Sam interviews Mike Novogratz — former Goldman Sachs partner, co-founder of Fortress Investment Group, and founder of Galaxy Digital — about his journey from army helicopter pilot to billionaire and back, and forward again. They cover the Goldman Sachs IPO that made five partners billionaires in a single day, early Bitcoin conviction, and what separates elite traders from good ones. The conversation goes deep on identity, risk, pattern recognition, and how to raise kids when you’re already rich.
Speakers: Sam Parr (host), Mike Novogratz (guest, founder of Galaxy Digital, former Goldman Sachs partner, co-founder of Fortress Investment Group)
Introduction [00:00:00]
Sam: I’m a good guy to sit around a campfire with drinking because I got a lot of stories.
Sam: This is Mike Novogratz. Mike grew up as a poor kid on Long Island, made his first million working as a trader at Goldman Sachs at the age of 32, and made his first billion at the age of 40.
Sam: Is that life-changing?
Mike: Yeah, we were the only company ever where five guys became billionaires in a day.
Sam: That’s wild. Mike is a cowboy in his personal life and his professional life. This guy likes to push it and he’s max risk all the time.
Sam: That’s crazy, man. Mike’s made and lost a fortune about two different times.
Mike: We made a bunch of mistakes and next thing you know, not only aren’t you worth $2 billion, but you’re going under the billion pretty quick. And you’re like, “Oh, that sucks.”
Sam: And what are you doing? What’s the lesson to be learned here?
Mike: The gap between the really great and the next level — and I put myself in that next level — is I value people who are good operators at life and who live a certain way that I like.
Mike’s Background and the Goldman Sachs Years [00:01:00]
Sam: I dressed like a cowboy today because you’re kind of like a cowboy — in the energy that you have — and that’s something I really respect. But I thought one of the coolest things was how you’ve made and lost a fortune, I think two or three times.
Mike: You know, I certainly have lost lots of money. That narrative exists and one of my kids and a few of my friends said, “Dude, that’s a little unfair, because even at your lows you still had a lot of freaking money.”
Sam: So your first hit was in your mid-thirties. You’re at Goldman, right?
Mike: Yeah. Listen, I was a partner at Goldman Sachs. Goldman is an amazing firm. It might be one of the firms that everyone should study because they create a culture there where — maybe not good for your mental health but good for the firm — people define themselves by what their boss thinks about them. Lloyd Blankfein was the big guy at Goldman in the later part of my career. Every single person: what does Lloyd think about me? You gave your heart and soul to this culture of Goldman.
It’s a culture of excellence. It’s a culture of world-class people. You’re competing and working alongside the best and the brightest, so you feel like you’re on the New York Yankees when the Yankees are winning. One of the big advantages of that is they paid you wildly less than market as you’re working your way up, because you had the privilege of being at Goldman Sachs and one day you might become a partner.
I started at 24 because I’d done the army and flown helicopters for a while. April 1st, 1989, I got my job. I moved out to Asia, which was a great move. The Asian financial crisis happened. What you’ll learn in a financial crisis is you’re either on the right side of it or the wrong side. If you’re on the right side — if you’re bearish when the world blows up — you make far more money than you thought you would. Goldman and me and the team I was with were very lucky that we got ourselves on the right side and we killed it. So I became a managing director first and then a partner.
Sam: What age were you when you left?
Mike: I think 33 when I became a partner, 34 when I left. And what was my big year? I made a ton of money for the firm. In ‘97 I got paid $2 million, which was by far the most I’d ever been paid — it’s a ton of money no matter how you look at it. I was a millionaire at 31. I wanted to be a millionaire by the time I was 30, but I didn’t have a net worth of a million dollars until I was 31.
Now, me and my team had made the firm like $200 million that year. That was a 1% payout. If you work at Citadel or any big hedge fund today, you’re broadly getting paid 15 to 20% of what you make. Goldman paid us 1%, but you were going to be a partner one day. And listen, you didn’t make it all on your own — there was a huge infrastructure. Goldman deserved more than, say, Citadel might. But they had this mythology at the place that allowed you to stay there.
I almost quit once and the bosses would take you out and say, “Oh, you’re going to be a partner one day.” I made partner in 1998 and in 1999 the company went public. Anyone who was a partner at Goldman Sachs when they went public in ‘99 was just lucky — the company had been built over a hundred-plus years. All those people who had built that enterprise value and weren’t partners that day, we got all their hard-earned effort. We sold this enterprise that was built over a hundred-plus years to the public. It was one of the coolest IPOs of all time.
The junior partners, we all had 420,000 shares. The stock was a $55 IPO which traded to $75. You can do the 400,000 times 75 and we were all roughly worth $30 million overnight. $30 million is still a huge amount of money. In 1999 it felt a lot bigger.
Sam: Did you have to vest — did that need to vest for the next four years?
Mike: If you were a partner, it was automatically vested, but you weren’t allowed to sell it for three, four, and five years — I think it was four or five and six, or three, four and five. So when you left, you got to keep it.
Sam: Okay, good.
Leaving Goldman — The Personal Blowup [00:09:00]
Mike: And listen, I left Goldman in not the nicest of ways. I had a personal situation that kind of blew up.
Sam: I’ve been there, man.
Mike: That was horrible. It was embarrassing. It was humiliating. You’re letting people down. Guys had made big bets on you. You’re like, “Oops.”
One of the great conversations I will ever remember: at that point I was working for a guy named John Thornton, who was one of the two co-presidents of Goldman. He had taken a big risk on me and I was like, “John, I just feel so bad for you.” And he said, “Feel bad for me? I’m the president of Goldman Sachs. I’m worth a zillion dollars. I’ve got a house here and here. I’ve got a nice wife and kids. You don’t need to feel bad for me. You need to worry about yourself.”
It was such a nice thing for him to say, and so true. I was so worried about what those other guys were thinking about me, about letting them down. Instead of thinking, “Oh my god, you let your family down. You let yourself down. Go fix your own shit.” I left with my tail between my legs and spent a year sorting myself out. I had a shrink for the first time in my life.
9/11 and the Return to Wall Street [00:12:00]
Sam: I heard you tell the story once, and it kind of got glossed over but it’s kind of brilliant. You said your brother was near the World Trade on 9/11 and he calls you — “I think there’s a terrorist attack” — and was he in the World Trade Center?
Mike: He was in the building right next to it.
Sam: What did you say when he called?
Mike: I was like, “You should buy Eurodollars or two-year notes.” And he was like, “What the —” And I was like, “Oh, maybe get out of the building.”
Then I realized maybe I should go back to Wall Street. I literally thought that. Then I decided to run down — I’d been in the army, I wanted to run down to help. I picked my kid up and I’m running down the block. We lived in Chelsea at the time. I’m running to the West Side Highway so I could actually see the World Trade Center. And my kids started crying and I was like, “That’s not a good idea to run down there with the kids.” So I ran back in and watched on TV.
They wouldn’t take volunteers. The police blocked it off and I felt impotent — no way to participate. I couldn’t participate financially, couldn’t participate in safety or physically. When you’ve spent all your life trying to make money, trying to be charismatic, trying to be powerful, and you’re like, none of this matters right now.
Sam: Yeah.
Mike: So I literally remember saying I’m going to go back to work on Wall Street, there’s another chapter left in me. In between I was looking at things like Outward Bound or just a whole different career path.
Sam: You were going to be like a camp instructor?
Mike: I was going to try to run Outward Bound. You know, you’re looking at what jobs you could qualify for. Remember, I was the president of Goldman Sachs Latin America. I was a young partner from Goldman. Camp instructor was below my pay grade at that point. But I was trying to think of other ways to contribute to my life and to society beyond Wall Street. And that 9/11 thing was like: go back to Wall Street. You got another chapter.
Founding Fortress Investment Group [00:15:30]
Mike: To be fair, I didn’t start Fortress. My partner Pete Briger — a partner of mine and a good friend from Princeton, Goldman Sachs, and Hong Kong — called me up and said, “Hey, why don’t we partner up?” Pete’s an amazing guy. He said, “How about this? You have a fun life and I’m a pretty good investor and you’re a decent investor.”
Sam: Decent. Thanks, Pete.
Mike: He said, “We’ll go together. We’ll split it fifty-fifty. Half of what I make, half of what you make.” At that point his stock was trading at a premium to fair value and my stock was trading at a huge discount. That he would make that call meant the world to me.
So the two of us were going to partner up. And Pete had known Wes Edens, who had started Fortress a few years earlier. At that point, Fortress was probably 80 people and about a billion dollars in assets. It had been a PE firm — Wes ran it with Randy Nardone and Rob Kaufman — and they were doing mostly structured credit-type PE buying. Wes was a genius. He came up with the idea of buying all the cell towers and treating them as a REIT. He would look at business opportunities and literally craft companies that would then become billion-dollar companies.
Pete was going to build a credit hedge fund. I was going to build a macro hedge fund. The three of us sat there and said, one plus one plus one will equal ten. No one had ever taken a hedge fund or private equity company public. We said, let’s build a company where we all build our own businesses. And to be fair, 90 to 95% of the time we spent alone — it wasn’t like every day we got together. I built a company, Pete built a company, and Wes built a company that we all put in the same box.
The Fortress IPO — Five Billionaires in a Day [00:21:00]
Sam: Did you have to come up with any of your own capital to join?
Mike: I did. And I actually didn’t have that much capital at that point. After Goldman we got $30 million — well, that’s pre-tax and the stock goes down. I think Pete and I put in roughly 10 or $15 million, which was all I had. So you were worth 15 or 10 million, and you put all of it into Fortress.
Sam: All of it into Fortress. And actually borrowed some, I think. And you’re what, 37?
Mike: Yeah, 37. I started a macro fund, Pete started a big distress fund, and Wes continued to build his private equity business. Part of our ethos was: if we do what we say we’re going to do, people will trust us. I learned that at Goldman Sachs too. Goldman’s asset management business didn’t have the greatest returns, but they had lots of money because people trusted them. How do you build trust with investors? It’s doing what you say you’re going to do.
What was wonderful about Fortress — and very cool — is that over the first five years, 2002 to 2007, Pete’s business, I don’t think, lost money in a single month. He’d buy broken debt, he’d give loans to people. I called him a loan shark — if you couldn’t get a loan from Deutsche Bank, you came to Pete. Private credit is now a huge business, but he was early. Wes continued to do his stuff and his track record just kept going up. And I had a very good run as a macro trader — my macro fund in those five years was top 5% of macro funds. Pete had never lost money in a month. Wes’s track record looked like Warren Buffett’s.
Sam: That 15 million you invested — at its peak, what do you think it was worth?
Mike: When we went public, we were the only company ever — and I think to this day this holds — where five guys became billionaires in a day. In roughly ten years you turned 10 million into a billion.
Sam: 2.3 billion. That’s what the— you were sitting around your office after you rang the bell at the stock exchange.
Mike: I had my two young daughters there. All of a sudden Bloomberg puts up a picture of Wes Edens. I was like, “Oh —” Wes Edens, 2.3 billion. And then a picture of Pete Briger. Pete Briger, 2.3 billion. Picture of Mike — I think Wes owned a tiny bit more, so he was probably 2.4 billion — and then Pete and I at 2.3 and 2.3 billion. My two nine- and ten-year-old daughters looked at each other and high-fived, because we had never talked about money.
Sam: Is there any difference between making $30 million then versus whatever —
Mike: I think the Fortress frenzy of us becoming rock stars — we were the first guys to take a hedge fund/private equity company public — we were all on such a high. It didn’t last long because the financial crisis happened.
You get treated a little differently. All of a sudden you’re getting calls from the president of your university who wants to sit down and talk with you. You’re getting invited to cool dinners. It goes to your head a little bit. You’re not really ready for the rush of excitement around it. You don’t feel that different inside. But there’s a little bit of everyone gets a little full of themselves.
Sam: Did your life stay the same but the people who wanted to talk to you change? Or were you getting emails and calls from people you haven’t seen in years?
Mike: Yeah. You get calls from people you don’t even know who say they know you. And because it was public, we were in newspapers and magazine articles, it really went to your head.
The wonderful thing about having six brothers and sisters is they don’t treat you much differently. They’re excited for you, but they — well, you have a bunch of siblings who are also doing well, so you know.
And then the markets always take their pound of flesh. We made a bunch of mistakes. ‘08 happened and next thing you know, not only aren’t you worth $2 billion, but you’re going under a billion pretty quick. And you’re like, “Oh — that sucks.” You’re losing a comma.
Risk, Discipline, and What Makes a Great Trader [00:29:00]
Sam: Some of this is going to sound crass, but if you were a kid in high school that played sports and people liked you — if you had a decent social life and didn’t have a chip on your shoulder — success seems a little easier to handle because you were used to winning. And it’s often the people who were misfits whose chip on their shoulder drove them to crazy success who have a hard time adjusting.
The reason I’m interested in you is because you’ve won in a bunch of different parts of life. You were a great wrestler. You went to Princeton. You did a lot of amazing things. But your personality is so loud and you’re so funny and tell these crazy stories — you talk about trading and you’re like, “Oh, yeah, I forgot you actually had to be skilled at something.” What do you think people who know you would say you’re good at?
Mike: I have a weird ability to look at what the future’s going to be — pattern recognition. I can look at charts and see where things are going, or I can synthesize information well. So I’m a good speculator because I see the future pretty well.
Sam: Do you read a lot?
Mike: I used to. I watch a ton of TV now. But I read a lot of non-fiction stuff that’s coming across my desk all the time. I keep up on news and the world and talk to people. Most of the great CEOs read a lot. They’re curious. I’m curious as heck. I get a lot of my curiosity and learning from conversation — I have this amazing network of people that I’ve met in the world and I’m learning all the time. I literally had lunch with Goldman’s chief information officer — he’s got 19,000 of Goldman’s 45,000 people that work for him. That was a master class in AI. And so then I’m meeting other people in AI. I’m learning AI from reading articles, playing with it, but mostly finding the world experts and learning from them. That’s how I’ve been learning as I’ve gotten older.
Sam: So people would say you’re good at seeing patterns. What else?
Mike: I’m a good storyteller. And why that’s been important is crypto in the last ten years has been about narrative. It’s been about the story of understanding the world and then telling that story. I’ve been unbelievably well suited for this moment to be a crypto CEO because I’m a good storyteller. How do you convince someone to buy Bitcoin? You’ve got to tell them a story.
Sam: What about being a good trader? Because you were actually a trader for a long time.
Mike: I still am a trader. That’s a hard job because you have to first of all develop a process — an internal algorithm that wins more than it loses. You’ve got to be really honest with yourself: am I good at this? Not am I intelligent, but am I good at taking this information and making bets on it? And even if you are, then you need to develop a discipline that allows you to make sure your best guesses are actually in your portfolio.
There are so many people right now who say, “Oh my god, you’ve got to be short the dollar. The US is on a downtrend, Trump is pissing everybody off. Short dollar is the biggest, easiest trade to see.” Every single macro investor, almost every single investor right now believes you should be short the dollar. Maximum conviction. But I’d bet if you took all their portfolios, only 40% of them have a really big position in it. It should be tautological that if you’re bearish you’re short and if you’re bullish you’re long. But it’s not, because of fear. What if I’m wrong?
So much of trading is anxiety management. How do I overcome my fear? I heard a guy the other day say anxiety is just when your brain is a lot bigger than your balls. Anxiety is real. There is this lion that shows up and you go into fight-or-flight. In trading you see the lion all the time. You get nervous when the market’s going higher and you’re long. What if it goes back down? I’ll give back my money. There are all these different reasons you get scared.
Sam: How do you learn to trust yourself?
Mike: That’s a really hard process. Out of 25 macro traders that people have probably heard of — Stan Druckenmiller, David Tepper, Paul Tudor Jones, Louis Bacon, Alan Howard, Chris Rokos — there’s a bunch of people that are great at this. The gap between the really great and the next level — and I put myself in that next level — is discipline. You have to have a set of rules you follow.
Sam: Do you consider yourself a highly disciplined person?
Mike: I think I’m a really hard-working person who was really disciplined at parts of my life. I have sporadic lapses of discipline, partly because I have this really diverse group of interests and I get excited. I’m a people pleaser, so I’m trying to help people out all the time. It’s a prioritization problem.
Stan Druckenmiller, for instance — I think he’s the best, or David Tepper’s pushing on him — the best trader of his generation. Tepper’s younger. 32 years never lost money, compounded over 30%. Everyone in our seats looks at him as the guy. A ton of integrity in how he lives his life and his portfolio. When he was managing other people’s money, he never golfed during a workday. And he loves golf. But discipline.
Ehud Barak and the Lucky Generals Theory [00:38:00]
Mike: So this is how I learned that I had the right to be good at this. I was making money and I was like, “Yeah,” but everyone has a bit of imposter syndrome. And Ehud Barak — who had been the prime minister of Israel — I’d hired as a consultant.
Sam: How do you hire the prime minister of Israel?
Mike: One of my investors said, “You need to meet Ehud Barak.” And Barak was looking at ways to make money and had just started this business. He had two clients: Louis Bacon, who was a multi-billionaire, one of the pantheon of the greats, and Bruce Kovner, multi-billionaire, one of the pantheon of the greats. And Mike Novogratz, who was a little peanut at that point.
Sam: What was his rate?
Mike: Maybe $200,000 a year or something. So you got the former prime minister of Israel to give you feedback and advice. I remember sitting with Ehud for lunch and he said, “I think I’ve figured you out. You know, you’re not so smart, but you’re lucky.” And I was like, “That’s the compliment?” He said, “Don’t worry about it. I was just with Louis Bacon and I spent time with Bruce Kovner. Kovner might be smarter than you, but all of you guys have an intuition.” And he gave me this quote from Napoleon: “I hire lucky generals, not skilled ones.”
And he said — I forgot you’re not so smart, you don’t know French — that they have an intuition, a pattern recognition, an ability to sense where things are like a general did, and that’s your intelligence.
Instantly I was like, “That’s why I’m right more than I’m wrong.” I never knew why I was right more than I was wrong. You can be commercial easily — if we can make these cups of broth for 50 cents and sell them for $2, we’re both going to say, “How many can we sell?” That’s not hard. But why should I be able to predict where dollar-yen is going to go in a year better than you?
Sam: Are you able to do this in other facets of life, like with people?
Mike: Without being conscious of it. I’ve invested in a few independent movies. Almost nobody makes money in independent movies. And I’ve invested in two of the top three highest-selling independent films of all time — Birth of a Nation, which I think sold for $19 million, and Assassination Nation, which sold for like $13 million despite not doing well at the box office. Those are two of the top five prices for independent movies.
Sam: Was that luck or intuition?
Mike: It’s not luck if it happens twice. For me, that conversation with Barak was giving me confidence that my decision process wasn’t random — there was something in it. Once I understood that, I was much more confident in telling investors how I make decisions. My hedge fund went from $300 million to two billion under management, and my performance went straight up over the next six months — mostly because investors could feel my confidence.
The lesson: spend time figuring out what you’re good at and where it comes from.
Sam: But where does it come from? I’ve read about Steve Cohen, how in the ’80s when there was a physical ticker he could just hear the rhythm of the ticker and make calls. That’s so vague. You’re explaining it like an art and I want it to be more of a science.
Mike: It’s very artistic for me. The type of trading I do is very intuitive and very pattern recognition. If I went blind, I couldn’t trade. I need to see the ballet of the charts. There are other people who do things very differently. The interesting thing about trading is there are a thousand different ways to approach it.
Sam: What does Steve Cohen do?
Mike: I know Stevie pretty well but I don’t know his exact process. He’s one of the most competitive guys out there. He used to go on vacation and have all his screens set up and if he wasn’t feeling things right he’d fly back to get to his desk. Obsessed with beating the markets.
Sam: Are you competitive?
Mike: I’m not as competitive — which is interesting when I think about Stan Druckenmiller and Louis Bacon and why those guys are at that level. I remember playing croquet against Louis Bacon and I’m like, “How is this guy killing me in croquet?” Well, he had hired the world’s best croquet coach. He doesn’t like to lose. These guys are ultra-competitive and ultra-disciplined and those two factors together create a maniac. An amazing performer.
Sam: Maybe not the easiest person to go to cocktails with.
Mike: Sometimes they are, some of them. But yeah — amazing performers. I don’t want to discount that I’ve had an amazing run at trading. I just know that I compare myself to those guys and I could probably use a little more discipline. I would probably argue I’ve had more fun. I’ve done more different things than most people. But each person makes their own decision on what path they want to take.
The key is to figure out how you want to live your own life. Figure out what you’re good at. That comes from mentors. It comes from sometimes chance. Without that conversation with Barak, I was miserable. I remember telling my wife: I might even shut this hedge fund down if I can’t have more fun. And I was winning, but I was feeling so much pressure because I didn’t know why I was good. That literal conversation over lunch unlocked this story in me. It was an intuition — you’re just good at certain things and you should trust it. It doesn’t come from sitting in a box. There’s a tremendous amount of information I’m shoving in my brain — looking at charts, talking to people, understanding psychology, looking at who’s long and who’s short. Tons of stuff goes into the algorithm. But it was at the intersection of the intuition.
John D. Rockefeller and Flagler — History Buff [00:48:00]
Sam: One of my heroes is John Rockefeller. I was listening to Business Untitled and you mentioned that in fifth or eighth grade you wrote a paper on Rockefeller.
Mike: Yeah, he’s a fun dude to learn about. And you and your partner Wes did the train thing — well, Wes did the train thing.
Sam: Wes did the train thing. I was a cheerleader and an investor.
Mike: But yeah, that was fascinating. I went down there and was reading about Flagler. He’s a man. These guys are hardcore.
Sam: I went and talked to some mutual friends of ours and they all used the word “risk” constantly. One person said he’s max risk all the time — his entire life, he takes tons of risk and lives life on the edge. Another person said, he’s blown up a couple of times and won a lot more. I’m amazed at how good he is at managing risk.
It’s hard to be in the crypto business and not be comfortable with risk. Bitcoin went up and crashed down. But I think it’s bigger than that. I think you enjoy risk. There’s some personality test where you score like 37 out of 40 on risk tolerance. And your kid is the exact opposite. And there’s the story of you flying a helicopter down the street during Princeton’s graduation. There’s clearly this thing of: this guy likes to push it and he’s pretty comfortable teetering on big ruins.
For your personal finances — are you at risk often?
The $18,000 Army Salary and Why Being OK with Yourself Enables Risk [00:51:00]
Mike: Part of it is there’s a balance. There’s an adrenaline need — I like adrenaline in sports and in trading. It’s a dopamine addiction if you want to think about it. But part of it is I like my life. I was a helicopter pilot at Fort Rucker, Alabama, making $18,000 a year after tax. $1,500 per month paycheck. My buddy Pat Tierney and I had the time of our lives in the middle of freaking lower Alabama — the wire grass, they called it, by Dothan — 700 guys and almost no women because all the women had gone off to college. We still had one of the best times of our lives.
When I think about it, was that year better or worse than the year I made lots of money? I can’t tell. That was a great year. So I think if you enjoy your life, it’s easier to take risk. If I lost my money, it would hurt my ego for a while. I would be embarrassed. I’d be frustrated because all the money really does at one point is allow you to help other people — which is both a blessing and a lot of responsibility. And sometimes it’s a pain in the ass.
I actually don’t think I’ve tied how I live my life on a year-to-year basis to money. Some of my friends say, “Look at the parties you throw, you spend lots of money.” I do spend lots of money. But I threw tons of parties when I didn’t have a lot of money either. I just threw cheaper parties. So much of being able to take risk is being okay with your life and not being defined by just your money.
Sam: Have you met Brad Jacobs?
Mike: No, I wish I had. I’ve never met him but I’ve read his book. “How to Make a Billion Dollars.” He’s created I think six billion-dollar companies — XPO Logistics is one. These huge $10 billion logistics companies. His whole thing was he’d take fragmented industries, buy them all up, operate them, take it public. He talks in his book about how he researches like crazy — anytime he gets into a business, he reads all the books, uses the data services. He’d hire experts and then also go talk to the employees.
Sam: What I’ve noticed as a pattern with you is that you don’t necessarily do it like he does — research — but you talk to a lot of people. On the way here I heard a story about how your roommate was Gloria Vanderbilt’s son. And your other roommate helped create Ethereum. There were like 20 stories where I’m like, “What the hell?”
Mike: I’m a good guy to sit around a campfire with drinking because I got a lot of stories.
The Princeton Dorm, Bitcoin Origin Story, and Pete Briger [00:55:00]
Sam: Who was in that dorm? How many billionaires came from that dorm?
Mike: At least three. For real. In that dorm.
Pete Briger, who had been my partner at Fortress, lived above me my freshman year at Princeton. This dorm was amazing. He’s the reason I got my job at Goldman Sachs. I was literally wandering around Bleecker Street a little drunk, interviewing for jobs, and I ran into him. He was like, “Bullshit. You got to work at Goldman Sachs.” And so he got me an interview, and 41 interviews later they gave me a job. Then we lived in Hong Kong together and slowly became very good friends. I’m the godfather of his youngest son.
Then we did Fortress. He was the distressed debt investor. But he made a promise to his wife that at one point they’d move back to California. He moved his business to the Stanford area — Palo Alto, probably around 2010.
He’s not a tech guy, but his brother-in-law was a tech guy and the group of friends he had were all tech guys and they all started talking about Bitcoin. Pete wanted to be part of the clan. So he called me up and said, “I’m hearing about this thing, Bitcoin. All my smart friends are doing it. What do you think?”
I’d never heard of it. I quickly did a Google search, asked around. This would have been 2012 or 2013 maybe. Bitcoin was at like $96. There was bitcoin.org and some forums. The Chinese had just started buying it and I made a thesis: we got to buy it. My friend Jeff Low, who’s become a great investor, was working in my family office and he bought my first Bitcoin for me.
Then Pete and I kept talking about it. We said maybe this should be bigger than just us buying a little bit. So we called a third friend, Dan Morehead — another Princeton guy who had worked on Wall Street, worked at Goldman, worked at Tiger. I had invested in his first hedge fund and he was on the sidelines after ‘08. He researched this for a while and came back and said, “Guys, this is going to change the whole world.” Dan was really confident and willing to put a big chunk of his net worth into it. Pete and I were wealthier at that point, and we were like: if he’s putting that much in, we need to put at least that much in. That’s the way guys think.
Sam: Was it eight figures, or can you even say?
Mike: It was seven figures in dollar terms — significant at a dollar amount at $100 a coin — but not in our net worth terms. We were very wealthy guys at the time. And it’s one of the reasons we were able to hold it so long. Even when it went up, if you’re a young guy and you put $10,000 into something and it’s suddenly worth $100,000, your friend is like, “Dude, you got to take it off the table. You can buy a house.” There are so many reasons you’re going to sell. Almost nobody can hold. But if you already have a lot of money, it’s just another investment.
So we get a lot of credit for making lots of money in crypto, but it was easier having started rich.
Sam: It’s gotten me thinking about why this world is so off sides.
Mike: When you’re wealthy, you have assets. Assets are basically chips on a table. I bought SpaceX when it was 1/20th of today’s price because someone said, “Hey, you got to buy some private SpaceX.” You look, you’re like, “Elon Musk is brilliant. Let me get some.” And all of a sudden you make $100 million-plus in SpaceX. You didn’t do anything other than place a bet. Getting money and getting network makes making more money so much easier. It’s almost unfair.
The advantage isn’t just capital. It’s capital and network. One of my strengths is I like people. I like cheering people on. I like talking about people. It makes it easy to make friends and network. And through that network, you learn stuff.
Sam: For my own finances, I basically do the S&P 500 and bonds.
Mike: You invest like a white guy from Missouri.
Sam: Oh yeah. Look, it’s worked out. Boring.
Mike: Which means you’ve outperformed about 90% of hedge funds.
Sam: So it’s worked out. I started making money in the greatest bull market of all time. For your personal finances — any boring stuff, or are you always active across the whole thing?
Mike: I have a chunk in credit funds like the one Pete runs — private credit funds that have done roughly 10% plus a year compounded. If you can compound a piece of money at 10% a year for a long period of time you get rich real quick. I have some private credit, a lot in my own company, and I trade currencies on my own. I have a bunch of private equity and venture investments. I own a chunk of Bojangles — the chicken company — which just got announced as being put up for sale, so hoping that sells for a high price.
I haven’t really ever done bonds and stocks, partly because that’s what I do. And my money has often been tied up in the enterprise — I own a lot of Fortress stock. I’ve probably run the lowest liquidity-to-net-worth ratio of anyone who’s been on your podcast.
Sam: Tell me more about that.
Mike: It’s not necessarily what I always wanted. I’ve always had a lot of faith that I’d make money, so I’ve always wanted to live a big life and also make a lot of investments. You just spend and live large and invest large and you always think you’re going to win. In 2021 we thought we were going to take Galaxy public and I was going to get a lot of liquidity. But we took a little too long to get into the SEC queue. The administration changed, Gary Gensler shut the door. Four years, no liquidity out of Galaxy. My other investments, some good, some bad, didn’t really change lifestyle. You slowly start burning the furniture of liquidity. We just did a deal — we took some chips off the table in terms of liquidity.
Sam: Dude, you live life on the edge. I admire your ability. I’m adrenaline-seeking too but I’m way more risk-averse than you. And I think it’s held me back, honestly.
Failing, Coming Back, and the Wrestling Lesson [01:06:00]
Mike: People say I blew up twice. Listen — I had a personal situation to deal with and I lost my job at Goldman Sachs. Actually, to be fair, I resigned, but that was embarrassing because I was on a high-flier track there and I loved Goldman Sachs. That was painful.
Coming back from that gives you a lot of confidence that yeah, you can fall down and lose money. It’s not the end of the world. You’ve got to learn how to get back up. And being a wrestler teaches you that. No wrestler wins every match. Kyle Dake in college — but then he lost internationally. No one wins every match. And learning how to come back from losing is one of the most important things. Losing doesn’t mean you’re a bad guy. Doesn’t mean you’re not competent. It just means you lost that game.
I think about Nadal when he left tennis. He said he lost 48% of the points he played and he was one of the greatest tennis players of all time. That process of stumbling and coming back — I’m often asked to help people think through it.
What does it take? Part of it is take some time off and do some work and understand what the hell happened. Most people don’t spend enough time figuring out who they are. Literally trying to understand who they are and why they are who they are. It’s always your parents. You’ve got a relationship with your mom and your dad. Processing that — that’s the human condition. Trying to understand what moves you.
Some people get there. Others just make progress getting there. I think I’ve made progress. I’m not sure I’ve ever gotten to enlightenment — not even close — but I keep making progress going on that journey. There are lots of ways to go on it: through getting a shrink, through meditating, through prayer, through ayahuasca or psilocybin journeys. Radical ways, subtle ways, taking time by yourself. But it’s investing in yourself. Most people don’t invest in themselves.
I once asked a room full of 800 wrestling coaches how many had in the last five years spent one week by themselves. Not one hand went up. Not one.
Sam: You do that now?
Mike: I try once a year to spend a week by myself. My friend Chris — who runs a publicly traded company — he’s like, “I screw up all the time and I always try to journal. What’s the lesson to be learned here?” I thought that was a really good way of asking himself that question.
Sam: What questions are you asking yourself during that seven-day solitude?
Mike: When I did the silent meditation retreat in Canterbury, England, you sit there for 11 days meditating. You can’t read, can’t do music, can’t exercise, can’t even masturbate. Literally 11 days. Your back hurts, you starve.
Sam: Do you set goals like this? You’re running a company with how many people — 200?
Mike: 600.
Sam: Oh my god, I didn’t even realize. And you have a lot going on, but then you’re like, “I do this week meditation and then this party here.” Are you setting, at the end of the year, this is what a win would look like?
Mike: We do set goals. We’ve got a management team with an agenda of things we want to happen. The crypto business and the data center business — we have two businesses, both at the forefront right now of explosive change. There’s a ton to do in both of them.
When I think about my time for the next six months, Galaxy is going to get a ton of it. There’ve been times when we first started — smaller business — my philanthropy got a ton of my time when I started doing criminal justice work. I’ve dialed back my participation in philanthropy solely because this 600-person baby needs a lot of energy.
My brain though — how do I have fun? My son and I are brainstorming on this fantasy project: if you actually had $100 million to give away to one thing, what could you do to make New York City better? So I’m working with people on that in the background.
Sam: There’s a do-what-I-say-not-what-I-do aspect to this —
Mike: My wife wakes up every day at 6:30, meditates an hour, meditates another hour at night, and doesn’t miss. Like a metronome. And I’m like, I know that would be good for me. I do meditate once in a while when I’m stressed. But it doesn’t seem broken. When I break, I figure out how to fix myself.
Sam: But on this other podcast you did, you said you went to a therapist for the first time and the breakthrough was about loving and forgiving yourself. And in my head I’m playing armchair expert and thinking — you’re doing it again.
Mike: One of the things you’ll learn as you get older is that you see very few people that actually do enough of the hard work that they really change. And most of the times you see those people is when they literally hit some horrific rock bottom where the only way to live is to change. That’s the whole AA cycle — where they just give up and say, “Okay, I’ll do what you tell me to do because I have to change.” Change is hard. Even subtle change is hard. And again, if someone’s living their fullest life, maybe they don’t want to change.
Sam’s Insight from the Green Room at Conferences [01:19:00]
Sam: I love hearing about this stuff. This might sound pompous, but in my head I’m like — I’m 35, and you’re 25 years ahead of me.
Mike: We’re both a little bit deaf.
Sam: Yeah, we both can’t hear. I came from a blue-collar family and I think you talked about Princeton — you got there thinking you were the shit and then you got around people who kind of were the shit and you were like, “Oh.”
So I always felt like — that line: if you can make it in New York you can make it anywhere. There’s nothing like New York City because you’re never going to be the guy. I go home and I’m like, I’m the man. And then I go to New York and I’m like, I’m nothing. But it’s both so liberating and so awesome.
Mike: I mean, go to a Knicks game.
Sam: Dude, we were supposed to do a podcast and you cancelled, and that night I turn on the TV and I see Timothée Chalamet, I see the Jenner girl, and then I see Mike. I was like, that — we were supposed to do a thing. And my wife was like, can you blame him?
Mike: Knicks in the playoffs — this city erupts.
Sam: You had Timothée right there. How much does a playoff seat cost to where you were sitting?
Mike: Those seats are free — well, we have season tickets, so you just pay the normal Knicks rate for playoff tickets. But if you want to buy front row in the playoffs, they can cost as much as $50,000 to $80,000. The second row, the guy who sat next to me I think paid $15,000.
Sam: Do you know Ryan Cohen? Billionaire Ryan Cohen?
Mike: I don’t know him, but I know who he is.
Sam: I saw him sitting right in front of you during a game. Jaylen Brunson fell into his lap and he didn’t break eye contact from the beautiful woman he was with. Those seats are fun because you always have a celebrity sitting in front of you.
The Burna Boy Chain Story — Gift of Gab [01:23:30]
Mike: I went to one game, just a regular season game, and Davido, the Nigerian superstar — there are two guys in Afrobeats, right? Davido’s one of them and the other guy’s Burna Boy. He was there and I didn’t know who he was, but he had a great chain. I like chains. I said, “Dude, where’d you get that chain?” He answered. I went to get a beer and was like, “You want a beer or a Coke?” And he thanked me. He turned around and said, “You know, no one’s offered to get me a beer in a long time, and I really appreciate that.” We started talking. I had no idea he was this mega star. He posted a picture and then his uncle texted me and said, “Dude, that guy knows more about crypto than you’d think. Get to know him.” So he came on — he was on our podcast. Became friends with him.
Sam: That’s the power of the gift of gab, I think, is what my father calls it.
Mike: People are scared to be nice to people. Ask the guy sitting in front of you where he got his chain — most people won’t do that. And you end up doing some type of business.
Sam: Well, not even business — you just got a friend.
Mike: He invited me to his wedding in Nigeria, which turned out to look like the coolest thing of all time, but it was a week before my daughter’s wedding and I didn’t think I could miss it.
Sam: Haven’t you noticed this pattern — all these silly small interactions have been like compound interest on your life? I’ve heard that story 12 times.
Mike: You know what I love? I love other people’s stories. And you must as well, otherwise you wouldn’t do the podcast. I get excited for other people. You meet Davido, you’re like, “That’s freaking cool.” I didn’t realize he grew up a rich kid and even the relationship with his dad — it all fascinates me. If you show interest in people and you’re open with yourself, it opens up a lot of opportunity. And it’s not a strategy. It’s not like I think about doing this. It comes from partly being raised with seven kids. It partly comes from feeling loved your whole life. Mom and dad love you, your friends love you. You feel comfortable in your own skin.
The gift you can give your kids — the gift you can give your employees — is for people to feel comfortable in their own skin.
Princeton, Gloria Vanderbilt’s Son, and the Lesson of Equality [01:27:00]
Mike: When I went to Princeton, my great insight: I had this roommate who was Gloria Vanderbilt’s son. Unfortunately he ended up committing suicide later in life and it was so painful because he was such a nice kid.
Sam: Would that have been Anderson Cooper’s brother?
Mike: His brother. And Anderson has written about it.
Sam: I read Anderson’s book on his mother. It was amazing.
Mike: I’m a young guy. I’m meeting Gloria Vanderbilt and I’m like, “Oh my god, I’m with royalty.” Middle-class guy. My mom had grown up in Queens and wore Gloria jeans, so she knew the whole story.
After about six months at Princeton — Princeton’s unique in that everyone lives in the same dorms, and they’re kind of crappy dorms. There’s not a hierarchy of rich and non-rich in terms of living space or even social life. And you’re like — they all use the same bathroom as we do. He’s got his insecurities, he’s got his strengths, just like me. The moment you realize everyone is kind of the same, everyone’s a little bit insecure, everyone’s got impostor syndrome, everyone’s trying to figure out who they are — you had that realization in college?
Sam: Freshman year. I used to host these conferences at my old company — it was a media company, we owned trade shows. And we’d get like the founder of WeWork or Casper or Bonobos, or Zapier — companies that were at the time like $10 billion companies. I’d play a trick on them where I’d say, “Your talk is at noon but you got to be here for mic check at ten.” There’s no mic check for conferences — it just works. But I wanted to be in the green room. And I’d hear these billionaires complain.
I’d be sitting there listening with four or five of them. I knew how big their companies were. And I’d hear them complain about, like, “I’ve had this CFO who I need to fire but I hate the confrontation.” Or this one company had just raised $400 million and they’re like, “Things are going horrible.” I’m thinking, “Dude, I just read about you in the New York Times. I thought you guys were the shit.” And I remember thinking that was the most enlightening lesson I’d ever had in terms of business and how to live life. These people have the same downside, the same issues I have, yet they’re still just moving forward and doing it. I found it very freeing to know that the people I admired were broken.
Mike: Listen, everybody is going through a similar journey. There are very few people that are enlightened. I’ve met one or two. We’re all on this path. The lesson I learned at Princeton wasn’t that I was the same as everybody — it’s that I was no better or no worse than anybody. I did some things better than people and some things worse. Wrestling is pretty objective. This guy beat your ass. He’s a better wrestler. And I’ve tried to keep that ethos my whole life. It’s why at my parties I’ve got a real weird collection of people — I just like them, as opposed to having a hierarchy.
That’s what’s brought me lots of joy. But it’s also given me — when I got to Goldman Sachs, I would walk into the boss’s office and be like, “Dude, I got this great idea. I deserve to be here.” Now, often he’d say, “That’s a stupid idea. Okay.” And I’d go back to my seat. But the guys around me were like, “Dude, how’d you have the courage to walk into the office?” I was like, “He sits on the same toilet as you.”
Sam: Were your parents confident?
Mike: My dad was an All-American football player from West Point, but very quiet. Stoic is the right word. He’s become the kindest man in the world as he’s gotten older. He was tough but kind.
My mother was very aspirational — the greatest storyteller — and she pushed us, not in a direct way but in an indirect way. If we complained about some kid being able to do something: “Well, she jumped off a cliff. Would you do it?” There was almost this sense of — we could be the Kennedys. I tease my mom all the time. She looked like Jackie O. She named my oldest sister Jackie. So we had Jackie, Robert, John, John —
Sam: Do you really have a John-John?
Mike: John. Yeah. John, Michael. I was like, “Mom, you named us after the Kennedys.” “I did not.” But my mom and dad got married right when Kennedy was elected. And the Kennedy family — I’m a huge history buff. I’ve probably read 12 books about them.
Sam: Thank God you aren’t the Kennedys, right?
Mike: My mother was very aspirational. She wanted the best for us and was a big cheerleader. Not like a Jewish mom or a Korean mom pressuring, pressuring, pressuring — but there was an internal sense of, of course you can do this. And I think all my brothers and sisters picked up on that.
Raising Rich Kids [01:37:00]
Sam: Are you nervous about raising rich kids?
Mike: I think about that all the time. When I became wealthy I thought, there’s nothing I can do about it. So I had one rule to my children: be kind. The only time I lost my temper with my kids was when one son was being tough on his brother. That was the only time — when I thought they weren’t being kind.
I didn’t think you could fake not being rich. When I was a young kid I was part of the labor force — if I wasn’t mowing the grass, my mom or dad had to. If I wasn’t doing the dishes, my mom or dad had to. You couldn’t fake “you’ve got to do this” when it doesn’t make any sense with wealth. My wife probably did a better job than me at this. All you can do is model good behavior. If you want your kids to work hard, work hard. If you want your kids to be kind to people in your house and to the cab driver, be kind to them. If all you do is talk about money, your kids are only going to talk about money. If you talk about interesting things around the dinner table, your kids are going to talk about interesting things. Parenting really is modeling.
By no means have I been a perfect model, and my kids can probably give you 85 stories on how I’ve fallen short. But that was my philosophy. And they’re going to be rich kids. So far, they’ve turned out lovely. Fingers crossed. They’re all finding their own path and doing cool things.
Sam: I think it’s much harder to be a rich kid than a poor kid. For us, our success was providing — going from here to there. You wanted to make money so you could go on a date, get laid, buy a house, send your kids to school. You want to be better than your parents and your parents want you to be better than them.
Mike: With my situation, I got really lucky at a young age. Compounding, if you think about it — it’s like — and I actually feel sorry for my children. The natural state is that you need to beat me. But I don’t want them to feel that pressure.
Sam: But they don’t need to beat you.
Mike: The book Sapiens was all about humans being people of narrative. The narrative in America was: the American dream is your kids are going to have a better life than you. That got built into our system. At one point you want your kids to have a good life. The European ethos is: I just want my kids to have a good life. As you get wealthier, the narrative shifts. I want my kids to feel self-actualized. I want them to have a wonderful life.
At one point, if you’re Bill Gates’s kid and he’s worth $100 billion — impossible. Like, you become idiotic about trying to “beat” that. So I think the moment you get even half as wealthy as I am, that narrative shifts and it’s like: how do I help my kids? How do I scaffold them to be self-actualized?
I’ve got one son who’s quirky and smart and we have no idea what he’s going to do. My wife and I, we gamble on it. But God — what do you think? It could go anywhere. Hopefully he finds his niche and we cheer him on.
Closing — Living a Full Life [01:43:00]
Sam: Appreciate you doing this. You’re the man. I really admire your business stuff, but I don’t think that’s what you’re great at. I think you’re great at living a full life. And I think there are only a handful of people I know from the outside or personally where I’m like, I really admire up to four or even five of the different facets of how they live. Whereas there are a bunch of people who are amazing at business and you’re like, yeah, amazing at business, but I don’t admire anything else about them. It’s cool to hang out with someone I put on that list of people I genuinely look up to and how they live all different parts of their life. So thanks for doing this.
Mike: I appreciate you. Thank you.