Is Buying a Home Still a Good Investment?

Summary

Podcast Summary: "Is Buying a Home Still a Good Investment?" — Ask The Compound

Date: August 5, 2026
Host: Ben Carlson (Director of Institutional Asset Management, Ritholtz)
Co-host: Duncan Hill (Director of Creative Media, The Compound)
Guest: Jack Raines (Author, "Young Money: A Field Guide to Wealth and Purpose in Your 20s")

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Episode Overview

In this episode, Ben Carlson, Duncan Hill, and guest Jack Raines tackle pressing questions from listeners in their 20s around investing, personal finance, career decisions in the era of AI, and—most prominently—whether buying a home still makes sense for young people. The conversation is humorous, candid, and packed with life and money advice that balances practicality with an appreciation for living fully in your youth.

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Key Discussion Points & Insights

1. Letters of Advice to Their Younger Selves

(Starts 01:57)

• Jack’s Specific Regret:
  • Advised his younger self to cash out of speculative SPAC investments during the 2021 mania ("You should sell all of the spacs that you were YOLOing in February 2021... and put in the S and P and it'd be a million dollars right now instead of…blowing half of it." — Jack, 02:35).
  • Emphasized it’s a personal story also detailed in his book.
• Broad Life Advice:
  • Jack argues that if you’re on a fast-growing career path, allow yourself to spend a bit more in your early 20s—enjoy unique experiences (like living with friends in a big city), since your earning power likely increases with age.
    • "You're only going to be in your twenties...living with your buddies right out of college for so long..." (Jack, 03:15)
  • Ben reminisces about traveling before settling down and wishes he had experienced big city living in his youth (05:14).
  • Duncan encourages young investors not to feel guilty about investing small amounts: "You can just put 10 bucks a week into the..." (Duncan, 06:12).

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2. Is Buying a Home Still Worth It for Young People?

(Starts 06:27)

• Jack’s View:
  • For young professionals in high-cost cities, home ownership may not be essential:
    • "Unless you're really, really committed to living in...your high cost of living city, if you don't want to raise kids there, I actually just don't think you should stress too much about whether or not you can afford a home and just focus on your career, focus on your personal life..." (Jack, 08:04)
  • Flexibility is valuable; many people earn more in high-cost cities for a period, then move to more affordable places to raise families.
  • Provides practical examples of how vastly cheaper suburban housing can be versus city apartments.
  • Jack himself intends to always rent as long as he's in Manhattan: "I'm probably never going to buy. Like I will always rent as long as I'm in Manhattan..." (Jack, 09:24)
• Impact on Wealth Building:
  • Ben notes a generational shift: younger people are more likely to invest in the stock market than in real estate, accelerated by market access (Robinhood, etc.).
  • Both agree: Investing in the stock market instead is a rational alternative, especially if it leads to higher net worth by the time homeownership fits your lifestyle and needs.
• Emotional/Status Aspect:
  • Jack warns against comparing yourself to peers who buy homes in cheaper markets:
    • "You can't get too caught up comparing yourself to other people...if you're not in the same life stage as them." (Jack, 11:22)

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3. Investment Advice for Grandparents (UGMA accounts)

(Starts 12:32)

• Jack’s Recommendation:
  • Keep it simple: S&P 500 index ETFs (e.g., VOO, SPY).
  • "Do the simplest thing that gives you market rate of return, which is the S and P." (Jack, 12:45)

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4. Navigating Careers in the Age of AI

(Starts 13:19)

• Question from College Senior:
  • AI disruption makes career planning daunting. Should young people pick “AI-proof” careers, or just become experts in AI usage?
• Jack’s Perspective:
  • Learn the fundamentals in your chosen field the “manual” way before leveraging AI:
    • "You should figure out what the fundamental building blocks are of your thing and know how to do those manually before you layer AI on top." (Jack, 15:01)
  • Use AI to gain productivity—especially for repetitive, quantitative, or easily-verifiable tasks.
  • "For stuff that you can and probably should skip—the tedious like organization or pulling of [data]—AI is just very, very good at that." (Jack, 16:40)
  • Continual learning is crucial: "You have to do the reading. You have to understand it's not enough to just kind of know what the machine tells you." (Ben, 18:11)
  • People skills and in-person presence are more valuable than ever:
    • "The person getting the promotion...the person not getting fired...is the face that people recognize." (Jack, 18:33)

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5. Risk-Taking and the Lure of Margin/Leverage

(Starts 19:09)

• Listener Question: Is heavy risk (5x margin) justified for young people since they have time to recover?
• Ben & Jack’s Cautionary Tales:
  • Jack describes riding the SPAC bubble to a huge gain, then losing half by overtrading:
    • "You think if I'd hit a million dollars, I was going to...Which is a crazy line to say." (Jack, 21:53)
  • The temptation is to keep pushing your luck:
    • "It's just so hard to like not let overconfidence seep in..." (Ben, 22:09)
  • Everyone thinks they'll see the top, but few do.
  • Jack’s nuanced advice: If you must gamble with leverage, do it with a tiny “play” account at a young age, so failures are instructive (and cheap):
    • "You'll get blown up and it's going to suck, and you're going to feel this like pit in your stomach..." (Jack, 22:58)
  • Survival—staying in the game long enough—is the real determinant of wealth, not lucky windfalls:
    • "If you just...can keep yourself in the game, that's the biggest thing." (Ben, 23:58)
  • Leveraging your career skills for higher income is a better path to increasing investment contributions/returns.

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6. Extreme Early FIRE and Minimalism

(Starts 26:18)

• Listener "Riley": Saved $10,000 to $700,000 in eight years by living extremely frugally (in a van), maxing retirement accounts. Now considers withdrawing $15,000/year with 10% penalty as early retirement.
• Hosts’ Response:
  • Jack: If it’s truly fulfilling, go for it—but cautions against sacrificing all experiences for mere financial optimization:
    • "Dollars exist to be exchanged for stuff, whether that's experiences, material things, or just having it for peace of mind..." (Jack, 27:34)
    • "I just don't think...the worst use of one's time is just trying to find the minimum viable way to...stay alive." (Jack, 30:42)
  • Ben: Use the financial cushion for flexibility and pursue something with meaning—even part-time or low paying—as opposed to simply surviving with no purpose:
    • "Now that you have that margin of safety...find out what's going to make you...even if it doesn't pay you very much." (Ben, 29:08)

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Notable Quotes & Memorable Moments

• On Enjoying Your 20s:

  • “If you are someone whose income is going to scale quickly...it's okay to spend a little more than you might be comfortable with at a really young age.”
    — Jack Raines, 03:15

• On Homeownership and Flexibility:

  • “Unless you're really, really committed to living in...your high cost of living city...just don't stress too much...and just focus on your career.”
    — Jack Raines, 08:04

• On Stock Market vs. Home Purchasing:

  • “People under 40 are the least likely to see a home as a good investment...the level of stock market ownership by people under 40...is up three times this decade alone.”
    — Ben Carlson, 10:01

• On Surviving in the Market:

  • “Survival is such a big key...If you just...can keep yourself in the game, that's the biggest thing.”
    — Ben Carlson, 23:58

• On Early FIRE Minimalism:

  • “I just don't think...the worst use of one's time is just trying to find the minimum viable way to...stay alive.”
    — Jack Raines, 30:42

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Timestamps for Key Segments

• [01:57] — Letter to your younger self: Advice from the hosts
• [06:27] — Is buying a home worth it for young people?
• [12:32] — Investment advice for grandparents funding UGMAs
• [13:19] — Making career moves in the age of AI
• [19:09] — The risks (and lessons) of margin and leverage in your 20s
• [26:18] — The ultra-frugal, early FIRE lifestyle: Cautionary perspectives

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Conclusion

Ben, Duncan, and Jack provide grounded, actionable advice for young people navigating a rapidly evolving financial landscape. The consensus: Stay flexible, enjoy your unique experiences while young, save/invest what you can, don’t rush or feel pressured into homeownership or “winning” financial strategies based on status. Career agility, learning core skills, and the courage to seek meaning over mechanical optimization are the enduring themes.

Check out Jack Raines’ new book, "Young Money," for more engaging stories and lessons. Submit your own questions to the show at [e-mail].

Transcript

[Ben Carlson]

Welcome to Ask the Compound, the show where you provide the questions, we provide the answers. I am Ben Carlson. AI is changing the way we work, but what are you supposed to do about it? Let's say you're 20 something. Growing threat of AI taking all the white collar jobs. Should you pick a career, it's harder for AI to replace. Should you embrace it, become really good with AI? How do you make long term career decisions when the technology is changing so fast? We're gonna answer these questions and more on today's show. Let's do.

[Duncan]

All right.

[Ben Carlson]

Ask the compound showmail.com if you have a question for us. We have a special show today in studio with special guest Jack Raines, newly published author of Young Money A Field Guide to Wealth and purpose in your 20s. I read it. It's great.

[Jack Raines]

You did read it good.

[Ben Carlson]

I did read it. The one thing I learned on my promotional tour from my book is that most people do not read your book.

[Jack Raines]

That's. That's right. But the people who do, you can tell immediately because they, they actually have questions from the book and not from, you know, ChatGPT.

[Duncan]

Yeah. I was about to say people use AI now. I'm sure to just summarize it.

[Jack Raines]

It's the amount of like inbound spam PR emails have gotten crazy.

[Ben Carlson]

Yes. I like the fact that the book was sort of Iobotographical and you told a lot of stories and I think that's a way to kind of hook people. So we got a ton of questions from our listeners in their 20s that we're gonna answer with you today.

[Jack Raines]

Great.

[Ben Carlson]

Today's show is sponsored by Compound Merch. Ituntshop.com We got two hats back there. If Jack wants one, a green one. And you want a dad hat or do you want like a Josh flat brim? Look at that.

[Jack Raines]

We got a big head.

[Ben Carlson]

All right, but that works in the studio. All right, looking good. Itemshop.com we have hats, towels, shirts, everything. And we got a bunch of good questions straight from the listeners. If you're live on YouTube, want to fire Jack a question? Fire it up today, live, and we'll take it on the show. Let's do it. Let's get right into the question.

[Duncan]

Someone said, I look startled. It's just there's a lot going on. We're in person.

[Ben Carlson]

We're in the studio. We got a lot of lights, a lot of cameras. We're doing it live. We don't do that often here. But. But it's good. Jack is ready to roll.

[Jack Raines]

Ready to roll.

[Ben Carlson]

Let's do it. First question.

[Duncan]

Let's do it up first we got. If you have the chance to write a financial advice letter to your younger self, what would it say? No stock picks or winning lotto picks, of course.

[Ben Carlson]

Okay. So Jack, you essentially wrote this book.

[Jack Raines]

Yep.

[Ben Carlson]

Right. It's part, like I said, part life advice, part autograph, biographical. But you're essentially offering people in their 20s some advice. How to handle big decisions, how to make the big moves. It's funny because every, I think every generation feels in their 20s like they're the lost generation. They're left behind. Gen Z is obviously no different. I guess just off the top of the bat, give some, like, give some good, big broad advice you have to people just starting out in their 20s.

[Jack Raines]

So I will before the broad advice, specific advice to my younger self, since that's how the question set up is you should sell all of the spacs that you were YOLOing in February 2021. When you send your data screenshot of your portfolio that you're up 6,000% and you've turned 6 grand and 400 grand in your Roth. You should just sell and put in the S and P and it'd be a million dollars right now instead of continuing to trade and then blowing half of it. So that was, that's the advice for older Jack to younger Jack. Could be much happier with the tax free million dollar Roth. I don't have that right now. That's also in the book. So you can, you can, you know, read to see how that happened. But my actual advice for young people

[Ben Carlson]

is basically you and Chamath are the only two people who made money on spacs.

[Jack Raines]

Yeah, I was kind of front running Chamath who was front running retail. It's, you know, there's levels to this. Um, but my actual advice to young people is, you know, all this is subjective. If you're in a high cost of living city, whatever. But like if, if you are someone who deems yourself to be on a career path where your income is going to scale quickly, but you are really worried about money and maxing out your 401k and all this stuff when you're 22 or 23, you're the brokest you'll ever be. I actually think it's okay to spend a little more than you might be comfortable with at a really young age. And my reason for this is it sounds counterintuitive, but you're only going to be in your twenties especially you're like early to mid twenties, living with your buddies right out of college for so long, and particularly if you're in like New York, San Francisco, like high cost of living cities with high slope career paths, you're just probably going to make way more money at 28 or 35 than you are at 22. And that extra $5,000 you put back at 22, yes, it compounds a lot, will be worth a ton of money in retirement. But if you could have spent it on a very fun thing with people you care about when you're young and you know that you're going to be able to double, triple, quadruple your retirement savings in your late 20s and mid-30s, you should probably do the fun thing. I think most financial advice really focuses on like protecting the downside, saving for retirement.

[Ben Carlson]

And doesn't you start saving in your 20s as opposed to 30? Like, of course, the compounding, I for sure, I completely agree with you that the, you want to do it when you have no responsibilities in life. I'll start with one thing I think I did right and one thing I did wrong. So one thing. My wife and I got married probably too early. We talked about it last week actually. We had like our 19th wedding anniversary at the end of June and we were like, why did we get married so young? I think I was like, we were like 25 and 26. Like, why did we do that? We had nothing. We didn't know all our friends were getting married. But we said, let's travel as much as we can before we have kids and we have no responsibility, so let's do that. So we did that. Right. But I wish I would have moved to a big city. I never moved to a big city. When you're, you're young and you don't mind living with three or four roommates,

[Jack Raines]

it's the best I lived with, like When I was 25, I was living with my two best friends from Georgia in New York. We had like a three bed, two bath apartment and it was freaking awesome. Like you share a bathroom with your best friend, there's like a metal pipe that's heating the bathroom because like you don't have central air and heat had a blast. I was 25.

[Ben Carlson]

You don't care as much at that point, right?

[Jack Raines]

Like, it's okay to spend money on like fun things, but the asterisk I always throw on this is one. If you have like high interest rate debt, pay that down. Like do not do the whole, oh, live for the moment. If you're in credit card debt, student loan Debt. But it's, you know, there's certain things you can do at 25 that you can't do at 35 or 45. Whether it's like, if you get married young. Yeah. You and your wife should travel. If you want to travel pre kids, you have freedom to do that. If you want to take a job in a crazy city, just like, yeah.

[Ben Carlson]

The flexibility is the biggest thing that people aren't like, take a chance and take some risks. That's like.

[Jack Raines]

Like, you have optionality in your 20s. Use it.

[Ben Carlson]

Right.

[Duncan]

I think for me too, I would tell myself to not feel guilty about investing when you don't have a lot of money.

[Jack Raines]

Yeah.

[Duncan]

I think a lot of people think, oh, I don't have enough money to invest with commission. Free trading on Robinhood. You can just put 10 bucks a week into the.

[Ben Carlson]

Yeah. Just build a habit.

[Duncan]

Yeah.

[Ben Carlson]

Do enough to get your 401k match and then the rest of it, just have fun.

[Duncan]

Yeah.

[Ben Carlson]

Yeah, that makes sense. All right, let's do another one.

[Duncan]

Okay, up next, we got. I'm 26 and live in a high cost of living city. It's so much cheaper for me to rent than buy a house or a condo. I'm not sure it's ever going to make sense for me to buy if I continue living here. Housing prices aren't coming down. Mortgage rates aren't coming down either. Is buying a home still worth it for a young person? What does it mean if my generation has a lower home ownership rate? How do we get ahead?

[Ben Carlson]

Okay, so I came up early on in a totally different mindset because when I was in my 20s, we had the great financial crisis, and people, a lot of people just weren't thinking about housing as a way to build wealth at that point. It was. So when my wife and I went to buy a house, it was 2007 and we were living in a. In a apartment, like a big, you know, exposed brick kind of place. They said, hey, we're gonna turn this into condo. So you guys are out of here. You have like three months to get out. And so, like, all right, I guess we'll buy a house. And if not, it seems so cavalier that that's what we thought about it and had done no research. And now it seems like all most young people think about is, oh my gosh, I'm so screwed. So I'm just curious how you feel like your peers are feeling about the housing market.

[Jack Raines]

So, like, for context, I'm 29, live in Manhattan, and for the last four years I've either lived in New York or San Francisco. So like New York was the most expensive city thanks to San Francisco is now just insane. My take on this is a lot of people move to high cost living city to make a lot of money, but end up moving either a lot of like I'm from Georgia, like I might end up back in Atlanta or something in five or 10 years. And there's a real like hyper focus on home ownership in America because like it feels like a step into adulthood.

[Ben Carlson]

It's the next step, right?

[Jack Raines]

My, my actual take is unless you're really, really committed to living in like New York, sf, Chicago, whatever your high cost of living city is if you don't want to raise kids there. I actually just don't think you should stress too much about whether or not you can afford a home and just like focus on your career, focus on your personal life. And once you get married and you're thinking about having kids, you might have spent all of your 20s or early 30s in Manhattan, but then you end up moving to Jersey, Long Island, Connecticut, upstate New York, where it's just cheaper. So yeah, if you go on street, easy, right? Like I looked at this last night, like a three bed apartment on the Upper west side to get a decent one is probably minimum 2 1/2 million dollars. That's really expensive. If you're on Long island or further out in Brooklyn or you go to Jersey, it gets cut in half or third. So it's a, it's subjective. But I think the first question to ask is do you actually want to raise kids in a high cost of living city? And if you don't, just keep renting and you maintain the flexibility to leave later if you do like you don't know what will happen with home prices. So you need to think about am I on a career path? Whether it's big tech, hedge fund, whatever, where like I will be able to afford that type of home that I would want to raise a family in. And then if not, you kind of have to decide, can I make the career jump to make it work or should I think about moving somewhere else? Once kids get school age, the rent

[Ben Carlson]

versus buy is so in high cost of living cities now is so skewed

[Jack Raines]

to renting 100% I'm probably never going to buy. Like I will always rent as long as I'm in Manhattan and I don't really plan on raising kids here. So it's like just rent, it's fine.

[Ben Carlson]

So it's interesting because the other thing that this has happened, that this is causing is more people are being involved in markets because they're saying, you know what, if I'm not going to save up 20% for down payment, I'm just going to put money in the stock market. So we've got a chart here. This is from Bloomberg and I think it was a Pew Research center study. And they looked at, they did it by age cohort is people under 40 are the least likely to see a home as a good investment. Yep. Okay. And then another one I have from the Fed, Dan, you can show that shows the level of stock market ownership by people under 40 and it's up three times this decade alone. And so people, younger people, Duncan said it's easy to just open up an account of Robin Hood. It's easier to invest than ever. They may not be buying a home and spending all the ancillary costs, property taxes and maintenance and upkeep and down payment and all that stuff, closing costs. So they're just saying, all right, fine, that money I would have been saving towards a house is going to go in the stock market. So do you think that young people are going to be okay with that trade off?

[Jack Raines]

I think it's, I think it's fine. Particularly if the plan again is if you're in a high cost of living city, but you plan on buying a home later. If your money can compound, your money will historically compound faster in stocks than other asset classes. If your money compounds faster and then say like, okay, your parents bought a home at 28, you buy one at 38, but your net worth is even adjusted for inflation, twice as high as theirs was. And then you go buy a home later. Fine. I think the trade off is okay in that it just gives you more wealth that you build up to eventually make the home purchase. I think the real battle is the status games falling behind your peers. Look, I grew up in Georgia, went to college in Georgia. A lot of my friends from my fraternity or that I played football with bought homes in the last two or three years. I haven't. But my rent, my studio apartment is about the same as their mortgage in Atlanta suburbs. So you just, you can't get too caught up comparing yourself to other people who are doing that thing if you're not in the same life stage as them.

[Ben Carlson]

And then you get the people that say you're paying someone else's mortgage.

[Jack Raines]

Right.

[Ben Carlson]

It's the flexibility. Right. You said you moved from New York to San Francisco back to New York. Like if you owned a home, you Wouldn't be able to do that.

[Jack Raines]

No. I took over a sublease in San Francisco, subleased my place out in New York, then I moved back and toured 15 apartments and signed the best one back in January. Right. Like it's flexibility, especially in high. There's so many people in high cost living cities that will get a job opportunity. If you're in New York, you might end up in Miami, DC, San Francisco, Chicago, LA where the ability to edit if your biggest cost is going to be breaking a lease and paying an extra two months of rent versus dealing with selling at closing costs.

[Ben Carlson]

And just all the frictions of buying and selling a house are way higher than people would assume.

[Jack Raines]

Totally.

[Duncan]

New York is one of the worst places to try to rent. They have all these rules, you know, the landlords have about how much you have to make and you have to put. Or you have to have a guarantor. And even with all that being said, it's still. What's the alternative to get a condo where your HOA is fourteen hundred dollars a month?

[Jack Raines]

Right?

[Duncan]

Yeah, that's like, that's what you're looking at here sometimes. It's wild.

[Ben Carlson]

Yeah. Yeah, I agree. It makes sense to just have a little patience. It's okay. You don't have to check it off the list just because other people are. Right. That's okay.

[Duncan]

All right, we got a question. In the chat, Dave Airey asks, what does Jack recommend for grandparents? Funding an UGMA for grandkids, what ETFs, single stocks, et cetera, investments, and how to help them be good investors when they grow up.

[Jack Raines]

I mean my, my take on all this is like broad index ETFs, like VU, SPY, whatever. Like most of my money is in s and P ETFs, right? So my. Again, everybody has different financial situations. I say do the simplest thing that gives you market rate of return, which is the S and P. So that's my. That's about the only stock picking financial advice I'll give anybody.

[Ben Carlson]

Pretty simple.

[Duncan]

No triple leverage. Okay.

[Jack Raines]

I mean, sometimes, maybe, maybe in 2022. Right. Like look, if you can, if you can triple lever QQQ right before AI happens. Yeah, you should probably do that. But outside of that S and P.

[Ben Carlson]

All right, see the next one.

[Duncan]

Okay, up next we got one from Haley. I'm going to be a senior in college this year. Everyone in my class now treats AI as this inevitable thing we all have to deal with, but no one really knows what to do. Go into a new field, figure out where the disruption won't happen. And go there. Become more proficient using AI. How can young people possibly figure out what career path to take when the future is so uncertain? P.S. our professors have no clue either. They're all trying to figure out how to grade papers that are being written by ChatGPT. I'm so glad I'm not teaching them Age of AI anymore. I,

[Ben Carlson]

this is, this is one where I give young people a break and I've spoken to a number of college classes in recent years and this is, this topic comes up every time just like, what do we do? How do I handle this? And obviously people who are in entry level jobs are having the same thing because intelligence is effectively becoming a commodity, right? You can outsource your thinking, you could outsource your writing. So it's kind of like, well, what sets you apart as someone who's going to be entering the job field? How do you help people think about this? Because it seems like it's changing so fast. It's like you give advice on how to deal with AI. It's like proficient in AI is going to be the new proficient in word on a resume, right? But like, what are young people supposed to do?

[Jack Raines]

So for context, like, I, I started business school the semester the Chat GPT launched. I was in my first semester at cbs. Chat GPT launched around Thanksgiving. And then I remember taking like you're taking your first semester business school accounting class and all of a sudden, oh, I don't know, my balance sheet, balance. This is really bad AI and it can still kind of figure it out. I'm glad that I didn't start now. And it can do everything end to end in Excel.

[Ben Carlson]

It's just, it's an easy button.

[Jack Raines]

It is my, my take is one. You should figure out what the fundamental building blocks are of your thing and know how to do those manually before you layer AI on top. And it's, it's so difficult to make yourself do that because AI will give you the answer. But the example is if you go into banking or anything where you need to know how to make financial models, you should know how to make like, you should know how to do cash flow statement, income statement, balance sheets, everything together. You should just know how to do a fairly complex financial model on your own, by hand, where you can do it. And you know if you're doing the LBO model test for like private equity, you can do that in a couple of hours on your own. And then you can layer AI on top. The example for like Excel modeling is there's a cloud Excel plugin. You should be able to build the model yourself, but then you can way more quickly treat Claude like a, you know, like a thought partner, question partner for okay, what's happening on this sheet or that sheet to more quickly grab context. But you should have the ability to tie the whole thing together by hand and then just speed stuff up with.

[Ben Carlson]

So my, my very first internship, the first day at the office, I had this guy from UPenn who did investment banking for three years and worked, you know, and now he's a financial analyst. And he said, I'm going to give you my model and I want you. And it had a million tabs and a million different macros and formulas that all tied in. He said, I want you to go through this for the next two weeks and figure out which formula ties to which cell and how that impacts other cells. So you change one cell and see what it impacts the others. And so you know, how the income statement impacts the balance sheet, impacts the cash flows. And you're right, you could have had AI say tell me how this all works. But by going into it and doing it myself, I actually understood, okay, if we change this assumption, it changes the output a ton. Yeah, if we change this assumption, there's no change at all, basically. So yeah, you have to know that stuff.

[Jack Raines]

I will, I will say for the stuff that you can and probably should skip the tedious like organization or pulling of, I was just very, very good at that. Like I'll give a pretty meta example because I have a book that just came out. I'm in the middle of marketing this. I keep pretty good track of like a Rolodex of just people I've met with that are interesting and having AI go through and pull. Who have I talked to the most on Twitter or iMessage or LinkedIn or email to make sure I just don't miss any people that I should text about the book. It aggregated all of that in five minutes and put in a spreadsheet. So data collection, data synthesis stuff, you should absolutely be using AI. I think that a good way of thinking about what can AI do and not do is anything that's verifiable, which means software, accounting, math, it can probably do much better than up until maybe the top level practitioners in that field. So like anything that you want to shortcut on your computer, you can probably use cloud code or codecs to do right now. And you're doing yourself a disservice by not getting in the flow of just how this stuff works and experimenting with it. So I guess it's kind of like two big pieces of advice. Whatever field you're going into, do the reading and just learn how to do the basic blocking and tackling of your thing. AI gives you a lot of leverage. If you don't know that stuff, you're totally a prisoner to your AI. But you should also be tinkering with like the AI coding tools, particularly if you don't have a, you know, a programming background. You can just do basically anything on a computer with AI coding assistance, and it's just a life cheat code.

[Ben Carlson]

Right now I think the people skills are more important than ever too.

[Jack Raines]

Yep.

[Ben Carlson]

Can you sell, can you communicate effectively? Are you creative? Like, can you deal with more informed people? People who have more than surface level knowledge now? Can you provide context and perspective? Like that stuff is going to matter more. But what you have to do is you have to be a continuous learner for that. Like you said, you have to do the reading. You have to understand it's not enough to just kind of know what the machine tells you. You have to be able to explain it to people.

[Jack Raines]

And if you're young in your career, show up in person especially. There's so much that you can fake from behind a computer now with AI that at the end of the day, the person getting the promotion, the person not getting fired if there's a reduction in force, the person who gets way more opportunities for luck to go their way is the face that people recognize. So even if you have the option to be remote one or two days a week, just go in the office. Like, you should be spending as much face time as possible with your coworkers,

[Ben Carlson]

especially when you're young.

[Jack Raines]

Yeah, 100%.

[Ben Carlson]

Yeah, I totally agree.

[Duncan]

Look at us in person today.

[Ben Carlson]

I know. For some in a while. All right, let's do the next one.

[Duncan]

Okay. Up next, we got one from Chris,

[Ben Carlson]

and I want to preface it this next question came in like a week before situational awareness blew up. So it's a perfect, perfect question for the currency. It's perfect.

[Duncan]

Yeah, it's good. Okay. What's wrong with 5x margin if you can get it cheaply? If everyone earns the one time market return, what exactly is the point of investing? I'm young and have plenty of time to make it back if my account blows up. So many, so many people are getting rich these days, why not try? Why not try when I have no other responsibilities?

[Ben Carlson]

All right, yeah. This guy was like a junior analyst at Situational awareness, I think or it's funny, it came in a week before that blew up. I totally agree that the time to take risk is in your 20s because you have a smaller capital base. Right. You can blow up effectively and still have time to make it back up your human capital. But the idea of getting rich fast, which is something that you wrote about, is sometimes the worst thing that can happen for you. So you were trading spacs and then rolling over into like warrants and it was spac.

[Jack Raines]

I mean we don't have to get super granular but spac warrants, they were bubble. It was basically making levered bets on spac warrants. Like they. I did not have margin on top of it, but warrants are effectively options.

[Ben Carlson]

Okay, so name some of the specs that you were buying into.

[Jack Raines]

So the several chamath spacs I will say the best trade I had was Apollo had a spac and I noticed that they had the Apollo SPAC website changed their website background from oil rigs to windmills. And my assumption was that because of that they were going to take an EV company public. And because at this point Tesla was ripping Nikolai Motors, which was a total fraud, was worth more than Ford. Everybody was just. I made some money on that one. I did trade Nikolai Motors. I just knew if they. I figured they were going to take something like Lucid or Fisker or one of these EV companies public or Rivian. And I just loaded up on warrants $0.50 because the market hadn't priced in a website change and Jack Reigns had and anyway, two weeks later they announced a deal to take Fisk Republic and the warrants 5X and I made more than my salary off of flagging that and felt like reverse Michael Burry. So back to the margin question.

[Duncan]

They had cool cars, but yeah, I

[Jack Raines]

mean occasionally it's funny you see one driving around on the street. It's like that company went bankrupt. They look, I mean Henrik Fisker, great designer, great fundraiser, not great at building a cash flow positive business. But the cars are beautiful but to the margin point. Okay, so I was trading all these spacs made call it 6 grand or 400 grand. I was 24, I should have cashed out. The spac bubble kind of stopped working. And then I went on tilt and

[Ben Carlson]

loaded up on at that point there's no way in hell as a 20 something you were ever going to stop and say all right, I'm cashing out.

[Jack Raines]

You think I disagree? I disagree. If I'd hit a million dollars, I was going to you had a line that was, which is a cr. Crazy line to say. But I was like, once I get there in a tax free account, it's like doesn't even matter. And it's also just the next benchmark after that's $10 million, which you can't even, you can't trade stocks.

[Ben Carlson]

It's just so hard to like not let overconfidence seep in and be like, I'll just keep doing this and keep doing this.

[Jack Raines]

I also probably wouldn't have stopped, right?

[Ben Carlson]

You would have got to a million. You would have gone, well actually 2 million.

[Jack Raines]

I bought a ton of warrants in a buy now pay later company that had gone public through a spac and I thought they were going to outperform form on earnings and they didn't. And I blew like 200 grand in a day. So. And I was making $56,000 at the time. So that's, that's, that's one example. Situational awareness was a hedge fund that just blew like 15, 20 billion dollars of LP capital. That's another one. I mean my, my advice on this is actually nuance. I don't think you should use margin, but if you do want to use margin and you're like 23 or whatever and you have a couple grand to put in a play account, fine, do it. You'll get blown up and it's going to suck and you're going to feel this like pit in your stomach thinking,

[Ben Carlson]

wow, some people just need to have that feeling before they learn their lesson.

[Jack Raines]

I think it's, I, I actually think it's probably good to lose a little bit of money when you're like 23. And I, I just will never do anything that's stupid.

[Ben Carlson]

When you have five grand versus 500 grand, like it's better to do it then for sure.

[Duncan]

Actual leverage scares me. I, I do 2x and 3x.

[Ben Carlson]

Duncan does the leverage.

[Duncan]

I've never done like actual account leverage or whatever you call it. You know, that scares me.

[Jack Raines]

It's, it's just you, there's so many things that can, like 5x leverage. You could be totally right on a company and there's just like a massive whale. Investor gets liquidated and they have to sell.

[Ben Carlson]

How? Leopold, he picked the right stocks. They were still up. The stocks that he picked had phenomenal returns even with the drawdown because he was leveraged over. Leveraged. He had to blow out of the positions. And I think that's one of the biggest things to understand when you're young. Is that survi. I've learned this as like an old guy now a middle aged guy. Survival is such a big key. Like I think about all the blogs that have come and gone since I started writing and I think like, I'm not any smarter than those people. I'm not better writer than those people. It's just like I kept at it.

[Jack Raines]

Yep.

[Ben Carlson]

And that's the same thing with investing. If you just like can keep yourself in the game, that's the biggest thing.

[Jack Raines]

Yep.

[Ben Carlson]

And if you get blown out of the game and then you're potentially like, it changes your whole perception of risk. That's the, that's the, that's the big risk.

[Jack Raines]

One of the setbacks. Say you're using margin. Say you don't even go to zero but you get cut in half and have to liquidate stuff. Then you start looking at it and you're looking at where like this, because this happened to me. Right. You go from 400, you have a high watermark. All of a sudden it's like, man, that extra 200 grand compounding over the next 30 or 40 years tax free would be like several million dollars that I blew because I was impulsive and stupid and I didn't even need the money then. Like it was, I was risking money that I would need later for something that I just didn't need now. And that's, that's the real issue with margin is it feels good on the way up, you will get popped and then you're just. There's no, there's no version of this where you come out on the other side being glad that you were using margin. Once you get margin called and you will get margin called if you use it long enough.

[Duncan]

Well, that's what Chris says in here. He has time to make it back. I mean that's like the, the math that I think a lot of young people forget sometimes is the thing you guys talk about where you get cut in half, 50 loss takes a double to get back.

[Ben Carlson]

And then maybe you take more risk to try to get back there. And you just, it's the person really moves against you. It's the friend at blackjack who says, I'm just going to double my bet until I win.

[Jack Raines]

I mean my actual advice is just like really focus on making more money. I mean, Nick Maggi's written about this plenty of times. The actual way to increase your returns over time is increase your income so you can contribute more. Instead of using 5x margin, is there something you can do to upskill yourself to where over time you can 5x your contributions to your portfolio. That's probably a better move. And if the market tanks, guess what? You're still employable if you're using margin and your only edges. I am trading stocks on margin and it doesn't work. The, the time suck you've probably put into analyzing those stocks took away from time. Especially when you're like when you're young. Yes. Oh, use margin. You know you can afford to earn it back. Okay. The time you spend on that takes away from focus. You could spend on just being better at your job or you can make more money which is the actual thing that compounds.

[Ben Carlson]

Yeah, and a lot of people don't talk about that in personal finance. But think about how much a $10,000 raise in your 20s is worth your whole career. Because it compounds and compounds and compounds and allows you to save more or spend more, whatever it is. Yes, that's way more important. I totally agree.

[Duncan]

And then if you're buying tqqq. I'm just kidding.

[Ben Carlson]

Alright, we got one more question.

[Duncan]

Okay, last but not least, we got one from Riley. Eight years ago I realized my only escape was compounding tax free money. I moved into a van in the desert and saved every dollar possible. Specifically maxing my self directed retirement accounts, 401k and Roth IRA. I have gone from $10,000 to $700,000 in my tax free accounts. In this time I can live an extremely humble life. And I'm overworking. What if I just lived off of $15,000 a year? I pull for my 401k as income which would actually be tax free because it's the standard deduction. Then I would only be paying the 10% early penalty and let the rest compound until I'm a multimillionaire. I could get Obamacare insurance because my income would be so low. But I'll really be making all my money in my tax free accounts. I'd love to know your thoughts. I know this sounds a little crazy, but so am I. Haha.

[Ben Carlson]

I mean this is, this is definitely a unique question that we've never gotten before. I love this. You talk in the book about making some unorthodox decisions in your 20s. You decided to quit your job at UPS and you go travel Europe and stay in hostels with your friends and such. So you're, you know, you've done something unorthodox like this before. I'm curious how you think about that type of risk where you're like really going off the grid in a different Direction.

[Jack Raines]

I mean, are you having fun? Like, if this is a thing that you want to do, it's weird, but I'm not going to tell you not to do it. My, my whole thesis on money and vesting and, you know, just like how you should spend money over time is that at the end of the day, dollars can only be like. Dollars exist to be exchanged for stuff, whether that's experiences, material things, or just having it for peace of mind as a nest egg. There's kind of the three things that money is worth and you can figure out where you want to spend that accordingly. I don't think a good use of money is to over time help you maintain like a minimum level of just survival in a van. Again, if you want to do that. That's totally different. I think it's just. This is like the final boss of Fire, the fire movement, right? Like, can I, can I, can I live on like 15k a year in a van in the desert?

[Ben Carlson]

Total minimalism. And you're right, maybe this guy is happy, but you have to do something.

[Jack Raines]

If he was happy, I don't think he'd be emailing us about the question of is this crazy? I mean, I think the real question is what kind of life do you want to live? And if this is exactly how you want to spend your finite. Call it, say you have 50, 60 years left. If this is what you want to do, then okay, do it. I think a bigger question to ask though is what do I actually want to spend my time doing? Who do I want to be around? And if you can get there from some kind of fire thing, sure. But I just. This feels like you're almost opting out of life and just trying to make your portfolio compound to what keeps you alive. You're almost making yourself an NPC from first principles is what it feels like.

[Ben Carlson]

He said he's done working, but it's possible he hasn't found what he really wants to do. So with the fact that he's gone from $10,000 to 700k in eight years, like, great, you did awesome. Like, you saved a ton of money. Like, good for you. Now that you have that margin of safety, to give you more flexibility, find out what you want to do, even if it doesn't pay you very much. Find out what's going to make you. Are you going to be a fishing guide? You know, are you going to take people dune bugging in the desert where you live? Like, find something that makes you happy and gives you purpose? That should be the Goal. Not just I have enough money and I'm just. I'm not going to impact anyone and my income's so low that I can have this cheap insurance. But like, what are you. Okay, fine. What now?

[Duncan]

This feels like one of those questions we get where someone's already made up their mind and they just want us to kind of say like, yeah, that sounds good. Do it.

[Jack Raines]

The risk you run here is how old does it say his age in here?

[Ben Carlson]

I don't think it's how old he is.

[Jack Raines]

36. In the bottom there's another note, like 36 year old for extra context. So, okay, this might sound good now,

[Duncan]

but it's 40 acres with no house on it.

[Jack Raines]

Are you going to be glad that you did this when you're 45 and parents are getting older, all of your friends married, kids growing up where you just kind of opted out of this period of, call it early to mid adulthood where you were just alive? I don't. I don't think you're gonna look back on that time and be glad that you just managed to survive by opting out of the system. I do think the right take is take some of the money, take three or four months and just try to learn about other things you might want to do and experiment with some stuff. I. I just don't think. I think the worst use of one's time is just trying to find the minimum viable way to spend stay alive.

[Ben Carlson]

Right. I agree. Take a piece of this and try to go have some fun and figure out what you want to do with your life.

[Duncan]

Unless they really do love gamifying this and figuring out a way to do it.

[Ben Carlson]

Maybe that's true for some people. That's what it is. It's just like the people who do the credit card rewards like to them it's more game than it is the money.

[Duncan]

Yeah, it's a hobby.

[Ben Carlson]

Yeah, but there has to be some end goal here, right? What you're doing not just living in the van down by the desert. Right. Unique question. We never got that before. Yeah, I'll give him credit. I like it anyway. Tons of other great stories in Jack's book. I laughed. I learned a lot. It was good. This is kind of book everyone says I wish I had in my 20s.

[Duncan]

Morgan Housel on the back.

[Ben Carlson]

Yeah, Morgan.

[Jack Raines]

He's a friend of the family fan.

[Duncan]

So pretty impressive.

[Ben Carlson]

Morgan is contractually obligated to put his name on everyone's book now.

[Jack Raines]

That's right.

[Ben Carlson]

If you have a email for us at the compoundshow at Gmail com. Check out Jack's new book, and we'll see you next time. Thanks, everyone.

[Duncan]

See you, Ron.