The coronavirus is real and we all should abide by the guidelines set by the CDC, our Federal Government, state, local governments. Although I have never lived through a major pandemic like this, I have lived through the Financial Crisis in 2008 and the Internet bubble crash in 2001. From a financial perspective, I advise everyone to be patient and not make irrational and emotional decisions. From a personal standpoint, it’s a time to use the time to better ourselves and think about how we want to come out on the other side. Everyone should take a moment each day and think about what we all are thankful for
As a part of my series about “Investing During The Pandemic”, I had the pleasure of interviewing Steve Ehrlich, CEO and CO-Founder of Voyager Digital. Steve has over 25 years of experience in capital markets, starting his career at TIR Securities, an institutional brokerage that was sold to E*TRADE Financial. Steve is the former CEO of E*Trade Professional Trading, which later became Lightspeed Financial. Under Mr. Ehrlich’s lead, Lightspeed Financial became the third-largest brokerage in the United States and executed an average of 450,000 trades per day by 2009. Currently, Steve is the CEO and Co-Founder of Voyager Digital; co-Founded with Oscar Salazar, one of the co-founders and first investors in Uber.
Thank you for doing this with us! Before we dig in, our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
I started my career in public accounting working for BDO Seidman in the late 80s. I wanted to work for a smaller CPA firm so I could learn more about how small companies work, as I always felt the pull to be an entrepreneur and start my own company. In 1994, I was lucky enough to be hired by Jarrett Lilien to oversee all of the financial, operations, and compliance aspects of TIR Securities, Inc in New York. We subsequently sold the business to ETRADE in 1999 and my transition from traditional brokerage to online brokerage was made.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
One of the funniest stories through my career was back when I was at ETRADE and helping to oversee the operations in Sacramento. We had a holiday party and I was challenged to sing Adam Sandler’s Hanukkah Song. I agreed to do so if we raised money for a local charity to hear me sing. We raised about 3k and it was probably the worst rendition ever. I had the words down but I can’t carry a tune, so everyone had a good laugh.
Are you working on any exciting new projects now? How do you think that will help people?
Everything we do at Voyager is exciting! We are working on international expansion, more funding options for customers in partnership with Circle, our rewards and token utility program, basket purchases, recurring deposits, and lastly, functionality closely associated with traditional online brokerages that customers have been asking for.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
This might be the easiest question to answer. It begins and ends with my father. He was an early entrepreneur and risk-taker. Back in the late 60’s, he started his own tax practice by leaving his job and going out on his own. The concept of an “entrepreneur” wasn’t what it was today. He took the ultimate risk with three boys under the age of 4. He had a staff but worked over 80 hours a week for four months of the year and still worked hard the rest of the year but without the “tax season” pressure. He taught me a lot but two things stand out, always work hard whether for yourself or for your employer, as hard work will pay off down the line, and to treat all your employees with dignity, as you are only as good as the team around you and they become your family away from home. He was also the one who guided me into studying accounting in college and obtaining an accounting degree because he always felt that if you understand the numbers and financials behind a business, then you can run a business well. It’s how I oversee Voyager today and how I oversaw my prior businesses.
Let’s shift a bit to what is happening today in the broader world. Many people have become anxious about the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty and loneliness. From your experience, what are a few ideas that we can use to effectively offer support to our families and loved ones who are feeling anxious? Can you explain?
The coronavirus is real and we all should abide by the guidelines set by the CDC, our Federal Government, state, local governments. Although I have never lived through a major pandemic like this, I have lived through the Financial Crisis in 2008 and the Internet bubble crash in 2001. From a financial perspective, I advise everyone to be patient and not make irrational and emotional decisions. From a personal standpoint, it’s a time to use the time to better ourselves and think about how we want to come out on the other side. Everyone should take a moment each day and think about what we all are thankful for (friends, family, etc). As human beings, we are resilient and will see better days but we all need to support the things that will get us there quicker.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. As you know the stock market and the economy in general have become extremely volatile and uncertain. Many people “dollar cost average” and put aside a monthly sum into a long term savings plan for retirement, college, or a home purchase. If a loved one or a client came to you and said, “I have been saving and investing $500 every month in an S&P 500 index fund. Over the next few months until the dust settles, should I be doing something else with my money?”, what would you say to them?
The answer to this question is different based on the purpose of the savings and the age of the investor. If we are referring to retirement funds, then leave it alone and keep making the monthly investment. If it’s for a shorter-term savings plan, then I would leave the money in the fund and allocate new funds to a USDC stablecoin and earn interest at 6% with stablecoin for the immediate future!
Eventually the economy will recover and rebound. Certain sectors, like travel and hospitality might be hurting for a while. But other sectors, like technology and healthcare, might do very well. If someone wanted to prepare today to take advantage of the future recovery, what would you suggest they do?
As a longer-term investor I like to look for bargains. Travel and hospitality will recover over time and when we have a vaccine people are going to travel more than they did previously. That being said, I would look for up and coming technologies that can scale in the future. One example would be contactless payment systems that can be used in bars and restaurants to avoid any contact on cards and machines.
Are there sectors that provide exciting and lucrative investment opportunities today, specifically because of the volatility and uncertainty?
Tough question. I don’t see one particular sector as they all seem to be really volatile these days.
Are there alternative investments that you think more people should look more deeply at?
Crypto. I believe we are still at the early stages of crypto adoption and we’re experiencing a time very similar to when people “dipped their toes” in International stocks and ETFs. Now is the time to invest in crypto. Not only Bitcoin but various cryptocurrencies as a basket.
If a person in their thirties and forties came to you today and said that they have $10,000 that they want to put away today for a long term investment what would you advise them to do with it?
20% in Crypto and 80% in an aggressive long term ETF strategy. It’s exactly what I told my own children to do who are in their 20s.
Ok, thank you! Here is a more general finance question. You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing what would you say? Can you please give a story or an example for each?
- Follow your gut and trust your instincts
- Never get emotional about investing
- Have a game plan and short and long term goals
- Plan early to save because you never know what life will bring
- Never listen to “hot tips”
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I am a huge sports fan. Unfortunately, being in New York, it’s been a struggle outside of the Yankees! That being said, I have always admired Wayne Gretzky. As a former college lacrosse player there are a lot of similarities between hockey and lacrosse players. The one quote from the greatest player to ever play the game I’ve always loved is, “The day I stop giving is the day I stop receiving. The day I stop learning is the day I stop growing. You miss 100% of the shots you don’t take.” This has always reminded me that it’s always important to think about others and their feelings when making decisions and giving feedback, and to always be open to learning, especially from your team and you can’t succeed without taking risks. This is how I live and since Voyager is the fourth startup I have been involved in, it has worked well for me.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
My wife and I had started a youth hockey program in Norwalk, CT many years back, and one of our core goals was to make it affordable to those less fortunate to play the game of hockey. We partnered with the NY Rangers and made the dream come true for many local kids. I strongly believe that giving children the ability to play sports they may not have normally played is very important to sustaining the youth of America and giving them outlets to learn and better themselves. The youths are our future and the more we can teach, the more they will grow.