#432: Michael Weisz on Investing in Alternative Assets

Michael Weisz is co-founder and President of YieldStreet, an investing platform that believes in the power of technology to drive equality and transparency to investing. Previously, Michael was the Vice President at a New York-based credit opportunities hedge fund with $1.2 billion under management. In this conversation, we discuss alternative asset investing, compressed yields, COVID’s impact on specific markets, portfolio construction, side hustles, investor protections, and a Biden presidency. ======================= Want to sell your wonderful internet business? Tiny partners with founders to give them quick, straightforward exits that protect their team and culture. We’ll make an offer within a week, close the deal within a month, and keep your business operating for the long term. Get in touch at http://www.tinycapital.com, and we’ll let you know within a couple of days. ======================= Crypto.com is the only all-in-one platform that allows you to BUY / SELL / STORE / EARN / LOAN / INVEST crypto all from one place. Join over 1 million users currently using the Crypto.com app. Download and earn $50 USD using my code ‘pomp2020’, or use the link https://platinum.crypto.com/r/pomp2020 when you sign up for one of their metal cards today. ======================= Pomp writes a daily letter to over 85,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at https://www.pompletter.com =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Michael Wise is a co-founder and president of YieldStreet, an investing platform that believes in the power of technology to drive equality and transparency to investing. Previously, Michael was the vice president at a New York-based credit opportunities hedge fund with $1.2 billion under management. In this conversation, we discuss alternative asset investing, compressed yields, COVID's impact on specific markets, portfolio construction, side hustles, investor protections, and a Biden presidency. I really enjoyed this

• 0:42Anthony Pompliano?

  conversation with Michael, and I hope you do as well. Before we get into the episode, though, I want to quickly talk about our sponsors. First up is Tiny. Andrew Wilkinson, one of the co-founders of Tiny, has been on the podcast multiple times. I'm a big fan, and I think you will be as well. If you want to sell your wonderful internet business, you should go and talk to the people at Tiny. Tiny partners with founders to give them quick, straightforward exits that protect their team and culture. They'll make an offer within a week, they'll close the deal within a month, and they'll keep your business operating for the long term. The folks at Tiny are founders. They speak the same language, they've been in the same situations. I can't recommend them enough. If you've

• 1:24Anthony Pompliano?

  got a great business and you're looking to sell it, go talk to Tiny. You can get in touch with them at tinycapital.com. Again, tinycapital.com, and they'll let you know within a couple of days what their level of interest is. If you want to learn more, go listen to the episodes I've done with Andrew, and then go to tinycapital.com. Next up is Crypto.com. They're an all-in-one platform that allows you to buy, sell, store, earn, loan, or invest crypto, all from one place. You can join over 1 million users currently using the Crypto.com app. They've got a great URL, Crypto.com, and it's the place where mass adoption is occurring. That all-in-one platform allows you to buy, sell, store, earn, loan,

• 2:10Anthony Pompliano?

  Or invest crypto, all from one single place. So head on over to crypto.com and let me know what you think. Again, crypto.com. You'll probably have dreams about that URL because it's really hard to forget. Crypto.com. Lastly, don't forget that I write a daily letter to over 85,000 investors about business, technology and finance. I break down complex topics into easy to understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. All right, let's get into this episode with Michael. I hope you guys enjoy this one.

• 2:48Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 3:14Anthony Pompliano?

  All right, guys. Bang, bang. I've got Michael here with me. Thank you so much for doing this, sir.

• 3:20Speaker 02

  Thank you for having me.

• 3:21Anthony Pompliano?

  Absolutely. Let's jump right into your background. What did you do before you started the company?

• 3:27Speaker 02

  So my background is mostly in alternative investments and specialty finance. But actually, when I first started out, I really thought I wanted to learn about the real estate market and be a developer. That was like the most exciting thing to me. And I remember talking to my dad about it when I was getting ready to start college. And I said, you know, like, if I want to get into real estate, what should I do? He's like, we got to start at the bottom, clean toilets. And I'm like, okay, that's a, can I do like one step above that? And so I started out doing 125 cold calls a day. I had this sick work ethic at a young age. A different time, I'll tell you about my middle school and high school side hustles, but um,

• 4:06Anthony Pompliano?

  What were they?

• 4:07Speaker 02

  Right now, what were they? All right, so I'll give you the middle school side hustle is great. So they, we had, I was in an all boy's school on Long Island. And in eighth grade, they decided to upgrade the lockers. And the way it worked was you had to pay like a hundred and twenty five bucks for a locker. But the locker would stay in your family. So for all the brothers you had in the school, and I had no brothers in the school. And it's like December time in eighth grade and I'm like, like, how am I going to pull this off? You know how it is like, you want to be the cool kid with the locker. So another friend of mine, we, we decided we're going to convince our parents to start a business with us. So we bought about six or seven lockers. And then we went to like the variety store, we got locker dividers with the Costco.

• 4:50Speaker 02

  We put in like those huge family bags of Rolos and mints. And we essentially sublet space in the lockers to people who couldn't pay the hundred and twenty five bucks. Six became ten. Once that happened, the school couldn't sell any other lockers. So we actually got suspended for subdividing real estate in school and taking the revenue away, which is kind of an awesome side hustle. And so I did a couple of things like that, you know, ordered bagels and people didn't want the, the school food. And we used to get one day credit terms from the local bagel store and get a hundred bagels. And so the older kids started school an hour before the younger kids sub fifth grade. My next door neighbor was like on the younger bus. It was the same bus driver doing the route twice. So I made a deal with him and I give him a bali and cream cheese every day.

• 5:34Speaker 02

  If you pick me up on the last stop of the second route. And I went around the corner of the bagel store. My parents thought I went to school earlier and then I would come with my hundred bagels and resell them to everybody in school. So I had this like sick work ethic, even as a young kid, I credit that to my dad. But anyway, I, I would get into the office around seven o'clock, seven thirty. I would catch up on emails, bust out a hundred and twenty five calls a day. Leave the office by five forty, run five blocks away to school. That was five fifty to ten thirty twice a week. Come back ten thirty at night, catch up on my emails, do my schoolwork and repeat the next day. And so it was a tough time, it was a grueling time. You don't see success for a number of months there. And, but I think it was an amazing experience. It taught you resilience, it taught you about rejection.

• 6:19Speaker 02

  And so I started there, found my way into, into the hedge fund world, into private capital markets. Originally was doing pretty simple stuff like receivable finance, purchase order funding. And what I realized early on is that, so a mentor once told me, riches are made in niches. And he's like, you gotta identify something for yourself that's different than everybody else is doing. And what I learned pretty early on was that there's something called perceived risk versus actual risk. And so, things that are at times more complicated, people will deem as higher risk. And ultimately, you get to get paid a lot more for those opportunities. And my first foray into that world was in the legal finance world. So in 2009, there was really very limited players in that space.

• 7:03Speaker 02

  And what I realized was that, like any other asset, contingency law firms that, let's say, sue pharmaceutical companies, or antitrust cases, or class actions, had an asset that wasn't clearly defined. And so, there's a level of risk around that ambiguity. But if you can get a big enough and a diversified enough portfolio, then it's a really interesting strategy that has no correlation to broader markets. And there really wasn't competitive. There were four people in the world that I knew doing it at that time. And so, that was my first. I had some other fun. I did a lending strategy around the NBA lockout, if you remember that, back in the day. And so, we were lending players during the lockout against the guaranteed portions of their contract. And so, for me, what I learned early on is if I could roll up my sleeves, work a little bit harder than the guy next to me, get a little bit luckier than the guy next to me,

• 7:48Speaker 02

  and try and do something different, that if you put the work in and you put the effort in, then that's really a path for success. And in 2013, I started my own fund with another partner. And we focused on legal finance and other asset-arych opportunities. But what was happening was really interesting. As I got more successful, two things happened. So, one is, you had high net worth investors who would hear by word of mouth and other people that, "Hey, I heard you did a great deal. I heard my friend was in this deal. You know, can I come into the next one? I can give you 500 a million, 2 million, 250, whatever." And that flow of traffic was increasing significantly. But from an administrative perspective, it became really difficult to manage that. And at the same time, my business was growing.

• 8:31Speaker 02

  The size of the investments that I was looking to make was much larger. And so, I needed to really get some serious capital without spending 50% of my time doing dinners and lunches and meetings, etc. And so the first foray into institutional world, I was able to secure with my partners a hundred and eight million dollar investment. It took us almost nine months and we got retraded twice. And here you are, more successful than you've ever been before, with a track record, with everything else. You got the whole world knocking down your door on the retail side. And basically, you just got screwed twice. And you don't have a choice because you know, you have all these deals lined up to close this hundred eight million bucks and you got to take it, et cetera. And so I went to a mentor of mine and I said, I don't understand, like, how does this? And he pats me on the back. He was about eighty at the time. And he goes, welcome to the big boys. You're going to spend forty, fifty

• 9:16Speaker 02

  percent of your time raising capital. And to me, that was super frustrating because that's not the part of the role that I ever enjoyed. What I enjoyed was identifying the strategies, the asset classes, finding alpha, working through, helping people grow businesses. Like, that's where I personally got a lot of excitement, a lot of sort of stimulation. And that's where my energy was really focused. It wasn't focused on, on the raising capital. On the other side of the equation, you have all these people that don't have access to these investments, that were literally without a tremendous amount of work, ready to say, hey, let me in, let me in. And as I would talk to my friends at the time who were coming out of law school and dental and this and that and the other. And I say, hey, guys, so you know, you're starting to make real money. Where are you investing? And it was all like three percent, four percent, five percent, not interesting stuff, not stuff

• 10:00Speaker 02

  that's going to help them get ahead. There's no sort of foreseeable future to financial independence. And I would say, well, you know, you're caught in, I'm caught in my bubble at the time. Like, why aren't you investing in the types of stuff that I do with other players, et cetera? And they're like, well, we can't access them. Like, nobody wants to take twenty, fifty, a hundred thousand. And so for me, you know, I realized that the system was very much broken in how investors can access product and how managers can distribute product. And so where the price is ultimately paid is in lower yield to investors and in lower performance fees for managers. Because there's this huge fee compression in the model. And so for me, it was a general frustration. And that's sort of a bit about my background and what I was doing and how I embarked on, knowing that there's got to be a better way to embark on this journey.

• 10:46Speaker 02

  What's the worst story you have on the fundraising trail? I feel like every

• 10:50Anthony Pompliano?

  Manager has that one story that they're just like, you'll never believe what happened. What's yours?

• 10:56Speaker 02

  I would actually say my worst story, most dramatic story was when I was still in the real estate space, which is really the impetus for why I left. So, um, I was working on a 13 property portfolio refinance. I even remember the guy's name based out of Collierville, Tennessee. Okay.

• 11:13Anthony Pompliano?

  Don't say his name, but go ahead.

• 11:15Speaker 02

  Say his name, but to tell you this, a Jewish kid from New York showing up in Collierville, Tennessee, like that's an experience in and of itself. All right. And so I'm spending a tremendous amount of time. We're with one of the major investment banks who have a term sheet out, committed capital. We're supposed to be closing in a couple of weeks. We're going through diligence. We get five days away from closing. Everything is done. Commitment letter is out. The deposit is in. I got a very simple email. Real estate lending is shut down indefinitely.

• 11:46Speaker 02

  2008. I write back WTF with a bunch of exclamation points and question marks. He writes back, same. Tried getting him on the phone for a day, nothing. Finally calls him back. He goes, it is what it is. We don't know where the world is going. We're not lending. And so imagine spending six months on a 13 property portfolio refi with an 80 something year old guy. And you're already counting your commission, right? I'm young at that time. That's a point in commission. It's a big deal. And, uh, gone, poof, five days before closing. So I'd say that was probably my biggest, um, my biggest, most traumatic moment, which also was part of the reason I left because it made me realize I had no control over my destiny.

• 12:28Speaker 02

  On the one hand, I had to call and identify and get referred and sort of find clients. And on the other hand, I didn't even control whether or not I could do a deal. And so the reason to go into the fund world was, hey, at least there's a pot of capital or at least there's access to capital that if you can find the right opportunity and you do the hard work and you get to the finish line, you have control over your destiny. And so that was my most traumatic experience or letdown, I would say, fundraising. And it's stuck with me ever since and how I think about capital formation and how I think about maintaining diversity of capital. Um, it's always been sort of running through my blood.

• 13:01Anthony Pompliano?

  Absolutely. And talk a little bit about Yield Street in terms of what exactly was the original impetus for starting the business and kind of how did you think about, uh, what you guys were going to actually go build from a product standpoint?

• 13:12Speaker 02

  Yeah, so a lot of it has to do with what we just spoke about, sort of recognizing how inefficient the market was, both for asset managers and for retail-looking tax as capital. There's another really sort of emotional or interesting story that very much drives a lot of decision-making that I've had over my career, which sort of lingered for a long time. I didn't exactly know how to deal with it or how to fix it. And so, I think back to December time 2008. I come home for Hanukkah dinner with the family, and my dad sitting at the kitchen table, manila envelope, white in the face, which is not very likely for my dad to give you a sense of who he is.

• 13:55Speaker 02

  Pretty resilient fellow, child of Holocaust survivors, grew up in Vienna, Austria, shipped out at age 12 to go to school. Sort of a very, very different world. Grew up completely broke, built a successful business for himself, at least, you know, had what he can, sort of living the American dream at his level. And big saver, very European in that sense, and sort of pushed all his extra savings into Charles Schwab. We always had what we need growing up, weren't rich, but were good. And that's just who he is. And so, this white face is just very uncharacteristic. I thought maybe it was like a health issue. And so, I'm prodding him to like, you know, tell me what's up, and he's not going to give. Tough guy, and he goes to the bathroom or goes somewhere, and I, you know, like a disrespectful

• 14:40Speaker 02

  son, sneak into the envelope to see what's going on. And I see his portfolio is down about 50%. And ultimately, he sells the remainder of the portfolio in a panic, really not understanding where the market's going to go. And I remember, in such a juvenile way, saying like, "Why would you put all your money in Schwab? Like, why aren't you invested in a bunch of stuff?" And he said back to me like, "Well, that's what people do. Like, we save, we put it in Schwab, and we expect to retire, and like, everything's going to be great." And so for me, at first, I honestly thought it was the dumbest answer ever because I was too young to appreciate it. But looking back over the following few years, the first thing was like I was petrified of ever having to have that experience. The second was I was

• 15:22Speaker 02

  determined whatever it took to be diversified in what my investment approach and what my income approach would be. And I went on that journey, right? And so the real estate idea was, hey, I could always have multiple deals in the fire. And the fund idea is obvious. We're always investing in different strategies, asset classes, et cetera. But the part that never, that I was never able to figure out how to fix, which came up again as I was building my fund, was how do we get people to have financial independence? Why is it that you got 90% of the population working, some of the people on the lowest side of the economic totem pole are working harder than the people on the highest side, right? Like, I don't think hard work is the determining factor per se, but they have no way to get ahead. So if you think about the mission or the goal of achieving financial independence,

• 16:07Speaker 02

  in its simplest terms, it's how do I get comfortable that I can pay every bill I have without ever having to worry? Like, that's my sort of view. And obviously, for everybody, that's a different level. But that's what we want to achieve. You want to wake up in the morning, you got a bill, you click auto pay, and you're good to go. And there really isn't a path to get ahead. And so I was always inspired by the idea of why is it always the big institutions getting that access? But to be candid, I never really had a moment of clarity where I was able to figure out, how can I be a part of that movement? And so I was on my merry way doing my thing with the fund when I started realizing some of these, you know, issues percolating and really starting to bother me. What really changed

• 16:46Speaker 02

  was two things specifically. So one is the Jobs Act. So when the Jobs Act allowed general solicitation, it actually changed the landscape of how you could market to people and how you could get people to invest in your vehicle. The second thing, which was equally important, was the maturation of technology. So if you had the Jobs Act and you had no way to identify, find people, market to people, create a seamless investment process, it wouldn't do much for you. It just meant that you could host a party at your local golf club and get people to show up and give them, you know, free bagels and locks and see if they want to invest. But with technology running at a pace of growth and efficiency as it was, and I think there was a huge change between like 2008 and 2015 and sort of what your capabilities

• 17:31Speaker 02

  were and how you distribute and consume information as consumers and how you sort of link to bank accounts and just make the overall process seamless. And what was really sort of the light bulb went off is if you remember in like 2013, 14, when Lending Club and Prosper really started to take off. So the notion of being able to originate investment's credit and distribute it en masse seamlessly was like a big aha moment where it was like, wait, you can leverage technology, marketing, and this new regulatory environment to leverage the masses to create financial equality. Like, I think we could actually do it now. One huge problem, I had the investment side and I had the strategic foresight. I did not have the technology, the marketing, and the operations skill set.

• 18:14Speaker 02

  And so I'm all sort of hot and bothered by this idea, by this mission. And I get introduced to Malend, my co-founder. And Malend, which was super interesting for me, he came from the exact opposite side. So Malend grew up in India, he and his wife. He came over here to Boston for college, and that's really when he came to America. And Malend is an engineer by trade. And he was always incredibly passionate about how do we leverage technology to solve for sort of the white space, like big, big problems. And for him, he was part of the early 2000s glory and, you know, God knows what his paper net worth was at the time, and he saw it all vanish.

• 18:56Speaker 02

  And he also appreciated, again in 2008, that he was putting his 401K in all his savings, and he saw this huge decline. Now fortunately for Malend, he didn't pull out because he was still a higher earner. He was still in a good business, growing his career, young, etc. So he saw the capability of being able to be part of that complexity. But when he sold Yodle to Web.com for just under 350, he had another major financial event and he was like, okay, how am I going to set my family up properly? And he's going around looking for investment opportunities and he hits the same wall that all the other people we mentioned it, right? High minimums, long lockups, not really being welcomed or able to participate in this world of passive income specialty finance.

• 19:38Speaker 02

  And so he became super passionate about creating financial equality and a path to financial independence, leveraging technology. And so when we meet, it's like, you know, love at first sight. It's a super synergistic, um, skill sets, expertise, passion. Like think about the greatest companies, right? It's about building and solving for problems that you have yourself or your loved ones or your friends. And so that's how we got on this journey to Yield Street. Our mission right now is by 2025, we want to have 5 million customers. We want to distribute $20 billion of investments and help people generate $3 billion of income that they otherwise would not have access to outside of the public markets. And, uh, and that's, that's a bit about our family story.

• 20:19Anthony Pompliano?

  And talk a little bit about kind of this focus on alternative assets. Um, how do you see that in investors' portfolios today? How has that changed over the last couple of months as we've kind of seen this chaos in, uh, in the legacy financial system, uh, that the Fed stepping in and lowering rates and printing money and kind of all the, the nonsense that's been going on? How do you kind of just see the alternative investment bucket, um, either growing, shrinking, staying the same, uh, in people's, uh, portfolios?

• 20:51Speaker 02

  Very loaded question.

• 20:53Anthony Pompliano?

  Intentionally.

• 20:55Speaker 02

  Yes. Okay. So, I mean, high level. Retail is always lagging the institutional world, right? The institutional world, and that's fairly simple and it makes sense. Institutional world is filled with people who are highly compensated to identify better investment strategies. Okay. So, you know, you and I sitting at home or even talking to people who are being sophisticated, we don't have the horsepower that, you know, a BlackRock or someone else has. And so what you'll see in every trend, in, you know, even when basic portfolio theory was started, right? In every trend, retail is always going to be lagging. So if you go back even 10 years ago, we started, institutions started moving 10% into alts. Now, I think what you're seeing is, as a result of interest rates being low, as a result of volatility in the market,

• 21:39Speaker 02

  if you think about, if you're an endowment and you have a 5% annual threshold that you have to meet for your obligations, for your charitable givings, et cetera, you can't get that with treasuries, you can't get that in bond markets. So you've got to look elsewhere. And so you're seeing a massive shift. We're seeing 20, 30% of people's portfolios moving into alternatives. I think it's still going to take a little bit more time for retail to get there. But the bigger issue for retail was a couple of things. A, how do I get access to it? Right? Do I want to go on to like BKLN and make 4%? Like, where's all that excess fee? You're seeing all these hedge fund managers and all these big asset managers making so much money. Why aren't we seeing the same thing when we invest in their strategies? It's because by the time we get there, it's fees and fees and fees and fees and fees.

• 22:21Speaker 02

  And so the access part is a big issue to actually helping people access more alternatives if they were conscious of wanting to get there even sooner. The second thing is, I think that what people's desires of investing in the past might be different today than they were. If you think back 30, 40 years ago, you were a career employee, you went to a particular company, you worked there your whole life, you retired, you got a pension, you put your money away, and then you started collecting income. The way we work today is changing, right? So people work five years, seven years, they take a break for a year, they want to, people spend more money on experiences, people build bigger homes, get nicer cars. Like, growing up, you shared a room with your brother. It's not as common these days, right?

• 23:06Speaker 02

  And so if you just think about the way we live our lives and the goals that people have, it also requires them to think differently about how they invest. Do I want to have passive income? Do I want to make my money work for me? You want to get a car, you want to go on a vacation, you want to build a house, whatever it is you want to do, how do I spend profit and not principal? And so being a part of the alternative space gives you a lot of advantages. And alternative is a big word, so we're focused mostly on credit or special situations, right? And so it's going to, in our case, we're going to look for assets that are lower correlation to the markets. We're going to look for opportunities to generate consistent passive income. We're going to look for opportunities that have downside protection. We prefer to have less volatility.

• 23:50Speaker 02

  I think that investors generally like, sure, it's amazing if you look at the last couple of days in the market that, you know, we've shot up like crazy. Look at last week, we tanked like crazy. Emotionally, I don't think we want to keep going through these gyrations. And so the, the, the reality is that investors, I believe, have stuck to stocks and bonds, mostly because of the limitation of what they were being offered and the experience in which they can access them. You don't want to go and get a hundred page PPM and sign the entire PPM and you can't understand it. You want to come to a platform that's digitally native, that speaks to you today. You want to see things in infographics, you want to see things in webinars, you want things to be broken down to you. You want to consume information. We have a policy here at Yale Street.

• 24:35Speaker 02

  If you can't explain the deal to your mother, we shouldn't do it. Period, end of story. When someone comes in and says, I have the most complex structure in the world, but you're going to make all the money in the world. It's like, thanks, but no thanks. We're not smart enough. That's it. And so I think that as people think about their financial goals, how they want to grow their assets, do they want to achieve financial independence? How do we get there? Alternatives is speaking more and more and more to what your goals and what your desires are. If you look back, um, a data that talks about when people have accessed alternatives. So we have this great slide that we use all the time, um, here at Yale Street to show an investor journey's life. Okay. So we'll get it from 18 to 80.

• 25:16Speaker 02

  So in the early part of your life called 18, 20, 25, it's all debt, student debt, housing debt, auto debt, credit cards, and the list goes on. As you start growing up, you get a job and now you have a 401K, then you have a little stocks and bonds, et cetera, et cetera. We only saw 10% of people being able to invest at the age of 65 or above in alternatives. Why? Because the minimums were high, the lockups were long, they didn't have the financial wherewithal to get into those products. At Yale Street, leveraging technology, we were able to bring that back. Our average user is 42.

• 25:55Speaker 02

  So you know the power of compounding. Twenty-three years of investing. Twenty-three more years. What is that? You know, how far can that get you? That's how we help people achieve that goal. And so when you think about the broader backdrop of what's happening with interest rates, you think about the volatility. You think about the reality that people aren't actually getting ahead. You think about how many companies were public ten years ago versus how many companies are public today with the advent and the growth of the private equity and the venture markets. We're not actually accessing the level, scale, or quality of companies that we were twenty years ago, or even ten years. So when you invested in Apple early on, or in one of these other major companies, whether

• 26:37Speaker 02

  it's Microsoft, or Exxon, or who knows what it was, you were able to participate in that convexity, in that growth of equity, in that growth of the business. Today, companies are staying private much, much longer, and maybe never even seen the light of the public forum. And so you don't really have that convexity story, other than high-risk, high-risk businesses, like in the tech space and otherwise. So where are you going to find an attractive yield or asset appreciation model with limited risk, with downside protection, with collateral, with loans, et cetera? And so that's why institutions are moving there, and that's why retail is moving there more and more aggressively. And so to answer, you know, one of your questions, where do I think it's going? I think we're going to see thirty to forty percent of people's overall portfolio in

• 27:21Speaker 02

  all over the next five years.

• 27:23Anthony Pompliano?

  How much of the obstacle right now is regulation, right? We recently saw a little bit more in some of the crowdfunding regulation, kind of go from a million dollars to five million, and there's a little bit of progress happening there. But we still live in this society that's driven by regulators where they essentially, one, use net worth as a signal for intelligence, right, or a kind of a proxy for intelligence. Two, there's maybe some, you know, lack of insolvency. If you've got somebody who's rich and they make a small investment, that, you know, they're not going to miss the rent payment because of it. But there's a ton of kind of regulatory tape and obstacles that prevent the average person who, you know, makes fifty, sixty $10,000 a year, they go to work every day, they do a great job.

• 28:07Anthony Pompliano?

  They don't have millions of dollars to invest. How do we kind of get them into some of these investment opportunities in the private market or in the alternative space that, you know, either one have been difficult to access, right? It sounds like you guys are solving that with technology, but two, there's still this kind of regulatory obstacle as well.

• 28:25Speaker 02

  It's a great question. For me, it's a mixed bag is the truth, and I think people don't, people don't look at it this way enough, in my personal opinion. So first of all, I think on or about December 8th, the accredited investor definition is changing to be more inclusive. Okay, so it's going to include qualified employees, it's going to include sort of a larger subset of people. Is it where it should be, in my opinion? No. Is it a step in the right direction? Absolutely. I think that

• 28:58Speaker 02

  the challenge for the regulators is you got to look at it this way. From their perspective, right, let's start from their perspective, and then I'll share my perspective. From their perspective, their job is to protect the US consumer to the best of their ability.

• 29:16Speaker 02

  What they see is a world of private investments that has

• 29:24Speaker 02

  limited transparency in some respects. And at the end of the day, sure, could they make it available to everyone? Yeah. Are people going to get hurt in that process by unscrupulous businesses? Yes. Who's the first person they're going to blame? The regulators. And so if you think about the risk reward for the regulatory bodies, it's really not in their favor at all. I don't think that's an excuse, though, right? I think that we all have sort of risk in our roles, and I think their job is to, is to find the right balance to protect the American consumer, but to give them an opportunity to get ahead, to grow, and to see economic freedom. And I think they're trying to do it, right? And I think a great example is what they're doing on digital banking,

• 30:09Speaker 02

  trying to create sort of a licensing model for digital banks, lightening the requirement for accredited investor, allowing Reg A plus. Certain things have happened. Even the general solicitation concept is a huge, huge move. I mean, I could never call you out of the blue and say, hey, Anthony, you want to invest in this product? And so we are moving in the right direction. This current administration has been very pro the relaxing of some of these regulations.

• 30:38Speaker 02

  Some of the bigger challenges, just practical challenges, I would say are a few things. One is they're always on the back nine. Meaning, we as entrepreneurs, as business owners, as fund managers, as people engulfed in the financial sectors are the ones creating and manufacturing new products and new structures all the time. They need to catch up with us and they want to see what goes wrong and what goes right during the process. And I think the world we live in today moves so much quicker than it did in the past. It's just difficult for them to be able to sort of run checks and balances to a certain extent. And so I think functionally, it's difficult. I think a solution to that is how do we have more of a partnership with the regulators? Right?

• 31:21Speaker 02

  Part of the problem is that the people who have an outnumbered seat at the table are the incumbents. The incumbents aren't particularly interested in helping the small guy. Doesn't serve their business model well. Technology is a disruptor. So for Yield Street, you want to put in 5,000, great. You want to put in 5 million, fantastic. Doesn't change anything. It's the same clicks of the buttons. And so we have investors all across sort of the investment, total investment size, from literally as small as 5,000 to as high as tens of millions. And so I think that's a challenge for them. And I think the solution again is how do we figure out and create a better partnership? You know, a think tank model. Hey, this is what we're building. This is why we're building it. Let's work together. The second thing is that as much as we want to sort of deregulate,

• 32:06Speaker 02

  it's not the easiest process. It's not like, oh yeah, you know, this makes sense. These guys are really trying to help other people. We should let that happen. Like, okay, we're just gonna cut the 1940 Act, you know, that's fine. Or the 1933, that seems like a little, you know, a little outdated. Let's, let's cut it up. And so the process and the bureaucracy that exists to move some of these things along, unfortunately, is very real and it takes some time. I think we're going in the right direction. I think that's the most important thing. I could tell you from our personal experience. So Yulshu is a regulated entity. We go through ordinary examinations as any other registered investment advisor would. And I will tell you that the level of engagement, especially on our first exam a couple of years ago, was much, much higher than I thought it would be.

• 32:47Speaker 02

  And I think that obviously they were doing their job and doing the proper sort of examination and going through and learning. But I think there was a tremendous amount of education that was happening on their part and saying like, hey, if you think back in 2016 when we started, nobody was doing this. And like the notion that you could distribute $10 million in hours or minutes is a crazy thought. And it was never been done before. And so making sure that the right checks are in place. Do you really do KYC? How do you think about a credit investor verification? Is your technology supporting these things? And just going through all that? There is going to naturally be an education cycle. But again, I think in summary, we are headed in the right direction. We have seen improvements continuously over the years. Can we do better? Sure. But everyone can do better. Business owners, regulators, governments.

• 33:31Speaker 02

  So that's not, you know, that's not, that's not something to knock on. I think what we really have to think about broadly from a macro perspective is where are we giving people access and where are we not? And is the logic supportive? So should people have more capability to invest in pink sheets? In biotechs or secure private credit? I would argue that secure private credit is a thousand times safer than pink sheets. And so I think we have to be a little bit more logical about how we think about why we want to give access to different cohorts of investors, but also how do we protect them?

• 34:10Speaker 02

  I do think that if you're, if you're looking squarely at the logic behind the SEC, it's not to suggest that wealthier people are smarter. It's to suggest that wealthier people have potentially more bandwidth for error. The margin of error is, is less impactful. So if somebody is sort of at the, the cutting edge of a $40,000 annual job, and they scrape $10,000 together and they invest in a deal and the deal goes sideways, that's going to be a really bad event for that person. If somebody has a hundred thousand or two hundred thousand vestable cash and $10,000 deal goes sideways, that's a bad event, but is much less impactful. And so from that perspective alone, they're trying to, to protect people.

• 34:56Speaker 02

  I do think people have the right to say, hey, you know, I should be the deciding factor of what my risk band barometer is. And I think that is the, the challenge that they're dealing with and thinking about how to open regulation up. Do we have hurdles in what we can offer to people because of regulation? Sure. How do we deal with it? We have to find structures that are old, but together with our technology, we can come up with a solution. So to be specific, we launched the 40 Act Fund in March of this year, which is available to non-accredited investors as well. Does give them access to a portfolio of investments that are inherently diversified by multiple positions and is an investment minimum of $5,000.

• 35:41Speaker 02

  So you can do it. It took us 18 months. It cost a fortune, which I'm never going to publicly say. It was a grueling process. And I think that, you know, I think that's a bigger issue. Like the moats to entering into creating these things are just super, super high. If you're not super well-funded and have an amazing team and have access to some of the best legal staff, et cetera, you can't get that off the ground. And I think that's cycling innovation question, which is a different story. But you can't fix it all in one day, but I think as long as we're going in the right direction and we're not regressing, then you know, we should be, we should be celebrating progress.

• 36:18Anthony Pompliano?

  Absolutely, and you guys have done a great job kind of navigating this environment. What are some of the more popular or interesting either opportunities or mechanisms on the Yield Street platform? And obviously understand that there's a bunch of regulation as to you're not trying to promote them, but if used without name, you can kind of describe the types of things that people are coming to Yield Street to get exposure to.

• 36:40Speaker 02

  Yeah, I think that what's most interesting about Yield Street than any other platform that's out there is like, as I think about what are our key differentiators, right? What are the real moats in the business and how are we different? And so when you talk to other sort of fintech businesses, there's a few things that I think come to mind. So one is I think fintech is a term that's abused every day. What fintech is supposed to mean is a balance between financial services and technology that help a business become much more disruptive. When you look at most companies, they're either started by a finance professional who

• 37:19Speaker 02

  hires a CTO, which usually ends up with limited technology, a beautiful website, some functionality, and a bunch of people in back office doing the same thing you were doing if you weren't a tech business. When you have a tech CEO who hires a finance professional, what you have is super robust tech. You have AI, you have, you know, incredible APIs, you have beautiful user experiences, you have all this other stuff, but there generally isn't the right amount of rigor on asset performance and asset quality. And I think what we have to do, and I know that we talk about it every day, one of our core values at Yield Street is investor first. You got to know a couple of things. One is, I don't care how wealthier you are or not, the money that you're putting on

• 38:03Speaker 02

  Yield Street or any other platform is harder earned money. Number two is not everything's always going to go right. Okay, and so you got to have tremendous attention to detail and focus on asset quality and asset performance. I always say never invest with someone because they can make you money. Right, we used to have this line, my office used to be on the 54th floor. And, um, you know, everybody comes in pitching the flavor of the month of their, of their idea. And I would always say you can take a million dollars in cash, open up the window, shake it out, express elevator downstairs, we'll get down, there will be a dollar left. Putting money out is the easy part, bringing it back home is where, is where the talent is. And so I think there's got to be real attention to detail and asset quality. And so the first thing that I think about when you look at the leadership at Yule Street

• 38:47Speaker 02

  is you have Melinda, who is purely your tech entrepreneur and all things we discussed before, who has sort of this real, from a leadership perspective, real pressure, real focus on the team. How do we leverage data technology to create a solution to this bigger problem? Right, and from my perspective, it's how do we focus on asset quality to make sure that we're always distributing best in class opportunities? Full well knowing that not everything's going to go perfect, but we got to have the team that understands how to deal with those situations. And so you have a team that really has serious rigor in both financial services and technologies. I think that's a key differentiator, number one. Number two is when you talk to a lot of these different businesses, you know, they want to distribute real estate.

• 39:30Speaker 02

  They want to, so they'll say we're democratizing fractional ownership or democratizing access to real estate or some other asset class, et cetera. And I think when we talk about it at Yule Street, it's a much bigger picture. So I told you what our mission was, right, and if you think about it practically, the how is to create a digitally native solution that really is a one stop shop for wealth management and wealth creation in a curated fashion. So you've got TD Ameritrade that's got every option in the world. I'm gonna ask Anthony, what are your favorite opportunities on TD Ameritrade? It's like, call me back in a month when I figure out the 17,000 options they're offering, right? And so I think consumers today want curation. So you look across the risk reward spectrum.

• 40:11Speaker 02

  I want some, you know, bonds here, I want cash and cash alternatives, I want equity, I want debt, I want high-growth equity like venture capital, some higher risk, some higher reward, etc. But I want to curate it. So based on my preferences, my income, my expenses, etc., show me the three or four best options for me. So I'll give you an example. You look out right now on, you know, in sort of the Wall Street world, you have every top-name manager raising capital for what they're calling distress funds or COVID dislocation funds. Okay, so think about aviation industry. At its peak during COVID, dropped 92% activity. So if I ask you, do you think in X number of years from now, whether it's six months or two years, are people still gonna be traveling?

• 40:55Speaker 02

  Are people gonna be traveling more than they did last year? Right, like, that's part of who we are today. We travel, we're global citizens, okay? And so there's going to be a shift in ownership, a shift in the capital structure of maybe who owns the planes or how they're owned, or someone hasn't paid their bills in nine months, so they're in default, right? So there's a lot of distress opportunities. Think about hotels. You walk around New York City, most of the hotels are closed. The ones that are open barely have any services. And so there's gonna be distress in the market and people in these funds are sort of going out there and raising enormous amounts of money to take advantage of that, you know, seeking to generate returns of 12, 15, 20% over the next few years. I don't know anyone in retail who's gonna get access to that, but they should, right? And so when we think about what we're providing to you and why we're differentiated, it's how

• 41:40Speaker 02

  do we create a solution for you across your whole portfolio? So we want to be that place that brings you a great experience, it's digitally native, it has your app, it has your web portal, it's exactly how you, if you close your eyes and you envision, how do I interact with the money? This is what it would be. And for us, there's a much bigger thinking behind it, right? And the question is, from a social behavior perspective, what has changed over the last number of years and where are we going and how do we be part of that story or lead that story? And so I have two great examples if you'll indulge me. First one is, 15, 20 years ago, what was your favorite cell phone?

• 42:21Anthony Pompliano?

  Fifteen years ago, probably, uh, would they have like the sidekick, the razor, all of those, right?

• 42:28Speaker 02

  Maybe I even had it.

• 42:34Speaker 02

  I don't know. So I usually have like a V phone and a Nokia on my desk.

• 42:38Anthony Pompliano?

  Yeah.

• 42:39Speaker 02

  Somebody might have taken. And so I would, I would go for the Nokia and the razor, right? The smaller you can get, as long as I could play snake. For my emails, I had my BlackBerry a couple of years later, but it took me like, God knows how long to separate from the two phone model and go to my iPhone. Now, let me ask you this. When we got our Nokias, we were looking for the smallest phone as possible, and we didn't want to spend more than like 200, 250. I remember when that razor came out and it was 450 bucks, like people were having a heart attack. Okay. So now you're spending two, three, four, or five times the money on a phone. It's four or five times the size. It's got way more glitches than my Nokia ever had. My battery on my Nokia lasted a week long, and I think I played more snake than anyone I know, and the BlackBerry was a big prick breaker. But here I am, buying an iPhone for a thousand bucks, 1,200 bucks. What happened?

• 43:23Speaker 02

  Let's talk about the way we shop. I remember I used to help my mom do errands and go to the baker, the butcher, the fisherman, the flower store, the variety store, the bank. Now I walk into Whole Foods, or you walk into your local equivalent, your one stop shop, bro.

• 43:39Speaker 02

  So we're fundamentally changed the way we behave and interact in different things in our life. I think if you, if you break down the behavior, we were task-based seekers. So we were looking for maximum efficiency at a task level. I want the best phone. I want the best messaging. I want the best fish, et cetera. To being utility seekers. I want to do the most I can with the least effort. Is everything going to be as good as if it was if I was singular focused? No. Am I okay with it? Yeah. Is technology going to get better over time? Is the store going to have better quality over time? Yeah. But I'm coming here for now. Now, let's think about your financial life. How many bank accounts do you have? How many credit cards do you have? How many different investments do you have? How many 401ks if you're in your 40s?

• 44:22Speaker 02

  And so everything else in our life is getting more efficient, focused more on utility. But the part that's like arguably most important, maybe healthcare is similar, right? And same issues there. The part that's most important that we interact with every day, how we spend money, how we make money, every single day, you don't move without getting a coffee, without doing this, without doing that, is completely fragmented. That makes no sense to us at Yield Street. And the question is, how do we solve that issue? How do we put one digitally native platform where you can have an enjoyable experience, but specifically that's designed for you and delivers to you the curated solutions of what you're looking for? And over time, what you'll see at Yield Street over the next number of years is how do we continue to introduce more and more investment product and other products, whether it's

• 45:05Speaker 02

  advice or tax, et cetera, to really create this ecosystem around Anthony's financial world that he feels comfortable in this one spot? And nobody else is thinking about it like that, not a single platform.

• 45:19Anthony Pompliano?

  And when you think through that, there's kind of two parallel trends here, right? One is kind of this like land and expand strategy with a user or a consumer. So if I can get you to start buying secured credit, now all of a sudden I can offer you parallel products, I can offer you advice around those products, I can kind of wrap services around it, I can really create that ecosystem you just described. But at the same time, there's also this like financialization of everything, right? If you look at a company that like a maybe a pipe who is literally going out and creating a financial product out of SaaS revenue contracts, or you kind of go through all these different assets that are now becoming investable in some form or fashion, you even see this in like sports cards and kind of

• 46:01Anthony Pompliano?

  all this crazy stuff that's going on. It feels like that is a second tailwind that is happening in finance. Is that something where you guys will also start to get into the more kind of esoteric alternatives as well? And you think that's interesting? Or is it something where you want to stay kind of down the fairway from a investable asset standpoint and then just kind of build out that ecosystem around those kind of more straightforward investment opportunities?

• 46:30Speaker 02

  I think a couple of interesting points to pick up from there. So one is, I think in part because of where rates are and people seeking yield and seeking higher returns. People are trying to get more creative. That's number one. Number two, I think that people are using passion in different ways to direct their investments. I think that's much more sort of a younger generation, millennial practice than maybe our parents. So whether it's a focus on ESG or a focus on collectibles, it's hey, I want to make my money doing something that aligns with who I am, right, or what I'm interested in.

• 47:11Speaker 02

  I think the other side is, like, for example, you touched on collectibles. The whole collectible industry is blown up in an amazing way. Part of it is because digitalization. Part of it is globalization. Part of it's because there's far more millionaires today than there ever were before. Right? So entrepreneurs, businesses, all that. So people spend money in different places. You think about like the watch industry is insane. You think, and like, that's like a real, you know, commoditized asset at this point, liquid market. You think about art. I think the other side is people recognizing that an asset should be considered an asset irrespective of what the underlying asset is. Like, I'll give you something that's like less known, for example.

• 47:54Speaker 02

  What is it? Almost thirty years ago at this point, maybe twenty some odd years ago. If you remember, the tobacco companies had the largest settlement in history when they settled those big tobacco companies. A lot of the payments were structured to the law firms in trust over a twenty or thirty year period. I don't remember exactly what it was. So imagine you're a lawyer, you worked on a case, you get this big fee. Now you gotta get paid over the next twenty years. So what people did was they went out and sold the payment stream, either in the securitization market or through private investors. So we had one on the platform a couple of years back. And so here you had a payment instrument guaranteed by Philip Morris, let's say, who his public debt was trading at nothing, but you were able to get, you know, a nine percent or an eight percent yield

• 48:38Speaker 02

  on the payment stream. And so I think what people are looking at today is saying, if I own a piece of art and the art market has a significant amount of data now.

• 48:48Speaker 02

  And the particular artist, you can have a good understanding, you know, call it real blue chips. So like a dead artist, 100 years ago, 5 million plus art. And so there's a, there is a way to create a thesis around where that art should trade over a period of time. And where rates are today and where people are looking for better stores of value and better tax strategies. There is a theory of why it would make sense to go there. So I think like, that's part of the reason why you're seeing some of that. I obviously disagree with a lot of the stuff that people are creating, sort of investable assets, just, you know, jumping on the bandwagon, sort of a, you know, high tide floats all, you know, rises all boats kind of thing.

• 49:26Speaker 02

  Um, for Yield Street specifically, our goal was never to be like the, the innovator of investment strategies. Like I, I leave that to the best hedge funds in the world and the best asset management in the world. Our entire idea was how do we leverage technology to create what I call distribution infrastructure? So we got hundreds of thousands of people, we have this amazing user experience in this technology. We can distribute fantastic, shouldn't say fantastic, we could distribute product that could be interesting to a bunch of people. On the other side, you can use that same technology on the consumer side of how do I create for myself? The best wealth management solution. In my personal opinion, it's not by trying to reinvent the wheel and say, hey, I think, um,

• 50:08Speaker 02

  ring lights are going to be like the craziest thing because everyone's home now and COVID and they want to look better on a, on interviews, so I'm going to invest in the green, the, you know, the, the ring light manufacturer. I think that for me, it's too much risk. I think if you look around the investment world, there's trillions of dollars of investable product with track records, with proven managers, et cetera. Within that universe, you can access the entire risk profile. You want to look for something that goes like that? Let's go find a good earlier late stage VC and participate in their fund. You want to find something that's super tax efficient and you live in New York? Let's find the best New York funds and curate them to you. And so I don't foresee in the near future, like Yield Street selling Bitcoin investments or, you know,

• 50:51Speaker 02

  some other much more speculative opportunities.

• 50:55Anthony Pompliano?

  When you think about kind of where you guys are going, let's say 20 years from now, 10 years from now, what's the kind of one or two sentence, here's what the goal is, here's what the mission is, uh, and where you want to be?

• 51:09Speaker 02

  I think in 10 years from now, honestly, I want to get there sooner, but let's say in 10 years from now, I want Yield Street to be the household name globally for digital wealth management across the board.

• 51:21Anthony Pompliano?

  It's a pretty, that's a pretty good goal to have.

• 51:23Speaker 02

  It is, but I think it's really doable. Like, I think, you know, who is that name today? Doesn't exist. And I think the incumbents, it's too difficult for them to build what we're building, right? We're starting on, you know, 2015 to 2017 technology and iterating, you know, daily on it. They're 20, 30 years behind, massive infrastructures. It just, it just can't be done.

• 51:46Anthony Pompliano?

  Yeah.

• 51:47Speaker 02

  So I, I think, honestly, I think we have a real shot at it. I think we have a massive head start. There is, like, if I asked you, like, hey, who would you think is like our number one direct competitor? There isn't a clear answer. And I think when you, when you really think about Yield Street, it's a category creator. And as long as we continue to scale and to grow and to build thoughtfully, in a measured way, and by being investor first and delivering what people really need to help fuel their financial ambitions, then I think that's going to be us in 10 years.

• 52:16Anthony Pompliano?

  I love that answer. Before I wrap up, I always ask people the same two questions, and you'll get to ask me one question at the end. The first question is, what is the most important book that you've ever read?

• 52:38Speaker 02

  This is a tough one. This is a really tough one.

• 52:43Anthony Pompliano?

  You can answer with two or three if you can't decide between the absolute best.

• 52:50Speaker 02

  I, my biggest problem with books is that I think most of them should be shorter. And I think there are a few key takeaways in, in different books. And

• 53:05Speaker 02

  I don't know that there's a particular book that I think is like the all time best book ever read because I read across many different genres.

• 53:16Speaker 02

  For me, I'll tell you some of the more recent ones.

• 53:19Anthony Pompliano?

  Okay.

• 53:20Speaker 02

  The book called The Four

• 53:23Speaker 02

  that I found really interesting, it essentially analyzes Facebook,

• 53:29Speaker 02

  Amazon, Apple, and

• 53:37Speaker 02

  maybe Uber? Believe?

• 53:42Speaker 02

  Anyway, it looks at the it looks deeply into the companies to understand what is it, what is really so special about those businesses that allowed them to ignore the success that they had. And it gives you a very different perspective in understanding some of that strategy. But what it also focuses on in the book is how do you, as a student, which I thought was really interesting, how do you as a student think about these concepts in the book, and I'll mention one in a second, and help that thinking apply sort of where you want to go next and try to identify the the whole notion of the book is who's going to be the fit for us, right? So let's look at all the components that make these companies so special

• 54:24Speaker 02

  and go from there. So like one interesting example to me that sort of, you know, blew my mind for a moment was when you think about Apple. So is Apple a technology company or a consumer brand? And so the author asks, when Apple unveiled the Apple Watch, they did an 18-page spread in a particular magazine. What would be like the first magazine that came to mind for you?

• 54:50Anthony Pompliano?

  Well, because you're asking now, I think it's like Vogue, but if you hadn't told me that, it would have been some kind of technology magazine.

• 54:56Speaker 02

  You know, Tech Punks or whatever.

• 54:57Anthony Pompliano?

  Yeah.

• 54:58Speaker 02

  Yeah, it was an 18-page spread in Vogue with an $18,000 Hermes band. Right? And so we go into the psychology behind the Glass Store Fund. So the whole Glass Store Fund is really about you walking outside, seeing the person inside and aspiring to be able to buy that $1,000 phone. And the person inside being able to feel like, hey, look at me, I'm buying this phone. And so it's a completely different way of thinking about how to build that brand, how they thought about that company. The notion of leveraging technology is to bring costs down. So here you have the most expensive device when it's supposed to be a tech company first, right? And so there's a lot of interesting things there. I thought that was a really interesting book.

• 55:41Speaker 02

  Another book for me is

• 55:48Speaker 02

  it's called The Road to

• 55:55Speaker 02

  you're really getting me here.

• 55:57Anthony Pompliano?

  I'm just impressed with myself that I knew the name of a magazine outside of the tech world.

• 56:01Speaker 02

  Yeah, I mean, I thought like all your subscribers know that you're go to Vogue guy, but that's okay.

• 56:08Anthony Pompliano?

  The other question I ask everyone was

• 56:10Speaker 02

  Character, Road to Character.

• 56:12Anthony Pompliano?

  What is that?

• 56:13Speaker 02

  Incredible book. So The Road to Character goes through, you know, people throughout history, great people throughout history, and really focuses on how they got to greatness, how they achieved what they achieved. And the common theme across the board is number one, having real major setbacks, whether like real travesty or real challenges, and having this incredible burning sort of desire for their mission, their vision, their purpose, and resilience. And as you sort of go through the book time and time and time again, it sort of makes you, it forces you to recognize, which I think a lot of people internally know, but we don't talk about it as much,

• 56:57Speaker 02

  about how that road to character and maintaining a moral high ground and being able to see these visions through is always met with enormous amounts of obstacles and it's about getting past them, right? And so for me, we're always going to have ups and downs. And you know, what you see on the outside world from a company like Mill Street or others is you see, you know, 14th fastest growing company, then 46th the next year, which is like crazy, your top 50 growing companies in America in two years in a row. Where you see like, you know, top of the stack at Financial Times or Cranes 40 under 40, you see all these great athletes. What you don't see is every setback, all the shit that you have to go through, pardon me, but all the things that don't work out well, right? And so

• 57:42Speaker 02

  Being in a startup and being successful means you have to have this incredible amount of luck. You gotta have this amazing team. Everything's gotta go right. You gotta find the product that work to fit and you're still gonna have a ton of things to deal with. I think that that was really important. And then for me, maybe, maybe the all time sort of best recurring read is not actually the book, or by now is a book, but it's the compilation of Warren Buffett's essays. And the reason isn't because I think you could glean the best investment advice. I think it's because who the man is. And when you bring it all together, whether it's humility, desire to have a better world, whether it's bringing calm to a chaotic investment world.

• 58:27Speaker 02

  You start to take all those lessons and you put them together and you see them consistently evolve over all the years. I think as both a business person, entrepreneur, I look at myself and I try to look at, you know, the people on our team, we have a term here at Yale Street called the growth seeker. We gotta be looking to grow both personally and professionally, always. And so I think that if you look at his journey, he represents that in a big way. Personally, I think if you look at most billionaires in the world, there's always, you know, some serious skeletons in the closet of how they got there and you could just, you know, pull out Forbes 400 and look right on that list and you'll say, okay, he stole that, he did that, he did that. You don't really find that with him.

• 59:07Speaker 02

  And I think the one thing that's really, that can really stick home to everyone is the notion that behave today as if tomorrow morning, everything you did today was on the front page of Wall Street Journal. And I think what's interesting about that message is it's not telling you to be a saint. It's not telling you to be perfect. But it's telling you that however you're gonna live and whatever you're gonna behave, whether it's personally or professionally, be okay with it being on the front page. Maybe you'll be a little bit embarrassed, okay, no one's perfect. But don't do something, don't behave in a certain way that that would be sort of below the line for you. And so I think there's a lot of lessons that come from him, but I can go on.

• 59:47Anthony Pompliano?

  Those are great, those are great suggestions. The second question's more fun. Aliens, are you a believer or non-believer?

• 59:56Speaker 02

  How do you define aliens? I believe in life outside of Earth.

• 1:00:02Anthony Pompliano?

  However you want to define it. Everyone defines it differently.

• 1:00:05Speaker 02

  So I would define that question as, do you believe there is some form of life, whatever that means,

• 1:00:13Speaker 02

  outside of planet Earth? And I would say absolutely.

• 1:00:16Anthony Pompliano?

  Why?

• 1:00:17Speaker 02

  Because I believe that things have a purpose. And so we are, you know, nothing relative to the broader galaxy, sort of the universe as a whole. We like to, human beings like to think of life in terms of Earth. And Earth is nothing comparatively to the bigger universe. And so the simple question is, if not for life or for some purpose, what is it? And so I don't know the answer. So let's not go there. But I do believe there's something. Whether they're gonna come and like destroy us, like that's not a high, that doesn't ring high on sort of my anxiety at all, or my focus.

• 1:00:56Anthony Pompliano?

  We want to, we want to find them for sure. We don't want them finding us.

• 1:01:01Speaker 02

  Yeah, I don't, again, like, I don't know about that. We've managed to live this many years here and like, nobody's coming and destroying us tomorrow morning. I mean, if that happens, thank God Will Smith is still around.

• 1:01:16Anthony Pompliano?

  Exactly.

• 1:01:16Speaker 02

  I am Legend, will come save us. But, um, I don't, we'll leave that up to others.

• 1:01:23Anthony Pompliano?

  To, to finish up, you could ask me one question. What's the one question you have for me?

• 1:01:35Speaker 02

  How has your, um, how's your military background helped you in your career in building what you built here? And can you leverage that to help others who have similar military background? Be as successful as you've been? And how do the rest of us do more of that?

• 1:01:54Anthony Pompliano?

  Yeah, I think there's probably two things and you know, one of them is like a pretty dark view of the world of just like, we're all gonna die, right? So when you kind of are immersed for a prolonged period of time in combat scenario where there's kind of always injuries and death, and that's always kind of part of the conversation and just around you for, you know, even it was just a couple of weeks, if not, you know, a year plus. I think that you just generally get this understanding of like, hey, we are all going to die. And so like, live life to the fullest while you're here. When I was younger, you know, I came back from Iraq when I was, I think, 21 years old. And like, as a 21 year old, live life to the fullest means you like, go buy a motorcycle

• 1:02:39Anthony Pompliano?

  and you fly down the highway at like 110 miles an hour and you feel invincible, right? As you get older, you realize like, maybe that's not the way to embody some of that. But I definitely think that's one piece of it. And the second is just, you know, people always talk about like, the leadership training of the military, of the army specifically. I was fortunate enough to go through a bunch of their various schools. But I always tell folks that like, the best leadership lessons were not learned at one of the leadership schools. That was more of just Yeah, it was just a formalization of what they wanted you to know, right? It was out of a book. It was in a training scenario, whatever.

• 1:03:20Speaker 02

  Like saying, an MBA graduate can go down to Fortune 500 company, date to not happen.

• 1:03:24Anthony Pompliano?

  Of course. And so I think that it's, you know, when you actually kind of go through things in the tough situations and stuff like that, that's really where a lot of that kind of gets forged. And, you know, it's, it's cliche at this point, because so many of these kind of great warriors that we have have come back and lever social media to kind of build large audiences and stuff. But you know, if you listen to like a Jaco Willink or David Goggins or a Tim Kennedy or any of these guys, like they all pretty much have the same message, right? Which is like personal responsibility and like, go do hard shit so that everything in life becomes easier. Like, that's not really that groundbreaking of advice. It's just that they say it over and over and over again, and they embody it and kind of do all these things. But the

• 1:04:06Anthony Pompliano?

  reason why so many people flock to those messages is like, because it's true, right? If you, you know, if every single day you're doing just things that suck and are hard and difficult and all that stuff, all of a sudden, the problems you thought you had become much easier, right? And so it's just kind of, how do you constantly condition yourself to have a little bit more of that mental fortitude and stuff like that? And it helps in every part of life. And I think that's a big lesson that people eventually learn at some point in their life.

• 1:04:31Speaker 02

  But I think taking the trauma out of what you just said, so let's take the death out of it for a minute.

• 1:04:42Speaker 02

  The ability to recognize is that, A, we don't control our outcome every day, and that B, everyone's going to die at some point. So another way of saying it is like forced introspection. There's something very peaceful about that.

• 1:04:59Anthony Pompliano?

  That's it.

• 1:04:59Speaker 02

  It puts things into incredible perspective and sort of your desire to have more clarity, more authentic living, more authentic experiences, more authentic relationships, is just that much more enjoyable. And I think in a different way, just to pivot to like COVID, COVID in some ways had that experience in a lot of people, right? It's like, we all had this rat race. I mean, speaking for myself, super rat race, right? Building this business, 21 hours a day working, I sleep with my phone in my ear, right? I'm sleeping in the office, sleeping in the city, all this stuff. I'm on planes more than I, you know, I want to attest to being. The upside is I never work a day. I love it. And I feel incredibly rewarded

• 1:05:43Speaker 02

  to sort of be building what we're building, like getting random LinkedIn or DMs from people like, hey, oh my God, I'm putting my kids in college because I'm on an investment in Hill Street. Never met you, never will meet you. Or being on a plane, coming back from Austria and wearing this Hill Street vest, and someone comes over to me and says like, how did you get that vest? And I was like, oh, whatever. I didn't want to say it because you never know which way it's going to go. And they're like, it's the best company ever. I'm like, oh, actually.

• 1:06:07Speaker 02

  You just, you get caught up in it. And I, so I got three kids at home. And in the first 10 weeks, I ran math cumulatively over the last 11 years married. I haven't spent as much time with them as I had in the first 10 weeks, right? And I think that when you're starting to get these emails and these texts and WhatsApp groups with all these people that you know, or their second, third relationship passing away, and you see all the horror stories of sort of loss of life and sickness. There was sort of a, for those who, who connected with themselves and sort of, you know, took a moment in time. It's like, okay, we've got to rethink some of this stuff, right? Like what's important in life? Where are the relationships? You didn't see your friends for an extended period of time, or the people you thought were your friends.

• 1:06:48Speaker 02

  And then you slowly started seeing people that you were particularly close with, family and friends. And sort of you spend more time with those people, so more intentional relationship, right? More intentional meaning in life, spending more time every day thinking about how to crystallize what's important to you. And so I think that the trauma is something I can't speak to. I just don't, you know, thankfully don't have that experience. We don't know about that. But I think the upside is, you know, if harnessed well, is a, is a beautiful gift to have. Sort of be able to see things much more clearly, much more real. And very early in life before it's too late, right?

• 1:07:27Anthony Pompliano?

  That is, that is the way I view it at least. Where can, where can we send people to find you on the internet or find out more information about the company?

• 1:07:34Speaker 02

  Best place is yieldstreet.com. So that's the best place. You can come to us on LinkedIn. You can follow me on LinkedIn. But the website is super intuitive. It's enjoyable. And download the old street app. And we're here for everybody. Ask us any questions you have. And whatever we don't have that you want, drop it in an email, tell us because we're here for you. So we got to build it.

• 1:07:58Anthony Pompliano?

  Awesome, man. Listen, thank you so much for doing this. We're definitely going to have to do this again in the future.

• 1:08:02Speaker 02

  I look forward to it. Thank you. Have a great day. It was a great talk. Take care.