time is worth more than money with @Jack_Raines | Ep 79

They were the first one. Yeah, they were series A, series B was...

Yeah. Yeah.

Jason, thanks for having me, man. It's a pleasure. I'm stoked to [__] chat with you.

Let's go.

So the cortisol thing is funny. I was talking to somebody about this this morning. I now have an app on my phone called Freedom where I've started blocking all social media. I block Gmail and iMessage when I'm like working on stuff because I'm so addicted to dopamine. Yeah, man.

Going to the oh [__] moment. I have this like weird, call it introspective, like psychological take on life that like you can get like you kind of spend the whole first period of your life up until an oh [__] moment just like living and chasing the next thing or whatever. Um, you know, [__] moment talk about in my book Young Money is I think everybody has this moment where they first become really, really aware of their own mortality and it's usually I think it happens to people in their 30s or 40s like you have a kid or you have a parent die or like I don't know, like all of your friends start having gray hair but there's this like you kind of when you're young you just you know you're aware that you're getting older but you don't really internalize oh like time's going by faster and faster. And then also oh, window of opportunity for thing I said I was going to do is gone. Like there's certain windows for like starter jobs, for going to college, for like living with all your buddies in New York, whatever it is, and then you get past a certain age or certain life stage and your friends start getting married or having kids and then that window shuts and you're in a new stage of life. Um, I had an oh [__] moment when I was 24 because I was terrified of flying and I was flying to Denver and it was very turbulent. I was going on a ski trip.

Yeah, it does happen. And I was like, 'Oh man, I'm going to die.' And it's every aerophobe has the same experience of, you know, your hands are really sweaty and you're holding on to the arms of the plane seat, but you're next to your girlfriend and you don't want her to think that you're soft, so you're just kind of like acting stoic. Um, I had had that experience like 20 times because I hated flying when I was younger. But for some reason on that trip after we landed, that whole thought of you're going to die just kind of stuck with me. And again, it wasn't like this is the first time I'd contemplated mortality or whatever. But it was just this weird I think it was because it was COVID and I'd kind of just been locked in my apartment for basically a year up until this trip for the most part where I just had a lot of time in my head and I was just really cognizant of wow, an entire year of my 20s just went by and it was COVID and it's gone and then the combination of that plus turbulent flight equals I'm really aware of mortality and I couldn't really shake the thought and it's funny right like you kind of spend the first 22 to 25 years of your life just thinking through get through middle school, get through high school, get through college, start your career, make money, and it's always the next thing and this like you just have this finite amount of time that keeps getting whittled down more and more and more. And it's not that I think you should be hyperfocused on, oh, I'm gonna die and have it as this like rumination loop, but it's just really fascinating how up until the point you really internalize that, you're basically totally unaware of it.

And then once you do really have this come to Jesus moment, like I'm going to die one day. That means I only have x number of years left. Okay. What do I actually want to do with that time? It just totally reframes how you think about like money. Like how much time do I want to give up to make money? How much time do I want to spend spending the money? Like you just start pricing your time the same way you price any other asset, right? Like it's in fact the fact that you can kind of always make or lose more money makes money inherently less valuable than time because there's just you can always restart, recoup the money. Like yes, it gets harder. Yes, life experiences change. Once you run out of time, it's cooked. It's over. And like the value of time as you get older also depreciates because like you start losing your health, like you are less mobile, you have less freedom, you have more responsibilities where, you know, I just I think the thing that I wish more young people would get is that the value of like every minute they have at 22 is just so much higher than it is any decade after that. But you don't really realize how much of a premium you should put on your time in the moment. It's almost always after that option value started to depreciate that you realize that you lost it.

Yeah. I think the right way to think about life is a very stage specific game. Um, you can almost think of your life like a portfolio, right? Or there's like you want to have some like higher risk things you do. You want to have some more balanced things you do, whatever. Um, it's pretty easy to get caught in this trap of okay, I'm 24 and I'm in my first job and I'm not making that much money and once I make more money then I can go do the things that I want. Like there's this most people at least early in their career do the and there's a lot of truth to that. You do need a certain amount of money to have enough like bandwidth to do other stuff.

But you can keep telling yourself this. It's a really convenient story of the thing keeping me from like taking a little more initiative in my life is money. I need to get a slightly bigger nest egg that buys me time. That's true to an extent, but you know, 24-year-old you and 27-year-old you and 35-year-old you are not the same person, right? Like you have the same DNA, but like you are the sum of like yourself, your context, your life experiences, where you live, who you're with. And if you keep like telling yourself that, oh, okay, say that you're 25, you want to start your own company, you keep pushing it off because you need to make more money. Well, then when you're 35, if you're married, you have kids, well, now your life's more expensive. Can you afford to take that risk? So, if you don't start from the end that like say I'm going to die at 90, then start working backwards from how does my life play out from then to now. If you do that, it's much easier to think through, okay, realistically, these are how my life responsibilities are going to ramp up at this stage. Like, this is like when I'm going to be peak health, have peak free time, have peak earnings. Like, this is when I'm going to want to be focused more on family versus being single. And if you start backwards, like start at death and go back to the current moment, it's much easier to determine what are the optimal stages of my life to do different things. Moving to a city, starting a company, like when should I be more risk on versus risk off? If you're only living in the current moment, like perpetually thinking about the future, those windows of opportunities will pass because there's never really a convenient moment to do something that deviates from the current path. Like inertia will absolutely keep doing its thing unless you proactively enforce a change. So I think it's a very good forcing function for you to actually both figure out what you want to do because you're setting constraints, right? Like if the perpetual kick in the can down the road, it works as long as you don't realize there's an end point. When there's an end point, it's like, okay, I actually can only do so many things. That endpoint forces you to think through which things are worth doing and which things actually aren't priorities for you and which portion of your life you might want to do those things in. And it's just you can't really start trimming the fat without fully acknowledging there is an end point and then working backwards to the current moment.

I think everybody should be thinking about it. It's not even a 20-something. I think opportunity costs are like probably the most important concept of just like how we spend our time, right? Like every single thing you do comes with a trade-off. It's there's the trading version of this of like I buy this asset versus like there's you only have so much money to allocate towards so many different things. It's like, you know, very smart hedge fund PMs will tell you that every day you should be rewriting all your positions because just because the thing worked yesterday, new information comes out. Like, you should not be holding a position just because you previously held it. That's not saying that you should be if you're in a relationship should be re-evaluating if you want to break up with your girlfriend or not every single hour, right? Like that's not a healthy way to live. But you do need to constantly be thinking about is this the highest leverage thing for me to get what I want like in the stage of life that I'm in where you take a certain job. I don't know people go into investment banking out of undergrad. I think that's probably the right starter job for most people. Once you're two or three years in, unless you want to be a career banker, if the opportunity cost of staying there versus you've proven that you know how to work and you have some pedigree, do you want to go take like a higher ROI shot? The opportunity cost of staying in banking means you might miss this right tail outcome of joining a startup, doing your own thing, just going somewhere entirely different to gain new experiences. Like even if the short-term cash amount is higher, the opportunity cost of like the other experience that could compound might outweigh how much money you can make, right? You see people um I mean this is something I'm 29 now, so I've seen this play out with like several friends over the last few years where they were dating college girlfriend or boyfriend. They dated for five years postgrad. Maybe they move in together, but they never get engaged. And then they're 28 or 29 and then all of a sudden like somebody says, 'Oh, I think I need some time to like figure myself out.' It's like, okay, if you move to different cities and you're doing the distance thing and you're doing that for four or five years and then somebody breaks up with somebody, that was five years where you probably knew much earlier, whoever called it off, that this probably wasn't it. And you just kept extending it thinking it would get better, right? And you were never going to talk yourself into that relationship. And you wasted five years of like peak single dating opportunities. You're in like New York or LA or whatever. There's a lot of young people. There's like a window where if this thing isn't right, you have a ton of opportunities to get exposed to other people and then you sort of wasted that for the thing that you knew you were going to end at some point anyway because you didn't have the courage to do it, right? So, I think opportunity cost apply to relationships to careers. It's just like there's two sides to it, right? On one hand, if you're staying in a thing just because of inertia, not because you want to do it, the opportunity cost is really expensive, but if you're also hyper optimizing for next thing, next thing, next thing, you never get a benefit from compounding. So, it's this trade-off of like I think you should cut your losses really quickly, but if you have something that has like a level of uncertainty, but there's a really good longtail payoff, it's worth sticking around. But it's all a game of just cutting losses. And I don't think that's a 20. I think it matters the most in your 20s because like your option value is the highest. You have a lot of flexibility. There's a lot of like you could start different career paths, start different relationships. You're much more geographically flexible. But I still think that framework of um what's the opportunity cost of thing I'm doing right now kind of matters until you die.

I've seen it in other people and I've heard it from parents, grandparents. There's again going back to life is a very stage specific game. It's not that you can't do a thing later in life, but you can't experience the 23-year-old version of yourself doing that thing. That's what a lot of people miss on this. Here's a canonical example. I am 29. If I go out to like some club in New York, I'm not really a big club guy. I like a bar. I like watching football, whatever. But like say I go to some club in Brooklyn. I at 29 probably feel a little old to be at the club. Like when I was new to the city at 25 like I was going out basically every night and had a blast as new 25-year-olds in New York do. Um I still have fun with my friends, but it's dialed back some. You'll occasionally run into the like 38-year-old at the club and they probably have more money. They get the table, they have the bottle service and then they're 38 and they're like hitting on the same girls the 25-year-olds are and it's everybody just kind of knows that guy's too old to be there. Um it's just weird like and there's nothing that he can do, no amount of money he can exchange to going back to being the 25-year-old in the club. Um my version of this was I when I was 23, 24 I had like always loved traveling and I like as a kid I had this massive map on my bedroom wall that had like entire world. I'd memorize the capital of like every country. I was a big National Geographic Animal Planet guy.

And um I just like love the idea of this world is really big and be cool to go see some stuff. And like when I was younger, my grandma took me on a safari to Africa, which is pretty formative exper the coolest.

Goated. Babaruth is goated. Yeah. Wow. Um, then I studied abroad in college, but I kind of have this whole I want to do the like gap year, like live in hostels, traveling by train with strangers, like that version of travel. And I became increasingly aware that like the window to do a trip like that was like pretty short. There's a reason that most of the people doing the hostel hopping thing are like either study abroad, gap year in college, or maybe a couple years in the workforce between jobs. Um, but like when I studied abroad, I meet a bunch of these kids who are anywhere from 20 to 25 doing them. Then if you meet like the 32-year-old in the hostel, it's kind of like, dude, you should be able to afford a hotel and you shouldn't be hanging out with the college kids. And you know, there's this window of I'm in the age demographic of the people I want to do this trip with. I should do it now. So, I ended up I spent the better part of a year in 2021, the first half of 2022, like hostel hopping Europe and Latin America, and I was like working part-time for this online media company that was basically subsidized. Like, I was basically making just enough money to pay for a hostel and plane tickets and food and beer. But, you know what? I had a blast. Like, one of the most fun years of my life. And I have 10 like pretty strong friendships from that. Like there's 10 people that I still talk to at least a few times a year from that trip, right? Let's fast forward now. I have a lot more money at 29 than I did at 24. The idea of staying in a bunk bed with a bunch of strangers actually sounds pretty terrible. And also just like it feels like I would be laring as poor at that point. Like do you want to do the lower quality version of the thing that you could do? No. It's like when you're young and you have all these cash constraints, doing the like vagabonding like kind of roughing it type of trip is just a really fun experience and it also makes a really cool story and you get a lot of memories from it where you tell people about it later. That's so cool. Blah blah blah. If you're 38 and you have like a four-year-old, it's like, oh yeah, let me go let me go hostel hop cry for this. Just weird. So, and then I remember talking to my parent like I called my dad when I was thinking about quitting my job and doing this and his take was he had wanted to after law school rent a motorcycle and drive it around the country and then start work.

No. Because he met my mom, got married, job. His old take was he wouldn't go back and undo it because like me and my sister wouldn't exist and you can't really you can't pick and choose which things you want to do. But in a vacuum, you wish you would have taken that trip. My grandparents traveled a lot in their like 60s and 70s, but they wish they would have sacrificed a lot of the money they had in old age to have like had a little bit more fun in their 20s. And I kind of internalized the idea that I'm confident in my ability to make enough money to more than compensate for taking basically a haircut on income at 24 to have more fun at 24. Basically, I value the like marginal experience much higher than the marginal dollar at my 24-year-old salary.

let's go blow it out, have fun, and then if in your later 20s and in your 30s, you have to focus more on making money, that's probably what I should be doing anyway, so I should just do this now.

Oh, yeah. It was de-risked.

Right. Trading SPACs. Yeah. Which, you know, shout out to you. That's [__] amazing.

No, it is a backstop. I had like not the money wouldn't have been super accessible because I was trading SPAC warrants in my Roth IRA. So, there was like there are penalties withdrawing that early and I did withdraw a little bit.

Yeah. I mean, it was You want to talk about a fun but addicting trading game? Trading SPACs is great and like yes, I things that worked well. One, my parents weren't going to give me any money to subsidize this, but my worst case scenario was like moving home and working on a farm or something like that would not have been great, but it's not like I would have been homeless. And yeah, I had gotten into a good graduate school and I knew that like realistically my employment options coming out of business school would have been higher like like nothing I did at 24 was going to come close to the career opportunities postgrad school. So, it was kind of like that year was a wash.

I agree with all that. The counterargument is you actually just don't need that much money at 24. Like yes, I had money in bank account that was or in I guess brokerage account that at the end of the day it was like a nice if if I really had to I could withdraw some of that, take the penalty, whatever. I ran like a net zero budget getting Venmoed $500 a week working a newsletter and was like balling out in Spain and Argentina for a year. I just don't think it's that hard to find random side hustling gigs to like subsidize that type of lifestyle. Whether you just work in a hostel for three months and they pay your like basically room and board to run the front desk and then you're going out or like you go take a part just take a part-time job abroad somewhere like bartending. There's a lot of life construction ways where if you back into a really cheap cost of living and you want to go live somewhere fun, you can actually just do that. Like people seriously underrate how many opportunities there are. Not saying you can just like pop over somewhere and make a quarter million dollars a year, but like you can live cheaply and make money as a young person pretty easily. My caveat is if you have a bunch of student loan debt, credit card debt, like everything I say about you should make experiences when you're young, they just shouldn't come at the expense of older you. Like I don't think savings rate at 24 matters that much, but I do think not going into debt or paying back the debt as quickly as possible, especially if it's high interest matters a lot. So, if you're in a position where you don't have much money, but you also don't owe people money, you can kind of go do whatever you want. If you do owe people money, that's like a whole different story, right? Um like when I was in Argentina, I met this guy named Eli just like at a hostel. We ended up hiking in the Patagonia together and he was the man. He was not in the same position I was. He had done the banking thing for a couple years and had made some money. But it's like even if you're banking analyst in New York, like you're making more money than most people at 23 or 24. It's not like you have a million dollars in the bank though. Like maybe hundred grand, which is great. Like that is a like big amount of money.

But especially if your rent's really expensive in Manhattan, it's not like, 'Oh, I'm okay like not making money for a while.' He had another job. Like he went through the whole recruiting process of getting another job and negotiated like a two or three month gap because he wanted to go travel and he did like a surfing trip in Peru and then he went down to Argentina. And you know what? He's crushing it now. He works for a hedge fund. I'm sure he makes great money. All this stuff. But he set up his life where 24 year old, we're the same age. So, like 24-year-old him would have this window of opportunity to go do a fun trip between pretty high stress jobs. And he set it up right. Like, it's a I'm not saying everybody should do a full year abroad. I do think everybody should take some period of time when they're young to go like mess around in other countries, live somewhere else. And it's just not that difficult to put a two to three month gap to go do thing that 24 year old you would enjoy and get back in the workforce. I just you just have to be intentional about how you plan out the timelines on stuff.