Optimizing Life and Finances with Jack Raines

26:07The issue was I was so used to number going up. I was kind of willing to bet the house on doing it one more time. I'm confident if I'd hit a million, I would have walked away. That was just like a benchmark number. Oh, you should know that when you hit a million, you would not have walked away. Junkies don't say one more hit and gamblers don't say, I just need this parlay to come in. Right. And then I'm good because you're always looking for the dopamine hit, for the adrenaline. I would have found something else to speculate on. But I think I would have stopped trading SPACs had that happened.

26:37Coming up, we continue our conversation with Jack Raines discussing slow ventures and investing in creators. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. Today's show is brought to you by Vanguard. Advisors, your clients count on bonds for income and stability, not unwanted surprises. That's why Vanguard builds institutional quality bond funds. They're designed to help portfolios remain steady when markets don't. Whether index or active, Vanguard aims for consistent bond performance with a low-cost edge, which helps clients earn returns that compound over time.

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28:08Bloomberg's Wan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time. The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes.

28:50That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode. available on Plus and Pro Plans. Amazon Health AI presents Painful Thoughts. I, um, I can't stop scratching my downtown. Yeah, but I'm not itching to go downtown and tell a receptionist I'm here to talk about my downtown. Some things you'd rather type than say out loud. There's no question too embarrassing for Amazon Health AI. Chat your symptoms and get virtual care 24-7. Healthcare just got less painful. I'm Barry Ritholtz.

29:38You're listening to Masters in Business on Bloomberg Radio. My somewhat special guest, is that how you want to be? Is that how you describe yourself? I would say marginally special. My marginally special guest, Jack Raines, is here. He is an associate at the venture capital firm Slow Ventures and the author of the book Young Money, which we'll get to in a few minutes. So I'm kind of fascinated how you pivoted into VC work. You joined Slow Ventures in San Francisco from New York. Did you relocate to San Francisco and then come back to New York? I kind of get the sense you're bi-coastal. I try to make it look bi-coastal occasionally on Twitter.

30:23No, I mean, the funny thing was they were hiring in New York and San Francisco. and I applied for the New York job. I met with the partner in New York first. And then one of the GPs in San Francisco, Sam Lesson, I get introduced to him by the guy in New York. And we're on a Zoom call. He'd just come from the gym, super sweaty and disheveled looking. And five minutes in. Are you allowed to say that? Is he okay with that? I think he would agree with it. Five minutes into the call, he's like, what do you think of San Francisco? And I said, fentanyl and homeless people. And he was like, that's a crazy answer for somebody applying to a job in san francisco and i was just like i i didn't like i applied for the job in new york and he was just kind of like well i thought i was interviewing you for an sf seat and i was just like he told me to like take a beat and like think about it and i i can't remember if i told him on the call or just texted him right after but i was like honestly dude i mean i want the job so i didn't know this is what i was applying for but if you hire me i'll move to san francisco and he He was like, have you ever visited?

31:21And I said, no. But I've been to 25 other countries and 50 other cities. I'm sure I can figure it out. Yeah. The only difference is San Francisco has so many more AI startup advertisements on the billboards. And they have Waymos, which are awesome. But yeah, like I mean, I. And they are everywhere. We were just in San Francisco a few months ago. They are so sick. They're like yellow cabs in New York. Yeah. They're incredible. I mean, the worst thing about New York is that we keep trying to block Waymos. Let it happen. I'm so pro Waymo. I'm like Waymo's biggest fanboy. But yeah, going back to fall 2024, I was in this real career panic.

32:00I want to get out of media. And I was like, I should have gone down the investing route. And then I had to take a step back and I had signed that book deal. I was like, okay, I'm going to have to write a book. I'm going to have to be able to market it. So that means I need to look at jobs where I can still have bandwidth and flexibility to do so, which So it eliminates a lot of investing-y stuff where there's compliance issues. No investment banking, no trading on a desk, and no portfolio management, or even CFA analysts where whatever you do is disclosable and requires approval, and it's complex.

32:35But venture capital is the biggest, build your personal brand, content helps you source deals. So I kind of honed in on, and I didn't have an investment banking background. VCs more open to non-traditional investing backgrounds. It just kind of made sense. And I had a decent network in that space from Twitter and writing and all this stuff. So I just kind of started pounding the pavement, reaching out to VCs I knew in my network that may or may not be hiring. And Slo happened to be hiring. And I messaged, hilariously, I messaged Yoni, the partner of New York, on Blue Sky. That was back when everybody thought Twitter was going to die and Blue Sky was the thing.

33:08Blue Sky didn't take off, but it does feel like Twitter is kind of ground to a shell of what it used to be. I think it's starting to come back as of like a month ago. Oh, really? It feels like they changed the algorithm where you can like see your mutuals again. So people I actually care about. Yeah, literally last week, Nikita Beer tweeted, they tweaked the algo. So like you're seeing your mutual followers. And I was like, dude, that's what it should have been the whole time. Right. But anyway, I basically got hired from a Twitter DM and then a last second flight to San Francisco. Six weeks from application to starting in SF.

33:41Is that about right? Like I didn't know where to live. I went on the Facebook marketplace, found some dude with an open room and just hopped on a FaceTime with him. And I was just like, yeah, like, I guess I'll just take the other half of your apartment. And then I moved there. I just put my stuff in a suitcase and just flew out. So are you New York based today? I live in New York now. I moved back here a few months ago. All right. And how do you work that out if your core office is San Francisco? So we have an office in New York, too. Flatiron. So 20th and 5th. It was one of those things where we were pretty async in San Francisco.

34:15We have an office in downtown SF. I was going in probably four days a week. Some people were going in a lot. My boss lived in the suburbs a little bit. He would come up sometimes, but I would take the Caltrain down to the Hillsborough area and go to his place to work from his pool house with him. It was a funny setup. But it was like we were async enough, and I also knew that long-term I was going to want to live in New York. I just pitched them on moving back and then flying out to San Francisco every three weeks or so. And that's the setup I have now. New York has a pretty robust technology sector.

34:50I mean, we all think of San Francisco for AI, computer, mobile tech, and Boston for healthcare tech. Where does New York land in that list? I would put New York as the, like... Pretty fast rising, right? For consumer tech, I would argue it's number one or close to it. Well, you've got a big Google office here. You've got a big Microsoft office here. You've got a giant Amazon office here. And Anthropics opening at 16 ,000 square foot. They're opening a massive office in Hudson Square. There's some space there. A lot of what keeps happening is all these AI companies start there, and then as they move into bigger and bigger enterprise commercial business, they expand to the East Coast.

35:35And there's a lot of sales teams on the East Coast and engineering talent on the West Coast. New York's also a more social, outgoing city where a lot of the sales and go-to-market people would prefer to live here. San Francisco's more insular. And it's like there's just engineering talent from Stanford, Berkeley, whatever that aggregates around the Bay. So it's honestly a big part of engineers end up on the West Coast, and then a lot of the salespeople end up on the East Coast. A lot of the customers are also on the East Coast. Really interesting. All right. So I got to start with a few quotes of yours, and we'll plow through a lot of that.

36:12One of the things, though, that you said, a quote of yours, junior investing jobs at VC megafunds are really just cold calling. Yeah. I don't think of VC in those terms. Explain. Are you really just smiling and dialing? Like a little bit. It's funny. I don't know if you read Bill Gurley's new book, Running Out of Dreams. So he said something similar where venture capital is 90 % sales, and it really is. But that's true about everything in finance. And I don't know about outside, but everything in this space is you're ultimately asking someone to trust you and give you their business. Yep, yep, yep.

36:50VC, especially at the big – like, it's like – slow is a fairly small fund, right? Like, we have, like, total teams, like, 15 or 16 people. Investment teams, like, 9 or 10 people. but like some of the bigger funds like I have some buddies that have worked at the like call it some combination of like the general catalyst type a16z type whatever it's just a machine or like inside is like this too where like you are managing just like tens of billions of dollars or whatever and there's so much coverage that it's I was a little tongue-in-cheek saying that it's like cold calling but it is very much like you need to be talking to like x number of people and there's metric hurdles on touch points and stuff.

37:31It's not that there's no discernment or anything like that, but it's a volume game. They really do try and quantify it and turn it into... The name of the game is you don't want to miss anything that could be something, therefore people should be pounding the pavement making touch points with anybody who could be starting an early stage tech company. Now, Slow Ventures kind of famously avoids the trendy hot stuff. No robots, no AI foundation models. What are you looking at at work that's kind of interesting? What do you guys get to see that most people are overlooking? So it's funny. We actually just announced one that's like Robot E doing like warehouses and fulfillment for e-commerce companies called Sotronic.

38:17So we do occasionally touch. They don't make robots. But you're not doing the human form robots. Right, we're not doing any of the stuff that gets clowned on Twitter because you can't fold clothes or do dishes right. I mean, we're like broadly generalists. We've done everything from, like, we've done, just to name some companies over the last 10 or 12 years, like Robinhood, Slack, Allbirds, before they pivoted to being an AI GPU company back when they sold footwear. I mean, we have like a hilarious one, Meme Lords Technology, where it's basically a software platform. It's like basically a marketing tool platform, but for creating memes.

38:55I mean, we'll do a little bit of everything. We've done crypto stuff. We have done some like vertical AI stuff. We just like making our calling card. We're not chasing the AI hype. The way that we broadly think about it is there's a lot of VC deals that are trades that are now marked up a lot. But like, do they have terminal value and would they get supported in public markets? You don't know. And a lot of early-stage investors that have played those and then sold when bigger funds come in at the multi-billion dollar valuations have made a lot of money. So you could argue we should have played that trading game.

39:27The bet that we're making is go for the stuff that's going to compound long-term value that could be a standalone valuable entity. How does the sort of dearth of IPOs, although we're in the middle of a period where there are suddenly a spate of them coming out and more and more companies choosing to stay private for longer. How does that figure into the VC calculus of, hey, we eventually want an exit and we can't rely on someone else either from a bigger firm taking this over or some M &A to give us an exit? It's interesting. I almost think you have to put VC in two buckets at this point where you have like we play at the really early stage, which also gives you like a lot more opportunities for exits.

40:10Whether you sell stakes to like a later stage, bigger growth, like a bigger growth investor once they're in the unicorn status or you get the acquisition or IPO. If you're getting at a company that's worth 20 or 30 million dollars, there's just like a lot of ways you can get paid on that versus you have companies like like Thrive is probably the most famous one where they manage like 50 billion dollars now. They own a massive slug of open AI. They take really big bets in companies that are like, it's worth$10 billion or$100 billion. We think it can be worth$100 billion or a trillion. So for us, we have a lot more flexibility on exits, which is good because we can be more nimble.

40:47You're primarily seed in A rounds, but you're not doing B rounds. We occasionally will with follow-on capital, but it's like 95 % seed in A. So that's our sweet spot. And then, so I think for funds like that, I think people, like a lot of early stage funds should get more creative where can you exit into a big growth fund coming in at like a$5 billion valuation from portfolio construction? Maybe you should. With the mega funds, it's like, okay, if you're going to do that, you can't really index all of the like$5 or$10 billion unicorns because a lot of those paper marks would never get support in the public markets.

41:24But Thrive going really deep on OpenAI or Spark Capital going really deep on Anthropic, those are going to go out at potentially trillion-dollar valuations. The math works if you invest$40 billion across a few big funds in something at a$200 billion valuation and you get a 4X or 5X, you're returning tens of billions of dollars. Right. So it's like at the early stage, should probably be looking to sell into some of those later stage companies coming in. At the later stage, it's like stock picking. You're basically running, you have to run a concentrated book of like there might be three or four private companies at any time, like SpaceX, OpenAI, Anthropic, that could go out at a multi-hundred billion dollar valuation.

42:09You have to be concentrated in those. Otherwise, the math isn't going to work. If you get those right, you can like 2X, 3X a fund. If you don't, you won't. Really kind of interesting. You come out of the creator economy. Slow Ventures has been a player in that space. How does your experience help you as a VC? And what does Slow Ventures see in that space that the traditional venture capitalists overlook? So to give a little more color on that, we have a separate fund we raised a year ago called our Creator Fund, where$64 million, we invest directly in creators, meaning YouTubers, podcasters, newsletter writers.

42:52Our bet on that is that distribution compared to technical abilities is getting increasingly valuable, where two things. One, it's easier to build stuff like software because of AI coding assistance. Two, the internet is so loud now that having a cylinder of trust from your audience gives you a massive selling advantage because it's so much harder to get attention with paid ads and growth hacks and all this. Sam, my boss, came up with this idea a few years ago that he calls it almost investing in cults. But people who have a true cult of personality and are a subject matter expert in a particular theme or vertical have a massive advantage on marketing and selling.

43:34So we raised a fund where we literally invest in creators like holding companies where any businesses they build like off their platform that leverage their brand and platform and all this stuff. These are 360 deals, covers everything that person does. Yeah, yeah. So it could be a podcast, could be Substack, could be all of those. Yeah, and like we aren't really that interested in like how money they make from like ad revenue or like platform revenue or whatever. It's more so, for example, the first deal we did was with this woodworking creator named Jonathan Katz Moses. and he has a massive YouTube channel.

44:07I know that show. It is shockingly intriguing watching this guy build stuff from scratch. Yeah. It's relaxing too. Yeah. He's a super compelling guy, incredibly talented, and he's equally good as both a content creator and as an entrepreneur. He has a business that's making millions of dollars in revenue. So he builds various things and sells them, but also generates revenue from the YouTube channel. Right. And it's like a specifically has like a tool line called KM tools. And like we invested money in like his holding company and that can go toward like hiring people to help with like the content development, editing, content creation.

44:46So we can like increase velocity of putting out YouTube videos. Also like more people to help rolling out new products and a wider product suite of tools. So the bet is that like you put money in that and maybe like the tool business really blows up and then like black and Decker type of company acquires it. Or maybe he launches another business vertical off his platform that we have exposure to. But his whole thing is like woodworking, woodworkers. He'll go to a woodworking festival in Texas. People will come out to come get him to sign their autographs. He just has a lot of clout in that space.

45:19So finding people like that in different verticals that we think have really compelling opportunities to scale big businesses through that vertical and that audience is interesting. and historically people have been very hesitant to back creators or they back like one business, like Mr. Beast has a bunch of different businesses. If you back Beast Burgers, didn't really work that well. If you were backing Mr. Beast as a whole, like Jimmy's entire empire is worth like a billion dollars or whatever. So you want to be like aligned where if they want to change their focus, like our capital is still aligned with that.

45:54Like you don't think this experiment's working? Move to this one. And I think it's called CDC. If you haven't seen these computer-controlled woodworking lathes and carves, they're just astonishing to people. Like you think of carpentry as kind of old school. It is not. It's really fascinating. Coming up, we continue our conversation with Jack Raines discussing his new book, Young Money, A Field Guide to Wealth and Purpose in Your 20s. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work.

46:38I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seed inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.

47:19The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChachiPT. Put ChachiPT to work on your most ambitious ideas and projects. Get started at ChachiPT.com today by selecting Work Mode, available on Plus and Pro plans.

47:47Amazon Pharmacy presents Painful Thoughts It's been a long bumpy road dealing with yet another bladder infection and driving to the pharmacy to pick up meds I went over a pothole and a little pee came out so now I get to stand in line with pee-pee pants Next time skip the pain and get fast free delivery with Amazon Pharmacy Healthcare just got less painful

48:40We'll be right back. Elevate your wins with Adio. Start your free trial at adio.com slash iHeart. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My pretty special guest, my kind of special guest. Somewhat special. Somewhat special guest. I'm going to write that down. My somewhat special guest is Jack Raines. He is an associate at a venture capital firm and an author. I've been subscribed to his sub stack Young Money for I don't know how many years has that been around? Let me know when you get to 30 and you'll be on to something but his new book Young Money a Field Guide to Wealth and Purpose in Your 20s I was really taken by it not only was it a fun read but I just I not only laughed throughout because I just recognized oh, I did that dumb thing.

49:39But it also is so wise beyond its years. It's hard to imagine that the guy who wrote this was 26, 27 when he wrote it? 27 and 28. 27, 28. 29 now. Last year of your 20s. Yeah. So I really found it a fun, enjoyable read about a space that I normally don't play in, Young Money. And there's so many things to talk about with this. starting with, quote, I had considered the opportunity cost of how I was spending my time and I adjusted my life accordingly. So you're giving the whole game away on page 13. You basically say, hey, time is finite and how and when you spend it is really important. Tell us a little bit about how you reached that insight back when you were in your early to mid-20s.

50:37Yeah. So, I mean, we talked about the SPAC trading thing earlier, but like when I was 23, mainly 23 and a little bit 24, my life basically looked like this. It was, you roll out of bed, throw on some sweatpants, grab Chick-fil-A for breakfast, and then you're just like kind of responding to like Slack messages, you're on Zoom calls, spreadsheets, PowerPoints, and you're doing all of it from your bedroom. And it had been like that for well over a year. And then on the side, you're over here trading options before we jump on this. I had my work laptop here and then I had my personal laptop here.

51:09And it's like, huh, interesting. This SPAC just got announced. So I was spending like, I was basically fake working while just trading stocks all day. And then in the evenings, you have your entire net worth and some speculative SPAC and you can't even sleep straight because if futures take, you think you might lose$100 ,000. dollars. And so I was almost in this like self-induced holding cell of like, I couldn't go anywhere really because of COVID and I was stuck at home. And then I was just watching screens all day. And thankfully I made some money from it, but I just became really aware around the time I was about to turn 24 that I had just spent the whole last year of my life, not really doing anything, especially like call it like personal relationships, whatever.

51:53I was probably a pretty terrible like boyfriend friend checked out son grandson like i just wasn't like i i was not in control of how i was spending my time at all i was kind of like a prisoner to like work and covid and stock market which is kind of crazy because during the pandemic you're no longer commuting you're no longer on the same schedule if if any of us had a little more prescience, we really could have taken full control of our day. A hundred percent. Because nobody's looking over your shoulder at what you're doing. You could come and go as you want as long as you got your work done.

52:28Whenever, however, everybody was fine. Yeah. Which is so, I mean, to the stock trading thing I did, like that would not have been happening if I was in the office, probably, at least not as much. But what was fascinating as I was reading this, because I started out trading, is you You nailed the phrase. You're a prisoner to the screen. You really can't leave your desktop. If you're on a desk, at least someone could watch a position for you. Hey, I got to go leave for 10 minutes. Can you make sure this doesn't blow up on me? If it hits this, get me out. You could do that. But if you're doing this from your bedroom and you have a lot of positions on, you have no other bandwidth for anything else.

53:10It's just push notifications on for everything. You go to the gym. You're checking your phone every two minutes. It was just a little bit nauseating. And exhausting. Yeah. And I honestly just felt pretty mentally exhausted from the always being on. And I just kind of had enough. And I also found my job pretty unfulfilling. And I knew I was going to leave it in a year. And it was just like all of these things came to a head. And I was like, okay, let's be really intentional here about how do I want to spend. If I know I'm going to grad school in a year, how do I actually want to spend the next year?

53:43Is it keep going in the motions of the job that I know I'm going to leave to go do something else? Is it like try to trade back the money I just lost on that trade gone wrong? The thing I kind of want to do is honestly just go have an adventure, having just been cooped up for a year and a half. And yeah, so it was just like all of that came to a head. And I was like, I should just, I mean, it's like the opening line of the book, just blow up my life and go do something crazy. And that's kind of what I did. And I went to Barcelona. You hit the eject button. The concept of time comes up over and over throughout the book, both generally and specifically.

54:22One of the things you write about is defining decades differently and about the opportunity cost of your 20s. a lot of people who just buckle down and grind it out through their 20s. You say that for many people, that's a trap smart 20-somethings fall into. Discuss that. So I think this is especially true in the, like, call it hyper-competitive, like New York, San Francisco, maybe like Chicago, D.C. areas where you're surrounded by very smart people who went to really good schools and they go into, like, at least for, like, an early 20-something high-paying job. But you're also objectively pretty stupid.

55:02You don't know anything. You don't know 22, especially guys. Objectively pretty stupid. Tell me when I get to grow out of that. I don't know. I mean, you tell me. You're sitting there and it's like, okay, what do I optimize for? And the obvious thing is money. And the derivative of that is status, right? Where high-paying jobs are typically higher status jobs. And I think it's when you don't have anything else, it's like a North Star, you kind of go for the ambitious thing that will pay you well that sounds impressive over and over again. And to be totally clear, there's nothing wrong with that.

55:42And that's also much better than being a bum and not doing anything. but you almost if you fall into that trap of like having some expectation of what you should do without it actually being like your own original thought like oh I want to go do this you almost become instead of being like the protagonist of your own life you're just kind of like filling a preordained role like you're almost like an actor right is how I think about it in someone else's play and I think the thing like I think the implicit bet people are making when they do That is, I will earn enough money and hit a level of stability where I can hit eject, which you can do, but you can't buy back the opportunities that you would have had in your 20s when you're in your mid-30s.

56:27So another quote, there's no saving time. There's no investing time. There is only spending time. And sentences like that is why I say this book is wise beyond its years, because I know people who figure that out in their 50s, 60s, 70s, not in their 20s. So kudos to you for getting there. Tell us what led you to that conclusion and how much did the pandemic lockdown accidentally lead to these insights? I think I became much more introspective much younger because like you just I mean I had roommates them like I just wasn't spending like that much time on a normal day-to-day and like I'm a very like sociable guy who like likes to hang out with people during the day that gets removed and you're just in your head a lot and you become really reflective of like how you're spending your time what you're motivated by so it was just like this again I don't like this book probably wouldn't have happened if COVID didn't happen because most of these like reflections were downstream of this whole, just being like kind of in like an isolated stage of life at a point where like, you should really just be like in an office grinding.

57:44Um, so I think that was a big part of it. Hilariously. I like, I mentioned like the second chapter of the book. I used to be terrified of flying and, uh, like horror, like I'd fly all the time now and I don't care. But for some reason, turbulence just like kicked my when I was younger and I, um, I I was on a flight to Colorado about a year into the pandemic for a ski trip. Plane was basically empty. It was awesome. We had a super, super turbulent takeoff, and it was just bumpy from Atlanta basically all the way to Kansas City. And I was just sitting there thinking the whole time, we're totally going to die.

58:16This thing's going down. We're going to die. I'm 23. It's over. I'm dead. And we obviously landed. I didn't die. But like, again, totally random, but just something about that, put that thought in the back of my mind, like, at some point you are going to die. It's not like up until then I just thought I was going to live forever. That's not stupid. You don't really think about that in your 20s. When most people are in their 20s, they're immortal. You're not thinking about, well, one day I'm going to die. Yeah. And that became like a forcing function for like, okay, let's work backwards from, I finally got over the fear of flying, but it's like, all right, like we are, you know, we're on the clock and what do I want to do with it?

58:59And so it was like a complete fluke from a turbulent flight kind of forced a lot of introspection that had been bubbling under the surface for probably the prior year. I was like, all right, like I should be doing what I want with my time rather than just letting inertia kind of do its thing. And it was that like, call it like awareness of mortality that became like a forcing function for basically what I've done in the last four and a half years since then. Like be in control of your time. Don't be like a passive participant in your own life. The difference between money and time is that money is both infinite and fungible.

59:37Time is neither. this this is a philosophical concept i consider myself a bit of a philosopher okay i i'm with you i'm there with you uh what's your conclusion when you realize that money is both infinite and fungible i think you like need to be really aware of how much money it takes to get what you want out of life at various life stages to your point earlier, you can kind of scrape by in your 20s, maybe early 30s and like still enjoy yourself. And the older you get, the more expensive it gets. Ideally, you're making more and more money over the course of your life as well. So like my conclusion on that is it's like counterintuitive financial device, but like young people shouldn't penny pinch so much if they have like fun, interesting stuff they want to spend the money on.

1:00:26The caveat to that is like you should put yourself in a position where there are like high income outcomes from that over time. But like, it's okay to be 25 and not be rich if it means like spending money on fun stuff with your friends right so you're not a fan of the fire movement the early retirement movement not when it's taken to the extreme i think that the core idea of like having enough money saved up or like you control your own destiny is healthy and good and admirable i think when you make the accumulation of capital to escape the labor force as an end goal, you just set yourself up to be bored.

1:01:04And almost beyond that, when you over-optimize for fire and your whole thing is like, I want to opt out of work, you're probably going to hit that in your early 40s when all of your peers are peak work. You're not going to be able to relate to anybody after a couple of years. There's a lot of... I think when you take the fire movement too far, there's social costs to that that are harder to see when you're looking at a spreadsheet. But it's just like... and you have to forego so many things you would probably prefer to spend money on in your 20s and 30s to hit that. It's just not – I don't think you should go into crazy debt, and you should max out your 401k if you can and all this stuff.

1:01:39But you just – you shouldn't pass up on life to accumulate cash to be able to opt out of another part of life being work is kind of my take on it. No, that makes a lot of sense. I love this quote. Many of life's adventures are adventures only because you're 22 and broke and stupid and you're surrounded by other broke, stupid 22 year olds. This is a feature, not a flaw of being young. Lean into it. Yep. Tell us about how you you saw that. What is it about being 22 and broke and stupid that has to be embraced? So, like, I, I mean, I spent that whole year of being, I guess I was technically 24, but I was with a lot of 22 year olds who were like, this whole like hostel hopping thing is hilarious, right?

1:02:26Because it's basically a bunch of kids like studying abroad. It's a bunch of people fresh out of college. It's a bunch of Europeans taking a gap year, a bunch of Americans fresh out of college, and then a bunch of like, call it 23 to 26 year olds who worked for a couple of years and took a break. and you're all just like in bunk beds. Everybody has a shared goal of like, I'm just trying to have cheap fun for a little while. And it makes every situation really, really funny. Like some guys like want to go from Sevilla, Spain to Paris and they're trying to game out like it's$200 to fly. But if we take a train ticket and then sleep in a train station for six hours, we can get there for$12.

1:03:04And avoid a hotel room. Right, and avoid a hotel room and extend our European trip like eight more days, right? So, or you have like... And you did that, right? You went from Barcelona to where in Europe? I mean, I covered... I was there from August to December, and then I went to Latin America a month later for a few months and back to Europe. And on that August to December thing, I think I went to like 19 different countries in four months, and it was just... There was no itinerary. I would just go somewhere, and then I would meet some people, and they would say, hey, dude, we're going to Prague next.

1:03:37Do you want to come? And I was like, for sure. And I meet this guy in Prague. He's like, yo, I heard Budapest is great. I'm like, all right. And then somebody's like, we're going to Krakow, Poland next. I met a kid at a hostel in Krakow who pitched me on a startup in San Francisco a year ago. Like, talk about weird small world stuff. But it was just like, I went like pure optionality for a year. And it was just like, anybody I meet interesting that's doing something cool, I'm going to go with them. Like, oh, I heard Tromso Norway. You can see the northern lights. Let's go dog sledding up there.

1:04:06And like, let's do that. So the ability to just cast a really wide net, because cheap thrills or having to sleep on a train or have a bunk bed with a stranger, it's just fine. When you're a kid, you just don't care. I'm still in my 20s now, but that would just sound awful. I don't want to be in a room with 12 strangers and worry about my stuff getting stolen. That sounds terrible. When you're 24, you've got nothing to get stolen anyway. Yeah, it's like, what were they going to take my backpack? I had a couple of Zara t-shirts and flip-flops. sick. I'll go play poker and win 20 bucks and go buy another one.

1:04:40It's fine. There's versions of that that play out with everything. I don't think everybody has to go backpack Europe, but you got to San Francisco and there's 24-year-old startup founders that are sleeping in the office with a bunch of their buddies and they're having a blast. They're in objectively horrid living conditions. They don't even notice because they're 23 or 22 or whatever. You can just really lean into adverse living conditions and find them enjoyable rather They don't take away from your life. They create really funny stories. I'm always fascinated by the pursue your passion recommendation that so many people make.

1:05:19You say pursue your passion is terrible career advice. Yeah. Give us some color on that. And you're giving this from someone who is pursuing their passion. So my more specific take on that is you shouldn't bank your income on a thing you're passionate about. the example that I give is like, I love writing. It's a, it's a thing that like I've enjoyed. I'll do the rest of my life, whether it's books, blogs, like it's something I'll always incorporate. My like initial job out of business school was columnist, podcaster, media guy, like an effectively a media startup. And I actually found it stressful where like every single day I had to like put something out.

1:05:56And then I also was sitting there thinking, this is draining the fun of like writing. Like I wasn't monetizing my blog. It was just a thing that I liked doing. And all of a sudden now I don't have energy to work on that fun thing because I spend all that energy on the thing I'm paid to do. So the issue with like chasing your passion is one, a lot of passions aren't that lucrative. Two, the second that your paycheck is dependent on you doing that thing over and over and over again, it can start feeling more like a chore than like fun. So the actual advice I have is like pursue stuff that you're pretty interested in that can pay you.

1:06:30Whether or not you're like most jobs are boring for a lot of the time. So whether or not you're passionate about it, a thing that you're interested in and have an inclination for and have some skills at, go do that for a career and then use that to subsidize your ability to work on the fun stuff. Like, you know, writing books and blogs is, like, a thing I want to do independent of the financial outcomes from it. I pivoted from media to venture capital because, like, I like the offshoot opportunities of investing and tech companies. And that's just, like, a better world to be in for a career path.

1:07:03Last question before we get to our favorite questions that we ask all of our somewhat special guests. Somewhat special guests. How do I know I'm making the most of my time? so the last chapter of the book is called are you having fun yet which i think is like i think fun is an underrated barometer that you're actually doing the right stuff with your life um and it sounds silly at like first glance but my take on it is i think the definition of fun and what you find to be fun changes as you go through life's different stages where when i was like 23 or 24 it was just doing dumb hostile hopping stuff and like getting drunk all the time or whatever.

1:07:43And it was great. Now I get drunk a lot less of the time. It's still slightly a little bit more refined though. Um, but like, you know, once you, once you get a little further in your career, like having real career success and making strides is like a source of like joy and personal achievement. When I was in college and playing football, like football objectively sucked, but like I like playing college football really sucks. And anybody who's played it will tell you that, but it's like a, by the way, the description of the workout routines and the 6 a.m. wind sprints. But when, you know, deep into the season, the coach tapped.

1:08:16Reigns. Get in there. Yeah, it's like incredibly fulfilling. It's like going from a walk-on to be putting on scholarship and then getting made team captain my senior year. That was a much cooler, fulfilling moment than anything I did before or after. I think it was because it was really, really hard, right? And a real sense of achievement. Yeah. It was a hard thing, and I'd executed on it. But it was fun. So my kind of definition of fun is if you find joy in the suck, then you're probably doing the right thing. And that could be being groggy and hungover on a park bench in Spain, but you feel like you're living out an adventure.

1:08:53Or it could be going after a really ambitious career and excelling at it. And I think a lot of people, as they get further in their careers, They keep chasing that ambition high off of that to the detriment of like their family or other parts of their life. I think a lot of young people like just start like I think the biggest mistake you can make is like keeping a prior version of use like benchmark or idea of what they should be doing with their time and trying to like force apply that to a future version. You have to always evolve it over time. Or trying to pull forward a future version too early in your life at the expense of the fun stuff you want to do now.

1:09:30And I think just having a very, very strong sense of like, what are the most important things right now that bring me fulfillment? And then going after those is the recipe to a good life. And the sequel to this, Find Joy in the Suck, is a great book title. Maybe I should call it Middle Age Money once I get to my 30s and 40s. Well, you could do something every decade. You have a built-in model. Young money. Slightly older money. Right. Middle Age money. Old Man Money. You got a whole run of things. All right, let's jump to our favorite questions that I ask even my somewhat special guests, starting with you're still young.

1:10:10Tell us about your mentors. Did anybody really help shape your career? Yeah, I mean, the early mentors would have been football coaches in high school and college, defensive line coach, Harold Brantley. He was the man. He was actually the one who pushed me to the point that I could play in college in the first place. and then my college defensive line coach, Kenny Baker, was like, I came into college playing in a small private high school and thought I was the s**t, and then I got to college and just got wrecked for a good year. And I was really close to it. Bigger, faster, stronger, or you just didn't know the game as well and didn't have the skills or some combination?

1:10:45It was like I just had to get better. Better shape, better skill. I needed to get stronger and just be able to react to the game on the field way faster, and I just wasn't. The processing speed and the size weren't there yet. People don't realize the quality of play at the college level. It's astounding, isn't it? We played Alabama. Little Mercy University. We played Alabama and Auburn in the same year. That's like a pro team. You want to talk about seeing pros? Monsters. We almost beat Auburn. We were down seven in the fourth quarter. But Alabama, Jalen Hurts, Tua, Mack Jones smoked us. They had Calvin Ridley, all-pro receiver, who briefly had a gambling problem, but he's back as their punt returner.

1:11:29I guess who started on the punt team was getting juked out of his shoes like 20 times because we punted so much. Me. But defensive line coach Kenny Baker was like, I worked really hard. He could tell I did. And he was very encouraging in that keep the work ethic up. And you will catch up to the point that if you keep that work ethic, you'll be able to play. And he was right. By my third season, I was decent. and by my last season, I was objectively good. Like I was never going to be an All-American, but I was like a starter and was like a very solid player. But I could have easily quit and transferred to Georgia and like, you know, done the fraternity thing at SEC school, which would have been short-term more fun, but long-term less fulfilling.

1:12:10So football coaches post-school, it's funny, like especially with COVID, my early mentors were like kind of people I found through Twitter. Like I remember when I read The Psychology of Money, I thought it was like a very profound book and I just like digested everything Morgan Housel published. And then a year after that, like I remember when he followed me back on Twitter, I was flying from Sevilla, Spain to Manchester, England. And I looked at my phone. I was like, oh, this is really cool. This is really cool. And then when I moved to New York, we like hung out in person at collab funds office and like great guy.

1:12:43But I would say like as a somewhat career slash just aspirational, him and Tim Urban were like my two favorite bloggers from the kind of like you referenced tim urban in uh the book but i think you referenced a piece of his and i was surprised you didn't reference the piece on optionality the sort of chart with the black lines yeah yeah everybody steals it on twitter i i find that piece to be so interesting because you know one of the things about getting old is some of your optionality goes away because you don't have, hey, this is a 25 year project. Do I really have 25 years? Like, what am I going to be doing at age 90?

1:13:28All right, maybe a 25 year project isn't the best thing for me or at age 80, best thing for me to start. But I laughed at a lot of your references because I'm familiar with many of them. They're really, really good. So you mentioned Morgan, any other post-college mentors you want to bring up? Yeah, I mean, I'd say my current boss, Sam Lesson, great guy. I mean, he's had a very cool career, right? He started a company in his 20s in Brooklyn, ends up getting acquired by Facebook, had a successful career at Facebook, and then co-founded the venture fund I work at now, right? And he's like, it's funny.

1:14:08I feel like a lot of people in my bubble of the late 20s have this, like, is this what I want to do with my career? you kind of hit this inflection point of like, you should pick a thing that starts compounding. And like, his take has always been like, you should just want to work with like really interesting, smart people you respect and like work on interesting problems. And that's a pretty good recipe for finding career fulfillment. And you know, if a couple of things go right, like financial success. Um, but like, it's, I don't know, he, he's done like a few different things and now like has like a objectively, like I, like if my lifestyle and like life is set up kind of like his in my 40s.

1:14:43I'd be very cool with that. He crushes. So you mentioned Morgan's books. Tell us what you're reading now. What are some of your favorites? So I just started reading this book called 1873. I think it came out pretty early. Lequod Ahmed? Yes. Who won the Pulitzer for, I forgot the name of the four central bankers that his first book was about. That is literally at the top of my queue, ready to go. How are you liking it so far? I'm about halfway through, and it's very good and interesting. I mean, the thing I've done this from time to time. I hadn't read much over the last year while I was working on that.

1:15:21Yeah, it's a killer. Writing is a killer. As someone who's written books, I had so underestimated. I have much more respect for other authors after going through that. Not only can't you read books, you can't blog. It just sucks up so much bandwidth. Yeah, it's like all your free time goes to that. But something I've always liked is I've always been a big biography guy or like certain moments or events in history because you can get the chat GPT, whatever. People can pull a story together in 300 pages of a thing. It's so fascinating. And with like 1873, like reading about the stock market speculation in the like Vienna, Austria stock market in the 1870s.

1:16:00And then you're just pattern matching that against like what I saw with retail investing in 2020, 2021. it's you just see like human behavior playing out cyclically 150 years ago is just really really interesting and like a you know totally different time and market and paradigm but it's the exact same thing lords of finance was his first book that won the the pulitzer um i'm excited about that book any other books you want to mention um the infinity machine the one about um the deep mind founders it was by um sebastian maliby i think anyway it's like as far as AI is now the thing everybody cares about.

1:16:37He did a really good job of how LLMs even became a thing in the first place and how this group of British researchers who've been holed up in London the whole time kind of kick-started this whole AI boom. Even though Sam Altman, Elon Musk, they aren't main characters at all, you're getting these interesting anecdotes of how OpenAI came together and how there was a bit of a coup with an OpenAI and then Elon leaves. It just did a really good job of framing like the current moment in time and how we got here. But those are like, I read both of those or been reading both of those in the last month and a half.

1:17:10They're great. Interesting. What about streaming? What are you watching or listening to? Give us your favorite. Hilariously on the podcast front, I don't have any shows I listen to regularly, but I will selectively, if there's like a guest that I find interesting for whatever reason, I've like, it's everything from tuning into like, like Josh and Michael on the compound of friends or Tim Ferriss' show or some of Scott Galloway's stuff. I'm so much of a... I have people who I think are good interviewers. I don't care about half the people they talk to, but occasionally they'll have someone where I really want to hear that because I think they'll pull out good questions.

1:17:49Like, I don't know, Michael Lewis on Tim Ferriss, really good episode. There's nothing I listen to specifically. Streaming, I did like that movie Obsession. I thought it was phenomenal. It was the one that went mega viral out of indie film that went mega viral out of nowhere. Who was in it? Who directed it? It's the, I can't even think of the guy's name. He got his start on YouTube. He does a lot of short form comedy. But it like blew up. And it was the one about the guy who like breaks the stick to make the girl, he makes a wish that the girl falls in love with him. And then she goes full psycho.

1:18:24Anyway, it went like nuclear on Twitter, Instagram, TikTok, whatever. Pretty good horror film. Thriller. I liked it. Final two questions. What sort of advice would you give to a recent college grad interested in a career in either writing, content creation, or venture capital? So my take on all the career stuff for that is like I think it's really – I think one of the higher leverage things you can do is just start a blog and put your thoughts out there. Even if you have five people reading it, 50 people reading it. I think that especially with AI becoming more and more of a thing, it's easy to like, like resumes are becoming increasingly meaningless, both from like the odds of somebody actually looking at your job application when you send it in cold or very low and the ability to like lie.

1:19:11Like you can make a hundred different resumes with LLMs based on the job you're applying to now versus when I was like when I was in college, you always tweak your cover letter or resume per job. and it's pretty tedious to do that when you're doing it by hand. You can make a million at once, right? So having some proof of your thoughts on thing or you've articulated ideas online that show how you think, I think carry a lot more. They've always been important, but stand out a lot more now with AI. Or if you like AI coding assistants are really good, anybody can access them to build stuff. So just having a portfolio of written work or stuff you've built online that shows that you took interest and initiative in a thing and put yourself out there, super useful.

1:19:55I mean, my take on career stuff in general is if you can go into investment banking or consulting right out of undergrad, it's still probably the right move just from getting trained on how to work hard. People who work at Goldman from 22 to 24 are typically more competent than other people. And for all my stuff about you should go take risk in your 20s, the caveat on that is like you should have a couple of prestige stamps first like columbia business school was a prestige stamp for me i enjoyed it i learned a lot the main reason i went was like i went to a somewhat no-name undergrad it's not like i worked at a marquee firm out of undergrad like you want to get a couple of like i have like somebody's de-risked me as an individual then you go take the shots that you want to so like i it's like have a collection of like independent work and thoughts like you can share like in real time and then I think it's important to get one or two prestige steps before you go jump off and do your own thing and yet in the book you talk about what a miss focus it is hyping on status and why that whole game is so challenging so my the status thing is so nuanced I think that if you treat status as an end to itself you're going to be incredibly disappointed I think if you treat status as a thing that you can acquire and leverage to actually do a means to an end.

1:21:15Yes. If the trade is, I'm going to go to an incredibly competitive school and spend two to four years working in some version of Goldman, Blackstone, McKinsey, whatever, and I can come out of that and do anything, that's very much worth it. But you don't want to be the person who, 10 or 15 years into their career, never really figured out their thing, so kept chasing status as a vanity project. It's like, I say status as diminishing returns, or like once you have enough of it, it gets marginal after that. You're good. And our final question, what do you know about the world of investing today might have been useful back when you were locked in your bedroom trading SPACs?

1:21:56I underestimated how much retail investing is like a permanent fixture in the market today. I think it compounds from like, and this is all like public market stuff, but like pod shops trading quarter by quarter are like more and more of a thing. passive investing is more and more of a thing you could argue that true like like price setters being like fundamental long short funds or and like long only mutual funds are less of a thing so it's created this thing where you have like a lot of like very short-term trading on like whatever alternative data quarter by quarter data and then you have a lot of passive stuff and then a really big active group is like retail investing is a thing like game stop i thought was a one-off fluke, it wasn't.

1:22:37Open door, short squeeze out of nowhere. You're seeing random companies will just pop off 500%, which makes it... Dan Sondheim was on a podcast with the Collison brothers, the Stripe founders, a couple months ago. He was talking about how they changed how they positioned their shorts now at D1 Capital. Because you could be fundamentally right, but guess what? Fundamentals don't matter if the borrow rates through the roof and the stock, like 8Xs and you get blown up, right? Ask the Melvin Capital guy about fundamentals when his fund got blown up, right? At the end of the day, the only thing that matters is making money.

1:23:12And I really thought a lot of that was a 2020-2021 thing, and it was COVID and people were at home. We're seeing so much stuff with random, speculative nuclear reactor. A company Oklo went public through a SPAC. It was a Sam Altman-backed company. It was worth$40 billion. I don't think they have a functional reactor yet. Are you suggesting that sites like Reddit, WallStreetBets still carry the influence they used to, or has that attenuated and it's spread out to different areas? I would argue that they almost carry more weight because I think that, like... Really? I think there's... This is pure speculation, but I think that they're now increasingly a thing that, like, call it, like, institutional traders, quant funds, whatever, will, like, look at as a data source, where if something spikes on one of these sites, they'll play the momentum, and, like, it makes these bubbles go even further than they used to.

1:24:01And everything happens so fast now because the speed that information moves on the internet is just instantaneous, that a bubble that might take months to build up and then collapse could happen within a week both ways. So it's just like the whole internet spread of information faster and faster, it's all derivatives of retail investors getting in the market and then yapping about stuff online. That's just never going to stop. Right. And it's so funny because everything old is new again. Back in the day of the Yahoo message boards. It's like the late 90s. 90s. Yeah, yeah, yeah. Like iOmega and that sort of stuff.

1:24:37Nothing has changed. It's just how much faster. And it's like zero commissions now. It's like the, there's. And it's in your pocket. You don't have, oh, let me go home and call my broker. And now there's like, oh, we have prediction markets and sports betting on your phone. We have removed all friction from people putting money at risk to do stuff. And we've made. Regardless of how dumb or speculative it might be. And the speed at which you can communicate what you're doing is now also instantaneous and free. So you just have people constantly going risk on on whatever for whatever reason. And then everybody else knows it.

1:25:10That's just that's only going to keep accelerating. Except it kind of sounds like a very late stage bull market. Could have said that in 21. And we were right. 22 is kind of a bear market. Then AI happened. So it's like I think that I just think market cycles in general will keep happening faster and faster. because it'll collapse, people get blown up, and somebody starts running another thing. I just think it's going to get more and more violent. I have a pet thesis that the giant reset, the giant fiscal stimulus and crash and recovery in 2020 was like a reset and extended the bull market in another five, ten years.

1:25:47But anyway, Jack, you were more than a somewhat special guest. Thanks. This was really great. Thank you for being so generous with your time. We have been speaking with Jack Raines. He is the author of Young Money, a field guide to wealth and purpose in your 20s. If you enjoy this conversation, well, check out any of the 653 we've done over the previous 12 years. You can find those at iTunes, Spotify, YouTube, Bloomberg, or wherever you find your favorite podcasts. I would be remiss if I didn't thank the crack team that helps us put these conversations together each week. Alexis Noriega is my video producer.

1:26:34Sean Russo is my researcher. Anna Luke is my podcast producer. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.

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