#104: How to Play Stock Market: Risk-Free
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I'm very happy to have Myles Gage with us today. He's the co-founder, Chief Marketing Officer of Rapunzl Investments. It is a mobile application that allows individuals to simulate stock portfolios for you utilizing real-time market data.
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! Myles began his career as a credit analyst at CIBC. He and his co-founder, Brian Curcio, realized that ordinary investors have paid a price to learn to invest — and that price typically was real money ending up in Wall Street’s pocket. Rapunzl was founded to provide an unparalleled investing education through fun (and free) investment competitions with scholarship and cash prizes.
In this episode, we’re discussing…
[2:04] How he gained exposure to the stock market through the elementary school
[3:49] His experience of holding Warren Buffet's wallet once won a competition in his eighth-grade school.
[5:10] How he started Rapunzl investments, how he reaches out to high schoolers and college kids, and Rapunzl goals itself
[9:54] What about people in their 30s or 40s or even older; the IRA and 401k
[11:49] Quit getting investment advice from Reddit
[15:37] His advice on people that like to do trading on apps that have ridden stocks into the ground and lost everything
[17:27] The basics of building a diversified portfolio
[21:18] How Gamifying the Stock Market
[23:19] How do they retain kids and young people since they have learned a different type of way
[24:36] Why do we need our children at a young age to get involved in this Rapunzl App
Myles Top Tip’s
“If you're never taught what to do with your paycheck, and how to save properly, or how to manage your money, then you're going to make all these poor decisions. And that's something that we've seen in society across the board. So, at an area, we started learning about personal finance and economics in first grade”
“We had the idea of creating a platform that would allow individuals to create simulator portfolios. And to paint the picture. This is around the time when mobile trading is becoming more popular and brokerage platforms are eliminating fees. So, its investing is more accessible. A lot of people that really don't understand the fundamentals are starting to create accounts and buying things that they hear on the internet, and ultimately losing money”
“Rapunzl is basically a mobile application that gives users 10,000 fictional dollars to buy and sell publicly traded companies in which users are able to see what their returns or losses would have been having they made those trades in real-time with real money. The platform is geared towards people that may be curious about investing, but don't know where to begin or apprehensive about putting money in the market especially for the younger demographic, that's such a great tool”
“We also have a bunch of educational tools. And they cover an array of financial concepts. It's something that our generation or just people in general, are in need of, especially as investing becomes more of a topic that's discussed in court are common conversations”
“The annual reports have the company's financial statement. You can look at the profit, you can look at the income statement and see if the company is profitable, you can compare those over years and see, is this company be more profitable year over year? Are they growing? You can also see a company's balance sheet so it gives you a snapshot of their financial health”
“There are several different industries that are listed on the Rapunzel app. And if you click the industry icon, you can see who the market leaders are. It provides resources or information on what the companies are, but I think everyone has to do their own independent research before they purchase a company. And that's going to vary from person to person, everyone has their own different strategy. What you like about a company may not be what someone else does. But that's what's unique about investing”
Do it on Rapunzl, then do it with your real money, to be honest, and I think that's one of the cool aspects about this is that, if you want to do a risky trade, or you want to be a trader, for however many periods you can test it out on Rapunzel, and you can enter a competition and maybe you win, or maybe you don't, but at the same time for those younger investors that may be doing that. It provides more light that maybe they're not good investors, but at the very least as they look at the leaderboard”
There was an acronym that was introduced to me in my investment club, which is called FETCH, and it represents five industries that are needed, regardless of the economic climate. The F stands for financial services, E stands for energy, T technology, C is communication, and H is healthcare. And those five industries are basically market cycle agnostic in the sense that, sure, they are impacted by recessions and bear markets. But at the same time, those businesses are always going to be needed”
“I think that competitions with scholarships are a great opportunity to expose students to the role that investing into the stock market. But, at the end of the day, doing your homework and doing your research, when it comes to making purchases with your actual money, that's serious. And I think that you have to do that. I don't think you can ever cheat that”
“If they do make money, then it's kind of like, alright, this worked for me. But then, at some point, if you don't have a philosophy or thesis, it's not going to work, because in theory that is gambling. But at the same time, this is where this generation is, and I think games are what's going to be more captivating to younger audiences”
Mike’s Top Tip’s
“It could also be for people that are in their 30s 40s, or even older that most of the people and I think in the world in the United States, it's the IRA, it's a 401k. And they don't get into individual stocks, they're just, here's the money and go at it. And because they may be a little apprehensive about buying it on their own. I think anyone could use this. I mean, if you're 45 years old, maybe I want to play around with it”
“I can see that even the universities themselves of teachers would absolutely love this app. Just teach people about the stock market, and in running the simulations, even if it's just during a classroom period. it's very cool. The heads kind of spinning, it's like on wow, I mean, this is just unbelievable”
Resources from Myles
+ Read the transcript
Mike Stohler
What if you could be doing something smarter with your money that creates income. Now, if you're wanting to get ahead financially, and enjoy greater freedom of choice, if you want a comfortable retirement, and you know you'll have more choices, if you can do more with your money. Now, if you've wondered who else is creating ways to make their money work for them, and you want actionable ideas, with honest pros and cons, and no fluff. Welcome to the richer geek podcast. We're here helping people find creative ways to build wealth and financial freedom. I'm Mike Stohler. And in this podcast, you'll hear from others who are already doing these things, and learn how you can too.
All right everybody, welcome back to the Richard geek Podcast. I'm very happy to have Myles Gage. With us today. He's the co-founder, Chief Marketing Officer of Rapunzel investments. It is a mobile application that allows individuals to simulate stock portfolios for you utilizing real time market data. How's it going Myles?
Myles Gage
How's it going? Many thanks for having me.
Mike Stohler
Yeah, you know what, that that was a lot to get out. And, you know, for people that don't know a lot about this stuff. It's very fascinating to me. So tell me about. Number one, what are you doing? Yeah, I'm looking through your bio. And I'm like, Oh, my goodness, this guy has been trading the stock since he was in elementary school.
Myles Gage
12, you know, for decades now.
Mike Stohler
So do you have family that's in the in the industry? And we have what in the world? I was doing not doing that when I was 12?
Myles Gage
Yeah, no, I definitely don't have family in the industry. But how I initially gained exposure to the stock market in the world of investing is through the elementary school that I attended. I went to Ariel Community Academy, which is a Chicago Public School on the south side, Chicago. And what's unique about Aereo is it was founded by John Rogers, who's the CEO of Ariel Investments, which is the largest minority owned asset management firm in the world, I believe, at this point, and Arne Duncan, who's former Secretary of Education, but they had this idea that young people need to start learning about personal finance and economics and the stock market early age, in addition to core curriculum, such as math, English, and social studies and science, because regardless of what career you enter, you're going to make money.
And if you're never taught what to do with your paycheck, and how to save properly, or how to manage your money, then you're going to make all these poor decisions. And that's something that we've seen in society across the board. So at area, we started learning about personal finance and economics in first grade, and each first grade class is given $20,000 of real money that manage in the sixth grade. And so basically, I got to manage my classes, stock portfolio with a group of other kids. And then I would join an investment club outside of school where I would manage my individual portfolio. But that's how I gain exposure to the stock market at such an early age.
Mike Stohler
Wow. And it looks like you did so well that you held Warren Buffett's wallet once, what is that all about?
Myles Gage
Yeah, no, that's a that's an interesting story. So my eighth grade year was pretty cool. I actually entered this essay competition about playing on finance, my college tuition. And my main point was liquidating my stock portfolio. So I ended up winning this competition hosted by the Federal Reserve Bank of Chicago, which ended up in the securing the Fulbright scholarship to a private school in Chicago lab in Chicago Lab School, and that we also my brother had won that essay competition previously. So we really started developing this relationship with Ariel Investments, the firm that helped fund and help develop the school. And we got to, we got invited to this dinner with Warren Buffett, which was a fundraiser for Brock Obama in 2008. And so people paid dinner or paid money to have dinner with Warren Buffett at Ariel's office to help with Brock Obama's presidential campaign. And we were invited to meet him and go to this dinner because we were standout students at the school. And basically, we were taking a picture and his wife suggested like 10 miles or less miles hold the wallet. And here we have got a picture of Warren Buffett. And at that point, I knew I was off to the races.
Mike Stohler
Wow, it's unbelievable. I mean, people pay hundreds of 1000s of dollars just to sit down with that guy. So then, you know, Rapunzel, investments? How did that start? And then, you know, let's talk a little bit about how you're reaching out the goal for Rapunzel and how you're reaching out to high schoolers and college kids, and what you're doing for them through Rapunzel.
Myles Gage
Right. So I really feel like this is a chronological story on those because, as I mentioned, I won this full ride scholarship to go to lab school in Chicago, one of the first people that I met at lab was Brian Curzio. And we hit it off, because when we were new kids at this at the school, and we didn't know anyone, but we also had a bond in the sense that we were both already teen investors. So we would have these discussions about the stock market in freshman year. And so why I say that is years later, after we go on to college, and we would reconvene during our summer breaks to talk about our internships and finance, we would continue to have these discussions. But we will recognize our friends had no clue what we were talking about.
And these are kids that also or attend prestigious universities and are pursuing careers on Wall Street, but they don't understand the fundamentals of investing in the stock market. So we had the idea of creating a platform that would allow individuals to create simulator portfolios. And to paint the picture. This is around the time when mobile trading is becoming more popular and brokerage platforms are eliminating fees. So it's investing is more accessible. So a lot of people that really don't understand the fundamentals are starting to create accounts and buying things that they hear on the internet, and ultimately losing money. So we recognize that there is this demographic, a large swath of people that aren't ready to invest butter, butter have the appetite and are eager to learn. And that was the genesis of Rapunzel. And to answer the second part of the question, Rapunzel is basically a mobile application that gives users 10,000 fictitional dollars to buy and sell publicly traded companies in which users are able to see what their returns or losses would have been had they made those trades in real time with real money.
So the platform is geared towards people that may be curious about investing, but don't know where to begin or apprehensive about putting money in the market. But to keep things exciting, especially for the younger demographic, we're like, well, wow, that's such a great tool. The attention span of a millennial is just so short. So how do we? How do we capture them? And how do we retain those users? So we had the idea of adding competitions to the platform. So for high school students, we allow users to enter their portfolios into competitions for scholarship prizes. And so we work with public schools across the country. And right now, we're actually hosting a National High School investment competition with $50,000 in scholarships, that kicks off October 1. And so that's an opportunity for students wanting to engage with the stock market in a simulated manner, but also earn scholarships.
And for college students that may already have a stock portfolio already making money. It's like, well, how do you get them to be users? Or how do you retain them? So the idea for college students is that we give away cash prizes. And so we have competitions, weekly, monthly, quarterly, yearly. And so that allows the, you know, the the college user, they may have a portfolio to execute a trade, they may be apprehensive about doing on the actual platform or the actual brokerage account, and potentially earn cash for that. But at the same time, it just creates this platform, and it's this engaging community. So you can write in follow your friends as if it were another social media type of platform, but at the same time, you can also see what the top investors are purchasing on their, in their portfolios. And we also have a bunch of educational tools. And they cover an array of financial concepts. So it's, it's a pretty cool platform, and I believe to be it's robust, maybe it's biased because I helped develop it. But at the same time, I think it's something that the Our Generation or just people in general, are in need of, especially as investing becomes more of a topic that's discussed in in court are common conversations.
Mike Stohler
Yeah, you know, I was thinking it could also be for People that are in their 30s 40s, or even older that most of the people and I think in the world in the United States, it's the, it's an IRA, it's a 401k. And they don't get into individual stocks, they're just, it's whatever, here's the money and go at it. And, you know, because they may be a little apprehensive about buying it on their own. And I think anyone could use this. Is that true? You know, I mean, if you're 45 years old, and think, Hey, maybe I want to play around with it.
Myles Gage
Absolutely. And I think to that point, um, it allows older or professionals to understand their, our IRAs, or their 401, K's, and maybe started contributing to them more. And it gets them excited about this retirement savings. And that's a service that we are offering to company. So this past summer, we actually piloted a program with McDonald's in their interns, and we talked about various aspects of personal finance. And things like Roth IRA, IRA account. And we think this is a tool that can be used, excuse me, by companies and wellness programs. And that's another avenue that Rapunzl is, is exploring. So we're talking to a few companies about offering Rapunzl as a wellness tool. Because again, as I was mentioning, we do have these modules that cover an array of concepts. So we talked about retirement, we talked about insurance, like life insurance, whole life term, all these different things, but it's in a more digestible way than we've seen previously.
Mike Stohler
Now, okay, you know, I love some of the stuff in your bio here, it's, and this is kind of common. For everyone that is a professional, they say, quit getting advice from Reddit. And, you know, I see it time and time again, you know, well, social media told me this while we Reddit told me this. Where can people get healthy investment advice, and practices for creating wealth?
Myles Gage
Reddit. But no, like, seriously, I think that you can look on Reddit and see what the community is talking about. But I don't think that that's the end all be all, I don't think that you just run and make a purchase, because you heard someone in the forums talking about this company, I think that can initiate your research on a company. And so maybe you hear about whatever business it may be, but it's on you to do your due diligence. And I think one of the best places are a wealth of information about companies is in a company's annual report. And that can be accessed on their website in their corporate governance section. So even if you don't necessarily know all the quantitative and technical aspects about valuing a stock's price, you can Elyse go and read this annual report which talks about a company's financial performance over a period of time, typically their fiscal year. And so there's a lot of context, there's a lot of qualitative information that can be told in those annual reports.
Additionally, the annual reports have the company's financial statement. So you can look at the profit, you can look at the income statement and see if the company is profitable, you can compare that over years and see, is this company be more profitable year over year? Are they growing? You can also see a company's balance sheet so it gives you a snapshot of their financial health. And you can look at his debt growing in this company, or do they have more accounts receivables? Or what are their assets looking like? And then there's the cash flow, which tells you the inflow of cash in and out of the company. So I think a lot of that information can be found, just by doing your research on the internet, I think that's one of the greatest tools like why that's such a great tool is because you can go as deep down those rabbit holes really understand the ins and outs of the business.
But you can find or discover companies on reddit but one of the cooler parts about Rapunzel. Going back to the app is that when you search you can search companies either by their name ticker symbol, or you can search by industry. So there are several different industries that are listed on the Rapunzel app. And so if you click the industry icon, you can see who the market leaders are. So again, it provides resources or provides information on what the companies are, but I think everyone has to do their own independent research before they purchase a company. And that's gonna vary from person to person, everyone has their own different strategy. So what you like about a company may not be what someone else does. But that's what's unique about investing. And I think rather than taking advice from other people, you really have to understand what works for you, you have to figure out what are your goals, you have to figure out? What is your risk tolerance, what's your risk appetite. And I think if you can justify that, or if you have those identify, then what you invest in becomes a lot easier, and you don't necessarily just run to the tip that you get, or just whatever information your friends are talking about. It may make sense or may not make sense.
Mike Stohler
What's your thoughts on, you know, within this app, and just your personal experience? The differences are the pros and cons. You know, there's some people that like to do the day trading, there's some people that do some short term term holds. I know people that have ridden stocks into the ground and lost. You know, they were tech millionaires until the the company basically went down to zero and they lost everything, what's your, what's your thoughts on
Myles Gage
I would say, if you're gonna do that, do it on Rapunzl, then do it with your real money, to be honest, and I think that's one of the cool aspects about this is that, like I say, if you want to do a risky trade, or you want to be a trader, for however many periods because you think you know, something, you can test it out on Rapunzel, and you can enter a competition and maybe you win, or maybe you don't, but at the same time for those younger investors that may be doing that. I think it exposes them. And it provides more light that maybe they're not good investors, but at the very least as they look at the leaderboard, and they understand or if they understand that the s&p 500 has delivered returns of 10%. On average over since its inception, they can understand that passive investing is probably the approach that makes the most sense in the sense that they have exposure to the market, but they are trying to beat the market because more likely than not the average investor is not going to outsmart the market. But at the same time, I think that initial exposure that's provided by Rapunzel helps young people see the activity and see the movement to even spark their curiosity, and may be investing in not in a passive way.
Mike Stohler
Yeah, it's, you know, because day trading, that takes some time, and I can see just how much Rapunzel would help and everybody, it's our AP you in ZL. If you're looking it up, I can see how I mean, if I was nervous at all, I'd say okay, you know, Am I successful in the app? And that would give me kind of the just just the ability to say, okay, you know, maybe I can do this, and maybe the and this is something that I might be successful with. If I have some success in the app. The basics of building a diversified portfolio, what are some of the things you should? You shouldn't always have? You know, when we talk about diversification, are you talking about someone tech? Someone healthcare?
Myles Gage
Yeah, from from a stock portfolio? Yeah. Yes. Yeah. And there, there was an acronym that was introduced to me in my investment club, which is called Fetch, and it represents five industries that are needed, regardless of the economic climate. So the F stands for financial services, E stands for energy to technology, C is communication, and H is healthcare. And those five industries are basically market cycle agnostic in the sense that, sure, they are impacted by recessions and bear markets. But at the same time, those businesses are always going to be needed. So like, you can think of the Financial Services as a thing.
Even if the economy isn't performing well, people aren't just going to remove all their money and put it under the mattress, nor are companies going to just start sending checks, paychecks to people via pigeons. That's not going to happen. Energy, for example, while we're moving towards renewable and electric vehicles, that's something that's going to be that because the transportation space is something that is so vital to the economy. And just like the energy that it's used to power our homes, that's something that's always needed. T, technology. I mean, we're chatting via a virtual technological platform that is always evolving. And I don't know about you, but I can't remember the last time I didn't have my phone. So these devices, they're always advancing, there's always going to be some technological advance. So there's a need for that. And that's why those companies are always in demand and communication, I think that we always need to stay connected to one another. And we saw that, especially during the global health crisis, which brought on a pandemic. And we weren't able to do things in person. So we relied a lot on devices and communication platforms and cellular service to remain in contact with one another. And he is healthcare, because unfortunately, people are always getting sick. Regardless, if it's due to the co COVID-19. People still have ailments, diseases, and they need their medications.
And then, and doctors need ancillary products like gloves, masks that scopes, and, you know, all these different things are anti bacterial. So like, there is a demand for that. And that was something that acronym was introduced to me by a lady of the name of April Williams, who ran my teen Investment Club, which is where I started managing my own money. But that was how I built the basis of my personal stock portfolio. I, it makes sense. So for anyone that's listening, and it may not already be investing, I think that that may be a cool acronym to follow. And you can go research those companies within the industry to see if they make sense to own your personal portfolio.
Mike Stohler
You know, I can see that even the universities themselves of teachers would absolutely love this app. Just teach people about the stock market, and in running the simulations, even if it's just during a classroom period. You know, I mean, this is, it's very, very cool. The heads kind of spinning, it's like on wow, I mean, this, this is just unbelievable. What do you think about Game of gamifying? Stock market? Is that, uh,
Myles Gage
yeah, I mean, I, it depends. It definitely depends. I think that we envision the gamification of investing as something that gets young people curious and excited about the world of investing. Yeah, I don't think investing with your own money is a game at all. I think it should be taken very seriously. So to that regard, I think that what we've seen in like the past year, of like, the whole Reddit craze of like, people, just buying companies and ultimately getting burned. I don't think that that's cool. But I think that simulators are a great avenue. And I think that competitions with scholarships are a great opportunity to expose students to the role that investing into the stock market. But like I say, at the end of the day, doing your homework and doing your research, when it comes to making purchases with your actual money, that's serious. And I think that you have to do that. I don't think you can ever cheat that. So that that's my thoughts on that.
Mike Stohler
Yeah. And I think that's, you know, these kids have, they've grown up on the games, right? I mean, they can't, and it's almost it, the teaching, and the education almost has to be some form of game just to keep their,
Myles Gage
you have to trick them in the learning, you really have to trick them into learning. And that and that's what I mentioned earlier about, like, Well, how do you how do you retain the kids? How do you retain the young people because short attention spans are so short, so it's like put a prize with the naked game, like, unfortunately, that's just kind of where I see that this generation is at, I can totally understand it from more seasoned individuals or investors that have learned a different type of way, especially the ones that are like, well, you should just buy an index fund or an ETF because like, we do get that criticism as well, because we know passive investing, and I'm like, yeah, we'll get we know that for sure. But you can't tell a 12 year old that that's not fun for them, let them let them go buy shares of AMC and Gamestop and lose money. And then they'll be like, yes, remember that concept that I told you the buying index on x, y, you do that? Oh, or if they do make money, then it's kind of like, alright, well, this worked for me. But then, at some point, if you don't have a philosophy or thesis, it's not going to work, because in theory that is gambling. But at the same time, like I said, this is where this generation is, and I think games are what's going to be more most captivating to younger audiences.
Mike Stohler
Yeah, in here that everyone you know, if you have children at home, why not get this app and sit down once a week or, you know, on a Saturday when you have time in teach your children about stocks? At some point, they're going to have to get into it. And you know, there's so many people that I know that make it Good money and don't put anything. They don't invest anything. So we need, and I agree with, Myles, that we need to get the children at a young age involved in this so that you know, they are the future of the stock market. They're the future workers. Rapunzel, app stores, Apple, Google, how can people find it?
Myles Gage
So Rapunzel isn't the iOS App Store and Google Play? It is our AP you in ZL. investments. So it's like the fairy tale, except there's no he. You can find us on Twitter at returns on investments and Instagram, same thing, and Myles Gage and go check our Rapunzal. It's a great app. We've got cash competitions for users over the age of 18. And we've got a high school scholarship for high school students with $80,000 in aggregate scholarship prizes. So tell your kids about it and tell their schools about it too.
Mike Stohler
Especially if all these parents out there is like heck yeah, I want my kid when $50,000 So I don't have to pay for it. When they get a good education with the stocks. Well, Myles, I appreciate you coming on. And it's been eye opening. This is I think, fantastic app that every parent needs to download every you know for their children and teach them how to make more money and how to invest. Thank you, sir. I appreciate you coming on.
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ABOUT MYLES GAGE
Myles Gage is the Co-founder and Chief Marketing Officer of Rapunzl Investments a mobile application that allows individuals to simulate stock portfolios for utilizing real-time market data. 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! Myles began his career as a credit analyst at CIBC. He and his co-founder, Brian Curcio, realized that ordinary investors have paid a price to learn to invest — and that price typically was real money ending up in Wall Street’s pocket. Rapunzl was founded to provide an unparalleled investing education through fun (and free) investment competitions with scholarship and cash prizes.