EP 86: Practice Investing with Rapunzl Training App. Myles Gage, Co-founder Rapunzl Investments
This week on The Millionaire Choice Podcast, Tony talks with Myles Gage, co-founder of Rapunzl Investments. Tony and Myles discuss financial literacy, investing, and community outreach.
Myles has been an advocate for encouraging young people to invest in the stock market given his exposure to learning about it in elementary school where he won stock trading competitions and even got to hold Warren Buffet's wallet once!
About Myles Gage
Co-founder of Rapunzl and advocate for financial education; especially for individuals in under-served communities. Attending Ariel Community Academy on Chicago's south side exposed Myles to the stock market at a very young age, as financial literacy was the crux of its curriculum. That's why, after graduating from the University of Illinois Urbana-Champaign, he developed Rapunzl with high school friend, Brian Curcio. Together they designed and developed an app that addresses the three roadblocks that prohibit many from understanding the stock market: fear, exposure, and accessibility.
Learn more about Myles Gage, https://rapunzlinvestments.com/
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Welcome back to the millionaire choice show today, we're gonna have a fun show and a talk with Myles Gage, co-founder of Rapunzl investments. I'm excited about this Rapunzl app. He was telling me about it in the pre-show; It's an investing simulator, which, if you don't have a lot of practice, or maybe you do have a lot of practice and you need a little bit more practice; working through your investment. This app is gonna be a fun thing to talk about. Myles, welcome to the show.
Myles Gage (00:26):
Thanks for having me. That was a great introduction. I'm the co-founder of Rapunzl investments, which is actually a mobile application that gives users 10,000 fictional dollars to buy and sell stocks of real publicly traded companies. So, you can think of this as a risk-free way to learn about investing in the stock market. The cooler thing about our simulator versus some of the other ones in the marketplace is we allow our users to enter their fictitious stock portfolios into competitions where you can compete first real scholarship and cash prizes.
I love that. You said that- let's make sure we don't pass over that again; your app is designed so that you get fictitious dollars to play with, but at the same time you can actually win prizes. And, did you say specifically paid out in scholarships or are there other ways that it's paid out?
Myles Gage (01:18):
So, for high school students, those are paid out in scholarships, and Rapunzl works with an organization in Chicago, Dreams for Kids, in which we're able to get donations and grants from financial service institutions because we satisfy a lot of their corporate giving requirements. So, through that avenue we're able to give away scholarships to high school students from under served neighborhoods. And, then for the over 18, or for college students, they're not necessarily driven by the scholarship aspect of the app. So, we figured out a way to give away cash prizes to them. Another part of Rapunzl's business model is that we do private competitions for various organizations and companies. And so, there are costs assocated with running those competitions. So, we're able to take a portion of the proceeds from the money that we receive from those programs to actually fund the cash prizes that we give away for users over the age of 18.
That sounds like a wonderful business model and design; plus, you're making a difference. Now, people may not pick up on it, but you're one of the younger guests I've had on my show. I didn't ask you this in the pre-show, but how old are you?
Myles Gage (02:30):
I turned 28 three weeks ago.
That's awesome. I was just making my millionaire choice at age 25 and deciding I didn't wanna be broke for the rest of my life. It sounds like you're a little bit ahead of that. So, you're in this financial world now, but how did you really get your start? What did things look like for you growing up? What were some of the hurdles that you faced as a young man in your family, learning from your parents, financial habits and things.
Myles Gage (02:56):
So, I think finances have always been around and something that's always been a very much an integral part of my life. As a kid, my mom enrolled my brother and I at a public school on the south side of Chicago. They had a finance based curriculum called Aeriel Community Academy that was founded by John Rogers, who's CEO of the largest minority on asset management firm and R. E. Duncan, the former secretary of education. But, my mom put my brother and I in the school because she didn't want us to make some of the same financial mistakes my father and she had. So, we started learning about the basics of money management in first grade and that carried over outside of the classroom. Every time we got money, she made us split it up three ways.
Myles Gage (03:44):
So, she had this thing called "the three jar system." 10% of our money would go to charity; cuz you always have to give back. 40% with savings because you always should be saving for a rainy day; that would ultimately become the investing fund. And then, 50% was your spending or your living jar, which is what you could use for discretionary purchases. So, that was something that was always instilled in me. I think just even watching some of some challenges that my parents had financially was something that always inspired me to wanna pursue a career in finance, or go on wall street just because I knew that this was an avenue or a route to making a high salary or really being in a position to take the reins of your financial future.
And so, your family was pretty stable growing up, but did you hit any turmoil or problems along the way?
Myles Gage (04:37):
So, I would say that I, for the most part, grew up in a stable middle class family. but, I think during, 2007-2008, a lot of folks experienced hardship and we were not immune to that. So, there were a lot of different challenges. My dad had to close his business. The house that we lived in ultimately got closed, and my parents separated. So, that was a very egregious and difficult time for me in middle school. So, I mean that adversity at a young age is really what I would say put the fuel in my oven, or just under me, to really continue and really want to be financially well off. So, this really was like all kind of crap hitting the fan when I was in middle school, and that's when I really got serious and got aggressive about my involvement in financial markets.
Now, if you listen to guys like Dave Ramsey and some of the statistics out there; they talk about money issues being the number one problem, or the number two problem, in marriages. Do you think that was a major contributing factor to your mom and dad's split? Was it the financial turmoil?
Myles Gage (05:50):
There were a lot of challenges, but that was definitely of them for sure.
I think my wife and I really haven't had a lot of problems fighting about money. I think the biggest thing was when we weren't managing our money really well. I was kind of relying on her to watch how we were spending money more. And, it was interesting because I would ask if we had enough money to buy a certain thing versus having a plan, and she would say, "sure, yes, we have enough to buy that." What I didn't know was that she was actually going into our savings, our emergency fund because that's where the money that we needed was to buy what I was wanting to buy. So, she didn't wanna tell me "no." So, we were draining our emergency reserve accounts down, and I would go the funds and the account and go, "oh wow. There's some money missing there. Where'd that $5,000 go? Where is that $2000?" And, that happened a couple times. And then, I stepped up to the plate and took responsibility, but the whole money journey is just a very interesting thing for people and for families. Now, with your app that you're out there promoting; let's go through the history of that. You said on the pre-show the app came out in beta in 2017?
Myles Gage (07:05):
I think it's important to really tell the story of why we even developed this app. So, the idea of Rapunzl- the Genesis of Rapunzl was in July of 2016 . This is around the time when Brian and I, my partner, who I co-founded the app with, we saw a lot of our friends flocking to other platforms; other brokerage platforms that were accessible via mobile devices. It also didn't have any commission. So, investing in the stock market was becoming more and more accessible around this. And, we saw a lot of our friends utilizing some of these systems and some of these applications, but didn't understand the fundamentals of investing in the sense that they were buying companies when they were green and then selling them when they were red. And, as a fundamental rule of investing; the idea is to buy low and sell high; not buy high and sell low.
Myles Gage (07:59):