TIP435: Why the Youngest Billionaire Walked Away from Wall Street w/ John Arnold & Michael Faye

**SPEAKER_1** (0:00)
You're listening to TIP.

**Trey Lockerbie** (0:03)
A quick note before we start today's episode, Clay, Robert, and I will be attending the Berkshire Hathaway Shareholder Meeting on April 30th. If you don't know Clay and Robert, be sure to check out their show, Millennial Investing on our Network. This event is called the Woodstock of Capitalism, and it takes place in Omaha, the birthplace of Warren Buffett and Charlie Munger. And for those who aren't familiar, all you need to attend the meeting is to be an owner of a Berkshire B-Share, which today is around $350. Also, each shareholder is entitled to a maximum of four meeting credentials, so if you're not currently a shareholder, you may be able to attend through someone you know. We'll be sending details on this to our email subscribers soon in case you're interested in meeting up with us.
On today's show, we have a powerhouse duo, and that is billionaire philanthropist John Arnold and Michael Faye, the co-founder of GiveDirectly. John was an early employee at Enron, becoming a multimillionaire in his mid-20s before starting his own hedge fund. After retiring from finance, he has been operating full-time at Arnold Ventures, his philanthropic foundation. Michael Faye holds a PhD in economics from Harvard and has founded multiple philanthropic organizations that focus on getting money into the hands of those who need it most. GiveDirectly has support from billionaires like John, Reid Hoffman, and others. This was an amazing opportunity to seek to learn about the philanthropic world through the challenges John has faced and the solutions that Michael has implemented. In this episode, we discuss John's early career that led him to become the youngest billionaire in the US in 2007, his experience as an early employee at Enron, becoming the head of their natural gas trading desk, his journey in founding his own hedge fund, his relationship to money, and his experience in philanthropy to date, what led Michael to co-found GiveDirectly, how GiveDirectly operates, and why it's important to start your own philanthropy efforts today, that and a whole lot more.
It was truly an honor to sit down with both of these gentlemen who are focusing their full efforts and resources on solving global poverty.
It was a very enlightening discussion and I hope you enjoy it as much as I did.
So here's my conversation with John Arnold and Michael Faye.

**SPEAKER_1** (2:05)
You are listening to The Investor's Podcast, where we study the financial markets and read the books that influence self-made billionaires the most. We keep you informed and prepared for the unexpected.

**Trey Lockerbie** (2:26)
Welcome to the Investor's Podcast. I'm your host, Trey Lockerbie, and today we have a powerhouse guest list. We have John Arnold and Michael Faye, and I'm so excited to have both of you on the show. We're gonna kick off the show by speaking a little bit to John, mainly around his career. He was at one point the youngest billionaire. What he's up to, how he's discovered Michael Faye and GiveDirectly and pulled Michael in about halfway through. So with that all being said, John, welcome to the show.
Thank you.

**John Arnold** (2:55)
It's great to be here.

**Trey Lockerbie** (2:57)
I am so glad to learn about you and meet you. This has been a really fun journey coming through from the GiveDirectly team. And from what I've gathered about you, learning what I have, you seem to have been a very enterprising young man. Your first company started it when you were 14
And given that you were the youngest billionaire back in 2007 and have now gone into philanthropy full-time as well as signed the giving pledge, I'd like to start out here by just hearing about your relationship to money, especially early in life, because that philanthropic career seems to have captured you very early on.

**John Arnold** (3:32)
So we're starting with a softball question.
My relationship to money. I think it's fair to say that I was consumed by the idea of making money from a very early age. I remember having this conversation with my parents that I wanted to be a millionaire by the time I was 30 That was my goal. It wasn't that I wanted a specific career track. It was my goal is to become a millionaire. And so I was going to reverse engineer how to get there, which started with that summer, walking around the neighborhood, trying to knocking on doors, trying to mow somebody's yard for $15.
And the following year when I was 14, it was the baseball card craze had started and my friends were all collecting cards and I collected baseball cards for five minutes. And then I realized I want to buy and sell baseball cards. I want to translate this into how can I start a business and make some money around it. And so that led to kind of a several year enterprise with me becoming a wholesale distributor of cards, taking advantage of geographic arbitrage and information arbitrage opportunities, sending cards all around the nation, bringing cards in and earning enough money to pay for a couple of years of college. But when that concept of how do I make money, I think it translated into the books I read in high school. I remember reading Wires Poker, reading the Wall Street Journal every day, reading corporate biographies, things like McDonald's, and even a Donald Trump biography, God help me. Then when I got to college, it was how do I get out of college as quickly as possible and get into the game? So I took heavy course loads, had some AP credits, took summer school, so I could graduate in three years and just get out there.