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Uploaded:2018-12-04
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Chelsea sits down with Reddit co-founder Alexis Ohanian to talk about money, work, life, and how to do all three better.

Download the Empower App here! https://itunes.apple.com/us/app/empower-money-management/id1136397354?mt=8

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Hey guys, it's Chelsea from The Financial Diet and today I am here with a very special guest Alexis Ohanian co-founder of Reddit and managing partner at Initialized Capital which is an investor in in many start-ups one of which is Empower which is this very very cool online baking app that will let you save on your bills and rack up points and just live better with money, so it's definitely something you guys should check out.

But he's also, therefore, very interested in talking about money these days which is, as you guys know, my favorite topic so I thought I would do something that you guys love which is our six awkward money questions. Let's do it.

Let's do it. What was the worst money you ever spent in the name of romance? Okay, well that is not a single dime spent on my now wife cuz all of that was well invested There were previous relationships though where I definitely mis-spent.

I was a little too earnest and a little too naive like there were definitely bouquets of flowers that I bought on the first dates that like I really didn't need to buy that were just in hindsight like too much it's just a little over-like right idea just way too overboard like- Bringing flowers to a date should be illegal particularly-especially a first date. And it's worse a blind date. and so it's you're like- You brought them to a blind date?! I have no-thank you for laughing at me yes, no I have no context for this person whatsoever but I just like I wanted to impress her like I heard really good things, so naturally I will bring some flowers.

So, very stupid. That's like bringing someone a balloon animal on a first date you just have to carry it around. I should have brought a balloon animal.

I should have learned how to make a balloon animal because at least then there would have been a gesture of- well I guess it would still be lame. So don't do that on a first date. What is a misguided purchase you've made to become a better person?

The first thing that came to mind, which is totally unfair, but the first thing that came to mind was my Peloton because I think yes but it's unfair because it is a stationary bike so by definition I can't travel with it and it was misguided because I got it for my SF home where I'm just rarely ever there and so it spends more time doing nothing. I mean every month I get the fee and I just remind myself like, "oh right, why did I get this stationary bike but I can't take with me anywhere?" Meanwhile like I get myself a TRX, which is this really the basic just ropes that you can throw over a door hinge and like strength like weight training anywhere. That I'll use all the time because it is mobile I can shove it into a bag it was a way better R.

O. I. for my health and well-being and it just- It was it was making the mistake of being seduced by an amazing experience but one that is totally impractical for someone who travels as much as I do and then I look at this, like, this hunk of rope basically and I'm like this has been way more valuable for me the ROI has been way greater than the damn Peloton but... I feel like at Peloton headquarters they have like a little framed picture of you as like the number one person they have in their mind when they're like packaging these things.

Cuz it is definitely geared towards start-up guys who will never use them. It has been effective I also personally don't care for cardio like I'm all-I'm all in on weight training and so I just thought, "Okay, this is the time I'm finally gonna get in, it's gonna work, cardio is gonna stick" but yeah it's still there in SF and they know how often. I've used it because they've- And now you're ashamed.

I've used it like ten times out of a year and it's like clearly not getting the ROI off of it so... You can actually do a full set of great exercises literally just using your body as the only weight and it is such a valuable-like if you want to start well. I really people who believe in health and wellness and I wish I invested in it way earlier in my life and certainly in my working career but you can actually live a very fit, healthy life not having spent a dime on exercise equipment, just doing these body weight exercises.

That is extremely my wheelhouse. I'm a huge I'm a big Pilates person and specifically mat Pilates. I do the machine, the reformer sometimes, but it's too expensive to do that much and the mat is literally your body and you on a yoga mat so and it's it's a workouts.

Out of curiosity, I imagine it must be funny to be married to like essentially the greatest athlete and not use your Peloton more than 10 times a year. Is there never a moment of like, "are you gonna get on that Peleton? I take solace in knowing that she hates cardio, I think even more than I do.

Is that true? Yeah like I said I don't use the Peloton I just do all my workouts using- But you're not gonna stop paying for it is the real question? No, no I'm still not going to.

That's dumb, I really should cancel that subscription, shouldn't I? That is 100% their business model. I wonder, I actually-I bet if I opened Empower right now the app would tell me "you need to cancel that Peloton subscription, we know you're not using it Alexis.

Click here to shut it off instantly." So what is a guilty pleasure that you spend money on even though you know you shouldn't? Shoes. Probably sneakers.

It's not the reason we invested in G. O. A.

T. but I spent- What's G. O. A.

T.? It's a sneaker marketplace so for buying new and used like fairly exclusive rare sneakers and so I I spend money that I shouldn't but I've tried to be really strategic with it. And so, I tie purchases to like some kind of life event and so like, these are the shoes that I got myself when I was coming back from parental leave because I was like, "okay.

I'll always remember like these are the shoes I got because I was like alright transitioning back to the day to day work." I have to say as someone who knows literally nothing about sneakers, I can just say it seems like they're just getting weirder looking. Well, especially right now,now is the-your your spot on. The trend right now are these ugly, ugly dad sneakers.

Yeah, they look like the Kirkland Signature one. Yeah, but that's-that's the trend it will phase out, for sure. Do you have some of those?

I don't because I still have like self-respect. And you are a dad. I am a dad,it's just I can't wear-I just haven't seen any I like enough to want to get but but sneakers are definitely the guilty pleasure.

What is something you are really cheap about even though you know you should be spending more on it? A lot of basics in terms of clothing. I will try to get what- literally whatever the cheapest undershirts, socks, underwear that kind of thing.

There's a ton of food staples that I just can't imagine having in large and fairly cheap quantities it's like-Okay so beans. Alright, I'm basically plant-based these days and so I need protein and beans are an incredibly efficient way to get protein and you can buy them in bulk, you've gotta put in a little work to prep them but like there's some of these things that I just can't really unsee. It's a-it's a bunch of weird weird stuff like that.

I feel like unused Peleton, plant-based/ quasi gluten free, like we're checking a lot of the start-up guy boxes. The sneakers. I'm a walking cliche.

You wear a t-shirt to work a lot? Yeah, usually. So what is something that people with money know that people without money don't?

I mean I'm still learning stuff it's weird, I thought I would be handed like a book... When you got rich? Yeah, I always assumed that someone was gonna show up one day like, "Good day sir, congratulations." And it is-and it'll be like the book of shit only rich people know.

And I never got this and I still am learning things and and it's-it's amazing. I and I know I'm gonna continue to be learning stuff and I'll just continue to just scratch my head and wonder like, "How is it possible this whole other world exists?" One of the most frightening ones was learning about access to health care and quality of health care. Growing up, I just assumed- I was raised with the assumption that of course anyone who goes to medical school becomes a doctor has to be really smart really hard working and that's mostly true, but the natural extension of that though is that all hospitals are basically the same all healthcare is basically the same like, there isn't that big of a difference and you just go to the hospital that's near to you and that's just what we always did.

And only in recent years as I've had to encounter some of this stuff for loved ones and have I had people who have obscene wealth, even you know relative to my own, like very wealthy and sort of old money wealth, have I learned that like, oh there-no there's a whole other world from concierge medicine and private medicine to very different tiers of hospitals and quality of care. And I literally never even heard of these before, let alone walked in them or seen them and now that I have, it's-it's jarring. Jarring.

I've been lucky to have not needed really any significant health care at all my life, knock on wood, aside from like breaking a leg from wrestling in high school like never had any issues whatsoever, but seeing loved ones go through it and seeing the sort of different levels of quality of care and ability of doctors is jarring. And I think that's one of the things that if we all as a public really understood the difference, I think folks would be even more upset than they already are about the inequality of health care in this country because it is staggering the difference. And I know-I know in ten years someone else is gonna reveal the curtain and be like, "Oh actually there's a whole other level of care where we're all using the blood of young healthy teens to live forever." That's not a joke there already-I think-I mean Peter Thiel literally literally does that.

Supposedly that's a thing I feel like at some point we're gonna have that and I'm just gonna be even more shocked. But that is that is something that really shook me because it really made me rethink the care that loved ones of mine got 10, 20 years ago because we didn't-we didn't-didn't have access to it one financially but we didn't even know about it. And now, obviously, this is a priority for me as a as a husband and as a father like obviously I want the very best that I can get and.

I know my wife and daughter are gonna have access to things that we never could have dreamed of but I just did I didn't think it was that different. And it's interesting because a lot of people when they are afraid of socialized medicine, which is such a silly thing to be afraid o,f but you know I lived in a country with socialized medicine for several years and one of the fun things that you realize when you live there is that the overall standards for every one are much better and much more egalitarian. You don't pay for it but rich people still have their fancy medicine like they still have their boutique hospitals and their boutique clinics and they like-a lot of the stuff like, you know, cosmetic stuff is out of pocket but also like a lot of them will like go to other countries to get stuff done and half of it is because they just don't want to be in crowded rooms with other people like and so rich people you will always always figure it out.

We will always figure it out and and that is the- that is the challenge, you're totally right, is that-how do we bring the standard of care up to a level that would make us proud as Americans and and and now having really seen this sort of the disparity firsthand, and I don't even fully understand or appreciate the other, like lowest ends of it when you're bankrupted by ambulance trip. Actually quickly related to rich people medical secrets; Okay, you guys get full-body scans every like six months, is that a thing that rich people do? Uh I don't, God I probably should, I mean I get the routine blood work that I feel like most people get.

You're not getting like-so I imagine that really rich people like every six months go into a tube that just like scan their whole body. There's-there are a couple of startups in the valley that are doing a version of this but I have not participated. So the last question is what is something that 2018 Alexis is doing with money that 2008 Alexis would have never thought possible?

You know what I actually think you were already rich so... How about 2005 Alexis? There you go, just just pre-rich Alexis.

Like even just the fact that uh, right I have a private car service I have a food delivery service for anything right from Uber to Lyft to Postmates like even just that mentally is a mind job for me and then obviously the advantage of wealth is that I I don't really have to think twice. Like if I want to make sure to bring home food for my wife tonight, like I can actually have an app take care of that so as I'm heading home in a Lyft that I've also magically summoned for me, there's a simultaneous courier dropping off some kind of food at the same time I'll get there. I mean that, to me, feels like magic and even I think 2005 Alexis knowing that he could do that and not be able to even just sort of really think about it it seems like pure wizardry.

So obviously specifically posts your nuptials you are doing a lot of fancy events, and one of the things that I think a lot of people don't realize is that a lot of those events, and not for everyone, most of the stuff that celebrities are wearing is free. Is often gifted, loaned etc. Maybe not be your case in each in each event but that is something that I did not know.

Even at the complete lowest possible end of public figuredom. You will be shocked at how much the more you could afford to buy things and the more things are given to you for free. So yeah, I get gifted a lot of clothes now.

Really, really nice clothes that I never would have worn or had before. Custom tailored for me and all this and it's it's a little insane but then this also works to financially you get access to different levels of banking and financial products. I remember the canonical problem is you can never get a bank to loan you money when you really need it and then once you don't they're more than happy to.

And and I realized I like I realized why that happens intellectually but from a practical standpoint, like I know they're trying to evaluate risk, but like I'm the same person I was before, right. And the tragedy of the system is that, yeah normally you get access to more of these things and features and whatnot the wealthier you are and unless you need them. And so that concierge banking experience all of those things where a bank might normally try to nickel and dime you, they don't.

I get free wire transfers, I get someone instantly who will call me to deal with whatever is happening and they're a live human and they know me by name and they've worked with me before. Now empower, to their credit, is using software to re-create a lot of this for everyone, but there is definitely still a next level to the financial world you just get access to once you have a certain amount of wealth that I just never even believed and so the same way that the difference in access to medicine makes my head spin, the difference in access to financial products is along the same lines and it's subtle. I mean it's these are very subtle things but they they add up a lot especially when you think about the implications that has in the rest of the world.

I can't remember where I read it but I won't take credit for it, someone once referred to wealth as like the lubricant of life. Like the more you have of it, everything is just smoother, everything functions better, everything is like more intuitive you can just make decisions based on needs and desires and not have to weigh options. Like everything is just- it's like the, what is it wd-40?

Yeah, there you go, yeah. And the more you have it, the more people want to give you. But there you have it, the six awkward money questions with Alexis.

Obviously check them out on all of his various Internet platforms. Well, thank you. And also most importantly check out Empower, which we'll also link you to in the description.

As always, thank you so much for watching and do not forget to hit the subscribe button and to come back every Tuesday, Thursday, and Friday for new and awesome videos. Bye! Thanks.