What's up, rich people? It's me, Haley, aka Mrs. Dow Jones, and this is Financial Tea. What's up, sippers? Welcome back to Financial Tea, the podcast where I teach you how to build wealth with a side of market drama, money scandals, and financial pop culture. Today's guest is basically the blueprint for new money. Baiju Bhatt is the co-founder of Robinhood, and you guys, he's here. And just to be clear, Robinhood is the reason that you can take out your phone and trade stocks for free. Like, it's that investing app that democratized it for millennials who are always on their phones. And he's basically the reason that retail investor became a household name. Like, he made investing part of the culture for everyone, not just Wall Street. But Baiju has stepped away from his day-to-day life at Robinhood. Guys, he's not the company anymore. I mean, he's still on the board, but now he's on to his next chapter, which is obviously space. Like, he's trying to beam solar energy from space to Earth using lasers, which is chic and we should probably find out about, but this is some billionaire stuff. And today, speaking of which, we're going to talk about the business of being a billionaire. So, like what it's like to actually go from being a physics student at Stanford with immigrant parents to having a net worth with nine zeros, the responsibilities that come with it, who's in his inner circle when your life changes that dramatically, and how you think about money once you've already won the game. Like, why is he still working? Shouldn't he retire? But first, let's get into the MDJ market report, Brood Fresh Weekly, so we are up to date on what's even happening on Wall Street these days.
Okay, guys. Welcome to the market report. This is our Monday evening edition. It is 8:00 PM. I just popped open a fresh Spindrift. We're about to get into it because there is a lot that you need to know about what's happening in finance and the economy right now. So, I literally just got back from my parents' house in Miami and I ran over to the office, press record, and we're going to go through it. So, here are the stories that you need to know. Okay, first of all, I don't know if you've heard, but the Dow did hit 50K for the first time last week. So, like the Dow is crushing. The stock market is doing amazing. You're probably like, 'Yes, Mrs. Dow Jones, let us pop champagne.' And you know, like I'm definitely excited, but what I'm also a little worried about is the wealth discrepancy because we live in a little something called a K-shaped economy. And what that means is like with the letter K, if you are on the top arm of that K, things are going up. You're going to the moon. If you own assets, only thing that you are doing right now is making more and more money. But the bottom leg of that K is going down. And that's everyone who doesn't own assets. And it's like, yeah, they are struggling. And the gap between those two arms is just getting wider and wider. Groceries have increased 25% in the last like four or five years, but wages have not kept up. So, I mean, this is why we always talk about investing. We're obsessed with investing. You've got to get on that upper leg of the K by owning assets. But also, I just like have been reading all these crazy stories about billionaires and the wealth gap. And I'm like, something's brewing. There's something that's going to happen. Because, you know, like in this society, you can't have... like we need a middle class. We need a middle ground. And that's sort of disappearing. But yeah, so Dow hit 50K. We're excited, but we're also a little nervous because we want to make sure that we do have a middle class and we don't just have top tier and a bottom tier, baby.
Okay, the next story is, you know, of course, we're talking about the wealth gap. The wealth gap is hitting a 30-year high. So, California, little state called California, has decided to enforce a wealth tax. Well, you know, they're voting to get it through. It's not official yet, but basically they want to charge billionaires a 5% tax. And yeah, you know, they've got them right where they want them. They said, 'Pause up. You're going to have to pay taxes now.' Because you know, billionaires hate taxes. But here's the thing that they didn't account for is that they could just move these people. Yeah. They can actually just get new houses. And that is what they've done. They are all moving to Florida. The founders of Google just bought places in Florida. Mark Zuckerberg was just announced to be moving to Florida. Bezos is already there. There is a full-on billionaire exodus from California to Florida. And yeah, so you know, you can run, but you can't hide is what I say because I do think that we are getting to the point where there probably needs to be a little bit of tax reform around billionaires. But right now, the only thing that's really being taxed is their patience for humidity. So, we have to see where we land there.
But if you want to hear what happens when a billionaire chooses to share the wealth voluntarily, look no further than our girl Mackenzie Scott, formerly Bezos, because she has just set a new record for charitable giving. Yep. She has donated, say with me now, $26 billion in the last 7 years. Like while everyone is, you know, fighting over tax brackets, moving to Miami, Mackenzie is just out here writing unrestricted checks, which is really cool and basically means she does not micromanage her giving. Like she, you know, vets the foundation, decides she wants to donate to them, and then she gives them the money and she leaves them alone. She lets them do their work, which is freaking amazing. She gave away $7.2 billion just last year, which is more than her ex Jeff and Elon Musk have given away in their lifetimes combined. Yeah, let that sink in. So, love you, Mackenzie. You are everything to us. And if you're watching this, just know we would love to have you on the show. We would. We really would.
Oh, and speaking of protecting your wealth strategically, Jessica Alba, girl, congrats. Jessica Alba's divorce went through from Cash Warren. Yep. They are officially no longer husband and wife. But it was a bit of a, you know, a tough one to figure out because they famously had no prenup, which is like Jessica, you know, talk to me, girl. We will make sure that never happens again. But she and she was so successful. She started the Honest Company, which is like everyone's obsessed with the Honest Company, the baby wipes. My little nephew Nest, he's always using the Honest Company wipes. Like, they really do a lot of good work over there. But I felt like the husband could have really taken her for a pretty penny, but I was shocked to see that they have settled for a $3 million payment. So, he's going to get a $3 million split up into two payments. 1.5 million this year, 1.5 million next year, and then they're done. No spousal support, no nothing. And I sort of feel like she crushed it. I mean, she has a lot of money and a lot of assets, and she just had to do 3 mil. Go girl. Go Jessica. Team Jessica. That is a clean exit if I've ever seen one. Okay. That is the market T for this week. Now, let's go to my conversation with Baiju Bhatt on the business of being a billionaire. You're going to love this one.
Baiju Bhatt, welcome to the Financial Tea. We're so excited that you're here. Before we kick things off, I just wanted to ask you a few quick questions. What's the coolest thing that you're wearing?
Oh, it's definitely this necklace.
Isn't that amazing? Yeah. This is my 40th birthday gift. And on the back is the solar system.
No. Oh, because you love space.
Yes. Because your dad also was like worked at NASA.
Yeah. I grew up around like the space industry my whole life. My dad was a research scientist at Langley Research Center, like working with NASA and actually doing stuff that's not that dissimilar from what I'm doing now, which like all roads lead back.
Yeah. The apple doesn't fall that far from the tree. What about do you have any financial icks? Like you're obviously around a lot of people, probably around a lot of like really successful people and like when they're moving with money, like do is there ever behaviors that just sort of give you the heebie-jeebies?
I think spending like an exorbitant amount of money on food.
Yeah. That I'm just like I don't really get it because you eat it and then you poop it out and then it's like it's gone. You know what I mean?
Oh, do you have an example of that?
I sometimes go out to these events and people have the fanciest wine. And I'm like, number one, there's going to be headache immediately. Number two, like what do you... you know, I just I guess there's a real like if you're into it, there's like a cool factor to like here's a really important expensive thing and we're just going to consume it. But I guess maybe I'm just saying I don't really like wine that much.
Last question. Do you feel rich today?
New York always makes me feel poor.
Yeah. New York always makes me... because when I first was an entrepreneur, like I started my first two companies in New York and I was dead broke, like dead dead broke. I remember my co-founder and I had a two-bedroom apartment that was also our office. And at the time we had like several of our college friends that were interns but we weren't actually paying them anything. Some of them we were, but anyways, they were living with us and so there were like at least like three or four dudes living in a two-bedroom apartment and it was just too much. Sweaty and miserable and we were so broke. So yeah, every time I come to New York, I sort of just like get... you like remember it's like PTSD.
It's a little bit like PTSD. I totally... What did it like look like when you were broke? Like what were like some of your habits?
Well, I just remember I used to eat like the halal street meat guys or like the shawarma down the street. Like that was like the go-to meal.
Yeah. Yeah. So, you and Vlad, your co-founder of Robinhood, started two companies before Robinhood. So, like, you know, people always talk about finding the one in relationships, but like did you feel like you had that with Vlad at Stanford? You like laid eyes on him and you were like, 'That's the one. That's my co-founder.'
I kind of do. Yeah, I kind of do. I remember the first time I met him actually. We met during one of the summers in between the years of college and we were both in this like summer research program through the physics department and you had so much in common. Yeah, I mean we were both only children. We both grew up in Virginia. We both had some variation of this haircut.
Yeah, it was a great haircut.
Oh, thank you. And we were both studying physics and so and it's kind of like this thing like for me at least going to Stanford having grown up kind of broke like you go there and you're like oh my god not only is this place intellectually intimidating but the people here come from like... Nepo babies af... yeah they come from like well-to-do families and you just I felt very lonely and I found myself like looking for basically like really really long-term friendships. I mean I met my wife at Stanford.
Yeah, everything happens so early. My co-founder there. And so, yeah, we were kind of like I was like, 'Oh, this is like the brother I never had.'
Okay. But when you were a first time founder at Stanford, how did you raise money? Because I feel like so many people are going to, you know, they're going to want to know what are the secrets because a lot of people are trying to raise for their businesses and especially in this economic landscape. Not easy.
Yeah, we ate shit and burned a lot. Like we sucked at it.
How many times did you get no'd?
How did you even get those?
I mean, we were just... I mean, this was kind of the... I look back on what was useful about going to Stanford and doing this because I studied physics and math. That was not super relevant for creating Robinhood. What was really relevant was when we were in our early 20s trying to start a company, we had a badge that we were smart. We went to Stanford. We studied physics and math. And so there was a certain point where like people just took us somewhat seriously which took on different forms getting the degree.
Yeah, it was absolutely. So I think that's like one of the biggest things that came from it. But going through all those meetings and like hearing nos from investors, there was a bunch of really interesting stuff that came of it and I think this will actually be useful for people that are listening to this.
Okay, good. But there was a version of those early pitches where we had this like very detailed plan of what we thought we were going to do, right? It's like we're going to build this and then this and then this and we would go and we would pitch it to investors and it was not like... that wasn't actually what would play out, right? Like the plan was like very detailed in specific ways and people would pick it apart and be like it's not going to work because of this thing. And we'd be like, 'Well, that's just what we think we're going to try to do, but we're going to ideally figure it out over time.' And then the light bulb kind of went off, I think probably after like a year or two of not really succeeding at fundraising. That fundamentally when people invest in companies at an early stage, before you've got a product, before you've got like substantive stuff to show for it, is they're betting on the people.
They're betting on like whether they think you are a good entrepreneur. The idea could be completely wrong. Yeah. But are you the kind of person that's going to see it through? And so then I remember early on like when we were trying to raise the first million dollars to get the thing started, we started doing it differently where we would go in and we'd be like, 'We'll send you the materials afterwards, but the first meeting, we just want to talk to you about what the idea is.'
That's sort of punk rock.
Yeah. Sort of flipped it on their heads and said, you know, we're actually... we're going to drive this ship. What people actually cared about and this, you know, there were still plenty of people that said no. Yeah. But they were fundamentally interested in whether we were the guys that were going to see it through even if the idea was totally wrong.
With Robinhood though, what's so crazy is that three years after launching it, so you're going from, okay, you're in New York, you guys are broke, you have your two startups, then you move back to California, you start Robinhood, 3 years later, it gets a valuation for a billion dollars. Did that give you financial whiplash? Like, what did that feel like? How did that change your everyday?
It didn't change it that much in the very beginning. I mean, I kind of told myself the moment I made some money, I was going to buy a Porsche 911.
Yes. Because you're a big car guy.
Yeah, I did that. That was like one of the first things that I did.
Chic. Okay. Do you still have it?
You can never get rid of it.
No, I... That's your baby. She's iconic. Yeah. But what did change in those early days? I think being able to exhale a little bit, right, was a big part of it. I think also being able to like earnestly focus on the company building because if you're... there's a threshold of being broke where it's very distracting.
Yeah. Totally. And expensive like you if you have overdraft fees, things like that where it's like you just feel like you're on this hedonic treadmill.
And interestingly to that point, like through the history of building Robinhood, one of the things that I did very regularly is I would go and interview customers. Like I would go travel around to middle America and just sort of pretend I was a software engineer or something like that so people weren't like, 'Oh, that's the guy.' Yeah, that's, you know, that's the guy that started it in the corner and just listen to the stories of people and their money and you realize exactly like this where overdraft fees and stuff like this like it's like a big deal for people in their lives, right?
It's a huge deal and it's a whole industry like that's like what propels so many financial services companies.
Yeah. Yeah. So okay, so nothing really changed, but like did how people treat you change? Like did you have any like weird moments? And also how with your actual bank account, like when your net worth is tied up in a company that is highly valued, that's not liquidity. So like, you know what I mean? So you're like, I know about liquidity, but like so how does it actually like, you know, affect you? So I sold a little bit of stock in the early days of the company which I think as an entrepreneur if you get that chance to do it especially if you're the first time around is I think it helps you kind of think a little bit more long term because you if you have the situation where on paper you've got like a zillion dollars but in your bank account you've got like nothing. Yeah. That's not how you want to be approaching your day-to-day. You want to have a little bit of calm again kind of in service of this idea of like focusing on the thing you're trying to accomplish. At the end of the day that decade or so of my life was about building that product and making it useful for people, right?
But you did, yeah, it worked.
And so like everything else is noise like it's the product and serving the customers that is the alpha and the omega of every day. And that's kind of how I approached it, right? So like if... And this is kind of again kind of coming back to the love of cars. Like that's one thing I kind of used to say is I could kind of like booby trap my life with fun stuff because I no matter what I'm doing during the day, I still have to like go back and forth from work. And so if I can make that little part of my day a little bit more joyful because I love cars. Yeah. Like it helps kind of focus on the main thing which is building products that people want and making them useful for people.
Okay. So, life changed really fast, but then you were in it for a while, but you know. Yeah. So, you but you met your wife in college. Yeah. So, how long into Robinhood did you guys like get married?
We got to... So, we dated for a few years before we broke up for a little while.
Do you think it's important to break up? Like in any relationship?
I think it was important for us.
Yeah. I feel like that always works though. It's like then you come back together.
Yeah. We were also like we were kids when we first met, right? We were like college sweethearts.
It's like the notebook vibes.
Yeah. And we got back together and when we did it was like we're like okay if we're going to do this like we're definitely... we're in it. We're in it. We're going to get married. We're going to have family. The whole nine yards.
Do you have people... I feel like something that is not really talked about but that's so important is like as your life gets bigger, as you get more successful, as you accumulate more wealth, you also have to accumulate like a team around you to support that.
Yeah, I think that's important.
Yeah. So like what does what did that look like to set that up? Because obviously you set up many companies but like now you are a company too. Your home life is a company.
Yeah. Yeah. Okay. So I'm going to give a shout out to my trainer who I got kind of recently. His name is Giles and he is ripped. He is a very very handsome dude. So I work out with him right now four times a week I think but I want to go up a little bit. So he's one. I have my estate manager who has been kind of by my side for a really long time. He's awesome.
He does all the different things in my life. So he spends a lot of time with like the car collection because he's also a car guy. That's like one of the things that he's spending a lot of time on. He also helps kind of with the day-to-day of things, right? So, he travels with me pretty often. He's an old special forces guy.
So, he's like a walking Swiss Army knife.
And he's very like, you know, he won't if you ask him it's like, 'Well, what was that like when you were in the armed services?' He'd be like, he'll never tell you. I'm like, 'Oh, shit.' Yeah. He's seen some things. This is like relaxing. He's like, 'Oh my, this is retirement for me. I'm just hanging out with some cars.' Another person that we have that joined us recently is the car mechanic. So, I have a full-time guy whose job it is to fix and work on cars.
And he's really good. And I love having him in the mix.
Okay. So, we've got trainer, a...
We have some nannies. How many nannies do you guys have? Because you've got three kids. You got another on the way.
Three kids. My wife is pregnant. So, yeah, we have I think three nannies.
Three nannies. And then when and then obviously when the baby comes, you'll have, you know, nights, all that stuff.
Yeah. Yeah. That's important. Four boys is a lot of boys.
Yeah. How do you handle generational wealth with them and like talking about money and like your success?
I don't really know to be totally honest. I think there's a version of this that you can do where it's like you want to try to recreate the childhood. Like if I were to try to recreate the childhood I had for them where you kind of like force these difficult circumstances on them.
Yeah. You're like you have to, you know, get... like you can't actually have this.
Yeah. Yeah. Yeah. I don't think that's the right thing to do to be totally honest. I think the most important thing you can do is just sort of phony.
