The Tim Ferriss Show - #451: Mike Novogratz on Investing, Bitcoin, Ayahuasca, and Running Through The Sahara Desert

Starting point is 00:00:00 At this altitude, I can run flat out for a half mile before my hands start shaking. Can I ask you a personal question? Now would have seen an appropriate time. What if I did the opposite? I'm a cybernetic organism, living tissue over a metal endoskeleton. The Tim Ferriss Show. This episode is brought to you by Pornhub. Just kidding. This episode is brought to you by Four Sigmatic, which is part of my morning routine, also part of my afternoon routine.

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Starting point is 00:06:58 different disciplines. And my guest today is Mike Novogratz. Michael Novogratz, at Novogratz, that's N-O-V-O-G-R-A-T-Z on Twitter, is the founder and CEO of Galaxy Digital, galaxydigital.io. He was formerly a partner and president of Fortress Investment Group, LLC. Prior to Fortress, Mr. Novogratz spent 11 years at Goldman Sachs, where he was elected partner in 1998. Mr. Novogratz served on the New York Federal Reserve's Investment Advisory Committee on Financial Markets from 2012 to 2015. Mike also serves as the chairman of The Bail Project and has made criminal justice reform a focus of his family's foundation. He serves as the chairman of Hudson River Park Friends and sits on the boards of NYU Langone, if I'm getting that correct, Medical Center, and Princeton Varsity Club, Jazz Foundation of America,

Starting point is 00:07:45 and Artists for Peace and Justice. Mr. Novogratz received an A.B. in Economics from Princeton University and served as a helicopter pilot in the U.S. Army. Mike, welcome to the show. Thanks a lot, Tim. And this has been a long time coming. I'm excited to have you on the show. You have so many stories. You have an unvarnished personality.

Starting point is 00:08:08 And you have just such a medley of experience that I'm glad that we were finally able to get on the phone to record this for public consumption. So thanks for making the time. No, I'm excited. I sometimes feel like we were separated at birth, me and you. Yeah, we have Long Island. we have Princeton, we have wrestling. As you put it, a little bit crazy. Psychedelics, meditation, crypto, the list is long. And I thought we could start with a place that might seem like a total non-sequitur, but I have to ask. I was in preparation for this conversation reading a really nicely done profile in The New Yorker

Starting point is 00:08:45 written by Gary Steingart. And there's a phrase that came up multiple times that I have to ask you about, which was speed racer pants. He kept on mentioning you're wearing speed racer pants. What are these pants? I have a pair of white pants with a big red stripe on the side of them, and they look like the pants speed racer used to wear. I bought them in LA at Fred Siegel one day when I was just bored. And I started wearing them around and no one in New York was wearing striped pants. And so it was quite the thing for about a year. And you seem to have a fair amount of lore surrounding you, which certainly became even more clear as I was doing homework for this

Starting point is 00:09:25 conversation. And one of them is piloting a helicopter down Prospect Avenue. Now, I'd like to know if that's true. And either way, maybe you could explain what Prospect Avenue is. But did that actually happen? You know, unfortunately, it did happen. I've had a tendency to drink too much at big parties. And, you know, Princeton has this did happen. I've had a tendency to drink too much at big parties. And, you know, Princeton has this reunion celebration every year where all the classes come by. And after the P-Raid, this is a parade of, you know, hundreds and hundreds of people, starting with the oldest graduate who, you know, is often 100, 103 years old, all the way to the new grads. Everyone migrates to this Prospect Avenue. And one year, I had to leave early for an event. And I was like, okay, I'll show off to my friends a little bit. And so I got in a helicopter. I was going to take me back to New York City. And I asked the pilot

Starting point is 00:10:15 if I could drive. And we just buzzed Prospect Street, much to the thrill of my friends and probably the dismay of everyone else. What was your Princeton experience like? We're going to zoom backwards in time to childhood in just a little bit. But what was your experience like at Princeton? You know, I was a middle class kid, so I showed up a little intimidated. And, you know, I thought I was smart in high school and I showed up at Princeton. I thought, gosh, I'm not that smart.

Starting point is 00:10:47 I thought I was a great wrestler in high school. And I went to Princeton and got my butt whooped. I thought, gosh, I'm not that smart. I thought I was a great wrestler in high school, and I went to Princeton. I got my butt whooped, and I was like, I'm not that good of a wrestler. And so it started off intimidated in lots of ways. And I look back. I took easier classes than certainly my kids take, thinking, how do I get through this place and survive it? And athletically, that flipped my junior year. Socially, it flipped early, and that was probably the biggest positive. Academically, it never really flipped. I never really felt, maybe until I did my thesis, like I was really a good enough student, didn't really feel smart enough to actually join the Army,

Starting point is 00:11:21 and on a test with 700 other guys got first place. i was like dude i'm actually pretty smart i learned something uh but i was intimidated most of princeton you know it's interesting that the the positive side was socially i was adept and realized you know i had my first roommate actually was uh gloria vanderbilt's son carter cooper who unfortunately tragically uh youically committed suicide years later. But he was kind of aristocracy, right? He's not just a wealthy New Yorker, but the Vanderbilts were aristocracy. And I went to New York and realized he had his own insecurities as well. And he had nice friends.

Starting point is 00:12:00 And other than them teasing me about having my hair parted in the middle, which I thought was a very cool look back then, but not in New York City. You know, I quickly realized that rich guys, middle-class guys, they all use the same toilet tissue. And that part, I think, gave me a lot of confidence in life that I could compete in essence. Now, there's a point we were competing mostly for girls, but I could compete with anybody. And that sounds like a small little win, but it was actually, when I look back, where a lot of confidence started. And you mentioned athletics. What flipped junior year, if I'm remembering correctly, for you in athletics? I don't think I reached puberty until I was about 20.

Starting point is 00:12:48 I was a decent wrestler, and I worked pretty hard at it. And I just got good enough to make the varsity. So my first two years, I was really on the junior varsity. There was one guy that was better than me at the same weight. And he actually took a year off. And so it opened the spot up for me. And having that opportunity to wrestle, I just started doing better and better. And I made the Eastern tournament that I made the national tournament. And back then, making the nationals was a huge chip plus for you. You felt like, you know, you're a real guy in the wrestling community. And so I came back senior year ready to, you know, ready to be an All-American. And so it was a whole shift of, you know, my confidence level again. But also, I got stronger.

Starting point is 00:13:24 You know, nowadays, kids redshirt, they take a year off. I really wish I was just getting strong and just getting good my senior year. I kind of always needed one more year. Probably why I've stayed involved with wrestling my whole life. What did wrestling give you? That's a leading question. I should probably just ask what impact it had on you. But having wrestled myself, you wrestled longer than I did. But I'd love to hear in your words, what part wrestling has played in your life, aside from the involvement that you had later with Beat the Streets and the Olympics and so on. Yeah, listen, I think it's a sport

Starting point is 00:14:05 that almost like no other sport beats the hell out of you. I mean, it is so tough from cutting weight to going out on the mat by yourself and just getting crushed. And so you learn to pick yourself up after you get crushed and you're like, okay, I got crushed that match. I don't need to get crushed next match.

Starting point is 00:14:22 And I got to work a little harder. And so it's resilience. If anything, the train it builds in people is grit or resilience. When I started Beat the Straits, we, we looked a lot at wrestling and, and it's interesting, 14 of the 44 presidents of the United States had wrestling in their background. There's no other sport. There's no other sport with that many. I mean, Abe Linton used to go from town to town to wrestle for money. Teddy Roosevelt was a wrestler. And often that toughness and grit ends up in leadership. And so you see a lot of wrestlers that move on in life into leadership positions.

Starting point is 00:14:58 So let's talk about the resilience. Because when I polled a number of my friends and asked them what they would most like me to discuss with you, it came back to resilience in some form or another. And in the New Yorker piece, there's one line which we could also dissect if we wanted, but it says, you know, Princeton, like Wall Street, where Novogratz has made at least three fortunes and lost at least two, is full of stories about him. So you have this incredibly powerful and public hero's journey that you've traveled more than once. And I want to read from a speech, this is the commencement speech in Iowa. I don't even know the story of how this came to be, but we can get to that. So as it relates to grit, so you say, as I've gotten older, this is in the middle of the commencement speech, as I've gotten older, I've realized that we have two missions on this earth, to know thyself, or as my wife would say, to sort our shit out and to walk

Starting point is 00:15:52 each other home. Most people I've met don't start this journey until they've really screwed up. They've lost a job, ruined a marriage, abused drugs or alcohol, destroyed friendships, or just can't get out of bed. I started my journey at 33 when I had done most of the above. I was a rising star at Goldman Sachs. I was a partner, a president, a respected man in the Wall Street community. And then I wasn't. Right after I resigned from Goldman, I literally thought my life was over. I had ruined it. Okay. So this is winding its way to a question. So that's a little bit of backstory for people who don't have familiarity. And the question is, when that happened, when you have what you might consider a public experience like that, how do you work your way through it, like psychologically and emotionally? What do you tell yourself? What

Starting point is 00:16:37 helps? I'm very curious to know how you dust yourself off and what you did that helped after something. You know, that was my kind of first public humiliation, failure, you know, personal failure, you know, failed the people I worked with. And it was painful. There's no two ways around it. You know, it was helpful that I had a supportive family that were just letting me be. I went into depression and it took a while to kind of work out. I was I had this narrative that I had ruined my life and I would never get it back. And I remember, you know, there was lots of little pieces of advice first.

Starting point is 00:17:19 I had one lawyer. I was so worried what everyone thought about me. And this lawyer said, dude, do me a favor. Write down on a piece of paper the people that you think will be at your funeral when you die at 80. Worry about what those people think. All those other people, they don't really think about you that much. And that was kind of liberating because as a partner at Goldman Sachs, every partner that had left Goldman Sachs, when you left, you got this beautiful little memo about all you had done. And, you know, it was a, it was a, Goldman's a bit of a cult and there was a very nice way they exited partners. And I just disappeared. You know, I was not spoken about. I was like, so I kept worrying that I was going to run into my ex-partners on the street and be, be so embarrassed. And so first he helped me get over that. Just think about it. But in the long run,

Starting point is 00:18:05 I ended up going up to rehab in Arizona. And, you know, that was a, I kind of got snookered in a little bit. I had this therapist. I'd never had a therapist before. And he said, dude, you talk so much. You got to go somewhere where you can tell your stories and have a safe space. And there's this beautiful holistic place in the middle of Phoenix or Tucson called Sierra Tucson. And I looked on the pamphlets. It looked so nice. And so I went out there and on day one, and I hadn't had a drink or a drug or got any trouble for three, four, five months at the time. But so I flew out there and you check yourself into a mental health facility. And you're like, what the F just went on here? And my first roommate was in the throes

Starting point is 00:18:48 of trying to kick heroin and he was not having a good time of it. And I'm like, how in God's name did I end up at this place? But it was probably my first experience with really digging in and trying to sort out like what are the patterns of my life that led to this and it was kind of traumatic in that you know the thesis that a lot of rehab centers use and addiction specialists use is that there are these deep emotional scars either big t traumas or little t traumas that people have a hard time dealing with and they start using

Starting point is 00:19:21 some substance it might be sex or alcohol or drugs or control of your food to medicate those feelings. And that medication all of a sudden has you end up doing more stupid things and you need more of the medication. And it's this cycle of, and so that if you could get to those core issues, it would really help in your journey. And you're sitting around a circle with people and one guy's father had kicked him in the spleen. He'd lost his spleen when he's 12. And almost all the women that were bulimic or anorexic had suffered incest. And I'm thinking here, I had nice parents. I had a pretty nice... And it was traumatizing not having

Starting point is 00:20:04 the big trauma. And one of my insights was sometimes the little trauma, 10 had a pretty nice, and it was traumatizing not having the big trauma. And, you know, one of my insights was sometimes the little trauma, 10 years, 20 years, 30 years later, can have just as much psychological duress as big trauma. You know, and so one man's pain is no different 10 years later. It's just pain or fear. And so starting the search to find that out was unbelievably helpful. It also really started building an underdeveloped empathy muscle. You know, I remember I met one woman who had been the teacher of the year in Florida for like nine straight years. And she was probably 45 years old and had a relationship, maybe 40 years old, had a relationship with a senior. And it wasn't even sexual, but it was close to sexual.

Starting point is 00:21:01 Got caught, and next thing you know, she was the pariah of the town and got thrown out of teaching, and everyone wanted to shoot her. And as you met her, she was one of the nicest women I had met. And she had a story. She had been abused by her both father and then stepfather and had developed a relationship addiction, which unfortunately then had her having a relationship with a senior in her school. But instead of being angry and wanted to lynch her,

Starting point is 00:21:20 you wanted to hug her. And so that process of trying to understand where people's mistakes came from allowed me to start kind of forgiving myself a little bit. And then since I didn't really get to that holistic place, I realized that maybe this is the trick of how to get started again. I just needed to create a new narrative. And some of the narrative was, I fucked up. I went to try to understand how I fucked up. I just needed to create a new narrative. And some of the narrative was, I fucked up. I went to try to understand how I fucked up. I haven't solved it all, but I'm starting over. And it wasn't until 9-11 happened. I was trying to figure out what to do. And when 9-11 happened,

Starting point is 00:21:57 my brother called me and he was in one of the big buildings right next to the Twin Towers. And he's like, dude, a plane just hit. What am I supposed to do? And I was like, buy euro dollars. And he was like, what the fuck are you talking about? I was like, buy short-dated treasury contracts. And I was like, oh, no, get out of the building. And I was like, okay, my brain's kind of screwed up.

Starting point is 00:22:23 And then I was with my young son, who was like two at the time, and I was looking on the TV, and I was like, we've got to go help. So I went running to run down towards the train center to see what was going on, and he started crying, and I was like, okay, that's not helping. So we ran back and watched it on TV. But my Army side of me wanted to participate, and there was no real room for volunteers. And I felt like I got to go do something. And I realized I hadn't fulfilled kind of my Wall Street journey. And so I literally, it was a 9-11 insight, and I went back to work at Fortress. And luckily, I had a lot of good luck and good, great partners.

Starting point is 00:23:10 You know, five or six years later, we not even six years later, we rang the bell at the stock market. And, you know, we were all billionaires and it was just kind of heady experience because the journey from, you know, walking out of Goldman Sachs and having one of the senior partners say, well, you know, maybe you'll work again sometime. I'm thinking to myself, geez, it wasn't that bad. But really feeling like you might never work again until six years later, you know, feeling like you're on top of the world. You know, it was kind of a heady ride. What did your self-care program, if it existed, look like between rehab and ringing the bell? Did anything change noticeably? any type of habits or routines or anything that helped during that period? So I gave up drinking for 13 months. And I have been a man who loves parties, who loves drinking, who doesn't drink at home, but a very social drinker my whole life. And that was difficult, was trying to be able to be social,

Starting point is 00:24:06 not with a glass of wine or a beer or Jack Daniels in my hand was tough. And I gave up recreational drugs. And, you know, 14 months later, I did something which I think was important. I ran this thing called the Marathon of the Sands, which was six marathons in a row across the Sahara. It was one of the original adventure races, 700 people from 100 countries. And you literally run across the damn desert and it would get to 130 degrees during the day and freeze at night. And about halfway into it, I was like, ah, it's good to be alive. And it just felt like what the eff are you complaining about? You're alive in this beautiful settings and you're meeting new people. And that was really the big trigger. And so staying fit, at that age, I ran a lot, but it was that push

Starting point is 00:24:57 yourself into the uncomfort zone physically even, and realize you're still alive, dude, you're not dead. And so that's, that was right before, you know, the 9-11 happened. That was whatever, the June before September. But that was really the turning point now that you asked the question, where I felt like, okay, I can go back to work. And then at Fortress, you know, there was a lot of stress at work because I felt like, you know, even though I thought I had made some big breakthroughs, there were parts of my story I hadn't sorted out. One is why I carried all this pressure all the time that stopped it from being joyful.

Starting point is 00:25:33 And so I exercised. I still wasn't really into meditation until probably 2006, 2007. So early on, it was just exercise. My core issues were pressure. When I made partner at Goldman Sachs, I felt relieved. I remember Lloyd Blankfein called me up. He said, don't tell my wife it was one of the most joyful days of my life, even more than my wedding. And I'm thinking to myself, I should have said that. Lloyd's going to come yell at me. I didn't feel that. I felt relieved. Like, ah, I got checked that box. And I was thinking back on it. I was like, well, that's kind of shitty that you felt that much pressure to be a partner at Golden Saks. Who the hell really care? You know, I lost most of the big wrestling matches in my life because I felt so much pressure to win that when I knew it was an important match, I wouldn't wrestle as well. And so I got a lot of second places. And I would remember walking out on the mat feeling exhausted beforehand. And it took me a while. Matter of fact, I remember the moment where I had my first insight.

Starting point is 00:26:32 I had the year before I had been at this investor conference called Lyford Key. And Byron Ween used to run it. He was a legend from Morgan Stanley. And this was the first legendary investor conference. You had to be a legend to be there and you had to share ideas. And I got invited in 2006, probably, maybe 2005. And it was such an honor to be there. I was one of the young guys. And you had to give your three stories, stocks, or ideas. And it came to me and the guy before me had used one of mine and i just panicked i literally was like uh uh and i'm sweating and it was one of the most miserable five minutes of my life so much so the guy next to me was like dude that wasn't that bad but i've got a plane

Starting point is 00:27:18 leaving soon if you want to go and i remember feeling all this stress about and i was telling my wife i was like i don't this is so much stress i'm not having fun i should just do something else in my life and she was like uh dude you hired all these people uh you just hired one of your best friends and you left his firm to work for you like like sort it out and you know as luck would happen, I have this life where I've stolen mentorship or found it or, you know, been gifted it, you know, in strange places. And I was, one of my investors suggested I have lunch with Uhud Barak, who had been the prime minister of Israel and one of their great generals. And he allegedly had the highest IQ in the Israeli army. And I was sitting with him and he was a charming charming guy later became a friend and he looked at me he said no regrets

Starting point is 00:28:10 i think i figured you out you know you're not very smart i was like thank you he said but you're lucky you're lucky and then he said don't worry about it you know lewis bacon who is one of the macro legends you know one of the best investors of all time. And Bruce Kovner, they remind me a little. They think they're smart, but they're mostly lucky. And I'm looking at him and then he gave me a quote in French. Of course, I don't speak French. And I was like, translate.

Starting point is 00:28:38 You know, I'm not so smart. And it was from Napoleon. I don't hire smart generals. I hire lucky generals. And it was about intuition. And that his, Napoleon's thought was these generals know where to be on the battlefield and they can pattern recognize the thing. They have a certain intuition and we don't have a word for it, therefore we call it luck. And the moment he said that, the way my brain functioned as an investor, the way I operated in life, it clicked.

Starting point is 00:29:06 I was like, that's what I do. I have pattern. Like, I'm actually. And I realized I didn't need, once I knew what I needed to make investments, to make decisions, I didn't need to fulfill what you think I needed. Right? I remember being so worried when I was at Life for Key that someone was going to ask me who the finance minister of Russia was because I was telling him I owned all these Russian rubles and I forgot the guy's name. Well, I didn't really need to know the guy's name for my investment confidence. Other people might.

Starting point is 00:29:35 And that was liberating. And from the moment that happened, I could tell the story of how I made investment decisions and had so much more confidence. My hedge fund went from $300 million to $ 2 billion in six months. The returns went up. But most importantly, the joy showed up. It was more fun. And the confidence came. I was like, I know I can always, if I need to, sit in front of the screen and sort out markets and make money from it. And so, you know, one of the great breakthroughs, literally, was from this guy who, you know, was a famous Jewish general, Israeli general. And I don't know, I seem to have gotten again and again in your life. And I'd be very curious to know, let's just say in that six-month period where you go vertical, basically, in assets under management, how have you learned, if you have, to discern intuition and pattern recognition

Starting point is 00:30:39 from, say, overconfidence, right? Or irrational confidence in a position or a trade or something like that. How have you learned to wield and discern what is what? Yeah, it's a great question. And listen, the world's best speculators or macro traders have two things in common. They have this pattern recognition intuition. I put that in one bucket.

Starting point is 00:31:05 And then they have discipline. And I said the three things. And then they have an unbelievable competitive spirit. And, you know, I look at guys like Stan Druckenmiller and Paul Jones and Louis Bacon. And to be honest, they're just they've done better than I have. And it wasn't because because I spoke to him enough to understand of their understanding of markets or intuition. Their discipline was just better, and it was – and I was like, why are they so much more disciplined than I? I think partly they're just more disciplined than I, but they're more competitive.

Starting point is 00:31:37 They just cared more. It was interesting. I couldn't tell if that was in life a strength or a weakness but there you watch that michael jordan documentary and the one thing that every single person who watches it comes out as he cared so he was the most competitive man i think i've ever seen in anything michael jordan you know the great speculators are very competitive like that and and shockingly i'm just not as competitive uh and listen i've done spec i've done very well by almost any standard, but not in the legend standard. You know, I know who the legends are because I've been around them.

Starting point is 00:32:11 And so I think about that a lot, and I'm trying to figure out, you know, that's not all terrible. Like, you'd like some more discipline. And I think it has allowed me to have a more diverse life than some of my peers. But I think about that. But that's how you, the only way you end up trusting your intuition to get to your question is to have some set of rules that you manage your risk by, your life by, because you're still anxious, right? We're learning to trust ourselves. So I think I'm right, right? It's this business that I think, not that I know. You really think, like this lines up, I'm right. It's this business that I think, not that I know. You really think like this lines up. I'm almost positive Bitcoin is going to go up right now. But if it doesn't, you've got to need a circuit breaker. And so that's a series of rules that you manage your portfolio by, manage your life by in lots of ways.

Starting point is 00:33:10 And that's where discipline really helps. And that's where I've often let myself down a little bit. And that's sometimes just trying to do too many things. Sometimes, you know, just not being tough enough on myself. But that's the challenge of anyone who goes into my business. It's really hard to learn that you're actually good at it because it's not a skill that, how do you say, I've got good intuition, right? It takes a long time for you to trust yourself. And then how do you hold steady to really having your portfolio constantly being a collection of your guesses.

Starting point is 00:33:46 It sounds like it should be a tautology, right? I'm bullish, therefore I'm long. But I would tell you that 19 out of 20 people that try to be traders, that sentence isn't consistent with them 90% of the time. Could you elaborate on that? Yeah. Yeah. So someone is bullish.

Starting point is 00:34:03 They say, I think the stock market's going up, but I'm not going to buy it yet. I think the stock market's going up, but I'm going to buy a little bit, but I'm going to sell calls on it. So then it goes up and they barely make any money. Stan Druckenmutter, when you hear him on TV, if he says, I think the market's going up, you can better believe he's long. And just for people who are not in the investing world, so long, meaning he is, I suppose, in the simplest iteration, buying things with the expectation they will appreciate the value. Yeah. Apologies. I forget the audience. And so that's the battle of being a speculator, but that translates into the battle of being life. And, you know, listen, even, I guess, if you're investing in movies, you have some algorithm in your head

Starting point is 00:34:49 or a written algorithm of what you think makes for a good bet. And so you invest, you invest, you invest. At one point, right, your track record, your wins versus losses are going to tell you, are you good at this this but really taking the time to understand what that algorithm is like how do you make decisions in investing in movies or investing in small businesses right if you're a venture capitalist or investing in markets and so one of my insights was always like any one of those processes you take an information you process it through an algorithm, and you have to then manage it, like manage the risk of it somehow. And so I use that process in lots of

Starting point is 00:35:31 things. And not every job, certainly not every investing job, is based on intuition. Quite frankly, very few are, because the more intuition-based the investing is, the more anxiety there is. If you're an arbitrageur, you buy something for $8 on one market and sell it for $10 on another, there's not a whole lot of risk. And so then it's just being commercial. And so I always tell people that you've got to try to understand yourself and figure out where your DNA, where your personality type fits into the space. Let's come back to one of the names you mentioned, and that's Paul Jones or Paul Tudor Jones, who has hit the news quite widely in the last few weeks because of his extensive discussion of Bitcoin, specifically in one of his memos. I'm not sure if he refers to

Starting point is 00:36:26 them as memos or letters or something else. But nonetheless, this has made the rounds that Paul Tudor Jones has de-risked Bitcoin for institutional investors. Here comes Wall Street, etc. You've referred to yourself as the Forrest Gump of Bitcoin. So I'll give you two questions, and you can choose which one you want to tackle first. So one is, why are you the Forrest Gump of Bitcoin? And then the second is, how are you different from Paul Tudor Jones? I know you know each other quite well. How are you most different or most similar? So that's a great question. So the Forrest Gump of Bitcoin was kind of a shtick. I was the first institutional grade investor that started talking about it, you know, for better or worse.

Starting point is 00:37:08 You know, back when it was trading around 100, I was on. And it was I promised my partners, quite frankly, that we wouldn't talk about crypto because Fortress was a real asset company and we weren't going to talk about these digital assets. And I was at some conference. I didn't know the press was there. I made some witty comments about Bitcoin. And the next day I was on the cover of the Financial Times. And then I got sucked into Bitcoin because everyone would call me and ask me what I thought. And at that point, I didn't really understand how it worked that much. I understood that it was a thing that was going to go higher. But partly by being forced to publicly speak about it, I got asked to speak at the Oxford Union

Starting point is 00:37:47 and I really had to study and try to understand how the damn thing worked. And so I became kind of an unofficial spokesperson or one of the unofficial spokesperson for it. Paul and I are as close in terms of what we have done. We ran similar businesses. His was bigger and a little bit better. He's been a role model in philanthropy, in spirit. If I had an older brother, 10 years from a different, and my parents didn't tell me about it, it would be Paul. And so it's fun to see him getting involved in Bitcoin for me personally.

Starting point is 00:38:23 It's important because I said I was pretty damn good, but Paul is one of those legends. You know, they're literally, honestly, three or four guys of his stature in the whole macro space in the last 30 years. And so for him to get involved, it basically says this is a real macro instrument. You's no more debate on, is Bitcoin, it might not always go up, it might go up and down. You might not put it in your portfolio, but there's no shame in being involved with the space anymore. And that's a big deal because for stores of value, and Bitcoin is really becoming a store of value, they only become stores of value when people believe they are. And so it's a belief system.

Starting point is 00:39:08 Bitcoin is not just the code. It's really the social construct. I say it's this. You say it's this. Therefore, it is this. And so we already have Jack Dorsey, whose Twitter handle says Bitcoin, and Abby Johnson from Fidelity and Pete Brigger from Fortress that all bought it personally or

Starting point is 00:39:25 had their businesses involved with it. Wences Casares and Mickey Melker. I mean, these are kind of legends in their space. Paul's the first kind of legend in the hedge fund space that didn't just buy it personally, but he bought it in his fund. And so it opens up a whole new avenue of potential participants in that community, which I think is really, really significant. If we had to put on the hat of Forecaster or Nostradamus, what do you predict, if you're comfortable going for it, with Bitcoin, cryptocurrency, etc., in the next, let's just call it 12 months? It's currently May 18th when we record this, 2020. Mark it down and write it down.

Starting point is 00:40:08 We're trading roughly $9,600 per Bitcoin right now. I think we'll take out $10,000 soon and end the year closer to $20,000, the old highs. Once these store of values start building momentum, there's not a lot of supply. We've had this thing called the halvening where there's half the supply being mined than there was even a week ago. But mostly, the story is finally catching broader adoption. And it's not just hedge funds that are going to be able to buy it. You're going to see wealth managers start selling it to their clients through products. We have a Bitcoin fund that's targeted to the 50 to 80-year-olds in America that make their investment decisions through TD Ameritrade or Charles Schwab or Goldman Sachs, our registered investment advisors. Bitcoin has been a young man's game.

Starting point is 00:41:01 It's been Gen Z and the millennials. It's been bought on Coinbase app or Square or Robinhood. Those things aren't going away. Quite frankly, there are going to be more of them, right? Facebook's Calibra is going to allow you to buy Bitcoin, and that'll be 2,000, 3,000 people using that wallet. And so there are so many more avenues of access. I always tell people if it was easy to buy, the price would be far higher already. Bitcoin's been hard to buy, and a year from far higher already. Bitcoin's been hard to buy.

Starting point is 00:41:27 And a year from now, it's going to be that much easier. So I'm really bullish. And listen, I don't have – I'm always careful when I say really because these things are recorded and you come back later and people are like, damn, that guy was stupid. It doesn't work. And so you're cautious to be that bullish publicly, but I haven't seen things line up as well in a long time. Let's rewind the clock as promised. It feels like probably an hour or so ago, maybe a little bit less to family. And I know this is a little bit like memento in how nonlinear this is, but you grew up in a big family. It seems like with no shortage of strong personalities. Could you describe for

Starting point is 00:42:13 folks what your family was like, what your childhood was like growing up? Sure. So for people my age that used to watch John Hughes movies like Pretty in Pink and Sixteen Candles, that was pretty much the neighborhood I grew up in. We were straight up the middle, suburban, middle class, all American family. My dad was an army officer, so he was a major. He went to Vietnam twice when I was very young, a major, then a lieutenant colonel for my growing up years. I went to public high school and we had, you know, seven of us. Seven of us in a house that had one and a half, well, two bathrooms, one for my parents and one for the rest of us. And, you know, we fought over the brush and the blow dryer because back then you blew dry your hair if you were a cool dude.

Starting point is 00:43:00 My mother didn't go to college. She got married when she was 18 to my dad. They just had their 60th anniversary or 19. She got married, uh, 60th anniversary and she was beautiful. And I think she had this fascination with the Kennedys because she named my sister Jackie and my brother Bobby and we've got a John John. And, um, you know, my dad was a handsome football player, a football star at West Point. And my mother thought we should, you know, we should be them.

Starting point is 00:43:31 Why not us? And so she was the one that kind of drove the pressure to succeed, not in a really harsh way, just in a like, you know, we used to complain about kids. And she says, well, if that girl would jump off a bridge, would you jump off a bridge? The same old saying that most suburban parents use. But there was a pressure my mom put of excellence that we could rise. And in the background, my father had been the lineman of the year in college football. He never has once mentioned a thing. He's the least braggadocio guy, very humble, but he didn't have to say much because he had my mom that would say it all for him. But we had this sense of excellence from my dad that he had been this star football player.

Starting point is 00:44:08 We also had a sense of service. My mom used to always say, you're given so much, you've got to give back. And I look back, I'm like, we had seven kids fighting over one brush. But we were – it was a Catholic family. There was lots of love involved. We come from a big extended family as well. And so we felt special. You know, it was special to be an overgrads.

Starting point is 00:44:29 My mother made it special to be an overgrads. And so we ran for office at the student elections. And, you know, it didn't always win, actually. It lost most of the time. But, like, even the confidence to be the third grader running for class president came from, I think, parents that made you feel special. My dad was tough. He was a military guy, and he grew up in an Austrian immigrant family. And so we got whacked around a lot, my brother and I.

Starting point is 00:44:56 We always complained that by the time my little brothers and sisters, who were – there was a seven-year gap between the top three and the bottom four came around. My parents were soft. But I look back at this big family all the time, and the one thing that I'm sure that came out of it was you're willing to take more risk in life when you know if you screw up, there's people that are going to catch you. There's brothers and sisters that will love you anyway. And they also, on the flip side, when you're doing really well, they don't buy that shtick either.

Starting point is 00:45:31 They're appreciative of it. They applaud. But you're not more special just because you made a bunch of money or got this award. And so it's humbling. It's safety on the downside, and it's humbling on the upside. Um, and so that's, listen, we've, we've all drafted off of each other. You know, I always laugh that it's, you know, it's a pain in the ass to have such a famous sister because wherever I go, everyone knows my sister because she's always trying to save

Starting point is 00:45:57 the world. Uh, but it's really, you should, you should say a few words about that because people may not recognize Jackie equals Jacqueline, Jacqueline Novogratz. Just a few words about your, can you say a few words about that because people may not recognize Jackie equals Jacqueline Novogratz. Just a few words about her. Can you say a few words about her? My sister is one of the unique souls that from age five decided she wanted to change the world. And so she was like a brownie, then a Girl Scout, and she started this organization, the Acumen Fund, which was really kind of the father of venture philanthropy or impact investing and has spent her whole life trying to figure out how to change systems,

Starting point is 00:46:33 how to invest in the poorest of the citizens on this planet to build permanent structures around housing and water and education and really to change the conversation, to start with the conversation of dignity. And, you know, she developed a huge following in that development world and in the conference world. She's got, you know, branches all over the world now of young acolytes that want to be like her. And so, you know, it's interesting what I noticed about her, and I noticed about some other leaders, but not many, is that she's never not known true north. And most people, and myself included, I try to be a pretty good guy and I do a lot of good stuff, but my compass gets out of kilter plenty of times. It gets out of kilter

Starting point is 00:47:23 for my own desires. It feels pretty good. It gets out of kilter plenty of times. Gets out of kilter for my own desires. It feels pretty good. Gets out of kilter because I get excited about something. I lose my own focus. You know, I put my sister in a special bucket. You know, Brian Stevenson is one of my heroes from the Equal Justice Initiative, who's really one of our great civil rights leaders. And you meet with him and you're like, after just a few hours with him, you're like, he's probably never not known true North. And so, you know, that's, listen,

Starting point is 00:47:52 it's inspiring to be around those people. It's sometimes humbling and frustrating because you're like, oh, but it's good to have morale because it grounds you a little bit. Just a quick thanks to one of our sponsors, and we'll be right back to the show. This episode is brought to you by Magic Spoon, a brand new cereal that is low carb, high protein, and zero sugar. I just had a bowl of their cocoa flavor. That's my favorite, an hour ago.

Starting point is 00:48:17 It tastes just like your favorite cereal that you remember from childhood, but it's actually good for you. Each serving has 11 grams of protein, 3 grams of net carbs, 0 grams of sugar, and only 110 calories. And their flavors are delicious. It comes in your favorite traditional cereal flavors you might remember, like cocoa, frosted, and blueberry. They also have limited edition flavors like honey nut and peanut butter. My favorites are cocoa and peanut butter. I'll usually have them with really creamy whole milk or some type of unsweetened coconut milk, something like that. Another fun fact, one of this podcast's most popular guests, Dr. Peter Attia, routinely crushes six to seven servings at a time with no glycemic

Starting point is 00:48:57 response. That means practically no blood sugar response, which is pretty miraculous. He likes this product so much that he invested in Magic Spoon. Listeners of this podcast get free shipping and a 100% happiness guarantee at magicspoon.com slash Tim. So if you don't love it, you get a full refund, no questions asked. Again, that's magicspoon.com slash Tim and use code Tim. Pretty easy to remember. magicspoon.com slash Tim and use code Tim. Check it out. See, you spoke earlier of feeling immense pressure, say going out on the wrestling mat or at the investment conference coming up to your five minutes and so on. You have a large family, many high achievers in that family. Do you think any part of that comes from a pressure or expectation to succeed that was made explicit or implicitly

Starting point is 00:49:57 clear from your parents? And I know that's a very binary question, but I'm just curious. I mean, it's a big yes. And I don't know if it was, I think it was more implicitly. My mother was very good at making us all feel like we were the special one. And for whatever reason, from kindergarten on, my teachers treated me better than everybody else, my parents. And so I literally remember if I didn't get an A in first grade on the way home, taking the paper, crumpling up and throwing it in the sewer. And I'm thinking to myself, now that I've had young kids, it's incomprehensible for me to think that a five or six or seven-year-old would throw a paper away if he didn't get an A. Who thinks like that? So somehow at that very young age,

Starting point is 00:50:42 I said in that article with Gary Steiger, when I was at rehab, I had to come blame my mother because everyone's got to blame their parents. I said, you put so much pressure on me because she used to tell everybody because I talked all the time that I was going to be a senator. My mother was very quick on her feet and said, yeah, he did all right. I should have said he should have been the president. You know, your little kid, you pick up cues that my parents never meant to put pressure on their kids. I don't think in that kind of way. But you pick up cues and they become your operating system. And I operated with that system. I still have a little bit of in me for so long a period of time that I needed to be perfect. So I remember cheating. Like, and then I was like, why am I cheating on a high school test when I'm the smartest guy in the goddamn class? Because I didn't know the answer.

Starting point is 00:51:32 I'm not going to get an A. Like, that pressure was irrational. And, of course, my freaking dad never told a lie in his life. He's another choir boy. They're not going to condone cheating on a high school test. My mother wouldn't condone it. And so it's interesting. When I talked earlier about big T trauma and little t trauma, the little t trauma of picking up some story for me was just as powerful as, unfortunately, for other people having gotten beaten up. And so that I think, again, I have a loving mom and dad. And interesting about them is they've gotten nicer and nicer with each year.

Starting point is 00:52:11 So my dad's 83, my mom's 79. And you literally, it's just fun to see parents grow and change. And so I've got nothing but great things to say. But I do think, and I said that in that speech I wrote, that everyone's journey is to kind of figure out their parental issues and how their parents impacted them. And then to understand it, to let it go and love their parents. And it took me a long time to figure out where that pressure came from. And again, I don't blame anybody for it, but it certainly was there. So let's come back to that speech, because this might be related to what I'm about to ask. So you have, I would not call it a small tattoo on your forearm. Can you describe this tattoo for people, please?

Starting point is 00:53:01 I have a forearm-length jaguar slash puma. I call it a puma, but you might think of it as a jaguar. Big black puma tattoo that goes from basically the whole length of my right forearm that I got literally. My brother had given me a tattoo for Christmas a few years earlier. And after my first ayahuasca experience where i literally on day three transformed into a puma uh i was gonna call a black panther but the movie had already come out so i was like i'm a puma i'm not a panther and growled and crawled around uh the floor two nights in a row uh and was so moved by the whole beauty of that experience i decided i would get a small tattoo. And I walked into this famous tattoo parlor called Smith Street Tattoos, where my brother had, you know, got me the appointment

Starting point is 00:53:50 and set it up. And I told the guy I would get this tattoo, and I was going to get a small one on my shoulder. And the guy looked at me, and he was like, dude, with all respect, you're old as fuck. And if you're going to get a tattoo, get a tattoo that people can see and i was like that was such a genius i was like i guess a genius it's just you know when you hear the truth so i put my forearm down there and i walked home with this giant eight inch tattoo of a of a jaguar i put him on my on my right arm and i love it i have to say i love It gives me power. I realize your forearms don't get flabby. It's like the one part of your body that stays fit. And so... You mentioned ayahuasca in this experience, minus the puma, in this commencement address.

Starting point is 00:54:37 Why did you decide to include that? You know, it was my first commencement address, and I worked hard on it. And the thesis was know thyself. And there's so many ways one can learn about themselves. And that journey that I went on in Costa Rica was unbelievably powerful. And I ended up getting different things from it that I thought I would. But afterwards, I was trying to convince my sister and brother-in-law that they should do this. And I really then started thinking, barring people that have bipolar or mental health issues, would an ayahuasca trip not benefit someone? As much as it might be tough and scary, like, should we put every politician in the world through that experience before they're allowed to serve? And I kept coming up with yes.

Starting point is 00:55:29 And so I was like, if you're a young college student and you're physically okay to do this, is there anything bad? And I couldn't come up with it. And so I thought, you know, I'll talk about it publicly. And part of this was in a chapter or part of the speech about destigmatizing mental health. Like, I think, you know, one of the things we need to do as a society is to allow that people have mental health issues, that depression is real and that, you know, people have shit to work through and that we should help them work through that. And, you know, both psilocybin and ayahuasca are, I just think, two things in that toolkit, powerful things in that toolkit of how one can process trauma. One can learn about themselves. One can dig into places that they haven't understood before. And, you know, it's funny. Once you see it, you can't unsee it yeah that's true and so i have a sister to tell her story but i will that went down after

Starting point is 00:56:31 i did the same same place and i had was laughing about being a puma and she's like god damn it next thing you know her her hands were becoming kind of furry and like a cat. And she hates cats. She's like, I hate cats. I can't believe I want to become a cat. And next thing you know, she climbed up this ladder and she's looking out and it brought her back to this high school, not high school, I'm sorry, like little school theater where she was the Cheshire Cat looking out on the audience. And she told me this story. I remembered I was the older brother sitting there. She was probably five or six at the time. And she was the Cheshire Cat looking out on the audience. And she told me this story. I remember I was the older brother sitting there. She was probably five or six at the time. And she was the cutest kid in the play. Of course, she was my sister.

Starting point is 00:57:12 And after the play, I remember telling her, oh, she stole the show. She stole the show. She was so great. I mean, she probably had like three lines, but she was the Cheshire Cat in Alice in Wonderland. And for her, coming off what she saw on this ayahuasca trip was all the other girls being mean to her because she was getting all the attention. And interestingly enough, her whole life, she'd never put her head up again. She always has been unbelievably supportive of everyone. She is literally our support system and our family. And as she came out of that trip and she was like,

Starting point is 00:57:45 I didn't put my head up because of those six-year-old girls that I didn't remember. And so, like, again, once you see it, you know, now she's got her own podcast and she's putting her head up. And so I find that's a sweet story to tell because it's not so, you know, damningly personal. But there's so many opportunities like that that I figured, you know, damningly personal. But there's so many opportunities like that, that I figured, you know, it's time at least to broaden the conversation. Now, listen, University of Iowa to the Teachers College might not have been the exact right place, but it was where I was invited

Starting point is 00:58:17 to speak. So. I'd love to highlight two lines from that speech. And one is in the middle of a paragraph. So, I'll just highlight verbally one portion of it, really. But it's discussing your time at that holistic health center in the desert of Arizona, 28-day rehab center. And it says, the 28 days didn't fix me or change me. No, it just gave me a start at understanding who I was, what forces controlled me. And then here's the part that really jumped out at me. What stories in my life were so strong I didn't even realize they were stories, right? So, now I'm zooming out because many of the stories we have or narratives about ourselves and the world may not be stories we're aware are stories, they're just our reality. And they're often stories that were given to us inadvertently or purposefully, and we're not aware that we've absorbed them. So my question

Starting point is 00:59:11 relates to the next line, and that is coming back to the ayahuasca. The lesson I learned in my last ceremony was that this medicine, this process was meeting me where I was, and that was gentleness. You must start by being gentle to yourself. So like you, I think you've competed at a much higher level in many, many arenas, but I've always been very, very, very, very competitive. And to the extent where being second place has often for me been worse than being 15th place, right? It's kind of like second place is first loser type mentality. So, I've been very mean to myself in the same way that those six-year-old girls were to your sister, right? And so, that has been kind of internalized.

Starting point is 00:59:58 And I'd be curious to know what has helped you to be gentle or more gentle with yourself? Gentler, I guess would be one of the two. Yeah, I think as a writer, I would have this English figured out. But what has helped when a lot of people would view competitiveness as your superpower, right? And it's such a driver. How have you learned to be better at that? Well, it's a work in progress. I remember before going down there, I'm an easygoing guy, and I don't lose my temper a lot. So I think I'm a nice boss. And I don't yell at people that often. And I told my lawyer, who's been with me for 10 years, I said, yeah, of course, I'm an easy boss. And she's like, dude, you're absolutely not a fucking easy boss. You're such a tough boss. She said, you're nice,

Starting point is 01:00:50 but you're tough. And I was like, what do you mean? She said, you never give a compliment. You're like, oh, that's pretty good, but we're having the best party. You're like, but if we only, and they're like, you know how disheartening that is. I was like, oh, it made me feel terrible. And it was when I was on that ayahuasca thing I realized you can't be nice to people until you're nice to yourself. And I never thought I was tough on myself. Why? Because I let myself get away with, you know, the stuff that sent me to rehab or drinking or drugs or, you know, breaking the rules. I've been a rule breaker my whole life.

Starting point is 01:01:18 And so I thought that's, well, if you can do that, you're not really being tough on yourself. Those are two different subject matters. I did the rest of that stuff because I was so tough on myself. And that was the interesting part of it. You should have, only. And that internal angst, I think some of it was just getting older. And I think with success, there's a little less pressure. And some of it is now just trying to have awareness of it and say, it's not that important. But, you know, if I think I pulled my employees, they'd say you changed a little, but not a lot yet. And so, you know, it's certainly a work in progress. I do notice it with my father.

Starting point is 01:01:59 You know, my father was this great looking guy, football star, spent his time in the army, always was nice to people, went to Vietnam twice. And in lots of ways, you know, became a colonel but didn't make general. And I remember when he didn't make general, it was painful in our family because, of course, you want your dad to succeed. And in the military, it's like not making partner at Goldman Sachs. There's a hierarchy and you either get it or you don't and and it was painful for my parents for my mother who had done all the and there was some scandal behind it and there's always some back story um but I remember thinking 20 years later like looking at my father at 70 now he's 83 and thinking do you think he gives a rat's ass that he didn't make general anymore like his priorities had shifted he was so happy to be around his

Starting point is 01:02:51 family the work he was doing at this church and and how we were all doing that that ego piece he just let it go and you know and i i didn't act like he let it go. He let it go. And so I think there's something about aging gracefully where you let that shit go because it just doesn't really matter nearly as much as you think it does at the time. And I think seeing that has helped. Act like dad, don't act like a jackass is kind of my internal koan mantra but for me it's a work in progress like you it's kind of built into the DNA of like wanting to do things right

Starting point is 01:03:33 when I throw a party I want it to be a great party and you know my poor assistants once bought a tent that was too big and I literally thought I was going to like it was like I died a thousand deaths I saw tent. I knew we had 200 people coming to the party. We had a tent big enough for 300 and all the energy would be diffuse. Have fun in the big tent, Jackass. But I'm trying to learn that. But it's, that's a process.

Starting point is 01:03:59 What advice do you think your older self, 10, 20 years older, would give to your current self? You know, to say you're okay. Like, you're doing fine. You're doing great. I have a shrink. My wife calls him the greatest enabler of all time. Because his whole mission is to say, that's great. I'll, like, make some confession.

Starting point is 01:04:22 He's like, oh, that's great. And I was like, like well i'm not gonna get in trouble uh that's just to accept yourself i have a funny story there's a a friend he's he's become he's not really a friend of mine i've only met him three times but i had a great time with him every time i met him but he's a dear friend of paul jones a guy by the name of Pete Agoscue. And Pete has a famous business where he was like a posture expert. And that was movement. And he had come back from the Vietnam War and healed himself. And then he's literally healed thousands and thousands of people, celebrities, athletes, the Agoscue method it's called. And when you meet him, you go through his process,

Starting point is 01:05:02 he gives you a menu of exercises, how to get your back. And his philosophy is if your body's in alignment, you'll be in alignment. Your emotions will be in alignment. And so I went to meet him the first time. It was supposed to be an hour meeting, and we spent like three hours talking. And I'm waiting for my menu. What's my menu? My menu.

Starting point is 01:05:22 At the very end, he said, no, no, no. You need to strip down naked, stand in front of your mirror every day for 15 minutes and just accept yourself. I was like, well, that's my fucking menu. So I remember getting back and calling Paul Jones, and he laughed hysterically. You didn't even get a menu. And so I think that's my 20 years from now, hopefully my telling, just accept yourself. You're good. And that was a little bit, that was a little bit the tattoo.

Starting point is 01:05:48 I was like, I am a fucking Puma. And so put it on your arm and remember, like, that's part of who you are. So I have to ask, did you try the 15 minutes in front of the mirror? I did it twice. I got embarrassed by my body type. I literally didn't have the patience. I did try it a few times, but I didn't, I times, but I didn't follow through like you needed me to. Well, a work in progress as we all are, like you said. Let's chat about criminal justice reform.

Starting point is 01:06:13 I know this is incredibly important to you. I don't know the Genesis story. I don't know how this became important to you. So I'd love to hear you describe how that came to be. You know, it's funny. I guess if I'm metaphysical about it, I go back and I think, well, my parents talking, I remember my mother bringing me to Head Start when I was four or five years old and this idea of philanthropy being part of our family. But the more practical side was, I saw Bryan Stevenson speak once and was wildly impressed at Ted. He gave his kind of seminal speech. And so that was in the back of my head. And then my daughter, Anna, got a job at a thing called the Bronx Defenders where she was a 20-year-old summer intern.

Starting point is 01:07:00 And she was trouncing around the Bronx collecting evidence for her lawyer's cases. And I'm like, you're actually the evidence collector. Like, how do you know? Like she's getting, you know, video from bodegas. And I'm like, you're the defense team. And I was like, and so I was A, impressed with the work she did. And I was like, wow, that's what public defense is. And, you know, I had made this movie with Nate Parker. And when I say made, I didn't do anything other than invest. Nate Parker was a good friend of mine. He was a wrestler. And he had this dream of making this movie called Birth of a Nation. And literally after 15 Jack Daniels, he convinced me to invest because I really didn't want to invest in an independent movie just thinking I'd lose all my money.

Starting point is 01:07:48 But Nate was very persuasive, and he's a winner, and so I bet on him. And it won every award at Sundance, and it sold for more money than any independent film ever to this day still. We sold for $18 million, an independent movie. And it's a painful and beautiful movie, but there's a big lynching scene in it. And I saw Bryan Stevenson, who was building a lynching museum. And so I said, geez, I'm gonna take my profits

Starting point is 01:08:18 or some of my profits and give them to Bryan. And, but I said, Bryan, you gotta come and have breakfast at my house. And so he came and of course, my daughter hijacked the breakfast, but we had breakfast and really heard his story personally and asked a bunch of questions at Cradle Justice System. And I just started getting angry. And then there was a thing called Audacious. The year cryptocurrency went much higher, I made a whole lot of money on this thing called ethereum

Starting point is 01:08:45 and you know to some of you it felt like wampum you bought wampum it went way up in price and i sold it and and it was a you know kind of a breathtaking amount of money and i wanted to do something fun for myself and i wanted to so i didn't feel so guilty and because i kind of thought it would have been karmic justice give an an equal amount to something else. So I bought a G550. I never had a jet, which was extreme. But I decided to take this similar amount of money, and I heard this story about cash bail, unaffordable cash bail that Robin Steinberg told. And it's a really simple story. There are half a million people that go to bed every night in jail cells solely because they can't afford to pay bail.

Starting point is 01:09:27 And the average bail we pay is somewhere close to $1,800. Most people in America don't have $500. Most people who are getting arrested don't have access to $500, so they stay in jail. They're seven times more likely to plead guilty if they're in jail than if they're not in jail. When we bail them out, 50% of the time, the DA drops the charges. When you're in jail, 40% of all prison death and prison rape happens the first 14 days you're there. And it has horrific long-term consequences for the person and the city.

Starting point is 01:10:00 And it just felt so stupidly unjust that I impulsively said, I will donate a bunch of money and share this thing, the bail project. And then I woke up and I was like, well, the bail project is going to be the biggest bail fund by a factor of 30 or more in the country. You better understand the criminal justice landscape. And so I hired a guy named Billy Watterson, who's been an A plus and a small team. And we started mapping out having activists come in, formerly incarcerated people come in, visiting prisons and jails. And with every rock we looked under, you just get more and more pissed off. You get infuriated. It is a system of stupidity. It is a system of spite and meanness. There is nothing rehabilitative at all. It's racially oppressive. It's literally

Starting point is 01:10:53 like, let's figure out how we can strip people of their dignity. Oh, let's make them shit in public. That's a very nice, you know, it's like, it's the whole system is just bizarre. And it doesn't have to be that way. We participate on a trip where we took 35 people to Norway and to Germany. And you look at the German prisons and you would give them a 95 out of 100. And you'd give Norway a 99 out of 100. And we're not a 60 out of 100. We're like a 14.

Starting point is 01:11:21 Like we're that bad. And so it just got me angry. You know, fairness had always been a thing in my life. I think growing up middle class, you thought it was not fair that rich kids had a, you know, better start than I did. And, you know, you talk about not fair middle class to rich kids. The prison system is just absolutely unfair. And it, you know, it preys on communities that are already in duress. I think about women in prison. How about this statistic?

Starting point is 01:11:49 Ninety-five percent of women in prison have been raped. So we're taking people that have been traumatized and putting them into a trauma machine. Like, who in the fuck thinks that's a good idea? And so, anyway, I get angry thinking about it. But so, we've gotten involved. I think we're, you know, I'm on the board of this thing called the Reform Alliance, which has been fun because we're doing great work around probation and parole. And, you know, that's Jay-Z and Meek Mill and Robert Kraft. And we have, you know, participated and funded or partially funded probably 15, 20 different organizations.

Starting point is 01:12:25 And really, it's been a big part of my life. I still am a novice, to be fair, I'm less than three years in. And so I'm a good enough storyteller that I can tell the story, other people's stories and hear them. But we need a complete overhaul. And the only optimism I see is that, you know, when I started, even there was like only $100 million of philanthropy coming into the space. And four years later, there's $600 million or more. It feels like the ball's starting to roll downhill. This COVID thing has really shined the light on just how horribly we treat the most vulnerable people. I would tell you, it's interesting. I looked before I came on.

Starting point is 01:13:06 There are 15 countries that have decarcerated by 18%. Italy, Iran of all places, France, right? They're like, okay, shouldn't keep people in prison when they're going to die because of this damn virus. The U.S. is about 2.5%. And so while that's a lot of people, right? And they've all come out of jails, not prisons. So for those who don't know, jail is one year and under and often pretrial and prison is one year and longer. And so we just haven't gotten around to saying, you know, we need to fix this. And we're way off. Our sentences are three times longer than Germany's for this same crime. Just mean.

Starting point is 01:13:48 And for people who would like to learn more about this, are there any starting points you would recommend? Sure. A TED Talk or a website or anything else? You know, Bryan Stevenson's TED Talk is spectacular because it really gives a framework of where this all started, right? It started with slavery, and we've never really dealt with the trauma of slavery. Robin Steinberg gave a TED Talk that's fantastic about bail and the bail project. And Philip Goff, Philip Atiba Goff, did one about policing. And so, like, we're not anti-police, to be fair. We're like, okay, how do you help the police department actually, you know, have data so they can, you know, be fair in how they

Starting point is 01:14:32 police? And so, you know, that's a controversial one because people are like, oh, screw the police. You know, you got to have people all engaged, all parties have to be engaged in trying to say, hey, we need to make a better system. And I do feel some optimism. I mean, even Trump, as much as I dislike Trump and would love him at a cage match, you know, criminal justice, because Jared Kushner's father spent time in jail, criminal justice is one of the few things that the Trump administration has been okay on. Not great, but certainly okay. The First Step Act was a great start, you know, and they've been helpful. And helpful. But again, to put it in perspective, we have 2.3 million people in jail or prison, and having done a whole lot of analysis on this, I people that go to prison every year. It's like a jail every year. It's like a revolving door. They stay in an average of 45 days. Two and a half million of

Starting point is 01:15:30 them are going there just for violating parole, which is bizarre. We should have nobody on parole. And so we have a long way to go. And I fear you pass one or two acts and you declare victory and the numbers never change. And so we're working on trying to get like a scoreboard so the whole country can say, all right, this is where we think we need to get, have people agree to it, and then work to get there. I want to shift gears just a little bit to a few questions I like to ask a lot of my guests. And if any of them are dead ends, we can scrap. But I'm curious to know what, if any, are books that you've given often as gifts to other people? There's one book that I've given 40 copies away probably, and it's called Reminiscence of a Stock Operator. And for anyone who wants to be a trader or an investor, this is the Bible.

Starting point is 01:16:22 It was written in 1932 by a guy who was at that time, maybe the world's greatest speculator. Jesse Livermore is the fictional character. And what's crazy about it is you can read it today in 2020, and it literally is still the Bible. And so every great trader annotates it, tears pages out of it. There used to be a tell when people would come to interview to work, and they'd say, all I care about is trading. I was like, well, tell me two books you've read about trading. Oh, I haven't read any books. And I was like, okay, here's a book.

Starting point is 01:16:56 Go read it and come back when you've read it. But you're not getting a job because you lied to me because you really didn't care that much about training if you've never read a book on it. But that's the book. And, you know, there's an anecdote afterward to it is that, you know, two years after he wrote the book, the guy committed suicide because he just couldn't take the – he lost his fortune yet again. But every rule that you need to – the discipline side of it is all in that book. And so it's – and it's a quick read. You can read it in three hours. I want to ask about, because you mentioned earlier that you run into certain people who seem to have a finely honed true north that they've had since age eight, right?

Starting point is 01:17:37 Someone like your sister or some of the names that you mentioned. When you feel unfocused or overwhelmed, scattered, fill in your adjective, even temporarily, what do you do, you personally? If you're feeling like you've committed to too many things or just not sure how focused your energies are, is there anything you do to refocus? Yeah, I think saying no. For me, saying no has been the hardest thing. You didn't want to disappoint people. It comes from my mother wanting me to be a senator. And so learning how to say no and draw a boundary has been really important to me. And it's hard for me.

Starting point is 01:18:17 I call back three phone calls and finally say no. And so by cutting a couple things out, think helps me and actually the other thing is writing it all on a on a whiteboard so it takes it out of my stress zone and onto the whiteboard and i'm like okay i see it all it might be a fuckload of stuff but at least it's up there on the board and i can put boxes around it i can start attacking it and so i think that's probably the most powerful is literally getting it all out of my head and putting it, and I'm a very visual person. So like, it's different to do it for me, like a whiteboard or a big piece of paper is different than writing notes. Cause I put little boxes and I say, okay, here's my criminal justice stuff I want to work

Starting point is 01:18:59 on. Here's my, and like, what are the stress points? Yeah, Doug McMillan of Walmart uses a whiteboard very similarly. I need to get a whiteboard. I think what this is saying to me, other than my like envelopes and diary of a madman scraps of paper, I think I need something bigger. Yeah, a lot of my whiteboards are metaphoric. They're the back of a piece of paper, but they function the same way. Do you have any quotes that you live your life by or think of often? I mean, are there any that come to mind for you? One of my favorite quotes is from St. Augustine.

Starting point is 01:19:34 It's, Lord, give me chastity and continence, but not just yet. You know, I remember leaving rehab and that was my joke. We had a big circle and everyone's, you know, banging the floor and you had to give a story. And I was like, what? Like, part of that is that tension always between doing what you're supposed to do and you know you're supposed to do and what you want to do. And so I do think I laugh at that quote, but I do hold that tension in my hands. Part of being alive is being impulsive and breaking rules. I take personality tests, and I'm 37 out of 40 as a rule breaker.

Starting point is 01:20:16 And so I have a son that will break a rule. If he doesn't keep off the grass, he keeps off the grass. He doesn't drink because he's not old enough to drink. Every high school kid drinks other than my one son, Nacho, who's the sweetest kid around. And I was thinking to myself, it's just different brain chemistry. Because it's just part of its nature and nurture, but part of its nurturing. But so much of it, I think, is also brain chemistry. Because, like, you know, as brothers and sisters, like, we have a whole family of social and, you know, we didn't pressure the guy to drink a little bit here and there.

Starting point is 01:20:47 But he's like, no. And I'm so impressed at how confident he is with his ability to put up boundaries and just say no. And then be like, Dad, you're going 90 miles an hour and the speed limit's 60. I'm like, oops, sorry. And so, for me, that quote's important because it holds those things in tension. Just a few more questions. This is one on investing, but it's a little broader than financial instruments. It could be.

Starting point is 01:21:13 But what is the best or most worthwhile personal investment you've made? Or just one of your better investments. That could be an investment of money, time, energy, or other resources. Does anything come to mind? It could be a trade. You know, listen, I, you know,. Does anything come to mind? It could be a trade. You know, listen, I, you know, cheeky, I bought Ethereum when it was one and it went to 1300. And I, you know, like I bought Jet, like in lots of other things. But I don't think that really, I, cause that kind of felt a little bit lucky and I was

Starting point is 01:21:37 already rich. I actually think investing in friendships, you know, I, partly I'm a hyper-social guy. And so it came natural to me. But when I think about my life and what gives it joy, it is the circles of friendships I have. My highlight to my life is this party I throw every two to four years, depending on how I'm financially doing, where 300-odd people, 350 people from my universe get together and we play sports and listen to music and drink too much. And it's a three-day event that takes a huge amount of effort to put on. But I feel like most complete in some ways, like this is my exclamation point on

Starting point is 01:22:19 the world and how I want to live. And so for me, it's friendships. They're high school friendships, college friendships, work friendships, friendships, people I meet at conferences, and they're not all, and they need to be invested in. Otherwise, if you don't have new shared experiences, they're just, they go kind of go away. Yeah, well, it comes back to what you mentioned earlier in a way, which was the advice you received of looking at who's at your funeral, right? And worrying about those people and no one else. Well, Mike, this has been extremely fun. Is there anything else you'd like to add? Anything else you'd like to discuss or mention before we wrap up? I think you covered a broad range of my life. I don't want to bore your listeners. I think that was great. I think that was great. I remember meeting you freaking probably 12, 13 years ago when you were an up and comer.

Starting point is 01:23:10 And it's been awesome. And just because you went to Princeton and you wrestled, it took a special interest. But I've been amazed at the following you've built, the adventures you've been on. I still go back to the, I was telling you this, your first book, the testosterone chapter and the orgasm chapter are required reading for everybody. And so I'm just proud to be your friend and love that I got to get on your show and congrats on all the success. Thanks so much, Mike. The four-hour body, the chapters with so many vagina illustrations that it got yanked from Costco.

Starting point is 01:23:46 That's my claim to fame. And it's been nice to get to know you. Adults should give all their teenage boys that chapter, and they will have happier boys and happier girlfriends. Well, Mike, thank you again for taking the time. And to everybody listening, you can find Mike on Twitter at Novogratz. You can learn more about Galaxy Digital, galaxydigital.io. I'll put links to everything in the show notes, all the books, TED Talks, organizations that we've discussed. And until next time, thanks for listening. morsel of fun before the weekend. And Five Bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week. That could include favorite new albums that I've discovered. It could include gizmos and gadgets and all sorts of weird shit that I've somehow dug up in the world of the esoteric as I do. It could include

Starting point is 01:25:01 favorite articles that I've read and that I've shared with my close friends, for instance. And it's very short. It's just a little tiny bite of goodness before you head off for the weekend. So if you want to receive that, check it out. Just go to 4hourworkweek.com. That's 4hourworkweek.com all spelled out. And just drop in your email and you will get the very next one.

Starting point is 01:25:24 And if you sign up, I hope you enjoy it. This episode is brought to you by Element spelled L M N T. What on earth is Element? It is a delicious sugar-free electrolyte drink mix. I've stocked up on boxes and boxes of this. It was one of the first things that I bought when I saw COVID coming down the pike. And I usually use one to two per day. Element is formulated to help anyone with their electrolyte needs and perfectly suited to folks following a keto, low carb or paleo diet.

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The Tim Ferriss Show - #451: Mike Novogratz on Investing, Bitcoin, Ayahuasca, and Running Through The Sahara Desert

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