People who grew up in families with money kind of know how the money game works. There is a certain subset of career paths, networks to tap into, opportunities to go after where if you play the game right, you'll make very high six figures to low seven figures. But you have to know what that game is. It's a little bit exclusive. You need to know from middle school or high school which colleges to optimize for, which internships to optimize for. Once you go in the investment banking or consulting route, like how to play that to get the next promotion, or do you jump to a private equity job, or do you go back to business school? There's just this whole internal knowledge that if you're from that world, you just know that's what you're supposed to do. And if you're not, you don't.
And the other thing is that, like, I noticed this especially in business school. If you are from a poor family and you manage to get into a good grad school, you have to go after the banking job or the consulting job because you need to take the guaranteed relatively high salary to pay back your student loans. You can't go try the startup. You can't join the tech startup. You can't start a business because you will owe $150,000 that you have to pay back and your family's not going to be able to cover that for you. You just can't really deviate. Versus the kids who grew up with some money, maybe they did the banking thing initially, but if they're 26, 27, want to try something new and they have a $10 million plus nest egg, right? They can do whatever they want.
What's up, folks? We have the author of Young Money, Jack Raines. We're going to have a fascinating conversation where we talk about his upbringing. For a lot of you folks who have kids growing up in this era, I don't know what we call them these days, not millennials, but Gen Z's, alphas, whatever. I think it'd be a great podcast to listen to to gain a little understanding about what they're coming up in, especially those of them with money, which you'll hear Jack's story, how he came up from a somewhat well-to-do family, entrepreneur family, and moving through his career path amongst a lot of competition in New York City, elsewhere in these more business, private equity, venture capital world. But oh yeah, hopefully you guys enjoy the show.
A lot of people in their 30s and even 40s and 50s especially don't really understand what kids go through these days. And one little anecdote before, I was having a conversation with an investor the other day and them saying, 'Yeah, I don't know why these kids, these kids are going to rent all these houses.' Like, 'No, they don't want to own those old 1980 houses. They want something newer and they don't mind it being under 1,000 square ft.' And it finally, the epiphany hit, but it's just different generations at this time.
All right, welcome Jack. Welcome to the podcast. I know your profile is very similar to a lot of our clients' kids, right? A lot of the kids go to prestigious colleges, doctor, lawyer, engineers, etc. Not all of them want to do that, but a lot of them are going to be given money and they go out to maybe the big city. Take us back to your upbringing. What kind of family did you grow up with and what was like the money mindsets? And then yeah, let's walk to where we're at these days.
As someone who's sitting in my, I think, 500-foot studio in New York, I can totally relate to that. But I guess I'll start a little bit with my backstory. I'm Jack, 29. I worked for a venture capital fund called Slow Ventures. Went to business school in Columbia, got my MBA there, lived in New York for most of the last four years and did one year in San Francisco. But originally, I'm from South Georgia, small town, middle of nowhere. I joke like I have a cowboy hat on my profile picture on like all my social medias and stuff. Yeah, I'm a southern guy. Played football in college at Mercer University. Studied finance and Spanish.
And it's very funny going from literal small town USA to then spending, call it, most of my adult life now in either New York or Silicon Valley because the norms of what people do for their careers, what seems like a lot of money and not a lot of money, it's just like night and day, right? I grew up, my dad used to be a lawyer. Him and his brother own, they're like entrepreneurs and they own a bunch of businesses, a bunch of, they own 15 furniture stores and five car dealerships, to call it 20 random stores. Mom's an interior designer, yada yada yada. As a kid, I kind of thought that I was going to grow up and sell insurance or be a commercial real estate broker or just do something in that realm of things in Atlanta, Nashville or Charlotte after college.
And then once I was a sophomore, junior of college, I really realized I wanted to do the New York thing or the San Francisco thing and applied to business school. I got into business school at Columbia and they had a deferred enrollment option where you can apply to business school as a senior in college. If you get in, you work two to five years and then you go back to school. For any college kids or parents of college kids whose kids might want to do an MBA, deferred enrollment is sick. It's very cool getting into grad school like pre-out of undergrad. Like studying for the GMAT when you're 20 or 21 is much better than doing it at 25 and you're working 60 hours a week.
Yeah. My goal at the time was like, I want to get out of the Southeast. I want to go to New York. I'll go to Columbia and probably be either an investment banker or a consultant and then figure out my life after that. That's not at all how my career ended up turning out over the last four years. I can also, I can hit the entire, do you want the speed run of undergrad to how I ended up where I'm at today?
Yeah. Let me pause there. So I mean, at Propel, we talk a lot about first gen, second gen, third gen money. I think maybe you're categorizing yourself as more second gen money here.
So I guess the definition, at least how we like to use it, is the first gen is the one who has multi-millions, right? Like everybody these days owns your house in Hawaii or California, you're a millionaire. But that's not that great, right? To be a multi-millionaire you have to judiciously save and invest, or like your parents owning being an entrepreneur. But maybe breaking that down further, any other siblings in there too, just...
Yeah, the whole mix. Like all my grandparents are still alive. Grandparents, at least on my dad's side, were entrepreneurs. I have a sister who's, I'm 29, I have a sister who's 24 who she lives in Birmingham, Alabama, went to the University of Georgia. Grandpa started his own insurance company. Grandma used to run her own stores. She was the chairman of a bank in South Georgia. Dad runs his own business. Mom runs her own business. Like everybody in my family has been fairly entrepreneurial the whole time. So my kind of like frame of reference was never go down track and do this for 20 years and make partner at your bank or consulting firm or law firm. It was like my dad was a lawyer for a little while and hated it and did his own thing. Everybody's always really been scratched with the entrepreneurial itch in my family.
Yeah. And but yet they sent you to college and down that traditional path. What was always the sentiment of it? Hey, go Jack, go try this out. Get as smart as you can, get some technical skills, but eventually we got off that path ourselves. But what do you think their goal in doing all this was? Or maybe even at this point?
Yeah, I think that the core thing, it's going back to my grandparents, parents, and now me, was always get a good education, be educated. You should have high agency over what you do with your life, but be thoughtful about how you go about it. And like education is probably the highest leveraged thing a young person can do. And I also extend that to going to a top school or having one or two jobs at like top well-known companies. If I could do it again, if I could have recruited for, if I'd gone to a better undergrad and could have recruited for investment banking out of undergrad, I probably would have done that, right? My dad does his own thing now, but he went to Davidson College and then he went to law school and he practiced law for five years.
The thing that I was taught, which I strongly believe, is that capturing a couple of, call it, prestige steps early in your life just makes everything else that much easier. If you want to go raise your own fund, start your own business, whatever. Having a network from being at very powerful schools and early jobs where you're with peers that are going to achieve big things, it just makes it so much easier to do everything later. Opportunities come to you much easier. So the thing was always like, I was never pushed in any particular career, but like the value of education was like, it was very clear to me from the time I was like 10, like you're smart, make good grades, like you have a good brain, leverage it, yada yada yada, and then kind of figure out what you want to do along the way.
Was that bridge there to come back and work with the family business there or not quite for yourself?
Like it could have been, to tell you the truth, but like I just don't love being in the Southeast. I'm a New York guy through and through. I would love to be in New York for the foreseeable future. And it's like my career goal was not to take over the businesses from my family. It was to do my own thing and that thing has thus far been a lot of like ad venture capital stuff in the kind of coastal cities.
Now you live in New York City, you moved away from Georgia. Part of the going to good schools, getting those stamps there is like your network.
I don't know. Was that always, was that ever talked about by your parents as being one of the things or maybe unspoken or...
The transparent answer is probably, but I was also just pretty keenly aware that like going to a, like I went to business school in Columbia. Like going, growing up in South Georgia and then playing football at Mercer University in Georgia, most of my peers for the first 22 years of my life were largely people from Georgia or the Southeast more broadly. I knew going to like a good school, you're going to get a lot more exposure to people from both all over the country and all over the world. And also like it'll be a lot of strivers, which I use that word as a positive, but like people like going after like trying to level up in their careers that are trying to do a lot of different stuff. So I was very aware when I was applying to business schools that it would be like a massive leverage point for me. The main reason I was going was not to build a network, but I was quite aware that I would have a strong network as a consequence of that decision and that definitely weighed into it.
Yeah. So maybe if you could think back at that inflection point, it seemed like there was a kind of a pivot where you saw a life in the southeast and then maybe it changed. Where did that come from?
The actual answer is I never felt like I was at home in the southeast. And I very aggressively wanted more for my life than, I don't know how else to put it other than I felt like I was underachieving a lot of the things I could experience if I limited myself to staying in Georgia my whole life. And I viewed business school, especially business school in New York, as an offramp to go do much more interesting stuff and put myself in more interesting circles. It very much came down to I want to have a more interesting life than what I'm probably going to if I graduate and live in Atlanta and never leave. And I don't know what that more interesting thing will be, but I want to go after it.
Yeah. But your sister, which is the best control test we have here, did she stay in the southeast or did she...
Yeah. Like she went to the University of Georgia. She works in marketing in Birmingham now. But she also loves living in the south. Like we were just two totally different people. She loves being near the family, living in the south. She has zero desire to live in New York City. Loves to visit, wouldn't want to live here. Me, I turned 25 and was just ready to get out of Georgia. And that's when I moved to New York.
Yeah. Cause I guess I'm trying to dig into maybe you can recall a certain instance that happened or maybe at some point you were exposed to it, right? Either through a magazine, that's dumb, but maybe you hung out with some people at a party that were going there and you're like, that's where is the inception of the idea, right? Because what we're trying to do here is a lot of these wealthy parents that are listening, I hear a lot of them too, the kids, to no fault of the parents, they just haven't had the exposure quite yet to something.
So the thing for me was like, I was not aware enough as a middle schooler or a high schooler of what the, call it, career trajectory differences are if you go to a Yale or Columbia or Princeton or even a Duke, UNC or Michigan versus most schools in the southeast. We'll exclude Vanderbilt, Georgia Tech, but there's a full subset of career opportunities where Goldman Sachs recruits kids from Princeton. They don't know where Mercer University is, right? And I, as a high schooler, the thing I cared, like I was the valedictorian of my high school class. I was a smart kid, but the only thing I really cared about was playing football in college and I was like hyper-optimizing for that.
And then it was around my sophomore year of college where I was like really starting to think about what did I want to do with my career and the thing I wanted to do was make a lot of money. Where do you do that? If you just Google, I do remember as like I was probably 19 or 20, googling highest income jobs for new grads, investment banking in New York.
The companies, right? I mean that was...
You see the Goldman, the McKinsey, the JP Morgan, whatever. And then you also realize those jobs, I tried to do the online application for some of those internships or even for some of the banking offices like Bank of America, big office in Charlotte, didn't even get a message back because I, like, it was my first experience of you're not at a target school, therefore these jobs aren't open to you. And I was like, dude, I totally screwed this up on college choice.
And then so to me the workaround was like, okay, I should probably go to grad school and it should either be business school or law school. And my dad hated being a lawyer and, like, he never discouraged me from doing it, but I heard so much negative talk about it from him that I was just like, I'm never going to practice law. So I kind of left business school and hilariously because I was playing football in undergrad, you can graduate transfer where if you have eligibility left after you've taken enough classes to graduate, you can play your extra one or two seasons at another school.
I wanted to graduate transfer and play football at Yale for my last year of eligibility because they had an MBA program where you start right out of college and then you work a couple years and then you come back and finish. It seemed like a good idea. And then like the Ivy League, they don't let graduate students play sports. It's just like a league-specific fluke. It's because they don't want somebody starting Yale Law School or Yale Business School and then dropping out and tanking their graduation rates, which I get. But from doing that, it put me down the like MBA recruitment pipeline. And I saw that seven of the top 10 MBA programs offer deferred enrollment options where you basically take the GMAT, apply to business school your senior year of college, and if you get in, you work a few years and go to business school. So to me, it was like my golden ticket out of South Georgia inertia and into a broader career set basically.
So maybe going back to your, sorry, we're skipping around a lot, but going back to your parents, a lot of things you hear about second, third generation families is especially before the kid comes back and takes over the estate or the company, you get promoted twice in other companies, typically Fortune 500, not some yo-yo company out there. Or what you did, you got a high degree or MBA from any school, but a high degree from one of those, obviously Columbia fits that category. Anything similar that you've heard that is best practices you've heard from your buddies on that, that their parents put them through like that?
Are you speaking specifically about people that are coming back to take over the family business or just people whose families push them to graduate school in general?
Family isn't pushing them, but then they got substantial monies coming back that they're going to take over. Whether that's a business or not.
So hilariously, I have a lot of international friends from business school where out of my main friend group, it's Guatemalan, Indian, Argentinian, whatever. And a Guatemalan guy, buddy named Marcos, his family runs a massive mattress firm business in Guatemala. And he, I think he was in consulting pre-business school, but the whole thing was like, go work somewhere, get experience, get your MBA. He did another job for one year out of business school with a tech startup, but the game was always going to be like, he had this foundation for a massive business in Central America and it was, if you want to go back and run it, do it.
And I think for him it was like a family push to go out and get educated in America and then also experience building a career there. But once you have grown into yourself and become a man, like you'll be in a position to come back and run this, right? So it's like, this is not the place to train you up to be the manager, be the face of the company, whatever, but like you have all the social ties here already. So get the degree, get trained, be the person who has the shiny Ivy League degree. And then when you come back to run this business, people will take you more seriously because you have the right pedigree.
It's almost like pedigree laundering where you're taking pedigree from here and then applying it to your business here to then scale that to the next level. And like, that's a relatively common thing, particularly for international students or students from, call it, like tier two, tier three cities, smaller towns. Like it would be the same if I went back and took over the family businesses. Not really my plan, but if I did, it's, oh, like Ivy League educated kid is now running like all our stores in the southeast, right? So I think a big...
For a company everybody knows and he was this title up as opposed to just coming back and nepotism right here.
See, I guess why we wanted you on to be a guest in pocket. You're obviously a writer, right? You wrote the book Young Money, but I think you do a good job articulating your ideas and you're a guinea pig through this, right, back in that time. What about, what could you tell us about the families who did not grow up with very much wealth? Maybe the parents, like my parents went to grad school, doctorate, but they didn't have millions, right? Like that kind of pedigree. What do you think that they were doing wrong or maybe right? Or because you're in the middle too, right? Like you're seeing these super wealthy people, then people that...
Yeah. It's funny, like I put myself in the, like if you compare my upbringing to median family from South Georgia, I grew up very well off. Like I got a truck when I turned 16. We had a big house in South Georgia. I had a football scholarship in undergrad. But in like business school, my tuition was paid for. But then on the flip side, compared to a lot of my friends from New York who I met in business school, I would be dirt poor because they're billionaires or hundred millionaires.
For example, like my family covered my tuition, but they did not pay my rent or pay my cost of living, right? They're like, 'We'll pay your tuition bills, but figure out how to pay for your apartment, work part-time at the time.' They're like, 'We're not going to pay for your trips in business school.' Like, business school is infamous for ski trips and yada yada yada. Like, my dad wasn't going to bankroll that. He's like, 'I'm paying for your education. That's it.' So I was like, you could say rich for South Georgia and then poor for, call it, Manhattan elite. So I've seen the full spectrum of the human socioeconomic ladder.
And in business school especially, there was like the kids who grew up poor, they were on like hundreds of thousands of dollars in student loans. There were the like billionaire grandchildren who never had to work if they didn't want to. And then everybody else in the middle. And I think there's two massive differentiators between kind of the like multigeneration haves and have-nots.
The first is that like people who grew up in families with money kind of know how the money game works. There is a certain subset of career paths, networks to tap into, opportunities to go after where if you play the game right, you'll make very high six figures to low seven figures at a certain point in your career, like in your 30s. And all you have to do is just not screw up. But you have to know what that game is. And it's a little bit exclusive. You need to know from middle school or high school which colleges to optimize for, which internships to optimize for. Once you go in the investment banking or consulting route, like how to play that to get the next promotion, or do you jump to a private equity job or do you go back to business school? There's just this whole internal knowledge that if you're from that world, you just know that's what you're supposed to do. And if you're not, you don't.
And the other thing is that like I noticed this especially in business school. If you are from a poor family and you manage to get in a good grad school, you have to go after the banking job or the consulting job because you need to take the guaranteed relatively high salary to pay back your student loans. You can't go try the startup. You can't join the tech startup. You can't start a business because you will owe $150,000 that you have to pay back and your family's not going to be able to cover that for you. You just can't really deviate. Versus the kids who grew up with some money, maybe they did the banking thing initially, but if they're 26, 27, want to try something new and they have a $10 million plus nest egg, right? They can do whatever they want. They have this...
Which to be clear, I actually think if you grow up rich, the right thing to do is probably take an entrepreneurial shot at some point because you are the most well positioned to do so. And if it doesn't work, you have a safety net to fall back on. So it's almost like first generation wealth has to secure the lowest risk bag that they can, but then their offspring or next generation offspring should be the ones that take the bigger swing because what's the point of having the money if you can't live your life with a little bit of agency, right? Having money, both you're much more likely to know how to go down the money path and you're also just free to take much more ambitious shots because you don't have to worry about, you don't have to have a scarcity mindset.
Again, New York and then business school in New York as a microcosm of that is just a really fascinating experiment of the human socioeconomic ladder because we're all, everybody's hanging out with everybody. Maybe I'm the like median educated New Yorker on the income family net worth. I'm seeing people way above me and way below me and we're all at the same bars, at the same restaurants, hang out with the same people. It's just wild.
Yeah. Going back to, I always had this analogy of the difference between rich kids and poor kids from an entrepreneur standpoint is the rich kids just got more quarters to throw into the game and...
100%. And it's if you come from the right network, guess what? If you want to raise venture capital or just friends and family money, you'll be able to find $5 million for your company. If you're a poor kid who's networked, you don't have access to capital. Maybe you can get an SBA loan and that's about it. I don't know. Like Bill Gates's daughter raised 30 million for her startup. I'm sure she's working hard, but it's also much easier to raise money when people know you, right? You're just playing with a massive competitive advantage on the financing side. So yeah, it's just like, it's just a different game. It's like an easier battle when you have resources.
What about a thought of like in terms of, I guess we call them the poor kids even though they're not really poor, right? But in comparison to the others, they're just a little bit more living paycheck to paycheck, I guess, in a way. But are those students more elite and as they progress through careers, are they like god-given talent in terms of, you did sports, right? Kind of that idea as opposed to, yeah, these guys are great and they're trying hard and everything, but they took the opportunities and did well with it. But...
But my take on this is, we'll take Columbia for an example. If somebody who grew up in like rural Utah or like middle of nowhere North Carolina that ended up at Columbia Business School is massively outperforming their like baseline life scenario by getting there, where they had to figure out how to do it on their own. They probably didn't have parents pushing them to do it. It was probably a lot more intrinsic motivation versus if you grew up in the Upper East Side and went to like private school and say you went to Wharton undergrad and you end up at Columbia Business School, you're just like doing the status quo of what you were supposed to do.
Or like honestly, business school is very big for people changing careers. You might actually be like, you may have messed up along the way from what your path should have been. Like should you have been on a path where you didn't need business school? Like why are you doing the redo now? So I don't know. Like if you're in a like largely elite institution, the people who are not from elite pedigree that make it, I do think are more impressive in that you know that they didn't really get any help getting there. And it's not that everybody from the, call it, New York, Silicon Valley bubble had a leg up, but some did and you don't know, like you know that they probably had access to more resources all things equal. So like I'm a, look, I'm a South Georgia kid. I always like meeting other people who are like not from like the bubble metropolises.
Yeah. But I mean like that character that has beat the odds and obviously a special character, they're different. Does that gain any clout in this whole social hierarchy? Do people know that this dude's different? Right.
So it depends. It's like there's an entire game of like people tend to hang out with their like undergrad friends or like people tend to hang out with their crews where I don't know, like in business school, like my friend group is from all over the place, both geographically, undergrad, whatever. And I'm now largely friends with like just my friend group that I made in business school and that's true for a lot of people.
But in like the New York scene in general, it's like people tend to hang out with people who were like working with them at their first company, went undergrad with them, went to business school or law school or medical school or whatever with them. And if you move up for grad school, it resets everybody where like we're all in the same bubble again and we're going to reset our... But if you just moved to New York for work and you were the kid who like didn't go to the target school, I do think it takes a year or so to really break in because people are so used clinging to their prior social groups, right? Like kids who went to Yale undergrad are going to hang out with Yale kids. So if you're the one kid who went to the like non-target school who ends up there, you're going to have less of your friends who ended up in New York. And it's like I do think people tend to find it impressive, but I do think you were a bit of a social outsider initially trying to break into elitism.
You made a great point. I never really thought of that. The high achieving person moving up, they're going to take the cop-out job. I guess maybe not the cop-out jobs, but just the more sure things, right? As opposed to...
