What You Can Learn From Losing $150k in One Day
and other insights from Jack Raines
LinkedIn provocateur-in-chief Jack Raines (show appearance here) has:
traveled to multiple continents
earned $400,000 flipping SPACs
lost $150,000 in a day
worked in corporate finance
learned Spanish
amassed over 30,000 followers to his newsletter, Young Money, while also writing a travel blog…
all before turning 27.
Oh yeah… and he’s studying full-time for an MBA at Columbia Business School.
Suffice to say, Jack has crammed a lot of Life into his life.
Let’s dive into some of his most valuable insights.
I. Opportunity Costs & Tradeoffs
“Freedom isn’t valuable because it liberates you from the burden of commitments. Freedom is valuable because it allows you to choose what to commit to. The key, of course, is that you do eventually have to commit to something. Having an abundance of freedom but a scarcity of commitment is like making millions of dollars and failing to spend any of it: a waste of a valuable resource.”
We have 4680 weeks on this earth. How do we want to spend those weeks? Each week that goes past is one that we won’t get back. In other words, opportunity costs define every decision that we make.
Many of us default to optimizing for money. At first, this is what Jack did. But optimizing for money comes with its own opportunity costs:
Money doesn’t have a monopoly on wealth. In fact, beyond a certain point, money has diminishing returns. Pursuing monetary wealth means trading off other forms of wealth (time, health, experiences, knowledge, relationships).
You can always earn more money. You can’t earn more time.
“If you blow all of your money, you can make more. When your time runs out, it's game over. Opportunity costs are everything, how much is your hourglass worth?”
What opportunities are available now that won’t be available in the future? Are you missing out on those opportunities as a result of optimizing for money?
“The truth is, if you’re actually a high performer, and if you’re confident that you will excel in your career, you don’t have to neglect other areas of your life to reach your goals. You’ll reach the same destination, but one journey will be a hell of a lot more fun. It quite literally makes sense to spend some of your early-career earnings on non-work pursuits.”
Jack on the Grind Mindset:
“So why is this “Grind over everything” mindset so popular? Maybe this is a controversial take, but I think it’s a heavy dose of copium self-administered and propagated by folks who couldn’t achieve success unless they neglected other areas of their lives.”
Health’s “greatest value is the optionality it gives you.” Health is the “multiplier that determines just how valuable how time and money are.”
A traditional job is a collar: the “cost of protecting against downside risk is limited upside.” Working for yourself holds the risk of absolute failure but has unlimited upside.
A tradeoff exists between the “shine of novelty and the consistency of commitment.” Western culture is too focused on commitment. “Having an abundance of freedom but a scarcity of commitment is like making millions of dollars and failing to spend any of it: a waste of a valuable resource.”
II. Travel & Experience
“Out of the 100 billion humans who have walked this Earth, we won the timeline lottery. What better way to spend your money, use your time, leverage your knowledge, take advantage of your good health, and maximize your relationships than doing cool stuff with those you care about?”
Travel is cheaper and easier than ever. We have a duty to ourselves to make the most of the opportunities that this presents:
“In an era where travel is both cheap and convenient, a refusal to venture beyond your geographic boundaries is a declaration that you believe what you are currently doing is more valuable and enriching than engaging with the experiences and perspectives of ~8 billion other people.”
“Considering that for the first time in human history, we can fly anywhere on the planet in under 24 hours for $1,000, we are doing ourselves a disservice by not taking advantage of our fortuitous circumstances.”
Life isn’t a chain of events that leads to a climax – life is the chain of events itself. We should care more about the 99% of our life we spend working towards something than the 1% when we achieve that something.
“The most dangerous story that’s ever been told is happiness lies just beyond achievement. And you can spend your whole life following that story just to find that there really wasn’t a pot of gold at the end of the rainbow.”
“I'm going to let you in on a secret: that "risk" that you are avoiding? It isn't actually risk. It's simply the unknown. The real risk is starving your life of experiences to pursue some arbitrary path that you might not even care about in the first place.”
Too many of us spend 22 years going through school and college waiting for independence…we get it… then we jump straight into work! We do what we are supposed to do rather than what we want to do.
We should optimize for experiences. The timing is never right: we can seize the moment or let it slip by. “Of all the tradeoffs one can make, exchanging financial wealth for experiential wealth is one that you will never regret”
Live life backward: what do you want to have done, and who do you want to be before you would be willing to die?
Fight entropy: “Entropy thrives on our idleness, but it shirks away from our efforts. Any effort that improves your life in any way is part of that battle against entropy, and these efforts are uncomfortable for a reason. That discomfort, that voice in your head saying, “Why don’t we just do this tomorrow?” That’s entropy.”
III. Writing & Growing a Newsletter
“Writing is a journey. Writing, quite literally, is thinking. Writing isn't the transcription of ideas from your consciousness to a physical page. Writing is the creative process that transforms fragmented thoughts into cohesive stories.”
Rigid systems. Loose processes.
Routine is important but doesn’t have to be stationary and rigid. “Chaos, movement, and novelty can be a routine too. I write my best content when the places, times, and environments are dynamic, not static.”
You do need a system to write. Firm deadlines.
Inspiration often hits when not writing. Capture it as soon as it hits.
Inputs dictate output: “I can't emphasize this enough: every single thing that I have written has been inspired by a life experience or a piece of content that I have read.”
Retain integrity: “Be wary of temporary “wins” that permanently impair your control of your future. Lucrative bonuses and lavish gifts may seem benevolent on the surface, but they are often gateway drugs to a lifestyle that forces you to maintain that high-dollar paycheck. Big checks and sponsorships might improve your financial situation in the short term, but they can erode the audience trust that made your content so valuable in the first place.”
“Making your passion your profession” is bad advice. An income stream unrelated to your passion is valuable as it provides you with time to work on your craft and experiment without needing to generate a financial return. It allows “time and luck to work in your favor.”
Growth comes partially from luck. We can increase our potential opportunities for luck.
“We all have a “luck surface area” which covers all of our potential opportunities for good fortune to strike. This luck surface area isn’t static, it’s malleable. As our luck surface area expands, our frequency of “luck” accelerates.”
“There are levels to luck, and these levels compound. Being active on Twitter and regularly sharing my content increased the odds that I would connect with interesting people online. Moving to New York increased the odds that some of these connections would deepen as we crossed paths in real life. None of it was guaranteed, but I had shifted the odds in my favor.”
IV. Risk
Taking L’s early gives you a healthy respect for risk. You’re more likely to avoid it, or at least acknowledge it, as you progress financially and professionally. But starting off with nothing but success? Well, that can be catastrophic.
Over lockdown, Jack “turned $6,000 into approximately $400,000 by flipping SPACs in my Roth IRA, then I lost $150k in a day by flipping stocks that used to be SPACs.” He later described this as “the best thing that ever happened to me.” What did he learn?
It freed him from thinking about the market all day, every day ✅
It gave him a healthy respect for risk ✅
It prevented hubris from driving him to an even more destructive loss later in life ✅
You cannot explain success and failure to someone. They have to be experienced. No one understands risk until they have lived through it. Taking losses early gives you a healthy respect for risk. Achieving nothing but success early gives you an imbalanced view of risk.
When risk happens, it happens fast. “And the magnitude of that first loss will be directly proportional to the length of time it takes for that first loss to occur.”
Risk is highest when everything seems perfect.
The conditions that create prosperous outcomes often are the harbingers of subsequent destruction.
Risk happens fast.
“leaving money on the table isn’t a bad thing if it provides a margin for error.”
There is never a single catalyst for an existential risk.
The most significant risks can’t be forecasted.
If you have succeeded, a terminal tail risk is never worth it.
The biggest risks always look obvious in hindsight.