Transcript of 699: Jack Raines - How to Build Your Career, Increase Your Surface Area For Luck, and Find Your Purpose | Why Memories Compound Faster Than Money

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If that's you, Go to learningleader.com/arena to apply. That's learningleader.com/arena. Welcome to the Learning Leaders Show presented by Insight Global. I am your host, Ryan Hawk. Thank you so much for being here. Go to learningleader.com for show notes of this and all podcast episodes. Go to learningleader.com. Now onto tonight's feature. Our next guest is a world leader. Jack Raines is a writer and investor. At 24, he quit his corporate finance job at UPS, bought a one-way ticket to Barcelona, and spent the next year traveling through 25 countries while writing a newsletter that grew to hundreds of thousands of readers. Since then, he's earned an MBA from Columbia, helped Robinhood build its media company, and joined the venture capital firm Flow Ventures, where he invests in creators. His first book is called Young Money: A Field Guide to Finding Wealth and Purpose in Your Twenties. During our conversation, we discuss why Jack's grandmother Ruth took Jack when he was 11 years old to Africa and how that trip shaped everything he believes about spending money on experiences. Then how we can all increase our surface area for luck and specifically what Jack does. We We also talk about the best networking tool, and then he shares what you can learn from studying how retirees spend their money.

Super interesting. Ladies and gentlemen, please enjoy my conversation with Jack Raines. I love your book. I love all your writing. I mean, you know, it's funny how quickly you became one of the few people who's every time you publish something, I read it. Blog, obviously your book now. Like in that kind of Morgan Housel, Tim Urban, James Clear realm of, all right, Jack just published something new, I'm gonna read it. So dude, I mean, there's just some, there's some really high comparison points.

Like, it's like, yeah, they all, they sold a combined like 100 million books or whatever. So I appreciate it.

No pressure, dude. No, I'm serious. And I also think too, like, you do a great job of being tapped into the age demographic right behind me, but you write in a way that really, um, entertains me. I do a weird thing with AI. I was not going to say this, but we'll say it anyway, where sometimes I'll read something that's kind of confusing and I'll say to Claude, can you rewrite this like Jack Reins? Can you rewrite this like Morgan Housel?

I love it.

That's one of my favorite uses of AI because it kind of rewrites complex things in the voice of the writers that I like. And it's kind of cool to learn about history or something in a way like that. So I appreciate you, man.

Listen, man, that's like high praise. I appreciate you.

Let's, let's go back to when you are, uh, this is where I was gonna start when you were, uh, 11. I love reading about your grandma Ruth, Mama Ruth. Yeah. And she offers to take you on a trip anywhere in the world.

Right.

And so you're thinking, I'll live with Costa Rica or whatever. You're not really sure, but she's like, no, no, no, anywhere, anywhere. So take that moment, what you chose and what you learned from both that trip as well as her and her philosophy on how to spend money.

So as a kid, I was a massive geography nerd. Like, I, in fact, I still have like around the corner of my apartment, I have like a, a map of the world with like pins on like all the places I've been. But like as a kid, I had this massive map in my room and like I'd memorized the capital of like pretty much every country on the planet. And when I was like really little, my grandma, my grandpa would take me on like board meetings around the US. Like I went with them to San Diego, DC, like we'd fly all over the place and Yeah, when I was 11, I'm the, the oldest grandchild in my family. She said, let's go on a trip for 2 weeks anywhere next summer. And I did not really know if anywhere meant anywhere or like relatively close to the US anywhere. So I initially said Costa Rica or like a couple of other places in kind of Central America. And she said, we can do that, but like where do you actually want to go? And the, the real answer was I wanted to go to Africa. I was such an Animal Planet nerd as a kid.

Like I knew all about the Serengeti, Ngorongoro Crater, Mount Kilimanjaro. Like, I just thought—

I thought— At 11, you knew about all this stuff?

Yeah, I was like such a geography nerd. Well, also, I was addicted to playing Halo 3, which is set in Africa, which in the future, obviously, like, you know, there's like missions where you're driving around Mount Kilimanjaro, you're in like coastal Tanzania. So like, I had a lot of random touchpoints where I just knew stuff about Africa. And I thought that seeing like giraffes and zebras and lions would just be super, super cool. So I said, okay, like, I want to go on a safari to Africa. She said, okay, let's do it. And she found this tour group, TAUK Talk Tours, booked it. And like 3 weeks later, she's like, okay, we're going in June and you'll have to get like yellow fever shot and then take like malaria medication in case you get bit by mosquitoes. She just had the whole thing lined up and we went to Africa for 2 weeks. And I was kind of like, I sort of knew it was a little bit crazy for like your grandma from South Georgia, just like classic soft-spoken, super drawn-out Southern woman to take her grandkid to rural Africa. It didn't really click until years later when I was older that that was actually a pretty insane trip, but it was awesome.

And she actually made me, which I thank her for this, like journal about, like I wrote this whole travel blog in my 20s when I went on a backpacking trip, but that's really started when I was 11. I have this little journal called like Jack's Adventures in Africa. She made me write down everything we were doing. There was another family from New York that was there that had kids. I've actually reconnected with them that had kids my age that were there. And I was just writing down like all the random stuff we were seeing. And after the trip, years after the trip, when I was like in high school or college, I was like, why did you do that? And her take, which really stuck with me, was that my grandparents had like, they're in their 60s, pushing their 70s at that point. They'd like made their money. They had plenty of money. And she was like, I can either spend the money on you and the rest of my grandkids now, or like y'all and your parents are going to get it when we're dead. And I just don't think leaving all the money in our will is the best use of that money.

I was like, huh? It was the first time I'd heard somebody verbalize thinking through like how they want to spend money over the course of their lives. And at that point I was still a student. I hadn't really like had a career or made money, so it just wasn't a thing I'd had to think about yet. But I think it was very formative on kind of how I think about the relationship between not just money and time, but money and life stages. It was useful for me to hear that as like a 16 or 17-year-old.

We took a family vacation to the Bahamas this year, and one of the topics at dinner was— this is expensive, but this is part of the reason as to why we work really hard is to create fun tokens. And I forget where I heard that phrase. I didn't invent that, obviously, But the hard work creates fun tokens and we are cashing in our fun tokens for this week while we're here, like Baja Mar and jet skis and, you know, water slides and good food and all that stuff. And that seemed to click with our kids of like, oh, okay, okay. And so my thing was like, let's work really hard, let's create fun tokens, and then we're gonna cash them in sometimes in addition to savings, low-cost index funds, dollar cost averaging every month, all that stuff that's kind of boring, but useful. So how did that trip affect you now in your mid to now later 20s?

Yeah.

Of how to best utilize money.

So there's this— I don't know if you follow Nikita Beer on Twitter. Yeah, he's now like the head of product at Twitter. It's crazy.

I've seen you tweeting with him. Yeah, yeah, yeah.

He's one of like a cohort of people that I'm like internet friends with but have never met. He tweeted one time like there was some— there's always discourse about like how much money do you need to like be wealthy? Like it's the favorite talking point on Twitter of like is $500,000 in New York poor or whatever? And he was being a little bit like speaking tongue-in-cheek, but I actually really liked his point where he tweeted that like every year of your 20s is worth $10 million, which I thought was pretty interesting. I would've sacrificed at 25. I would've done a job I really didn't like if I knew I was going to get $10 million for that. I would've taken less money than that. So there's, I don't fully agree with that, but I do think this idea of like early adulthood years should really have a premium on like how valuable you put them because there's this like very finite window of time where you are like a fully independent adult, but you haven't quite reached a lot of the like responsibilities that lock you into certain life stuff. For example, like I'm not married, I don't have kids.

I think kids are freaking awesome. Like I'm not in the like Gen Z camp of I'm never having kids. I'm like a big family guy, but I'm also aware that like there's a full subset of like life experiences and things you can where you have maximum flexibility that you really should exploit knowing that that door closes. And then by doing that, I think you can more fully enjoy that next phase of life in your 30s and 40s, like as you build a family and you like progress in your career and become a leader in your community. So how that relates to money and time is really starting a couple years out of undergrad, I became very aware that there was this pretty short window of time where I was going to have really high optionality. And there are a lot of different life experiences I could go after that wouldn't cost that much money, that would be highly enjoyable, that if I didn't do them at 24 or 25, I just probably wouldn't do them or they wouldn't be nearly as enjoyable. And the example I give in the book, and I've written a lot about this in older blog posts, was I spent the better part of a year just like backpacking Europe and Latin America at 24 and 25.

And you meet like two types of people when you're doing a trip like this. You meet people who are also kind of in my bubble of maybe they're taking a gap year after college, maybe they'd worked 2 or 3 years and took like 4 months between jobs to go do something fun, or people who are just kind of running away from their problems. And it's kind of an age-specific thing where as a general rule, the like early to mid-20-somethings are the we're having fun doing the hostel thing, hanging out with a bunch of strangers and like we kind of all know we're going to go back to the real world within the next year, but let's have fun. Like, sort of like your, like, Bahamas trip with the family, but like the, like, younger, more like just chasing thrills, right? And then there's people who are like 5 or 10 years older than me who just felt a little bit out of place. It's not necessarily they weren't having fun, but they probably would have enjoyed it more and just fit in with that lifestyle or type of trip better. When they were younger. My thought on it was, okay, if I want to do this really cheap, call it backpacking trip where I'm staying in hostels with a bunch of random roommates, I should probably do it where I'm young enough that sleeping on a train and being hungover and miserable and not really knowing what I'm doing is fun and adventurous and not stressful.

And that was why I did that trip. And as a broader philosophy, I, from really ages 23 to probably 27 or 28, was very much in the camp of like, always say yes to like interesting experience. Don't be afraid to spend money on it knowing that this window of opportunity is pretty short. And also like I'm expecting my income to climb exponentially as I get into my 30s and 40s based off the path I put myself on. So like I shouldn't worry too much about saving an extra $500 or $1,000 at the expense of like memories that could be really cool.

Well, I wondered too, the influence your dad had on you, because he talked about this motorcycle trip, right, that he had wished he had gone on, right? There was law school, there's life that happens, your mom, they have kids, right?

Yep.

And he didn't do it, right? And so what role did that conversation with your dad have on you?

I love that you've read the book, by the way. I like the very pointed, specific questions. No, it's interesting, right? So I, like, I was 24 and my parents had very much pushed me to be ambitious, but they never pushed me to do a specific thing. Like, my dad played football in college. I played football in college. He never pushed me to do that, but he did when I expressed interest and ability, pushed me to, like, try my hardest if this is a thing I wanted to do. So I had, for context, I'd gotten into business school at Columbia out of undergrad, but I had to work 2 to 4 years before starting. It was basically you get out of undergrad, you get work experience, then you go to business school. And I was about a year out from when I was planning on going to school. I'd been working for 18 months and I just like really didn't like my first job. Corporate finance, really boring. It was also COVID, so it was doubly boring because I'm a pretty extroverted guy and I was stuck on Zoom calls like this all day, except I was looking at spreadsheets instead of you.

And I just like called my dad and I was like, hey, this is going to sound crazy, but I'm thinking about quitting my job. And just I was like, there's a one-way ticket to Barcelona for like $300, and I kind of just want to send it and I don't really have a plan, but like borders are reopening post-COVID. I kind of want to go see a bunch of places I haven't been. And I think this like pre-business school window is probably the right time to do it. And I had no idea about this until then, but he was like, I always wanted to do a motorcycle trip around the continental US right after law school. But then I met your mom during law school. We started dating, we got engaged, and then I'm practicing law. And he's like, Now it's, you know, basically 30 years later. And he said, I don't regret any of it. Obviously, I wouldn't exist had he, like, done that trip and it didn't work out with my mom or whatever. But he was like, I do wish I could have done that or something like that when I was in my 20s, just to say I did it.

And it's like, he's not retired now, but is like, like he could like just say he runs his own business. He could just go do it now if he wanted to. He's in his late 50s. He doesn't want to do that now. So his take was basically, if this is a thing you really want to do, you should go do it because you're not going to have a better window of opportunity. But he also was very stern that he was not going to subsidize or pay for any of it. And if I ran out of money, I was going to have to come home and figure it out. He's like, the things I will pay for for you are like your college and graduate school education. I'm not subsidizing you like backpacking Europe or partying or whatever, which I think is the right take. I think like as a general rule, Parents paying for education is good, but like, don't enable hedonistic behavior. But it kind of like gave me the encouragement that, okay, he wanted to do this when he was my age and didn't, and still kind of wishes that he had done that.

I should probably just say like, screw it, take the trip, and then I'll make money later. That was the calculus for me.

I also sense that for some reason the word luck has come up a lot recently. I've interviewed people who've written books about luck. I see articles, I see, you know, it's out there for some, it's in my algorithm, I guess.

Yep.

And I feel like a guy like you who moves to where the action is, who travels on a one-way ticket, who's a social guy. I read the whole, when you went to India for the wedding and stuff.

Had a blast.

Had a blast. I mean, I feel like you are doing a good job of increasing your surface area to potentially get lucky by, instead of just resting and chilling out, you're like, I'm gonna go out there. Whether that's travel, whether that's move to New York City, whether that's go to Columbia, whether that's move to San Francisco and work with Sam and that team. You see like a series of decisions that you're continually increasing the potential for you to get lucky. And so when someone's like, well, look at Jack, he just kind of got lucky. It's like, well, if you actually looked at his choices, he has created the luck by going out there and doing the things that could be uncomfortable for a lot of people. How do you view luck in increasing your surface area for luck with the decisions that you make?

I think everything in life comes down to relationships, and I do think people overemphasize the importance of networking without thinking about— I view a network as a thing that amplifies your innate abilities where if you've expressed ability to do well in a thing and you have a high-value network that opens opportunities, you become the guy that can exploit those opportunities that works out well for you. But having a strong network without you yourself being capable and competent is just kind of useless. It's like a million times zero is still zero, but a million times two is 2 million, right? So the thing that like I've always tried to do is put myself in positions to either like do things that make me a more interesting person or do things where I am working with or surrounded by interesting people doing interesting things. Which is why, like, moving to— I had a couple of different options for business school. I wanted to be in New York City. I came here for that. I love living in New York. I live in New York now. I think it's especially for young people, like in the first, call it, 10 or so years of their career, probably the best place to live off of ability to make money and meet interesting people that will compound over time because it's just such a dense collection of, like, ambition.

But when I took my current job in venture capital, slow, I had applied for a job initially in New York and then hit it off with one of the partners in the fund. And he was like, you should move to San Francisco. And I thought about it for probably 10 minutes and then was like, okay, fine, I'm in. And, you know, I'd never lived in San Francisco, but the math was I'll probably learn way more, way quicker if I'm in the same city as the guy that I'm working for. And there's this whole cohort of like all the AI stuff is happening. I know there were a lot of people that I knew virtually from Twitter or newsletter or whatever, living in San Francisco, building companies, working in AI. Also in venture capital that I hadn't met in person. And I knew going in I didn't want to be there forever. But I think as a general rule, doing uncomfortable things that probably have high payoffs is usually the right decision over, you know, getting out of your comfort zone and just like avoiding complacency in general. That was a move that I was not comfortable with, but I knew was probably correct.

And yeah, it off of both broadening my network and just showing me how that part of the world worked. How does the fundraising game out here work? Who's actually getting hired at these jobs? Also, how much of what I'm seeing on Twitter is total BS? And some of these companies have no idea what they're doing and they're dumpster fires. There's a lot of that. Like there's a lot of performative stuff on social media. And if you're not going and meeting with these companies in person and like interacting with these people, you just don't really get how that world works. Where when I was in New York initially, it's business school, everybody's going to banking and private equity and consulting and there's like this like track. And then you go to San Francisco and it's just out of control. People are throwing tens of millions of dollars at 21-year-olds from Stanford to build AI for dogs. I mean, it is just an outrageous world, but it's awesome. And it's like, as somebody who's always broadly been interested in like tech and investing and kind of oscillating between like different versions of that, it was super useful for me to like really be up close and personal with just everything going on out there.

And I still go back to San Francisco every month. But I've always optimized for where will I learn a lot and like, where am I going to be able to have like contact with interesting people with strong trajectories? I think if you repeatedly go for like high slope of learning and high slope of contact with good people, whether that's in the real world or like hanging out in the right parts of the internet, those aren't like mutually exclusive anymore. There's just no way it doesn't work out well for you and create opportunities for you to take advantage of.

Do you think you'll stay in New York long term? Let's say fast forward, wife, kids. Do you think you'll stay there?

I'm very much in the camp of I would like to stay in New York until I have school-aged kids. Like, I have no issue with having like a toddler in New York City, but then it gets into the— I don't know how much money I'm going to be making. Let's say like realistically, I'm 29 now. It'll probably be 8 to 10 years before I have a kid who's in the first grade. And that's if I like meet somebody tomorrow, we get married in 2 years, right? So if I'm making enough money that I could have the lifestyle I wanted living in New York, I would be down with that. If it's a, wow, I could make this work, but can't save any money if I want to do the whole like private school, blah, blah, blah, it's probably move somewhere else. I don't really have anywhere that I have to live. Like if I met a girl from Georgia and she wanted to move back to Atlanta, I'm pretty cool with that. Or like Charleston, South Carolina, I would be down to do the New Jersey, Long Island, Connecticut thing. Like I'm, I want to be in New York until I'm at a point that like kids' school system starts to matter.

And then that's probably the like driving thing of where's the family support group. It's also like I'm in a position where I have a lot of other young single, or at least like pre-kids friends in New York. But like as my broader social group's life circumstances change, the value of being in Manhattan drops a lot once my career is more established and once the people I like hanging out with aren't here anymore. So it's like, while I'm in this phase, I want to be here. I actually think if I was going to really play it out, I'll probably be in New York for the next 5 to 10 years and then would like to move back once kids are like college age, or at least like have an apartment here to come visit because I'd always like spending time here. But I don't know, it could be a thing where like something goes right, I'm 40 and it's like, yeah, let's have a penthouse in the Upper West Side. Like I'm open to that for sure, but I'm not so New York or nothing that like I would just not save money for the sake of living in Manhattan forever.

Yeah.

One of the quotes, the best measure of one's life is the sum of memories you make while you are alive. And this is from the overall idea that memories compound faster than money. This is where you're ahead of your time. Can you riff and talk more about this? The best measure of one's life is the sum of memories you make while you're alive and How memories compound faster than money.

Money is so fascinating because it's the one tangible, quantifiable thing that like relates to everybody, right? Like it's kind of the lowest common denominator of like human comparison points where you can ballpark guesstimate how much money people make based off of what they do for work or like within a standard deviation of like net worth based off of like where they went to school, who their family is, whatever. The trap you can fall into is treating money as the scoreboard and therefore treating it as like the thing you are trying to achieve. I am very pro making a lot of money. I would much rather be very rich than very poor. And I think that's a like— I think it's weird that people try to almost like vilify pursuit of money. Having money means you can just— you have much more control over your life. Like that's a very good thing to want. It means you can take care of your family, you can take care of people you care about. But the only purpose of money at the end of the day is to like spend on stuff. And that's not just like materialistic blow cash on like really expensive clothes or whatever.

It's like truly at the end of the day, you are either spending money on yourself, on people you care about, or you're leaving that money to other people, whether that's leaving it as an inheritance, whether it's giving it to philanthropy, like money, it is literally just a like non— on its own, non-valuable asset. It's only worth the things it's at some point exchanged for. So the thing everybody has to figure out is like, how much of that money do I want to exchange for things now? Both physical goods, experiences, whatever. How much of that money do I want to invest so it can compound and grow over time to spend on things later? And what I think is pretty interesting is like, my belief is that the amount of money it takes to like get a certain, call it, unit of enjoyment out of life is probably a lot lower when you're young because you're just quality of life and your expectations of quality of life are lower. For example, I live in a like 500 square foot studio apartment in New York. I have a fairly nice apartment. It's also just one dude living here, right?

If I was married with a couple of kids, we need a bigger place. It's gotta be more expensive. Or a few years ago, the whole backpacking Europe thing, I was in a bunk bed with like 10 random strangers and you have like a, a locker under your bed that you put your stuff in so people don't rob you. It was kind of hilarious being with like, there's like a French guy there and some of them were co-ed. It's like a French guy, Swedish girl, a bunch of like dudes that were at like Fordham. They were on study abroad. It's like a really funny setup. I would find that just so annoying and just terrible. And I'm still in my 20s, but I'm like 5 years older. That's just not what I want to do. Like I'm just going to get a hotel or an Airbnb, right? So when you're really young, like a few years out of college, it just doesn't take that much money to like find the same level of enjoyment that it'll take later. Which makes sense because also you make more money as you get older and you should be investing money so it compounds and grows over time exponentially.

So there's this like constant tug and pull of how much money does it take to create those experiences that become memories now? How much money do I need to put back or how much work do I need to put in my career to increase my earnings to be able to maintain that level of enjoyment and satisfaction? What you want to optimize for is hitting like a pretty high level of life satisfaction in your 20s, and being able to maintain, they call it an 8 out of 10, maintain that over the course of your life. But the amount of money it takes to maintain that goes up a lot, probably peaks in your late 40s. Then as your kids grow up and start going to college, it flattens out and plateaus until you die. So how much money do you need to both earn and invest and have expendable to be able to keep that quality of life satisfaction is the thing people should be optimizing for. But because it takes more and more money to keep hitting that, people start focusing on money as the output they're optimizing for rather than money as step 1, with step 2 being the things you should put that money toward.

So that is the Jack Rains philosophy on life cycle of money.

Okay. In Chapter 5, you have how to be stable from a financial perspective. I'll list out the bullets and maybe you can riff on these because I mean, They seem pretty obvious, but they're not. If you actually follow these, I think you're good. One, spend less than you make. Two, build an emergency fund of 6 months living expenses. Take your company's full 401 match. It's free money. Contribute to your IRA. Don't gamble on individual stocks. Stay invested, stay employed. Don't go into credit card debt and don't get divorced. Talk to me more about these bullets from chapter 5.

Yeah, I mean, to be clear, I've never been married nor divorced, but my understanding from seeing other people that have is like divorce looks like it really sucks and it takes like all of your time, half your money. And like, I'm a huge Tom Brady fan, but man, his like post-divorce, like going on like maybe WWE and all this stuff is just like tough to watch.

Like what's going on now? This is a little bit time sensitive and we're, we're both on Twitter 24/7, but yeah. Oh my goodness. It hurts me, man. I love—

I'm a quarterback.

Like, yeah. What's going on, dude?

It's like watching, watching his retirement arc versus Peyton Manning or Tony Romo who have just like done a great job of like, they're making some investments, they're talking on TV versus Tom Brady, like viral clips of him like flicking off the Paul brothers and like fake slapping them. I don't know if you were old enough that you have like 5-year-old kids and you want to be seen at Michael Rubin's all-white party. Come on, man. Like what, what, what are we doing here? Like that happens for people in their 20s. Get outta there. At least that version of it. So I don't know. Tom Brady's midlife crisis needs to be studied. That is my, my main take on this. And I hope he gets through whatever he's going through because it's like, I'm not even a Pats fan. I'm just somebody who respects, like, dominant performance. I really wish I just never saw anything about Tom Brady post-retirement because he really went out on top with the Super Bowl, the Bucs. And it's just like, dude, even if he's making money from this, you're just like ruining your legacy. And like, I don't know if it's because he, like, wants to be a billionaire and he's like, being too performative chasing these things, or he just wants to be in the scene.

It like kind of sucks though.

I agree.

I hope LeBron James doesn't have a similar arc as the, the other kind of GOAT of this generation, but we'll see.

Yeah, sorry I took you off track from the financial stability thing.

No, you're good. I can riff on the downfall of Tom Brady forever. I mean, look, I'm a Falcons fan, so like after what he did to us in the Super Bowl several years ago, he kind of deserves it. That's the end of my talk track on Brady.

Yeah, but what about those rules? You know, spending less, emergency funds, 401s, IRA, don't gamble on individual stocks. You're not smarter than them. I mean, most of us are not. Stay invested, stay employed, don't go into debt. Where are you at there?

My take on personal finance is it's actually like incredibly simple to compound wealth over time in the US where just like max out your 401 or at least get the company match and then like don't spend more money than you make. Literally just track your budgets. If you have credit card debt, pay it off immediately and then save for retirement. Have it be like automatic contributions so that way you don't even have to think about it. It's just you have like, if it's $1,000 a month, $2,000 a month, $500 a month, just like have that going in the market and compounding. For the amount of like podcasts, newsletters, whatever, that are giving personal finance advice, up until you have like several million dollars and you're really optimizing for like taxes or estate planning or whatever, you can spend 10 minutes with ChatGPT and figure out how do I make sure my money's compounding at 8 to 10% a year? What I think is much more interesting is people don't spend enough time thinking through how they want to spend that money. Again, it's not the personal finance stuff isn't important. You should have that foundation set where it's like, I don't think about the money going into my 401.

For all the stuff I say about don't pick individual stocks, I do still sometimes pick individual stocks and I both made and lost a lot of money when I was 24, really aggressively picking stocks. But I am like aware that that's probably not the optimal use of money or like brainpower. Yeah, my like broader take on that is like it just isn't that hard to put yourself in a position where assuming you remain employed and are competent at your job, like you have a few million bucks saved up for retirement in your 60s just by doing the boring thing right over and over and over again. And it's actually like User error can interrupt compounding way more than like, you need to use like second and third level thinking to figure out how to make more money. We, we just like overcomplicate personal finance. You should spend a little bit of time figuring out what's the like lowest lift, hands-off way to benefit from compounding and spend a lot more time thinking about once that structure's set up, how and where do I want to be like spending this money? And like you model out how much am I going to save up over time?

Okay, what am I going to want to use that for? Is like the much more interesting question.

Because you also cite some of Nick Maggiulli's work that retirees basically, they spend their whole life saving it and then they retire and they don't spend it because they're like in this mode of save, save, save, save, save. And this is a good problem, right? But save, save, and then all of a sudden it's time to start taking it and they, they don't really do it. Can you talk more about that research, some of Nick's work, as well as maybe what we could think about now before we get to those days, right? Because again, I'm the generation right ahead of you. Those days are— they're not close yet, but they're going to get here. And like, how to better think about that.

So Daniel Kahneman has some really good studies on like humanity's propensity for loss aversion, where to like really, really quickly summarize his work on this, the pain you get from taking a loss like financially is about twice as strong as the joy you get from like a gain where if you make $100, you get like 5 feel-good points. If you lose $100, You get negative 10 feel-good points. And because of that, people are really wired to not want to lose money, which means that when it comes to saving for retirement, most people will really optimize for, I need to keep stacking money because I do not want to be in a position where I lose money. And granted, the older you get, the higher chance of a health scare, or there's a natural disaster that messes up your home, or the just over time, the number of things that can go wrong that could really screw you financially increase exponentially. So it's like, it's not an ungrounded fear that you could think I need to have such a big nest egg that like nothing can touch me. But going back to Nick's point, like Nick's the COO of Ritholtz Wealth Management.

I would say he's probably the, one of the, if not the best, just pure play, like personal finance guys out there right now. And he pulled a bunch of data over the last, I don't know what the time period was, 30 years or whatever of like retirees. And his findings were that like most people, they don't ever touch the principal of the money they put in their retirement account, meaning that like their gains are compounding faster than they're spending it down. When in reality, I don't think you should try to optimize for like, I spend down all of my money in retirement because you actually just don't know how long you're going to live. You should always keep a margin for error where you can keep compounding, but like If you retire at, call it 70 with $10 million and then you die at 90 with $25 million, that actually probably wasn't the optimal amount of— you probably should have spent more money sooner where you still have money to leave to your kids and grandkids or whatever, but how much utility did you just leave out there on the field that you didn't take advantage of when you were alive because you had a scarcity mindset?

So the way that I think about it is If you're that person who they couldn't spend on their retirement if they tried to, because the other thing is when you're in your 40s or even your 50s, your burn rate is probably way higher than it's gonna be when your kids are out of the home and they're self-sufficient. Like the amount of money you're spending on your kids in like high school and college of like sports and tuition and all this stuff, maybe like helping them out right outta school. By the time they're 30, let's say they're 30, you're 60, they're probably like totally self-sufficient at that point. But you are going to be anchoring to, wow, my burn rate when my kid was 21 was this, and you think you need to keep hitting that when actually as you get closer to retirement, you're just going to spend less money. You have less energy to do stuff. You have way less expenses on your family because you're probably not supporting your kids anymore. So you probably should have spent more money on stuff when you were younger because the burn rate's just not going to be that high later.

Again, I think running out of money in retirement is a way worse problem than having too much money. I do not think you want to be destitute and a burden on your family in your 80s, but having way too much money at a point in life where you don't have the energy to do anything with it is a completely self-induced problem that shouldn't happen. So I think the thing to think about is actually look at the data of people in your income cohort on what their burn rates actually are in retirement to realize that, okay, what I'm spending at 45 or 50 is actually probably higher than what it will be at 70, and then thinking about, okay, you might have 10 years in retirement where you're still high energy, maybe in your 70s where you want to go do stuff, and that's going to slow down a lot in your 80s. Where should I be spending while I actually have the ability to do it? Because I don't think people really internalize how much their mobility and energy drops with age, especially old age. And once you get to that point, when you're 85, you can barely see or walk, there actually isn't that much you can spend the money on to do other than just healthcare-related, staying alive stuff.

So versus you're 60, you still have a ton of energy. Your kids are probably out of the house. You should probably go take the— I don't know. I have a great uncle and great aunt that just twice now they've just sailed around the world. They're getting too old now where they can't really do it anymore. They took a mini retirement in their 40s and just sailed to Australia and New Zealand, which is kick-ass. It's my grandpa's sister and her husband. They did that. My uncle went down and visited them when he was in high school or college, and then they did it again in their 60s. And it's like, Yeah, take a mini-retirement. You made all that money in your 20s and 30s and early 40s. That's like 25 years of making money. Take a year off and go do a sabbatical and then come back to it if you need to. I just, the whole idea of I'm going to save all my money over the most valuable parts of my life to then try to spend it and be like least valuable part of my life is just a really stupid trade where I think it comes down to either people aren't really running the numbers on it or My more like meta philosophical introspective take is like people really don't like contemplating their own mortality and aging and just like the like call it depreciation of their physical self where to fully understand that you need to capture the moment now, you also have to accept that like you're fighting against the clock.

It's almost easier to just ignore that reality. And then if you're ignoring that reality, you just keep focused on making the number go up. So my, my like, this is my like crazy young person take on a lot of this is that a lot of people's problems just come from like they don't want to deal with the fact that they're going to die one day. And if you actually internalize that, you would probably be a lot more intentional about how you spend your money and your time.

Have you talked to Bill Perkins, the Die With Zero guy?

We have never talked in person, but like we've chatted on Twitter before a few times.

What do you think of him?

So one, I think Bill Perkins has— I think he is the perfect type of rich dude where I don't know, as far as he made a lot of money as a trader and running a fund. He's also a pro poker player. He's produced movies. He's a bestselling author. I don't know. I follow him on Instagram. Him and his wife and new kids seem to be having a great time, just like fooling around on their boat or whatever. He made the money and knows how to spend it, but he's still like an— like he started a couple of venture-backed companies. He's like still a super active entrepreneur, businessman, like runs a fund. But his whole philosophy of like die with zero and like spend all the money over the course of your life, I think is right. Like if you put yourself in a position where you're at the top of your game, What do you want to do with that? But what's really interesting about him is in the first chapter of his book, he talks about how his best friend in his first job took a few months off and just went to Greece and just hung out in Europe.

He took a payday loan from a loan shark because they were only making like $20K a year at the time in Manhattan, which was just, even back then that was nothing. And just went to Europe for 3 months. Guess what? He came back and he was a successful energy trader in Texas. Him and Bill had very similar career paths. The difference was one of them had way more fun at 24 than the other one. And one of Bill's regrets was that he he didn't really do a trip like that until he was 30. And by then that window of like crazy young guy going on journey, he had some story about like meeting some Greek girl and like falling in love or some fling. Like he just didn't get all those random things at 24. And he was like, I could have done that and still have the same career. So Bill's whole take on like the usefulness of money, I'm like pretty aligned with.

You just retweeted this, I think right before we started, somebody's advice. Basically here it is. This says for young people. I just think but I disagree. I think it's for people. I think you could cut out the young part. Experiment as much as possible. Don't feel like you're wasting time. The only real risk is not doing anything. Again, we're increasing the potential. You mentioned this earlier, but every single opportunity in life, literally every single one of them, comes through a person.

Yep.

And that comes through a person you probably have some sort of a relationship with. And the only way I think to develop an actual real relationship with a person is to go out there and be with them, to see them, to increase the odds that you'll actually touch shoulders, you know, going out there doing things. So I think the only risk is not doing that. And I feel like this is kind of the mode where you're at.

Yeah. So that retweet was Steven Woppe. The company's called Woppe. It's like an e-commerce company. Hilariously, I joke that they're like the Shopify for course pros. But they're like the e-com platform for all the like, call it Gen Z people doing weird e-com sort of scammy stuff. Wapp is a real business. I don't know if a single one of their customers have real businesses or not, but they built like a sick platform. It's funny, there's this whole subset of advice that like, like Steven's probably about my age. He looks like he's in his 20s. There's this whole subset of advice that like young people give that probably applies to everybody. But you don't want to be the 28-year-old who's like essentially giving advice to the 50-year-old because you're not there. So you say this is for young people. That's kind of like with my book, like the whole thing that I have geared it toward people in their 20s. In reality, a lot of the like time and money and opportunity cost and status game stuff is like pretty applicable to anybody. But I can only like with confidence say like, I know what it's like to be a 25-year-old dealing with this stuff because I have been a 25-year-old.

I've never been like a 40-year-old with kids. But yeah, going back to like that take itself, I mean, I, the one thing I'll push back on you a little bit is like, I agree that like being like very like experimental, taking shots and trying stuff is basically like, say like having high agency and the ability to like be uncomfortable is a useful lifelong skill. I think you have a lot more leverage on it when you're young because like the older you get, the more you have to have like proof of work for people to take you seriously versus when you're young. I talk about this in my book, but your potential gets valued at a premium in your 20s. And then like as you hit your 30s and older, proof of work matters more and more. Being heavily experimental and trying a lot of stuff when you're young just speedruns the time in which like you can make contact with interesting people in a lot of different domains. And also like your learning curve accelerates because the more that you're experimenting when you're young, the more you can like go up these like proficiency curves in different vectors.

And you can develop a feel for like what you actually like doing and where you want to spend your time. So by the time you hit your 30s and 40s and you really want to see those bets compounding, you have like a very good sense of self, right? It's like you experiment a lot when you're young, you develop a skillset to experiment and take shots versus if you never really take shots. I, I, I think it's much harder to start being risk-on at 35 if you were never risk-on in your 20s, right? So, It's a lifelong skill, but like anything else, the ability to do things in the compound compounds. But you want to take a lot of weird, interesting shots when you're young. So like you can figure out which of those paths you want to double down.

It reminds me of— I have this section, most recent book, it's just called The Best Networking Tool. And in my opinion, the best networking tool is doing great work.

Yep.

Which is what you're talking about, like competence. Not just experimenting, but I mean, one of the examples, it's a little bit crazy and it's not a perfect example because her dad's famous, but like, how does Gracie Abrams get on the Eras Tour as an opener? I, I saw her open, it was one of the shows I went to and with my daughters, and, um, she did it because she, she worked really, really hard and wrote beautiful, great music in some people's eyes. I like it.

Yeah.

And Taylor noticed And Taylor called people who she noticed was really, really good. So how did Gracie get in front of Taylor? She created great work. She was very competent at her job, right? She's very good at being a musician. And Taylor said, let's go. Did her dad and all that help?

Probably, yes.

Right. But if she wasn't good, it doesn't matter. That's not happening. I think part of it is the best networking tool in the world by far is doing great work. Other people will then notice, and then that creates the opportunity for you to meet, and then it's on you to make the most of those opportunities. But the best networking tool is creating great work.

Yep, yep, totally agree with that.

One question more before we go. The champagne question comes from my friend Jason Gaynard. It's a year from now, you're surrounded by all the people you love— friends, family— and you guys are popping bottles like crazy. You're celebrating. I'm curious, what are you celebrating?

I mean, hopefully my book blew up. Like at the time of recording this, this will come out in 2 weeks, I guess like when it actually like comes out, it'll be right around launch day. I mean, the, like you've been through the book gauntlet a few times now. This is my first time going through it. It's like there's so much you can do to try to make a book do well, but at the end of the day, you write the best thing you can, you do what you can to, you know, get people to know about it and care about it. And then ultimately like it either travels word of mouth or it doesn't, right? So like, I'm less concerned with the, oh, I need to get big marketing pop and I want this to be a thing that like a lot of people do that speedrun the launch, fine. I want it to be a thing that a year from now people actually care about and have like told other people about. And whether that's like, I don't know, like I'm not gonna put a set number on number of sales or if it's a New York Times list or whatever, but like for what I wrote to be a relevant thing people are talking about a year from now and there being some milestone or benchmark that I hit a year from now, Probably that.

Yeah, I love it. Book is called Young Money: A Field Guide to Wealth and Purpose in Your 20s. As we just said though, it certainly applies to people beyond that. Look at that, dude.

I love it. The, the hardcover I think looks a lot better. The colors look better than the softback.

They sent me one of the soft ones, the early ones. I got to get the, I got to get the hardcover too. But it's, it's really well done, dude. Like your other writing, it's obviously, uh, uh, I love it. Big fan of your work, man. And, uh, certainly we're going to continue our dialogue as we both progress, man.

100%. Thanks again for having me.

It is the end of the Podcast Club. Thank you for being a member of the end of the Podcast Club. If you are, send me a note, ryan@learningleader.com. Let me know what you learned from this great conversation with Jack Raines. A few takeaways from my notes: get the boring stuff on autopilot, spend less than you make. Build the emergency fund, take the full 401 match, and automate the contributions. Dollar cost averaging every month, no matter what. Set it up once so you can stop thinking about it and spend your attention on the decisions that actually change your life. Get the boring stuff on autopilot. Next, spend on the things that expire. Some experiences only work at a certain age. Some of this comes from Bill Perkins. And die with zero, meaning if you're going to go hiking, do it now. If you can go skiing, do it now. Maybe later in life you won't be able to. So like in Jack's case, sleeping in a hostel with your best friends is an adventure at 24, but you don't want to do that at 40. So what's something you want to experience right now but haven't done it yet?

Take this as a nudge to do that thing right now. Much like Jack's grandmother taking him to Africa. When he was 11 years old and spending on experiences. And then the best networking tool: do great work. The most reliable way to meet people worth knowing is to do something worth noticing. Jack has created some life-changing relationships for himself because he's had the guts to publish his work online, and it's really good. And he's amassed a big fan base, which has led to all of those great opportunities.. So how can all of us network with others, do excellent work? Once again, I wanna say thank you so much for continuing to spread the message and telling a friend or two, hey, you should listen to this episode of the Learning Leader Show with Jack Raines. I think he'll help you become a more effective leader because you continue to do that. And you also go to Spotify and Apple Podcasts and you subscribe to the show and you rate it, hopefully 5 stars. Stars, and you leave a thoughtful review. By doing all of that, you are giving me the opportunity to do what I love on a daily basis, and for that, I will forever be grateful.

Thank you so, so much. Talk to you soon. Can't wait.