone asked me that question and my response was similar to yours. I was like, it's really not about the achievement itself. It's about the person that you have to become in order to be able to do that thing. And because we are always in an act of becoming, human life is dynamic.

39:29Jack Raines:So we are always becoming every day for better or worse. You know, sometimes we're becoming worse. But because we are always in an act of becoming, a goal is simply a way to, it's a forcing function that gives direction to what one is becoming. Yeah. Yeah. You write about how life is stage specific. What do you mean by that? Let's say somebody lives 90 years, right? Let's call it like median human life. You stay healthy 90 years. On one hand, you have the same 52 weeks in every year. But what gets missed when you look at like a calendar view of life is that the experiences you would want to get out of like any one of those years or call it like any block of five years is very different from like any other block.

40:15Like the things that you will want to do and have the ability to do it, call it from like 22 to 27 is much different from like 52 to 57. You're just in a totally different life stage. The desires you're going to have, the responsibilities that you have, the energy levels that you have, the opportunity set that you have is like totally different. And I think it's really tough for a 22 year old out of school to be fully cognizant of the fact that I am going to get older. And while I'll still be me, the like things that I will want to do, the amount of money that will cost to do the things that I want to do.

40:49Like all of this stuff is just going to change a lot as I get older. And because of that, you can like graduate from college at 22 and have all these ideas of things that you want to do, but then convince yourself, you need some level of stability or money saved up or whatever to go do these things. And then 10 years later, you blink and you're like 32, you're married, you're starting to have kids and the window of opportunity for a lot of those things shuts at the same time. a new window of opportunity opens for other things that involve like your spouse, your kids, your community, all that stuff.

41:19But if you're not aware of this shifting window of opportunity, as you go through different parts of life, it's like really, really easy to just not achieve or do some of the things that you want to do because you didn't realize there was an expiration date on those things. When I was in my early twenties, I wanted to do this whole backpacking trip abroad. I had a blast with it. It was super fun. I'm 29 now. I still like to travel. I'm going to France in a few weeks for vacation. I'm still very much go do interesting stuff. I have like very little desire to do a three month stint abroad. I love living in New York.

41:53I like how my life's set up right now. I just don't want to go to Australia for three months or whatever, but I'm really glad I did do that at 24 where it was the 24 year old Jack got way more enjoyment out of an experience than any other older or younger version of myself would have. That was an example of doing the right thing at the right time for me versus if I try to do that exact same experience later, I could do the exact same trip. I would enjoy it way less, right? Because it was a stage specific thing. And careers are like that. Relationships are like that. Every part of life is the amount of enjoyment or utility you get from a particular thing isn't just dependent on that thing.

42:32It's dependent on the version of you and the life stage version of you that's doing that, which I don't think people take that into account enough. And they're thinking through like what you want to do with your career, what risk you want to take and when you want to take them. There's so much more to any decision than how much will it cost or how much time will it take? If you aren't thinking through, is this a thing that like, I only have a couple of years that I could go after. Therefore I should do it now. You might miss the window. Once a window has closed, it's very obvious that it has closed.

43:05As you get older, there's always things that maybe you wish you would have done when you were younger and you can't. Or if you go do them now, you're just not going to get the same enjoyment that you did. It's like a stereotypical example. But if you're like out at a nightclub and you're 25 and then you see the like group of like 45 year old dudes over there at the table, like maybe they're like having fun, but they kind of look out of place. You can spend so much money to be in the club, but you can't buy back the experience of being the 25 year old in the club. That applies to a lot of stuff.

43:31Jack Raines:I'm going to challenge you a little on this. I get how it's stage specific, but I don't necessarily correlate stage with age. And what I'm thinking about are all of the people who in their 30s or 40s or even 50s either retire early or they take a sabbatical, a prolonged sabbatical from work and do something awesome. You know, like ride the Trans-Siberian Railway or backpack through South America for six months or get an RV. And maybe they've got kids and they're like road schooling with the kids, like homeschooling, but like turning it into a big field trip. And so when they're doing their chapter on Machu Picchu, they take their kids there.

44:19Jack Raines:And when they're doing their chapter on the Great Pyramids, they take the kids there with the right. and of course you need some level of disposable income for that but with the right attitude with a commitment to it and with adequate disposable income seems like you could create that stage at any age i agree with that but even let's take the like road trip school example two things on that are one you do need some level of disposable income that's higher than doing like a solo backpacking trip whatever it's not that the window of opportunity to like go have interesting experiences abroad expires, but the window of opportunity to do the, like, I'm fresh out of school, hostel hopping experience expires.

45:01That's not to say you can't do that then, but there's a difference between being like 24 and a hostel with a bunch of 22 to 25 year olds and being like 35, like your relation to the people around you in that environment changes because the majority of people doing that are in a different, they're like 10 years younger than you or whatever. It's not that it's right or wrong, but it is a totally different thing with just how you relate to the other people around you. That's honestly a big part of it is like, for example, a lot of people do, I don't know if I would say a lot, but like people do retire early and a lot of people take sabbaticals at some point here or there.

45:33One of my concerns about the veneration of the fire movement is that while you can get to a point that you have a lot of freedom to do whatever you want earlier than what would have been a traditional retirement timeline. If most of your peers are still like fully in the employment cycle, it can be fun for a year, but at some point you're going to find yourself increasingly alienated from people who are like, if you're 38 and retire and then you're 39, most of your peers are working another 15 years and they're like starting to like peak on what they're doing with their careers. While you fully stepped away from the career game, you're going to just find yourself less and less able to relate to people that you like.

46:09It's not that you're going to lose those friendships, but you're just not in the same game that they're in anymore. And it makes it harder to relate where like we're social creatures and none of us live in a vacuum. So if you're doing the thing that's totally different from the other people, your age, or it's not even just age, but you're just broader peer group before that part of the value of any life experiences, the relationships and the connections of the people like doing that thing with you. And even though you have full autonomy over what you're doing, you don't have autonomy over how that relates to other people in your environment.

46:42There's like a whole cohort of people that either right out of school or like they've worked for a year or two, do the whole like vagabonding abroad thing, which is cool. And there's a digital nomad community of all age groups. I'm like, well aware. I like hung out with plenty of people in their thirties and forties in Argentina when I was down there, for example, but it becomes an increasingly like smaller and smaller cohort, the older you get. Like you've traveled for like a couple of years in your twenties. I'm sure you saw the same type of thing where like, there's a version of that. That's very like twenties weighted.

47:08And then there's like a different version of that, where there's people with more disposable income, maybe they work 10 or 15 years and then they're taking a year off going to do different stuff, but it's just different. So it's not that adventure expires, but the version of this is cheap and thrill seeking and I'm trying to do this on the cheapest budget possible and blah, blah, blah. And I'm hanging out with other people my age that does go away and gets replaced by like different iterations of that.

47:33Jack Raines:Right. And you do see with the fire community, one of the dominant conversations that you hear often is that loneliness. In part, that's why there are so many in-person meetups because it's such a rare thing to do that you have to have those in-person experiences, especially for people who don't live in major cities that can be really hard to find. I mean, a lot of people like to say the work sucks. I would argue like, okay, well, it's what's the alternative? Just we're not made to just chill permanently either. Like it's working toward things is the default state of satisfaction. Like it's funny.

48:08I just started reading, I think it's called the strenuous life by Theodore Roosevelt. It's a collection of like speeches and essays. He has the recurring trend is basically, and it's funny, these essays are there from year 1900 approximately, but he has this whole thing about how people were created to like go after difficult things. Peace is a by-product of like hard work or of war or of conflicts and like overcoming stuff versus if you're just optimizing for like a life, even if you're like, he talks about people who are super high net worth, whether they're rich because of like work they did or that their family did, that wealth was a by-product of doing the work.

48:46And even if you have reached that point, it's still your responsibility to contribute to society through like writing or art or like scientific discovery. We should just always be doing things and having positive momentum. and that's where the only sense of true satisfaction, life satisfaction comes from, not just enjoying this consumer surplus or whatever, right? Like with a fire movement, it's like, it is a very good thing to have enough money where you don't have to worry about money anymore, but you still need to work on stuff. Like everybody needs to work on stuff. I just really disagree with the idea of the whole point of making money as you get to a point where you don't need to make money anymore.

49:27I think obviously financial responsibility matters. Having money is much better than not having money. But I don't think the end outcome of life is just get to the point that you can opt out of the labor force.

49:38Jack Raines:Yeah. Anecdotally, at least what I often see with the FIRE movement is they're very highly educated, very driven, very ambitious, and they often are in some type of a work environment that they find constraining. Yep. Reaching a particular net worth allows them to get rid of that constraint. And often, at least anecdotally, often what tends to happen is there might be a short period of three months or six months where it's like, great, I'm free. Let's go travel. Then their attention turns to, all right, with those constraints off and with cash flow not being an urgent need, what then do I want to do?

50:20It is very nice to have that mental bandwidth to take a few months and just think things through that you just don't get when you're working full-time, especially if you like in like, I don't have any kids, but like working full-time plus kids, there's like zero room for I need to take three months and just figure out what to do next. The biggest benefit of achieving fire is you just have flexibility to like take a pause and figure out next thing. You just don't want the pause to become like the default state of like what you're doing.

50:51Jack Raines:Yeah. And I think what's valuable about your messages for people who are in their 20s is such a reminder that like you don't want to be 24 or 25 and so committed to this idea of what your life will be like 20 years in the future that there's that expression um plan for the future don't live in it right and i think what can often happen especially among people who self-select as people who listen to personal finance podcasts, we're often so focused on planning for the future that that can sometimes translate to living in the future, overliving in the future. It's a very bad trade-off to continually sacrifice the present for a hypothetical future.

51:34A lot of people live in the past and ruminate too much, which is not great either. Everybody knows that staying stuck in the past is bad. It is much easier to fall in the trap of living in the future because you tell yourself if you're being prudent and frugal and this and that, but in reality, you're just like, life is only in the present.

51:52Jack Raines:You know, wisdom is holding to seemingly contradictory ideas simultaneously. We simultaneously have to hold the value of, I mean, I hate the phrase delayed gratification. I've always hated that phrase because I believe that if you're doing it right, the act of saving and investing itself should be inherently gratifying, which is why I hate the phrase delayed gratification. But in any regard, we live in a society where like delayed gratification, deferred rewards, those things are considered prudent and are considered wise. And it's all about working hard today so you can reap the benefits tomorrow.

52:30Jack Raines:And that has to be held in tandem with also living in the present. And that can be very hard to do, particularly when you're in a situation, you're in a job that you hate. Actually, yeah. What advice would you give to anybody who's listening to this who's like in a golden handcuff situation? I think it's just you have to be very honest with yourself where one golden handcuffs are actually a pretty good spot to be in, all things considered. If you're employed and making a lot of money and your biggest issue is like you want to do something else, but I don't know if you can give up the paycheck.

53:04I guess the alternative is like not making a lot of money. Like there's, I don't think that like golden handcuffs are, it's, it's such a kind of ridiculous label to me because what you're basically saying is like, I'm making too much money to go do something else. If that's true, that constraint is some mix of like, you're spending too much money or it's kind of a self-imposed restriction on you just refuse to either take the status hit of leaving the thing, or you've put yourself in an incredibly expensive lifestyle where like, if you're living in Manhattan, your kids are a private school in Manhattan, this and that.

53:43Yeah. That's very expensive. And golden handcuffs are a real thing. The alternative is like you move somewhere else. You can make the changes to get out of the golden handcuffs. It's just a matter of being honest with yourself. You're either making the choice that the more expensive lifestyle is worth the job that I'm increasingly growing tired of, or I want to do other stuff, but to be able to do that comfortably, I might have to like make radical lifestyle changes. You still get a pick, right? Like golden handcuffs are a like lifestyle specific thing where there are changes you can make, or those don't exist anymore.

54:16You just have to be comfortable making those changes. I guess my advice is be honest with yourself. Do you want to make this change enough that you're willing to make lifestyle changes to make it affordable because the reality is very few people are in a spot where they can leave the high paying job and still maintain the high cost lifestyle unless they have sold a company. Maybe they sell their company to a big company. They made a lot of money in that. They're now working for that big company and still have high pay. Well, if they made$20 million and they sold their company, yeah, you can take your foot off the gas for a little bit and do other stuff.

54:50If you're a high paid salary employee at a bank or a tech company or whatever, and you want to maintain the Manhattan, Palo Alto, whatever lifestyle, okay, to be able to change the lifestyle how you want, you might have to think about, is this the right geography to live in? Whatever. It's just a matter of being honest with yourself.

55:10Jack Raines:Do you think that also applies to other types of golden handcuffs scenarios that aren't specifically a job? So for example, there are a lot of people right now who they're living in a home that they bought in 2020 and they locked in a 2.9 % mortgage and they don't want to live there anymore. Maybe they don't even want to live in that city or state anymore, but they feel golden handcuffed in. The other example that comes to mind, I know a few couples that probably should break up, but then they would lose 50 % of their assets. I mean, I don't think I'm going to spot to give like marriage or divorce advice as a unmarried 29 year old.

55:48I've never bought a home either. But on the home thing, it's like, yeah, that's a thing. And if you sell your home and then go buy a new home, your mortgage rate's going to be higher. And that home's probably going to be like, it's definitely going to be more expensive than whatever you paid in 2020. The flip side is like, you could sell a home and go rent. You're going to be paying rent and you're not going to build equity in a home. But if you can sell your home for like$1.5 million and then you're paying$7 ,000 a month in rent for like a nice home after that, I don't know. There's always another thing you can do.

56:16It's just, that's kind of the trade, right? There's no perfect fix where I feel stuck in this home and I think we should downsize homes. But if I sell this, I'm going to buy another home at a higher interest rate. You could sell it and then rent and see if rates keep going up and then prices drop or maybe mortgage rates dropping. Nobody actually knows what's going to happen with interest rates or home prices or whatever. I don't think you should make a decision on what to do with a home you own based off of a hopeful forecast on where prices or mortgage rates are going to go in the future, you either stay or you sell it and you move.

56:51But it's the same thing as anything else. It's just a matter of you just have to have a very clear-eyed, transparent view of this is the reality of the environment right now. Therefore, these are the choices I can make. Same thing with relationships. I mean, I've never been married, so therefore, I've never lost assets through a divorce. I have been on the spot of like, you're dating someone you thought at one point you were going to marry them and then you're sitting there like i don't know if this is it or not the longer you delay having a very tough conversation it actually only gets worse like you're just sitting the whole thing we talked about earlier about living in the future you're actually like kicking future you in the ass by like putting off a conversation for six months or a year or two years i have multiple friends now who started dating someone in college or right out of school and then i don't know like you you date two or three years, you probably have a pretty good idea at this point as working adults, if you think you're going to marry this person, and then you see people get like six or seven year relationships.

57:48And then finally somebody breaks up with somebody. If you started dating at 22 and you broke up at 24, you don't really ruin anybody's life. People have their entire future ahead of them. You didn't waste someone's time. You just figured out it didn't work. But if you kind of knew two years in, this probably isn't it. And you just kept kicking the can down the road because nothing was quite wrong, but you don't think you're going to get the conviction to like get out on one knee and propose. Then you're 28 or 29. I don't think breaking up after a year or two waste someone's time. But like if you break up after seven years, when you kind of knew after two years, it probably wasn't it.

58:23That kind of wasted two people's twenties when they could have been dating other people. No problems in the onset are big problems, but refusing to address a certain problem until X number of years goes by, then becomes a big problem. That's like relationships. It's if you think you're in the wrong career path, if you do the wrong thing for two years and you change jobs, fine, everybody does that. If you knew two years in that you should have changed careers and just didn't do the work to do that up front, it becomes exponentially more difficult seven years down the road. The simple solution to most of these problems is just address the thing sooner rather than later versus letting it metastasize.

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1:03:03Jack Raines:There are kind of two things that I'm hearing from you. One is that problems get bigger the longer you delay. The second thing I'm hearing is don't let the tail wag the dog. Right. Right. Because so much of the time people, especially people who are very financially savvy, they will make the decision that maps out on paper. Yep. Even if it's not what they want. Yep. And it seems like a major theme of what you're talking about is let the heart lead and then the mind execute. Yeah. It's like if you do want to make the decision that maps on paper, cool. Just know that you're making that decision.

1:03:37I actually, I don't know. I do think that there can be a misconception of it's easy to romanticize the idea of money doesn't matter. Live, laugh, love, go chase your dreams. I don't actually think that's good advice. Typically, I think it can be in like specific windows. Like if you want to take a career sabbatical to go do something, yeah, you should do that. But I have a plan. At the same time, I actually see nothing wrong with spending a few years where like you tolerate a really rough lifestyle and work-life balance to make a ton of money. Okay. Investment banking is kind of a grind, but it's also the highest paying job.

1:04:12The median person can get right out of undergrad if they play their cards right. Making$200 ,000 at 23 or 24 is pretty crazy. And your social life is going to be worse than some of your friends. But if you know, going in, I'm doing this to get the right prestige job and make a lot of money along the way. I think that's a totally valid decision to do. You just should know what trade you're making. You can't get upset about the circumstances of a decision where you should have known the consequences and the trade-offs going in. Just like if you pursue the more frivolous, have fun, whatever thing, you can't be mad that people who made another choice are making more money than you.

1:04:49And I think envy is such a toxic trait that's also so universal and pervasive because everybody wants what they can't have. But just having honesty with yourself of like, I made this choice, therefore this outcome shouldn't surprise me. I think more people should just be honest with themselves about that.

1:05:06Jack Raines:Yeah. Yeah. And envy is funny because people often, they envy the result, but not the sacrifice it took to get there. Right. Like, why do you envy the life? I don't know. Like, it's the whole, oh, look at a list of billionaires, 11 divorces for the seven wealthiest people in the world. Shout out Mark Zuckerberg, the only like mega billionaire who's actually still married to like his college sweetheart. Would I trade spots with Elon Musk? Probably not. He seems like he doesn't really seem like he's having fun. He seems incredibly stressed out. Would I like to have a trillion dollars? I mean, probably.

1:05:35That would be cool. But it doesn't seem like he's happy. He's successful, but he seems stressed. You just have to be really honest with yourself about what the cost of the thing is.

1:05:48Jack Raines:We had the former president of Tesla as one of our guests, and he described a moment where Elon was having a pretty significant mental health crisis. And he talked about how Elon didn't want to show up for this earnings call and was laying on the floor of the conference room with all of the lights out, just having an absolute breakdown. And this guy, John McNeil, laid down on the floor of a dark conference room with all of the lights out and talked to him long enough that eventually they both got up off the floor and made it to the call. But those mental health crises can happen at any net worth level.

1:06:31Yeah. I don't know what the number is. There's probably a sweet spot of net worth where like if you go above it, stress only reaccelerates. And if you go below it, stress accelerates. It's the level that your home is paid off and you have flexibility. You can quit job if you need to, and you can cover emergency medical situations and you can just do what you want, but not at the level of like, you feel like there's like whole companies dependent on you or you're just in this. I don't know. There's a level between like being broke and being Elon Musk. That's much better than both of them. And I don't know where that it's probably aged depending on like where the like net worth tapers off and both ends on life satisfaction.

1:07:10I would much rather have$10 million than a trillion dollars based off of what it would take to get to either of those levels. Yeah.

1:07:19Jack Raines:This reminds me of Nick Majuli's Levels of Wealth, where he talks about the level between 1 million to 10 million. That's the sweet spot. And then once you go above 10 million, the combination of obsession plus luck plus time that it takes to get to that. And then you find yourself in like management mode. Like, like, how do I allocate my money? How do I set up my estate? How do I minimize taxes? Like you hit a level of where it's probably not just like index funds and maybe some bonds or whatever and chilling. Like there's a whole, there's just complexity increases. There's this guy, John Arnold, who's like one of my favorite Twitter follows.

1:07:56He was one of the most successful traders of all time. And he now has his own investment group, does a lot of philanthropic stuff. he put out a tweet that was pretty interesting like he's worth probably a billionaire if not a billionaire like hundreds of millions of dollars and just discussing how complex like well like his own family wealth management is now with where do they allocate money into like private investments or fund managers or real estate or does he still trade some of his own money and this and that and it's just the amount of things you have to think about when you have that much money it almost like a family office kind of becomes a full-time job good problem to have i would love to be in a position where I'd have that problem.

1:08:34But those aren't problems that you have with$5 million. They are$500 million.

1:08:39Jack Raines:Speaking of trading, you rapidly made$400 ,000. This is a hard pivot. It's a great pivot. Yeah. You rapidly made$400 ,000 trading SPACs and then lost it all? Yeah. I didn't lose it all. I didn't lose it all. And this is actually probably the worst financial advice anybody's ever going to give on your show, but I don't recommend trading. Steve, can we have an alarm sound of like not financial advice? This is the opposite of financial advice. If you are going to actively speculate in the market, I do think it actually makes sense to do it in your Roth IRA rather than in a taxable account. Because one, if you do manage to make a lot of money doing it, you want to taxes on it.

1:09:18And two, your accountant won't have to look at you like, dude, why did you play 700 trades this year to make like$200 or whatever? I started working right when the pandemic hit. I graduated college December 2019, start working February 2020, and I was in the office for a week. I distinctly remember I had like$10 ,000 to my name. I put it all in a Robinhood account. I bought put options on the S &P. Basically, you make money if market goes down. And I made like$20 ,000 in a week, and I thought I was like the next Michael Burry. I was just like the man. I bought more put options the day the market bottomed.

1:09:53It started going back up, and I round-tripped$10 ,000 to$30 ,000 to$10 ,000 in two weeks. and almost threw up. I was like a broke 22 or 23 year old. After that, I was like, I'm not going to trade stocks again. I think Roth contributions are$7 ,000 now, but at that point there was$6 ,000. Put it in a Roth, TD Ameritrade. I put in like the QQQ and the S &P and wasn't going to touch it again. And then one of my buddies texts me and he's like, do you know what a SPAC is? And I say, I have no idea what a SPAC is. Tell me about it. He said, well, I don't either, but if you buy this thing called Desert Eagle Acquisition Company.

1:10:29In two months, it'll turn into DraftKings stock. And I was like, that makes no sense. So I look it up. He was right. Basically, a SPAC is just a, it's like a shell company, a blank check company that's publicly traded. You can buy shares in it, just like it's Apple or Tesla or whatever, but it's called something acquisition company. These companies raise a bunch of money from investors. They go find a private company to take public, they give them that money in exchange for like 10 % or 20 % of the company. And then the whole thing merges. And then you have a publicly traded, in this case, draft Kings.

1:11:02SPACs are pretty interesting because if you buy the SPAC when it's publicly traded and you don't like the deal, you can redeem your shares for cash before it closes. So basically if a SPAC is trading at like$10 and there's$10 per share, like in its bank account, then you can just like get your money. You've got full liquidity. Even if on paper it crashed, like a lot of these crashed 10 or 15 % in 2020 with a market crash. There was actually free money in buying them because the net asset value that you could redeem out was$10 a share. SPACs were also a total bubble in 2020 and 2021, like a lot of other stuff, because it was like COVID and everybody was trading and whatever.

1:11:42I basically figured out that a lot of these SPACs were a total bubble and that because of the redemption clause, if you buy really close to 10 and then they go up to 15 or 20, you basically risk anywhere from one to 5 % to make, if it's a literal meme stock, a hundred or 200%. So I just kept parlaying over and over and over again, buying SPACs really close to$10 and then selling them as they started catching heat basically on Twitter or like Jim Cramer would talk about them or whatever. And yeah, I turned six grand and a 400 grand in like nine months just, and it was like pretty close to risk-free just because of the, like I was tactical about what I bought.

1:12:21The issue was like anything else, they became a bubble. Then everybody raised a SPAC. There wasn't enough money to go around and they just like stopped going up. So I would buy one and then it wouldn't move. I hadn't realized at the time, but I was kind of addicted to the whole making more than my salary in a week because I bought the right SPAC is actually like a pretty intoxicating feeling. I was like, Oh, I could probably just trade regular stocks. So I bought like a really speculative buy now, pay later company and like put my entire portfolio in it. I thought they were undervalued compared to other companies.

1:12:52I was right, but it turns out that even if you are right on, if they're undervalued, if the market thinks it should be even more undervalued, it can tank from there. And I lost like$160 ,000 in a day on an earnings report that went poorly. I basically lost like 200 grand from like top to bottom in a period of about a month. And I was like, okay, well, I'm not going to trade. The actually smartest financial decision I ever made was looking at it like, I'm not going to trade stocks anymore. I still have a decent chunk of tax-free money in a retirement account now. We should probably just let that compound.

1:13:25I've still bought a stock here or there, but I'm certainly not trading anymore. I'm not even going to say it was fun. It was actually entirely stressful, but I certainly learned a lot about both my own psychology and investor psychology and just like how markets work.

1:13:39Jack Raines:Nice. So in some ways there might be a glimmer of financial advice here, which is the cautionary tale around trading. Well, it's like the cautionary tale is if you make a lot of money doing one thing and it worked and then that thing stops working and you try to do another thing, it's probably not going to work. Like the whole like, oh, I had an edge here. Therefore, the ability to make money trading stocks actually doesn't just apply universally across all things you can buy and sell. So V1 is like, don't trade at all. V2 is if you ignore V1 and you do trade and you make a lot of money doing a specific thing, if that thing stops working, you should just like throw it in an index fund.

1:14:18And then V3 is, again, you probably just shouldn't be trading to begin with. But if you do, I guess do it in your Roth IRA. I don't know. I don't know if I should tell people that or not, but like it kind of worked for me ish. I'm also probably the only person who made money buying SPACs, considering pretty much the stock charts for all of them.

1:14:39Jack Raines:It's just like, yeah, the last five years. Yeah. I don't know anyone else who made money in SPACs, which is why it makes for such a unique story. It was a weird year. Yeah. Did you buy a portion of the Constitution? That was that was another thing. No, one of my friends did. So again, talking about weird things happening in 2020 and 2021, there were like 12 different bubbles happening at the same time. Spacks are certainly one of them. Another one was NFTs. They were non-fungible tokens. You buy a picture of a thing that picture serves as a store of value. Again, this was like the stupidest thing of all time.

1:15:16People were paying$2 million for a picture of a rock, the ETH rocks. I was like, or the whole, if you remember the, um, the board ape yacht club where people were buying pictures of monkeys for like hundreds of thousands of dollars yeah yeah i remember that incredibly stupid bubble when i was bopping around europe i'm in copenhagen at this irish pub with two of my buddies who'd flown out to visit and we get this call from our friend austin he's telling us he worked like wealth management too like very normal job in atlanta he was like do you guys want to buy the constitution i just think he's like drunk making something up whatever and i was like dude what are you talking about he's trying to explain it to me and i just said just tell me about this tomorrow like i don't want to hear this right now so he sends me an email with a super long there's seven copies of the constitution that are privately owned one of them the guy who owned it died and his family trusts putting it for auction sotherby's is running the auction and they expect it to fetch like a 15 million dollar bid basically he and some other guys created a they call it constitution DAO or decentralized autonomous organization where a DAO is basically just a group chat with a bank account.

1:16:26There's all this like weird lingo and verbiage of like, oh, we have these governance rights. No, no, no. It's like you make a WhatsApp or like I message group chat and they have a shared Chase account and everybody just puts in money. And now there's, in this case, there is$42 million of people in the group chat.

1:16:41Jack Raines:That's a great description, a group chat with a bank account. Yeah, it's crazy. He and a few other people flew to New York for the auction and they bid$42 million for the constitution. What they were going to do is like, they'd raised all this money where if you put money in, you got a certain number of constitution tokens, basically. And again, they were like actually kind of worthless, but the idea was whatever proportion of tokens you earned gave you like voting rights on what to do with the constitution. And they were going to like, they were going to like put it in some museum or whatever, have a plaque.

1:17:10This is like constitution doubt. Again, 2021 was an incredibly stupid year.

1:17:14Jack Raines:What a weird time. How did we all live through that. And it was just like a totally normal thing. So they go up there. They make the bid. Hilariously, they get outbid by Ken Griffin, the Citadel guy. He was already like, this is right around the time that the whole GameStop fiasco happened. I actually think Ken Griffin did nothing wrong in that. There's the whole popular narrative. He's manipulating markets. People don't understand T plus two, stock settlement, whatever. But Ken Griffin was like a known kind of villain figure in the stock trading internet, whatever. The problem with this constitution, Dal, was because they have like a public ledger of how much money they raised.

1:17:53Somebody who had a lot of money could just come in and like outbid them by a dollar. I mean, they would just win. It's like, there's no way to, it's like playing poker where like your cards are face up and like everybody else can see them and decide if they want to fold or double down. So he just outbid them by like a million dollars because he knew they didn't have a million dollars. And if they were to raise more, he would have just raised another dollar. And getting outbid by a billionaire who then got infamous for the whole GameStop thing is hilarious. That is literally what happened. And Ken Griffin now owns that copy of the Constitution.

1:18:24I have a few Constitution DAO tokens, and then I ended up selling them. And like the transaction fees I'm making them cost about half as much of the money put in. So I think I lost like$500 or whatever. After that whole thing ended, pretty much everybody just sold or redeemed or burned their tokens where there weren't that many left. and the tokens for no reason just turned into a meme stock. And like a few people made several hundred thousand dollars just because like the tokens ran up and they still own stuff. It was like, again, 2021 was proof to me that the efficient market hypothesis doesn't exist because like people are just throwing money at stuff.

1:18:59And that was just one example of a few people probably made a lot of money and a ton of people lost a ton of money.

1:19:05Jack Raines:2020 and 2021, especially with the benefit of hindsight, It's like such an interesting social experiment in what happens when everyone is just stuck at home in front of their computer with nothing to do. And then there's a bunch of liquidity injected into the system. Yeah. Yeah. And it's that. Yeah. Everything that you've just described is that's the outcome. Yep. Any takeaways that people – I actually want two separate buckets of takeaways. One for people in their 20s and at the risk of asking two questions at the same time. We'll start with takeaways for people who are currently in their 20s.

1:19:46Jack Raines:And then any takeaways you have for people, let's say in their 40s or 50s, who are like, my 20s are a distant memory. But how do I take some of the wisdom of that era and how do I apply it to my life now? So we'll start with takeaways for people who are currently in their 20s. I think the biggest two things for people in their 20s are one, you should just be incredibly optimistic. There's so much doomer porn out there about AI is going to take all the jobs or we don't know what's going to happen or the economy is awful or the world's going to s**t. There's actually basically never been a better time to be alive just from the level of consumer surplus we have of technologies on so much cool stuff that our standard of living is so good.

1:20:29And on the whole AI thing, I just think artificial intelligence has kind of democratized the ability to build and do really interesting stuff quickly, where there's never been a better time to be early in your career because so much stuff is changing. It's just opening opportunities everywhere. So there's a lot of uncertainty in what does a job look like or the correct paths to go after 10, 15, 20 years ago. They don't really exist. like it's true that pattern matching might not work as well as it did 10 years ago but there's just so many opportunities i think those are only going to keep going that the first piece of advice is be optimistic and the second piece is it's so okay to like not know what you want to do at 22 or 23 even though it feels like a lot of your peers know exactly what they're doing you're following behind and blah blah blah like it's okay to like experiment with two or three or four different things.

1:21:22It's way better to spend your twenties, trying a lot of different stuff and then figuring out where, if you want to call it your zone of genius or like what overlapping interests you have that you find yourself to be good at. It's okay if you don't find those until you're five or 10 years in versus the one thing that you shouldn't do is like commit to a certain path out of fear or scarcity mindset and doubling and tripling down on that. Despite your internal compass saying, this is not what I should be doing. I should be doing something else. Again, And there's never been a time to be like a curious generalist.

1:21:53And I think that it's easy to fall in the trap of, I don't know what to do. So I'm going to panic. Like there's just so many opportunities out there. I think that still applies to like anybody, regardless of age. I think it is easier to restart and try different stuff now, just because of 10 years ago, if you didn't know how to code, there were a lot of limitations on what you do with a computer. You can like build really interesting stuff. Everybody has their own set of life experiences. And there's just so many ways to do interesting stuff with your individual experience and expertise now that whether you're 25 or like 55, there's a ton of opportunities out there.

1:22:30But I do think the through line of my book about life being very stage specific is just being honest with yourself about if you are 25, like, are there things you want to do now that like you won't be able to do later? You should go do those. that exact same phenomenon exists, whether you're 25, 35, 45, 55, 65, there's certain window of opportunities that are just very, very pressing and in the now, and regardless of what stage of life you're in, you should be honest with yourself about this is where I am. This is what's going on around me. Like, these are the things that matter to me now. And these are those things that like, I probably need to take action on in the next year or two to like make the most out of them.

1:23:08And these are some of the things that might be more of a lifelong pursuit. and then kind of stack rank those and go after them. I know you mentioned earlier, like the whole information overload of feeling that there's so much inbound, not just from messages, like so much information, so many things you might want to do, whatever. My kind of, I call it filtering mechanism for like what are the right things to go after or what are the things that I consider to be fun? I think your internal barometer of fun is like a very useful, it's a very useful tool for figuring out what are the right things worth pursuing where when I say life is stage specific, I think having a sense of fun or enjoyment around a particular thing helps reveal to you which things are the things you're supposed to be going after in that stage of life.

1:23:51Where example, if you're 24, you want to go backpack Europe and you do it and you're having a blast, it was probably the right move. If I did the same thing now, I would probably actually be somewhat stressed about like, Ooh, like, will I be able to get back on career path after that or this or that, that same experience, I would probably find more stressful than enjoyable, it's probably the wrong thing to be doing at that time, right? Like having this sense of just fun and satisfaction in what you're doing with your life, I think is a very, very, very strong signal that you're doing the right thing.

1:24:20And if you're lacking that, you should probably do a bit of soul searching on like, what things can I do now that would bring out that feeling?

1:24:29Jack Raines:Right. And that goes back to letting the heart lead and then the mind execute. Well, thank you for spending this time with us. Where can people find you if they'd like to learn more? Look up Jack Raines on basically any social media platform. I have a cowboy hat on and my profile picture on everything. So it's pretty easy to recognize Twitter, LinkedIn, Instagram, Substack. I substack youngmoney.co. I write a weekly email newsletter. And then most importantly, pre-order or buy my book, Young Money by Jack Raines. It's on Amazon, Barnes and Noble. You can go to jackrains.blog slash book. At the time of us recording this, I'm recording the audio book next week.

1:25:07So there's going to be an audio book. So if you like listening to me here, you can get that.

1:25:10Jack Raines:If you hate the sound of my voice, get an ebook or a physical book. But yeah, get the book. Hopefully you'll like it. That is Jack Rains, the author of Young Money. Thank you so much for tuning in. If you enjoyed today's episode, please download our free, it's like a workbook on how to think through your money at affordanything.com slash F-I-I-R-E. That's affordanything.com slash F-I-I-R-E. And we walk you through financial psychology, increasing your income, investing, real estate, and entrepreneurship. And it's a space where we walk you through how to think through the way that you want to approach those.

1:25:47Jack Raines:So on the topic of having a philosophy of money, download this. It's completely free. Affordanything.com slash F-I-I-R-E. Thank you again to Jack Raines. His book is Young Money. Check it out. I've read it cover to cover. It's fantastic. It reminded me a lot of the world travel that I did in my 20s. and how unique that time in your life is. So I highly encourage you to check it out. Give a copy of the book to anyone you know who's in their 20s. And if you are in your 20s, check it out for yourselves. Thanks again for tuning in and for being an Afforder. My name is Paula Pant. This is the Afford Anything Podcast, and I'll meet you in the next episode.