Mailbag, incl: Is AI a risk to bitcoin? July 26, 2026

23:09It's a fair one because we did talk about it. They're not publicly available to non-members. They are available to members, every single recommendation ever. And our current view of those recommendations where they're still buyers or holds are all behind the paywall. And a bit of inside baseball, because it's a good question, Genevieve, and I'll give you the honest answer. We used to, and ASIC took exception to the way we did it. And the challenge with, it's kind of boring, but it's worth talking about really quickly. ShareVise is not a portfolio. We don't have a fixed amount of money that we allocate across companies.

23:42We add one new recommendation every month. When I say new, it could be a re-recommendation or something you've previously recommended, or it could be a new company to the scorecard. When you do that, it's the equivalent of adding more money to a portfolio, right? Because you're not selling anything to fund it. And then you get this weird circumstance where you start doing time-weighted rates of return and money-weighted rates of return, and the math gets really messy. And then we were asked by ASIC to annualize the numbers. But you can't annualize – well, you can't annualize the number for a rec that was released yesterday except to do that, let's say it was up 1 % yesterday and it was released the day before, that's a 365 % annual return, right?

24:18Which is clearly nonsense. So behind the paywall, we have given our members the absolute return of each individual recommendation. We've given them the market return since the same date. So you can compare recommendation by recommendation. We've also put an annualized number per recommendation. And again, the same for the market and the gap on that one. So per company, you can see all of that information. when you start averaging that stuff, it gets really messy. And I've got to say, so ASIC's issue was we used to do total return, not average annual return. And their concern was that it makes the numbers look really big, right?

24:52If I'd recommended something 10 years ago and it's up tenfold, for example, we say company X is up 1 ,000%. And ASIC's view was, well, that's not an annualized number and it seems too big and it's problematic. And I don't necessarily disagree. It's their call. I don't get to disagree. It's not the way this works. I get where they're coming from because if I had made 1 ,000 % over 150 years or 1 ,000 % over two years, it's a very different number, right? And so annualizing something in their view makes it comparable. And that makes perfect sense to me. As long as you're comparing the two though, right?

25:23Like if you annualize – if you didn't annualize the rec, but you annualized the market, then that's a little bit dodgy. But if it's apples with apples, like what's the – Yeah, and that's what we used to do. And ASIC said we want both to be annualized. So anyway – Fight a good fight, ASIC. We love your work. Well, you know, keep up. I get where they're coming from. You love the protection. Thank you. Well, they used to recommend, they used to managing regulating funds. And so they're kind of looking at this and going, everyone else does it this way you should too. And so I kind of get it, right?

25:53And I'm not going to bag us. You know, they're doing their thing. I can do that. Anyway, so long story short, Genevieve, we don't think it's really, we can't, we're not allowed to share absolute numbers. We can do it as long as we put the annualized number beside it, but we can't do that in good faith for a stock that's been recommended less than 12 months for the reason i just mentioned about the one percent or even even over six months right you double the return if i'm up 10 and six miles i'm up 20 annualized it's just not a reasonable number and i don't feel good about doing that so we've actually pulled all of our performance numbers from our marketing for that reason um and i think it's probably hurt our business and i think it's probably hurt members or potential members because if we keep beating the market over time over the long term then you know we're probably hurting people not bringing them in but look Again, I'm not going to complain.

26:39ASICs got a job to do. They do their job the best they can. We did have a conversation with them, very good conversation. I said, look, guys, here's why we're doing it. Here's what we think. And they said, cool. We don't think you should. And we went, okay, fine. That's cool. That's your call. You're the regulator. We'll do what we're told. And so that's what we did and why we did it. I love how you framed that as a negotiation. I was like, no, it was a negotiation. That's very interesting, Scott. We need you to do it this way. Correct. Exactly. Sure off. So, yeah, let's negotiate. Absolutely.

27:05Absolutely. You come back with me and it handcuffs the cell. You do what I tell you. I'll do what you say. I'll go with your suggestion. Anyway, so yeah. Sorry, it's even longer than I wanted that to be. Apologies. But if we did say publicly available, it's not publicly available. That's the reason why we've taken it off our marketing. It's the reason why we don't put it on the front page of the website because you can't compare. It's just not a reasonable comparison. In my view, it's not a reasonable comparison. You can, this is not an ad, by the way, Genevieve, you can join ShareAdvisor. We have a 30-day money-back guarantee.

27:31If you don't like it, the first 30 days, we'll give you your membership fee back. I'm not saying join for that reason. I'm just saying you get to see everything on the inside at that point. And if you don't like it, then you're happy with it or whatever, then you can cancel and we'll give you the money back. So anyway, enough about that. But it's a dual question. I raised it only because I could have responded to Genevieve directly. I raised it because we had said it was publicly available and she was right to ask. And that's the answer. Yeah. And Genevieve, you're just not smart enough to be able to make an informed decision based on the facts as presented.

27:58So thank goodness we have a regulator there to hide the information now for you, because I would think we all agree that you're in a better position to make an informed decision after that. And there was zero sarcasm in that at all, ASIC. Thank you for your service. Next question. Scott Andrew Page, P-A-G. For the record, I'm a very big fan of ASIC. I think you did a wonderful job. Yeah, yeah. Great work, guys. Motley Fool Money. For more, subscribe to the free newsletter at fool.com.au forward slash listener.

28:54for that to ever happen. I'm a simple man. I know the feeling. Although my wife may not be as simple as me. Oh, man, you should have put your name on that, Aaron. As we don't aspire to be driving a Lambo, but simply want to live comfortably and have time to spend with our family. But how much is enough? I'm guessing by the time I'm 75, a schooner of beer could cost me around 150 bucks. A decent house could cost 32 million. Jeez, inflation is pure evil, says Aaron. And Andrew says, amen. Yeah, yeah. here i came up with an alternative oh no in my crazy head i think that one bitcoin today will be all i'll need i'd love to hear your thoughts oh man now to my question does ai pose i'm pretty sure he asked for our thoughts here's the question here's the question here's the question now to my question does ai pose any risk to bitcoin thanks aaron um let's do the last one first mate because it's a pretty quick one and then we'll go back to how much we need i was just joking.

29:52No, there's nothing to say. Well, it's actually, look, no, I mean, this is, it's money is as a general, like not make it about Bitcoin, just money, right? Is disruption proof. We will always need a store of value, unit of account, medium of exchange. It's, it's, we will need it, right? So it's just, it, it, I don't, I don't know what could possibly happen to an economy. I think you mean, sorry, just quickly, I think you mean disrupting the system. So think about But some of the recent reports about some of the AI tools being able to exploit vulnerabilities in banking systems, for example, I suspect.

30:29Not the case of Bitcoin being needed, but will the Bitcoin system, the blockchain, the whole ecosystem, is that under threat if AI is able to somehow subvert or exploit weaknesses in the system? Theoretically, yes. I mean, any system has vulnerabilities and there's always the unknown. unknown. So it'd be silly to say that, no, no, definitely not. That's impossible. But you've got to understand what this thing is, right? It's really at the end of the day, it's a social construct. You know, it's a shared view that there should be a, you know, open, free, decentralized protocol that no one can control, which is hard capped at 21 million.

31:12That's all it is. Now, how that is instantiated in what kind of code, you know, it's kind of beside the point. It doesn't really matter. I can build you a website using React as the code front end, or I can use another kind of framework. It doesn't really matter. It's all machine code at the end of the day. So it's sort of, it's one of the things that I think every person goes through when they start looking at this thing. Particularly if you're from a STEM kind of mindset, it's very easy to get enamored by the technology, by the computer science, because it's, well, it's elegant. It's beautiful.

31:47It's a wonderful piece. It's a wonderful discovery. But if there was a vulnerability, let's just play it through and ask yourself, what if, okay, someone exploits, an AI exploits some kind of vulnerability. Well, there's a gazillion copies of the blockchain around the planet. We can see the point at which it's happened. If enough people go, well, wait a second, we need to patch this. And this has happened before, not through AI, but in the early days, there were a number of patches. There's still people that work on it today that as computer systems change, things need to be upgraded and updated and all the time.

32:23I think we're up to version 30 of Bitcoin Core at the moment. So it'll be patched. People will download the new software and we'll carry on. It can't be killed. It can't be killed because it's an idea. I think that's the thing that people struggle with. And it's like, they look at it in this particular set of code, you know, lines of code. And it's like, yeah, but not really. I mean, if - Maybe that's a different way then, mate. Is the account value at risk? Bitcoin could be, because of concept, I think you're right. If I had some Bitcoin, should I be worried that that could go away if AI was to somehow hack a vulnerability in the blockchain?

33:01Well, yeah, what it would do, what it would do would undermine confidence. And that's the base layer here. Confidence is the base layer. Confidence is the base layer of any human institution. Trust and confidence in the system, you know, and that's true of the Australian dollar or the Japanese yen. Like it's confidence. So if something was to happen and that very seriously shook confidence, I mean, I'm the biggest advocate there is, but I mean, let's be real. The price is going to collapse and it'd be very scary for a while. and it would take a long time to rebuild that trust. So, yeah, I don't deny it.

33:35But just remember that that is true of any system, right? So it's something that people like to point out, you know? It's like, ah, that's like, well, but your ANZ account is just safe, is it, mate? I mean, this thing has the ultimate bug bounty program on it. 17 years, you know, it's never been hacked. There's a trillion dollar bounty at stake if you manage to hack it. A lot of people have tried, you know? I'm not going to say it's not possible, but I mean, there have been more eyeballs on this code than there has been on the code that CBA uses, you know, for its systems. So, yeah, I just, I hear it, but I think we get, we get too wedded on the specifics of things rather than the general concept of things.

34:19You know, if you and I were playing chess, chess.com, that was our shared platform. It was one of the more popular ones. It's a good little platform, actually. That was to go down. The concept of chess still exists and will always exist and can be played on a number of different platforms. I'd be pretty happy if I lost my game and my money and I said, you can play chess again. It's like, yeah, but I've got no pieces left because they just all got stolen. So I think there's two pieces. I agree with you on the concept. I think the question about, does Bitcoin survive as an idea? Yes. Do my Bitcoins disappear?

34:50That's a valid and different question. The answer may be the same, but I think there's difference between the system itself or the idea and whether my value is safe within that system. Absolutely. Now, what you would want to do, though, is you ask yourself, are enough people in that situation? I mean, here's the thing that's so democratic and so beautiful about it is that no one person or institution, no matter how rich or powerful, can have any impact on it. for change to be affected, you need a very, very strong consensus. Now, I wouldn't guarantee it because I can't guarantee anything. But if such a serious hack happened that you lost it, I lost it, and like every participant on the network lost it, I'd be pretty confident that we as a group would go, hey, everyone else has got a sizable amount of money.

35:35Does anyone else think it's a good idea to wind back to block height 943 ,000 and just like restart the system from there? It's like, now again, someone will propose that and someone will propose a slightly different fix and there'll be a thousand different proposals that are out there. But consensus will form around one and that will be the new Bitcoin. But by the way, there's Bitcoin Cash, there's Bitcoin Satoshi Vision. There's a thousand different forks of this Doge. Doge is a fork of Bitcoin. It's a million different forks. None of them have got any success behind it because no consensus formed around it.

36:05What I'm saying here is that I think in a severe enough situation that it's not unreasonable to expect that people would find a new consensus to go, well, let's just go back to this point and go forward. And it'd be very disruptive, yeah. I think that's a key point. I will say too, this week, we're recording this in the last week of June, and APRA has actually said they reckon AI is a threat to the financial system, potentially, for the same reason you're talking about, which is we're kind of used to money as we know it. And I think the question from Aaron is very reasonable, And I'm nowhere near as big a Bitcoin bull as you are, obviously, listeners know that.

36:42But the reality is we're talking about a ledger. And the Bitcoin ledger or the ANZ ledger are different, but similar in concept in terms of what they are there for, which is to keep a record, in theory, an official record or whatever record. Official is the wrong word for Bitcoin because it's trustless. But your account details, your account balance is a record, and you trust ANZ to keep that record as it is and make those funds available should you want them. And that can be vulnerable to AI. I don't know whether as much as less than more than Bitcoin, because I'm no coding expert, no AI expert, and for all I know, AI is going to find different ways of doing different things.

37:26I would simply say they are both that. and so to whatever extent AI is a threat to Bitcoin it's a threat and again I'm not saying more or less or the same but it's a threat in the same way to other bank ledgers for exactly the same sorts of reasons. I think that's probably the key. The weird thing about Bitcoin I still don't have it. I'm not still 100 % across it. Across it I don't have a 100%. You never reach the bottom. No one understands Bitcoin and that's okay. That's right. My view do I feel better about a trustless system like Bitcoin or an appeal to a higher authority like the Australian dollar slash my ANZ bank account?

38:03I don't know the answer to that, honestly. They're very different, and there are different ways that either could play out depending on how the records were resolved or rolled back or kept or backed up. So I don't know, but I would say they're different in terms of execution, but the same sorts of risks, the same cause of the risk and the same potential style of outcome can be the result of AI. And so I wouldn't personally be any more or less concerned about Bitcoin than I am an ANZ bank account. The question is how either would get resolved. And good law willing, we'd never have to find out on either front.

38:40There is a clear way the ANZ thing would be resolved. There's a clear way the Bitcoin thing would be resolved. How would it actually happen in reality? We'll never know. So is it a risk in my view? Yes. Is it a bigger risk than sovereign currency slash bank accounts with a commercial bank? I don't tend to think so. It may end up being a bigger risk or a smaller risk, but the risk is there in both cases in my view. Yeah, it's funny, right? Like it's just, it's very hard thing to wrap your head around, but it's like so many of the criticisms that are out there, it really is people in glass houses.

39:12I mean, I had a really good chat to a friend the other day and he was, you know, talking about how it's all made up and it's like, well, do you know what a bond is? Can you point to this bond? Is the bond in the room with us right now? It's a completely made-up legal contract. It's an agreement that's only as good as how well it can be enforced. It doesn't exist in the real tangible universe. Even the gold bugs are like, well, I've got a gold ETF and that's real and it's physical and touches. You can't touch your ETF. Have you gone to the vault? Have you looked at, have you done an audit of the gold?

39:44Like, no. It's trust me, bro, all the way down. You know, and this is society and civilization has gone a long way with all of that. And it's kind of what's kind of cool about this and Bitcoin is just like we're removing the human element as best as possible. And rather than putting your faith in a human institution, which has got all of the great, great. These are great things in the absence of anything better. But the question is this. What do you think is more immutable? The laws of mathematics and thermodynamics or a bunch of hairless apes, scared, greedy, fearful people? Like, yes, it means that it's completely robust and bulletproof in every conceivable possible way.

40:31You know, you didn't mention quantum. That's a whole other discussion we can go down as well. But it's kind of like - They probably call us at some point, those two things, I suspect. I suspect that they do. But again, it just, you've got to look bigger picture than all of this. And I can't guarantee what's going to happen. But my thesis is pretty simple, is that, you know, a digital gold, for want of a better term, that I can transmit over the internet without any permission. And if whether I'm a pauper or a billionaire in Manhattan, I've got equal access to that no one can screw with. I feel as though that's got incredible utility that the world will increasingly find valuable.

41:07And if that is true, you know, the instantiation of that is almost beside the point and it will continue. So we'll see. We'll see. I mean, was it Genevieve who said before, it's like, I feel your pain, you know, it's down 50 % from the high, but yeah, welcome to Bitcoin. Welcome to the share market. Exactly. Exactly. Yeah. This is why I'll get very antsy in the future when, when people Genevieve are calling you lucky and the rest of it, you can just go shove that middle finger firmly in the air and tell them to walk a plank because it's just like, this is very easy in hindsight, but this is this, and I'm really not making this about Bitcoin, I make this about shares, right?

41:47Like it's just, we're talking about um was it james and nvidia before it's just like i mean he just oh lucky so-and-so he did that it's like what he didn't tell you is how many how many 20 30 drawdowns did you experience along the way there my friend you know how many times did you stare that in the face and and and and not be deterred like these are these are very challenging things and you've always got to you've always whether it's property or shares or bitcoin you've just come back to the the, the, the core thesis here, what is this thing? Why, why do you want to own this thing? Where is the value in it?

42:21Why will value be, why will value be seen to have increased over time? And if you can't answer these basic questions, you've got no business in it, whatever, whatever the asset happens to be. And, and I, I honestly get it. When it comes to this kind of stuff, a lot of people, yeah, I don't get it. It's like, don't invest in it. I don't care. Like, you know what I mean? Like, and I'd say that about anything, anything, because then it's just a pure investing on hope. and investing on hope is just gambling. And that's not a sensible thing to do. But these are great questions. And I think that's where you get people sort of gone down the rabbit hole like me and you come out the other side of these insane permabulls is because you're really just trying because everyone's asked these questions for nearly two decades now.

43:01What about this? What about that? What about that? And is it actually, they're really good. I'm not trying to throw shade at the question. They're the best questions. They're the questions you should ask, but you should also have the humility to realise that they have been asked and in very thorough ways answered over a very long period of time. And then there is just the example of it existing is probably the most strongest argument you can mount because for all these reasons that it shouldn't exist, yet there it is, ticking away, locking in a block every 10 minutes. It's like, okay, keep telling me how this thing shouldn't exist, but it does, right?

43:36And you've either got to have a very good explanation for that and why it won't continue, And if you can't find, this is the whole Charlie Munger thing. If you can't find a bear case and you can't understand the bear case, you shouldn't be investing in it. So ask these questions and then satisfy them to the best of your ability. And if you can do so and then have confidence at the end of it, then stay humble, sex sats. And to your point, mate, at the point in which you look at that and say, actually, my thesis is broken, you do something different. So you don't have to be permanently right forever in any investment.

44:05It's ideology otherwise. Yeah, I think this will go up because I think this will happen. When the this will happen bit doesn't happen, and you go, okay, I'm going to reassess. And maybe that means it's even better, or maybe it means it's worse, or maybe the whole thing is busted. Again, not just about Bitcoin, but you've made the point about property shares, anything. It's like, well, I think this company will do this. Let's have a drinking game and talk about Kogan, right? I think Kogan will continue to grow sales. I don't expect it to beat Amazon, but I think it'll be a pretty good number two in the categories in which it operates.

44:30I suspect over time, sales are meaningfully higher. I suspect at that point, they can do reasonable margins. I suspect at that point, the price will be worth, the company will be worth a lot more. and if that's true, today's price is cheap relative to that. What's wrong with that? Yeah, what's wrong with that? There's no different – well, I'll say no different. I think you have more conviction in Bitcoin than I have in Kogan, which is fine. But either way, the idea is at some point you look at it and go, huh, turns out that I'm attracting any more customers. The simple top-down revenue growth, okay, well, if that's the case, they can't get the margins I expected, they can't get the margins I expect, they can't get the profit they expected, they can't get that, the shares are expensive or at least not going to have enough upside to justify my investment, I'm going to sell.

45:07and both those things, that's the point, right? You have the conviction until the conviction is broken and then, as you say, it's ideology after that and that's the difference. There's literally the difference is when the evidence says otherwise and you still stick to your view and we see that in all sorts of life. We talk about politics regularly on our Friday episodes in particular. When the evidence doesn't support you, all you're left with is ideology and that's blind ideology and frankly wrong ideology because the evidence doesn't support it and that's okay. You can do what you want but at that point, you lose the ability to defend that on any rational basis.

45:36That's such a good point you make. It's something else I've struggled with in the sense that the investment case for Bitcoin has to conform to such a high standard that we don't apply elsewhere. So for example, you just said, I probably have more conviction in Bitcoin than you have in Kogan, but you've got a lot more Kogan than you have in Bitcoin. In other words, if we were to make a bet, and I reckon if I asked you, like, hand on heart, what's more likely, let's forget about values, to exist in 10 years' time, I mean, you'd probably say Bitcoin, right? Well, maybe you wouldn't. No, no, no. It exists because your point, let's not fight in the rabbit hole, but your point about Bitcoin is no matter what it's worth, unless literally everyone turns off their nodes, the thing is there.

46:28So, yes, 100%, yes. Yeah, but people will just sort of like, I am really happy to have 10 % in this particular business where a million things could go wrong. Like that's every business. NVIDIA, just name the superstar business. Woolies, I don't know. The bluest of the blue, Berkshire. Berkshire could not exist in 10 years time. And if you think otherwise, you are absolutely, I mean, I don't expect it to happen. I think it's unlikely, but it's possible. It's absolutely possible. but it's just, it's just, it's funny to me that when I talk about Bitcoin, it's just like, there has to be absolutely no risk whatsoever.

47:05Otherwise I'm not touching it. But these other things that have a million risks on it more than happy to, it's just like, it's just held to a different standard. And that's cool. That's cool. It's just, it's strange at the same time. Right. Like it's probably a very, it's a different proposition when you're talking about being a hundred percent in the thing or something, but it's like, my argument's usually like, you probably is like it's either not a very high number or a million dollars a coin like there's your there's your asymmetry is like maybe that's a one percent percent oh i couldn't do that no like okay but you've got three percent in a pre-revenue small cap stock i just reckon yeah yeah i just reckon i was like when that's and it's fine but it's just like it's just different standards i i i personally i personally don't don't get it but anyway i'll shut up by just saying, it's like, for me, it's more a, I mean, I think that there is a case to be made for it, but I really hope just for the sake of humanity that there is.

48:02Like, I think we would be much better as a species and a civilization if we had a digital hard money, whether it's Bitcoin or something else, I think would improve a lot of things on earth. So let's hope for all of our sakes that something like that does emerge and persist because it gets rid of a lot of silly buggers. Nicely put. Do you want to have a stab at Aaron's question about how much is enough? How would you think about, if you're 25, you've got a long time to retirement, if you're aiming for how much is enough, how are you thinking about that, mate? The way I've always thought about it is as much as I possibly can.

48:39Yeah. With balancing out against - At some point, you're going to say, I've got enough now to stop working. So as much as you can is absolutely true. But at some point, you'd be like, so for Aaron's thing, I didn't mean to interrupt you about, but I'll keep going because I started. I think that's right, but I could say 50 % of my income have a rubbish life so I can have as much as possible. And we all instinctively or maybe sometimes even just thoughtlessly invest a certain amount and spend the rest and we kind of set our own number. And that is, I don't think any of us do as much as possible, almost by definition, because as much as we'd like to, as much as we're comfortable with, they're different words.

49:16But we all kind of go, I will change this much of my life to invest this much so that I have enough. I'm not going to deprive myself of 40 working years. You made the point about the really wealthy who have this really, you know, scrimp and save mentality and then can't bring themselves to spend it. So there is a line. You kind of say, okay, I'm saving enough, but I'm happy to make the trade-off between the extra amount I could save versus spending it now. So there is an implied decision in that. Maybe as much as possible is absolutely right. it's a false decision though you don't you don't need to decide now for god's sake you're 25 you know play it as it comes like i don't know i'm twice years at your age i don't know but i'll but i will reach a point i hope where i'll look around and go hang on yeah and then and you honestly take it from someone who has been around on the planet for twice as long as you like Your view of things will change radically.

50:13That's true. It should. Like if you think the same at 50 as you do at 25, you have not grown as a human. That's not trying to be negative towards younger people. It's just we all gain experience and we grow and we learn and hopefully we do anyway. So I just feel as though it's a false, it's an unnecessary decision. Why do you have to decide at 25 how much money you need? I would say. Okay, okay. Well, I would just say, I'm going to backfill my answer. When I say as much as possible, it comes across really hedonistic and really greedy and more, more, more, I need more for the sake of it. And I was like, no, it's not.

50:51I don't know. It's the same when I go for a job. I'm going to negotiate for the highest pay possible. It's the same when I look around my investment set, my opportunities that are out there. I'm going to pick the one that has the best. Like, are you not doing that? Are you a bad person? I mean, who amongst you listening right now goes to a job interview and they offer you the job and you say, you know what, you can pay me 10 % less? If you say that to you, I'm going to call you a liar, right? Like it's just, it's not, you don't know what the future will bring. You could be hit with some horrible illness tomorrow.

51:24You might not make it to 70. So just go for as much as you can. Make sure that you live a life of balance so that it's not all about accumulation of wealth. You've got to stop and smell the roses as well. And then just don't take that pressure away from yourself. You don't have to make a decision. You will reach a point where you feel that I've got enough. I'm happy. My priorities have changed. I've now got kids. The kids have left home. I don't have kids. And I've got a partner. I don't have a partner. I've decided to live in the jungles of El Salvador. I'm living in Canada. I don't like anything, any number of things are going to happen.

52:00And if, and like, I mean, my life, if you would ask me where I expected my life to go over the next 25 years. As a 25-year-old, I would have got it completely wrong and what I said and what I thought was important and it just completely changed. So I just don't put the pressure on yourself. Do the best you can with the cards that are going to be dealt towards you. And then when the time is right, you can make the call then. And even then, this is what a lot of, because I've talked with close friends and family about, you know, one day really slowing down and actually already am fairly slowed down.

52:32To be honest, I could be working a lot more, but it's just like, let's say tomorrow I go, that's it, I'm done, I've got enough. Even that's not a permanent decision. I could ask because people always go, oh, you'll get bored, which to me is like that's the best counterargument that you can come up with that I will get bored. Well, here's the thing. Let's say that I – great problem to have. I was talking to you off air about what's bored like. I don't – I've got children in a business and I don't know what bored is. I never have the opportunity to be bored, right? But let's say that I retire and let's say a year later I'm just climbing the walls and I'm bored senseless.

53:10Well, I'm going to go back to work. This is beautiful. There's no one that's going to come down and tap you on the shoulder and say, well, Andrew, you did say you're retiring. And unfortunately, we are going to hold you to that decision. Like, no, I get to change my mind. And then I can go back and then retire and go back and decide to, you know, become an artist and then give that up and then become a farmer and then give that up. Life's one big adventure. go find yourself go figure it out you know and then at some point if you're fortunate enough to look around and go shivers things are pretty good and then success find success in whatever way you can and and and you probably won't recognize it until you're there and even then it's going to be hard to spot so don't don't i don't know i'm i'm waffling don't don't put that burden on yourself and and there is no number and there is no time limit i don't think he'll be well enough mate with the rain behind me.

53:59That's pretty full on. It's pretty full on. I won't talk for long, but I will ask the follow-up question, which is, let's say that's the right answer. How should he decide how much is reasonable to put aside? How do you, you know, 1%, 5%, 10%, 20%, 50 %? You're right if you say, well, it's an open-ended question, but what, to get there, the amount you put away now to some degree determines that range of outcomes. And again, as much as possible might be the answer, but possible is everything other than bread and water. How do you decide how much to put away? Oh, there's no formula. I mean, it is going to be...

54:34There's the kind of person who puts everything away, lives on two-minute noodles, and then gets struck down by a bus. And it's just like all of that for nothing, right? You know, I'm some idiot podcaster in these Ugg boots. Well, I don't have the answer. These are existential. These are deep ponderances that go right to the heart of the human condition. I do not know the answer to it. I just know that like with most things, the extremes are usually wrong. And if you're the kind of person who lives for the moment and doesn't put anything aside, I would probably urge you to go in a different direction.

55:10If you were the kind of person who just saved everything and didn't enjoy yourself right now, I would say you need to go into a different direction. The real thing here is to try and take your time and figure it out. One thing perhaps I can offer as someone a little bit older is that I can tell you, and I think the science backs this up pretty well, which is the things you think will make you happy are not the things that will make you happy. Fast cars make you really happy for the first few months you've got them, and then it's just normal. The big house is the best thing in the world, and then it's just what you're used to.

55:49I mean, it goes the other direction when they've done experiments on this. It's sort of like when they do happiness surveys of people who've won the lottery, five years later, they're as happy as everyone else. They've got all the same problems and gripes. But also like people who have horrible accidents and end up being paraplegic are actually, you know, obviously devastated. But then five years later, often it's based, we return to baseline pretty quickly. And the reason I say all of that is that I think this is true more for younger men, because the girls are just a bit smarter on this. but like we, we chase a lot of the toys and the things that we think are going to make us happy.

56:23And they just, they just don't. And, and the way I like to think of everything is, everything is opportunity cost. And, and, and that's why we, what you've got to say now, do I want to go out with my friends and family, spend 200 bucks on a great night out and, or am I actually spending something that'll be worth 20 ,000 in 50 years time? I don't know. Well, that's the choice, right? And which is the better one? I don't know. In 20 years' time, you'll be glad you didn't have that big night out. Right now, you're going to have a grand old time. I don't know. I don't know. It's super hard. Good luck if you ever figure out the formula because I sure as hell don't have it.

57:03But balance. Balance is the best answer I can give. And again, just course correct. If you find that you're too much of a spendthrift or the other way, then just nudge it back. And we'll figure it out as we go. And then when you're on your deathbed as an old man looking back, you'll realize all of the thousand things that you did wrong. And you'll also realize that all of the things that you thought was super important weren't. And it's the same thing talking about studies, right? It's like friends, family experiences, like they're the big things, you know, they really are. It's such a wiffly, waffly kind of airy fairy kind of stuff.

57:38But it is. I mean, I know plenty of rich people are just miserable. I don't know, plenty of people who don't have two cents to rub together and they're just living, they're just happy and, you know, I don't know. I'm getting very philosophical here. Sorry, mate. No, I like it, mate. I like it. I'm not sure how this sounds going, so let me know. But a couple of quick thoughts. It's really hard when you're 25 because not only you don't know what life's going to turn out like, but if you get pay rises over the next 40 years, your lifestyle's also going to increase over that period of time, right?

58:06And so honestly, and this is kind of fine in human nature and normal, but it's really hard because the person who spends their life digging a proverbial ditch on minimum wage is going to have a lower expectation of living standards in retirement than the corporate CEO who's been earning$3 million a year for the last 25 years of their lives. And so the answer at 25 is really hard to know. And I'm not saying it's right or wrong. It just is what it is. We have lifestyle inflation, right? Our lifestyles expand to the incomes that we've got. And so if you say to someone on minimum wage, I'm going to give you double minimum wage to retire on, And they're like, oh, my God, I can't believe how much money I've got.

58:41You sell someone on$3 million a year, they go sell someone on$1 million a year, and they won't look at you like you're crazy. And so it's kind of – it's a good point. It's philosophical, mate. It's also experiential, I think, to some degree. If it was me, to give you something to go with – and, again, we can't give you personal advice, obviously, as always and ever. But I think, Aaron, the – I would, simple rule of thumb, take your super at 12%, add 10 % of your take-home income to that and be done with that. So that's a pretty good starting point because at 25, if you compound what's effectively 20 % of your income for any length of time, you are going to be perfectly and completely fine.

59:19And if you find yourself getting there earlier, then, yeah, you can stop and go and be a farmer or what was the other thing you were going to do, mate, a beekeeper or something. Then, yeah, go and stop, work, and do that. And if you're not there yet because you haven't saved quite enough or you want more, then keep working as long as you're able to. I think Ram's right. It's impossible to answer for sure, but it does mean you still have to make a decision. You have to still make it as to how much to save without knowing that answer. The retirement experts, in quotes, will say the best target is 75 % of your pre-retirement income, which is easy if you're 60 because you know what that's going to be roughly because you might get a couple of pay rises, but you're kind of there.

59:56When you're 25, I don't know if you're working, Aaron. You'll probably change jobs. You'll probably change careers. You'll probably change incomes. And so trying to work out, hang on, I'm earning this much now. By the time I'm 60, I'll be earning that much. 70 % of that number is that number. it's a ram's point it's really hard to do but i think the opportunity and the you've got but you got to do something right you can't say i don't know what to do so i'll do nothing and so you've got to pick a number ram's point about the trade-off is absolutely spot on if it was me to give you something as a guide i'd go with super plus 10 and then see how that compounds over time and take it from there and whack that into a spreadsheet you'll get some sense of it the key thing here and i will say this aaron you're so young the amount of money you put aside is important but putting money aside at all is even more important because it's going to compound for 40 years, right?

1:00:38The money you have to put aside now is a fraction of the money someone in 60 has got to put aside to have the same income at retirement. Why? Because they don't have 42 years of compounding ahead of them between now and the retirement age or the pension age, right? So whatever you can put aside now without screwing your life. And by the way, enjoy your life. You're 25, man. Go and have the night out. Go and enjoy yourself. None of those friends and family and stuff around you talked about when you retired, but it's also memories, right? And so the memories are the things you're doing now that you'll remember when you're in the proverbial rocking chair.

1:01:07So I would think about that. But if you want something as a starter, I would say super plus 10. Do that for a few years. Let that compounding start. The other thing, by the way, is the earlier you start, if you need to then lay off a little bit as you have three kids and a mortgage and, you know, whatever, whatever, school fees, whatever you're going to pay in 25 years' time, 15 years' time, 20 years' time, whatever the numbers are, if you've got the base, you don't have to contribute as much later if you feel like you're on track to the right number. So again, don't not have the experiences, but also know, it's one of the last cruel tricks, right?

1:01:40The best time to be putting money aside is when you're young. It's also the best time to spend the money and have the experiences. And that just sucks. And you can blame whatever gods you can find or nature or human nature or curse whoever you want. But that's honestly, the best time to enjoy yourself is in your early 20s. The best time to invest is also in your 20s. And that just sucks, but that's just the way it is. Yeah, yep. Have you seen Train Dreams at all? Never heard of it. Tell me about it. It's, what's his name? Joel Edgerton, is it? Really good, really good film. Yeah, yeah. Yeah. I think he directed it, wrote and directed it.

1:02:14Train Dreams. Yeah, it's on Netflix. Worth watching. Okay. Anyway, there's one part that stood out to me on it, and it was talking about when it was young with the baby and the wife, and they were poor, and they didn't have two cents to rub together, and just the narration being is like he would later look back on this as the happiest time of his life, which just really resonated, right? It's like in so many ways, like from a financial perspective, that was about as hard as it got for him. But in retrospect, as an older man, I was like, no, these were the best years. If I could pick any one part of my life to live over and over again, it would be to relive that part of my life.

1:02:58you know and it's just it was really uh it was a great film and and and that is just one one one part that that really stood out to me yeah um i just wanted to make a really good talking point here aaron actually it's it's it's interesting i wanted to just touch on the goldfish phenomenon that you mentioned before mate which is that as someone who's young um yeah chances are as you get more experienced and more qualified um you will you will reasonably expect higher rates of pay as you grow up, grow up, get older. Thanks, old man.

1:03:36Sorry. It's very hard to ratchet down. It's very easy to ratchet. So true. So, so, so true. One of my bits of advice, speaking from experience, would be when those events happen, like, you know, you got to, I don't know, I'm making up a number here. You got extra$20 ,000 per year. Just make the decision. It's just like, I'm going to save half of that and invest it. Because you never had it. You're not giving up something. All of a sudden, you've got something extra. And you've still got something extra to enjoy the here and now. But just if you can make that as a point as to... I was talking earlier before about the challenge of scaling up as you build your wealth and as compounding does its thing.

1:04:17It's true also, not just of investment returns, but of income returns or entrepreneurial returns or wherever else you generate your income, it's a good idea as that gets higher and higher to let your savings contributions and your reinvestments or your regular dollar cost average investments ramp up as well as you do it. 100%. Because once you get used to that new rate of pay, and also too, as a human being, you judge the sufficiency of that income almost entirely by what your friends, family and peers are on. That's as a human, how you judge it. It's like, I'm on$200 ,000 a year. Wow, that's really above the average.

1:05:03That's a great rate of pay. Yeah, but everyone else in my firm is on 300 grand a year. Now you feel like that's the crappiest pay in the world, right? It's all relative. So I'm just sort of saying as those things scale, just make sure that you ramp up you're saving and investing along the way too, to a degree where you can still enjoy the extra fruits of your labours, but you're doing that, you're scaling appropriately as you get older. I love that, mate. Again, assuming the rain isn't too loud, I've shared with you before a story that I first heard on David Gardner, Motley Fool co-founder. I've talked to him a lot.

1:05:37This time it was on his podcast. And he got a letter from a former serviceman. I think he was in the Army in the US. and he talked about some advice he was given. And can I read this, mate, just for fun? Is that okay? Good, yeah, please. Please do. So a guy writes to David Gardner, and this is the letter he wrote to David Gardner, which David Gardner reads out. He says, quote, Back in 1975, good year, by the way, one of my instructors took a few minutes to talk about finances. He had a recommendation. He suggested that when we graduated, we take$5 out of our$625 per month that we were going to receive as second lieutenants.

1:06:17Take$5 out and do so without fail or changing the amount until you're promoted from second lieutenant to first lieutenant. And then the instructor asked us, how much would we have? Well, knowing it would take two years until we were promoted, we quickly figured 24 times 5 plus interest, we'd be at$125. He said, yes, that wouldn't be much, but the goal of the first two years was to develop their habit of saving. He then suggested that upon getting a raise, we save half of the increase, which is what you said, mate, and use the rest to pay additional taxes and increase our standard of living. He pointed out if we could make ends meet on a second lieutenant's salary in our 24th month, we could certainly make it during the 25th month on that amount plus half of the increase.

1:06:56He said to do this throughout our career and we would have a sizable sum by the time we retired. It made sense to me. I did not have a career of military service, but I followed his advice with my civilian pay. When I was about 55, my wife and I went out with another couple and the husband asked if we'd saved anything yet for retirement. He said they were concerned as they had not yet started. I related the story of my instructor's suggestion and said we were probably saving about 40 % of my gross salary. They were shocked. The next day I came home and my wife gritted me with the music to any husband's ears.

1:07:30She said, you're right. I had no idea of what she was speaking. I was almost afraid to ask what I was right about. She said that when she heard my story, she thought it was quite an exaggeration to say we were saving 40 % of our gross income. She said she'd never added it up, but did so that morning. We had some money going here and some going there. She was shocked to find it added up to 42%. End quote. Now, honestly, you should say 40 % of your, you know, 67th year worth of income. But that's exactly the point you're making, mate, about the lifestyle inflation and putting aside some of the pay rise.

1:08:03Frankly, lots of inflation right now. Maybe you can't afford to put aside, you know, an inflation-linked pay rise. But if you're 25, you can absolutely – promotion money, that's the different stuff. You know, pay rise, you're getting 3 % more and the inflation is 4%, you probably need a lot. If you get a 10 % whack and you get a new job or you get a pay rise or something else or promotion, that's the stuff you can absolutely put aside. Yep. Yep. That was a great set of questions there, Aaron. Yeah, very good. It's brilliant, yeah. Well done. Mate, I reckon we're probably at the end of this podcast.

1:08:32Let me leave you an early mark, mate, given you are under the weather still, knowing the next time we chat, it'll be four weeks hence, but an internet time will only be five days. And that's the magic of pre-recording as we do occasionally on this podcast as opposed to doing them live. Insert the usual joke. Mate, thank you very much for, this is the last pre-record, as I said at the beginning. Thanks for doing it. Really appreciate you making the extra time over the past few weeks. Fools, thanks for listening. We hope you've been entertained and informed over the last four weeks. As always, if you're still here, thanks to our mothers, but send us an email.

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