In this week’s episode of Retire in Texas, Darryl Lyons explores one of the most significant economic shifts happening in our state: the creation of the Texas Stock Exchange – and what this means for business owners, investors, and the long-term financial landscape of Texas.
Darryl begins by sharing a personal story from a recent trip to New York with his daughter, reflecting on how Wall Street has changed over time and how electronic trading has transformed the markets. That reflection sets the stage for today’s discussion: the movement of major financial infrastructure away from New York and into Texas.
He breaks the episode into several key themes:
• Why “Y’all Street” is becoming a reality, including how the Texas Stock Exchange – backed by BlackRock and Citadel – represents a major shift in where capital markets operate.
• How ESG policies contributed to this moment, and why regulatory burdens pushed many companies to seek a more business-friendly environment.
• How Texas prepared for this growth, from specialized business courts to economic development incentives that attracted Fortune 100 companies like Oracle and Tesla.
• The culture factor, including why some Texas cities – especially San Antonio – may limit their own growth unintentionally due to strong family-centric values.
• How access to capital unlocks expansion, using PAX as an example of how a company with a strong mission might scale when the right financial pathways exist.
• What the Texas exchange could mean for your investments, including why more homegrown Texas companies going public could eventually strengthen 401(k)s and IRAs across the state.
Darryl connects the dots between local business culture, economic development, and national capital markets to show how transformative this shift could be – not just for corporations, but for everyday Texans who invest for retirement.
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This episode provides general educational information only and is not intended to provide specific investment, tax, or legal advice.
Transcript:
Hey, this is Darryl Lyons, CEO and co-founder of PAX Financial Group. And you’re listening to Retire in Texas. This information is general in nature only. It’s not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information. If you’re looking for a show that’s really designed to keep you grounded, but also think deeply about money, this is the right show. And I don’t want to use a lot of nbers in this show.
I want to make sure that you walk away and go, you know, that really made sense, and you might even be able to share it with other people. By the way, do share it with other people, because you and I both know as we come into this Christmas season, people worry about money. And so, this show, if listened to over time, will help you think about money differently, I assure you. Today I want to give you perspective.
It’s called Y’all street, not Wall Street. Y’all street. Wall Street’s coming to Texas. I’ve mentioned this to you before. Wall Street is coming to Texas, namely in Dallas, Texas. Not long ago. Let me back up actually, I’m going to back up the back up, if you don’t mind. I went to Moldova this year and I’ll get to the point in just a second. I went to Moldova this year. We have, as you know, we have a nonprofit that we get kids off the streets onto the basketball court. It’s called the Admirals Basketball Academy. And so I was visiting Nick and the ministry there. I didn’t go to Ukraine. We went to Moldova and Romania, and my daughter was going to go with me.
Claire, she’s seventeen and she got sick, so she couldn’t go. So, I had an airline credit with United, and I felt terrible because it was something she was really looking forward to. So I said, hey, I’ll take you somewhere. We got a flight ticket. Let’s go somewhere for the weekend. Just fun, you and me. And so we went to New York. So we just got back from New York. I took her to Wall Street, had to take her to Wall Street and showed her around. Saw the bull.
Pointed to the inside. We didn’t go inside or anything like that, but it made me think. I was thinking about how Wall Street, you know, I’ve been in the exchange, and it’s not much like you used to see old pictures where people, had like papers in their hand and they were yelling at each other. If you go into the exchange now, it’s computers and a few people in there, but not like it used to be. So the fact that, you know, this really important mechanism to make the economy run used to be in New York and on Wall Street.
Now it’s everywhere. And so, the two major exchanges that were kind of like the supermarket for stocks and bonds that were responsible for bringing together buyers and sellers, it used to take place namely in Wall Street in New York. Now it’s electronic, as you would imagine. But the two major players that are responsible in the United States for exchanging stocks, namely stocks, I would say fixed income as well, are the New York Stock Exchange and the Nasdaq. Those are the two big ones.
And you’ve heard of them. Maybe not the Nasdaq as much, but definitely the New York Stock Exchange. What you might not know is that there’s a new exchange coming to town, a new sheriff coming to town, and that’s the Texas Stock Exchange. The Texas Stock Exchange is actually, believe it or not, backed by Blackrock and Citadel, two financial companies. And the intent behind this, this is important. And I think you’ll find this to be interesting. And it connects the dots.
As we went through the prior administration and saw a, I want to be very tactful. But this is just facts. This is not me. Like, belittling a party. The reality is, is the last administration had a simply a really heightened, elevated focus on ESG. They did and everyone knows, it’s the Environmental Social Governance piece and the consequences of elevating that focus namely, if you have, to me focus is a superpower. So, when you water down focus I think it has some damage that is often understated.
Please remember what I just said. So important. Focus is a superpower. Consistency is a superpower too. But focus is a superpower. So, what Wall Street New York Stock Exchange did and Nasdaq is they followed suit in some capacity, whether they were told or not to adopt these ESG policies on corporate America. So in other words, corporate America, then if they wanted to trade their stock on the exchange, they had to subject themselves to specific standards.
And the social standards might be, your board construction has to have a certain number of types of people. Your board has to have certain number of types of people, and if not, you’re going to be fined or sanctioned. And here’s the challenge is there’s a regulatory reporting element to this. Another alternative is you, your companies had to have certain emission standards. And then there’s a regulatory and reporting element to this. This doesn’t seem like a big deal, but it is so frustrating as a business owner when your job is hard enough and then you’ve got an overlay of these things that frankly, you might even have an agreement with.
But the adoption of it is just so cumbersome that it’s just, if you’ve never run a business before, if you’ve been a teacher, a cop, and you’ve had to deal with just these burdensome regulatory issues, it just drives you crazy. And we all know it. So what happened is somebody woke up one day, I don’t know who it was, and they said, we’re going to do a Texas stock exchange. And Texas said, we’re going to create a different judicial system, that these judges have different business acumen than just normal judges.
And so, the court system, the regulatory environment is going to be extremely business friendly. We’re going to get things done. We’re going to cut down on the red tape, we’re going to reduce cost and inefficiencies, and we’re going to create our own exchange. And that’s called the Texas Stock Exchange. And it should be up and running next year. I’m telling you guys this is huge. And it shook up the New York Stock Exchange and the Nasdaq so much that they moved two of their regional offices to Texas to compete because otherwise I mean, Texas is booming.
They were going to lose a ton of business. And so, it’s not main offices. Texas, the New York Stock Exchange and the Nasdaq are regional offices. And it’s right out of Dallas. I mean, the greater Dallas area, I think Irving. I don’t know where else exactly, but the greater Dallas area and this whole DFW area is now Wall Street. I mean, Y’all Street. It is coming together beautifully. And many fortune one hundred companies are now in Texas. This Texas corridor between Dallas, Houston and San Antonio.
That little triangle there is where the vast majority of the population of Texas is and will continue to be. I live in New Braunfels, and we all know that in Texas specifically that I-35 corridor, that the state flower is an orange cone. So yes, we appreciate the growth. We appreciate the jobs. I was talking to a business owner today. He’s a homebuilder. He’s just he feels blessed that he’s in a place where people are building homes. But it comes with traffic and it comes with construction and it comes with stuff.
But it is amazing what’s happening in Texas, specifically this Texas triangle. And some of it, if you look back, Texas has used some. I forgot the specific tax code. It was in another podcast, but we’ve used a specific code where we subsidize the taxes, the property taxes and other taxes that companies pay should they meet certain standards of employment. And this is normal business and we’ve taken advantage of that and really attracted the big companies like Oracle like a huge win.
And then Tesla in Austin is another huge win. And then here’s kind of what as you would imagine. Then the businesses come here and then they’re having dinner with other CEOs. And they said the water’s fine. You mean they don’t ride horses. I mean, you know, they don’t think that, but they’re just trying to just realize that the water’s fine. And then you have other CEOs come here. And so that’s that.
Recruitment takes place. Different cities have different organizations that are responsible. They’re called the Economic Development Council that are responsible for pulling in business into the state of Texas. So how does this all connect with this stock market coming to Texas and these businesses here, and we recruit businesses. Here’s where it gets, what I think is important. Okay, so I’ve been in Texas my whole life and not so much Austin, but definitely San Antonio.
We’ve got a problem with growing. We’re afraid to grow. And I think I have theories behind this. And you might disagree. It’s fair enough because I don’t know if there’s been any studies on it, but man, if you would say anything about San Antonio that makes it nice is we’re a family city. We love our family. We spend time with family. We enjoy family. We enjoy getting together. And the idea of accelerating growth using the capital markets, which I’ll give you some detail on that in a second. The idea of accelerating growth at first glance, because the way we are, which I love, it means we have to sacrifice our family.
So, if we presuppose that, or if our presupposition is that San Antonio businesses have a self-imposed limit to their growth potential because of our appreciation of families, then I think that’s a worthy consideration. I think that’s cool. No problem. But you do leave your head. Like, leave yourself scratching your head saying, is there missed opportunity? Is that just kind of culturally just kind of what we do? But is there opportunity for some businesses in San Antonio to say, I’d like to break through that, that cultural ceiling that exists not so much Austin, but in other areas.
And I’m using San Antonio example and access capital so we can grow and use our company for greater good. And the reason I mention all that is because you have to break through this self-imposed ceiling as a business owner, because you have a good product and service to offer. Not only do you have to break through this, then you have to find access to capital, access to money to expand a product or services. And I’ll use PAX as an example. So, suppose PAX is growing and doing good things for the community, and we start really growing, like we’re growing.
We do well, very well. But imagine we got this crazy exponential growth. What that’s doing is people are voting with their wallets and they’re coming to PAX because we’re doing a good job for them. Wouldn’t it make sense that we ask ourselves, could we do this? Could we offer this service beyond where we’re at because people really want it? See, I always come at business that business is generally good. I do believe that business is generally good.
And so, if people are demanding a good or service, then it’s incumbent upon the owner to say, how can I distribute this good or service beyond just this little community? And then of course, how do you get capital? How do you get money to be able to expand, to have new offices, to hire new people? This is where it becomes tricky. This is what I’m getting at. It becomes tricky to get access to that capital unless you’ve created a culture where capital is flowing.
And that’s what happens when you bring the stock market to Texas. It changes the landscape. So now business owners in Texas who have hit an inflection point that want to expand their growth, it doesn’t feel like a huge leap to go to New York. They can now go down to Dallas or at least communicate with people that maybe even have the same access that feel like they’re relatable, that similar cultures, maybe they both hunt. And I know these are just nuanced things, but they’re really true. But businesses that have a desire, there’s going to be plenty of businesses that say, my family is important, I’m just going to stay here. Cool. All good.
But there’s going to be many businesses in Texas at this point forward that are going to say, I see a pathway to get money from the outside markets to grow my business beyond Texas. And I can’t tell you what that will do for the Texas economy, it will put fuel on an already, incredible entrepreneurial environment, an environment where people love to start businesses. It’s going to add fuel in such a way that capital and cash are going to come into these businesses in the state of Texas and help them accelerate and grow through these New York stock exchanges, through the Texas stock exchanges and through the Nasdaq exchange.
Those three exchanges are going to help be a bridge, whatever that bridge is, whether it’s psychological or inherently economical, going to be a bridge to capital for Texas businesses. And this may take place over the next five or ten or fifteen years. The last thing that it’ll do that it’s worth mentioning is if you have a 401k, if you have a business, I’m sorry. If you have a 401k. What I was trying to say, if you have a 401k at your job, then I just want you to know that inside of your 401k you have something, even if you don’t have a 401k. If you have an IRA or any types of investments, you may have something inside that that says it’s a small cap fund.
It’s a mutual fund or an exchange traded fund. A fund is you know, a fund is just a package of a bunch of stocks, a small cap fund. Inside that small cap fund are a bunch of companies that took the leap of jumping from a private business and went to the markets, to the stock markets and said, we need more money. And they then, their company got a ticker, and now you can buy it in your portfolio. That’s how that whole game works. So you own, when you own small cap funds. These are companies that broke through that private barrier and ended up going into the exchanges for you to be able to buy.
So I say all that because if the Texas exchange system works, which I think it will, namely because the regulatory environment will be less, then long term, the benefit for us as investors is that we will have better homegrown Texas companies going public, which we can then own in our 401ks and in our IRAs. Now, you don’t specifically have to make those decisions. They’re oftentimes made by your advisor or made by the fund manager. But over time, I think it would be beneficial for all of us to own better companies that are homegrown in Texas because of the values that we have here inside of our 401k.
This is obviously a very big long-term picture, but I’m helping you try to connect the dots between these nebulous capital markets that we often think are rigged, or people that are just way out, you know, we don’t even like. It’s so complex that we can’t get our head around it. I’m trying to help you understand that these access to capital, access to monies is happening right here in our backyard now, and I think we may not ever realize it.
There will be a long-term benefit both for Texas, for jobs, for growth, but also for your investment portfolio. So, I hope that helps you understand the construction, and I hope you understand that Y’all Street is happening in real time. And I hope more than anything that you enjoy this holiday season. Merry Christmas. And remember, you think different when you think long term. Have a great day.
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