Investing Vs Real Estate Vs Crypto Debate: The Retirement Crisis Is Coming & They’re Lying To You About Renting!

24:25And so there's no cost. It's not like buying a house, like servicing all this stuff. There's no debt involved. There's nothing. In theory, but theory isn't reality. How many people end up losing money when things go down? How many people panic, especially with Bitcoin? because if we look at especially the early adopters of Bitcoin, who are those people? These are the people that, well, a lot of the average person is, I want to get rich. I want to get rich quick. I want to make money fast versus the average person who's buying the S &P 500. This is somebody who is, I want to invest and build wealth for the long term.

25:00It's a very different mindset. If the average investor of this is 32 years old, and we said, you need to invest for the long run, They're never going to have a house. So their whole vision of their future selves is utterly destroyed. But you said it becomes a logical thing to actually take more risk. It's logical for them because they've got nothing to lose. So Bitcoin you're saying is 145 % a year. Yeah. And in recent years, as the trend rate of adoption grows, it's probably down to about 100 % a year. Let's call it that for easy maths. But now, let's think about this just from a practical long term perspective.

25:33Devorn Buffett is arguably the best investor in the history of time. He has averaged about 19 % a year over the course of his decades, making him a multi -multi -multi -billionaire. And so when we compare a 20 % return from one of the top investors in the world versus, hey, Bitcoin is going to give you 100 % a year. There's some sense of something to be wrong. So even if I'm wrong by 50%, you're still outperforming Buffett. To put it in perspective, Bitcoin since 2010 has done, I think it's about 90 million percent returns. There's no asset in all human history. There's ever generated as much wealth and the shortest period of time.

26:17And because it's not a random thing, it's actually a technology, it's a network model of technology. As more people use the network, and we see with Bitcoin governments buying it, asset management firms buying and everybody else, you have this network adoption model. And so what it creates is the same chart as Google or Amazon, all of these. It just goes up and a log trend over time with some volatility. So you've got a secular bull market, which means that over time prices go up for measurable understandable reasons. And it happens to be the highest performing asset of all time. There's one problem.

26:52And it's volatile. Well, the psychological thing you're dead right about, it's very hard when it falls 70%. I've gone through three of those, they're hard. The problem is, just like with real estate, everyone has said, real estate only goes up. Well, how do you make money on that real estate? You make money when you sell or you lose money if you sell. Elsewhere, it comes down to that. You make or lose money only if you sell. Well, what about everything along the way? and what if I need to sell during that 70 % crash? Because what happens during those crashes? A lot of times people lose jobs. A lot of times people lose their income.

27:28A lot of times people need that money during that time. And so now I'm desperate or I'm panicking. There's two things happening. And now maybe it's the end and I go on and now I lose money. Thinking that I'm gonna make all this money. I think I can appreciate your love for cryptocurrency and your 100 % concentration in cryptocurrency. I'm not saying you're in it. You're in it. You're in it. right? Right. I've got my bottom of Maslow Harak, who needs taken care of. I've got how's that don't have debt. You know, it's easy for me. I've got multiple sources of income that I can take that. I'm not saying that for everybody, but I can also understand what a 25 -year -old can do that too because they've got nothing to lose.

28:06But do you think that if a 25 -year -old puts their entire salary and savings into Bitcoin and they lose it, let's say they run through a 70 % and draw down, are they just putting themselves in a bigger hole for their future as well? Like maybe before there was a glimmer of a chance that they could, that they buy a house that they now they can't. The most important part of financial markets is the least understood is time. It's not just price, it's time. So if you're 25 years old and you get wiped out, we've all done it. We've all kind of screwed up and had to move home to our parents to do whatever.

28:40We've all done it. You can do that several times when you're young and it's okay, you just don't want to do it when you're... And age 50. I think age 50. Sure. You really, really don't. You become more risk averse, generally speaking. Okay. It just depends where you are and how much time you've got to take that risk. But now, if I'm investing my money in Bitcoin or really anything, a lot of the value is, but some people refer to it as like equity. It's a bottom four, like I started buying Bitcoin when it was $3 ,000. dollars. That odd -the -shop is equity. It's invisible money, which in my view is theory.

29:16It's not actual money in my bank account. It's sitting there waiting for me to sell, hoping that when I go to sell, there's going to be a profit versus cash flow. If I buy a dividend paying stock, some companies have big profits. For example, McDonald's has billions of dollars of profits. There's three things that they can do with their cash. They can save that money for an emergency. They can take some of that money and reinvest it and open more stores and create better burgers or the third thing that they can do, which some companies do not all, is they can just give this money away to their investors, the shareholders.

29:51It's called a dividend. So it's a cash payment for doing nothing except owning that investment. So if I buy something, whether it's ETF stock or whatever, this paying a dividend or rental property, this putting money in my bank account every single month or year, that's money I can use to buy food, go on a vacation, do something. Here's what, let me tell you, you're getting paid 4%. Listen, so I started buying Bitcoin at $3 ,000 a coin. When I went through multiple crashes, I remember when $20 ,000 a Bitcoin was the, oh my God, we did it. And once they hit around $70 ,000, I looked at this and I said, wow, I have my real estate, my stocks, my speculator, which is crypto and startups, and the 2 % gold, which is now looking extremely inflated.

30:37I need to lower this that way I can have some more income. So what did I do? Assaults and Bitcoin? About rental properties. That now rental property is putting money in my bank account every single month. The Bitcoin, it's a big number on paper, but it doesn't actually mean anything unless I do something with it. Could you state it, which means you can state the cryptocurrency and make a monthly yield from it? I'm going to learn against it. Now that's at in risk. Well, what happened if I take a 80 % loan, 70 % loan, let's keep selling. Yeah, yeah, yeah, it's very volatile. So let's take a 50 % loan and Bitcoin falls by 70%, which it has now under water, now what?

31:22Now the bank comes knocking on the door, margin call, you're forced to sell for closure. My point being on my Bitcoin. I don't disagree and really speaking, people should have the ability to have cash flow or cash for if things go wrong. That's a super important thing to be able to have a long -term view, to be comfortable with drawdowns, to be able to invest in startup, so to invest in crypto or technology and all of this stuff. That makes sense, but I just don't think a dividend of 4 % makes any difference to anybody. Well, it does if you do it consistently, Monday after month, you have three years.

31:57You need huge capital to start with, so you can just while. No, if you start investing for dividend income, I call it a decade of sacrifice, and this is why it's so hard. If you're 33 years old now, you're sacrificing until you're 43. You're going to become 43 at some point, and imagine if you're 43, and now you have the income to pay for that card, to pay for the house, you don't have to worry about it. Well, do you wanna have hope that you have the Bitcoin or would you have there have more security? I'm, again, Bitcoin in my perspective, high risk, high potential return. And I'm not saying don't buy it.

32:35I'm saying allocate it in your portfolio and a way where you understand you are arguably one of the top crypto experts in the world. I'm not. I also, I'm not the stock expert in the world. I'm also not the real estate expert in the world. But I don't think I'm probably going to be wrong. If my stocks crash, I have my real estate. If real estate crashes, I have my stocks. Crypto crashes, well, that's part of my speculative portfolio. I really don't care. And if everything crashes, I got some gold. So for me, I have to diversify against myself because I know stocks crash. I know crypto crashes. I know real estate crashes.

33:15But if you're not starting with a lot of money, your strategy is the strategy of a rich person. Oh, I've got houses and I've got dividends and I've got some gold and I've got a bit of this. That's the strategy of being rich. But I didn't start with all those. I didn't start with all those at all. I started with one. Where did you make most of your money being entrepreneur? What were you doing? Taking obscene risk. I did. That was me. But you haven't. But if I'm making $50 ,000 a year, the first step, let's assume now I'm putting $5 ,000 $7 ,000 a year. I can take high risk, high potential return, or I can be conservative or a hybrid.

33:56And not everybody should be taking all the risk because there's Bitcoin has risks. And again, I'm telling you that somebody who owns it, the government could come in and change policies on Bitcoin. Quantum could change Bitcoin. people could stop caring about Bitcoin. And if any of those things happen, and all my money is in this very speculative asset, I'm the one that's caring all the risk. So if someone is the $1 ,000 in disposable income to invest, what would you suggest they did, Humphrey? My take on $1 ,000 is as change over the years. I used to say you could invest $1 ,000, but as Rural probably mentioned, 10 % on $1 ,000 is not that much, right?

34:42So like, you know, if you invest a thousand bucks in the SAP 500, you get 10%. Next year, you'll have $1 ,100. That $100 is not going to change your life dramatically. So if I had a thousand dollars, I'm investing in myself. So trying to improve my skills to make more money at some point. How exactly would you do that? When I was still coming up, I was trying to take a lot of courses online. So I'd try to figure out different types of skills that I could use in the marketplace. So I took an ad words course back in the day for like 150 bucks that taught me how to do Google AdWords, and I would try to consult for businesses out there to try to make more of an hourly income on the side.

35:17And Google AdWords for anyone that doesn't know is Google's advertising platform. Yeah, and now there's TikTok ads and Facebook ads, but anywhere where I could be more of value to another business, I knew that economically speaking that I could command more in the marketplace. So something with that would be great. So right now clearly that is AI, because what you saw there is like a knowledge arbitrage with a new technology where most people didn't understand ad words and you could be the young guy bridging the gap for people's ignorance. So most businesses now would be dramatically more efficient and effective if they understood even the basics of AI.

35:53So a kid could take a course in AI and you know what's crazy. If you read the top 10 books on AI, you'd be in the top 1 % in the world in terms of knowledge. Yeah, I mean if you just read the instruction manual of how chat you be or you could probably be in the top 1 % of prompt engineers, right? And that could be a value to a business or service, right? So that's probably where my career came from, was we were the kids 18, 19, 20 years old, that new social media, because we'd messed around with it, so we sold it to companies. And that started my first business, and then there was, yeah, hundreds of us.

36:26And there's a lot of these apps right now coming out from 18, 19, 20 year olds. Have you seen that one profile of that guy who created Kaliai? Okay. Cal AI is this app where you take a photo of your food and then it sends it to AI and it tells you how many calories you're in it. Well, the guy is making 50 million bucks a year or whatever it is. And I saw that this morning, fun, four million dollars a month, he's making it from that. Yeah. Basically, it's an AI wrapper, obviously. I think he has some secret sauce that he puts into it, but a lot of the kids these days are using AI to try to leverage that and try to turn them into businesses.

36:59is I do want to say though, I think with $1 ,000 and with what Jess Breet said, I think you can still make a decent income. If you can make a decent income, you can start to slowly save and invest your way to some sort of semblance of retirement. I think you can still be able to retire and be financially independent without having to, let's say, bet your life savings on crypto. I know that I personally bought Bitcoin on $100, but I've sold it many times. I bought and resold it so many times because when it's up 10x, you're like, oh, if you would give me a 10x return when I first bought it, I'm like, yeah, I'm taking that any day of the week, right?

37:37And so I think that's why it's so hard. It's like, Bitcoin does produce 145 % returns since 2012. But in 2012, no one knew how to buy it. I bought it on some random sketchy website. I got this string of characters for my wallet, and I tried to buy a coffee at a cafe in Palo Alto. So, and I didn't know that Bitcoin transactions took 30 minutes to go through. So I sent Bitcoin twice for a $5 coffee. Now, keep in mind, this is .1 Bitcoin. This is 10K. So it's been Bitcoin. Yeah, it's an expensive company. I sent it twice and then didn't get it and guess what? I saw it to pay for a coffee with my debit card.

38:10So where do I make this one? You spent 20K on Bitcoin coffee. I spent 20K on coffee. Yeah, that could be the title of this video. This is 20K on coffee. Yeah, I literally, I sent it to Koopa Cafe in Paul, if anyone wants to go there. I think the average person psychologically speaking, it's really hard when it goes down 80 % and if Jaspreet says you need money, like at that moment, you're going to sell it. But your point about, I mean, the primarily important thing is income. Yes. I mean, and that, and we talked about last time, I was on the podcast, it's like, how do you just leverage the same skills in different ways that you can earn more money from it?

38:45Like the story I was told when I left university was speaking to a friend of my dad's, he was like, What are you going to do? My father was in marketing and I liked marketing. It was like late 80s Wall Street thing was going on. I'm thinking about either going to work for somebody like Mars, do marketing, great company or go and work in the city in London. The guy looked at me and said it's really simple. It's the same job. You're a salesman in both. One, you get free Mars bars and the other, you get free money. He realized, Oh, there's actually arbitrage in what you can do with the same skill set.

39:25Well, I would say there is a point. So I agree. If it was me with a thousand dollars, I'm going to go out and invest in my income, read some books, get whatever I got to do, go start something because that's enough. But if we look at time, a thousand dollars compounded is decent. If you go back 1971. How do I pay for my college loan and my house deposit? and I want to get married and have kids. You're telling me I can't do that for another 20 years? If I took a thousand dollars in 1971, I invested that into the S &P 500 and I did nothing else. I keep doing whatever I'm doing my job and I only invested a thousand dollars.

40:03I never invested another penny again. Today, that would be worth it reinvesting my dividends about $330 ,000. And I never invested another penny after the first $1 ,000 investment. Why? Because the S &P 500 has grown by a little bit over 10 % a year from 1971 to now. It's something. Now imagine if I invested $1 ,000 a year, $1 ,000 a month. Now, I can't say that about Bitcoin because Bitcoin didn't exist 50 years ago. I can't say that about Bitcoin because Bitcoin didn't exist 25 years ago. And so... How about Amazon? What about Amazon? That started trading in 2000, or even better Facebook, 2012.

40:46How do I know? Do we not invest in it because it wasn't around? It hasn't been around as long as gold. Facebook has been around less than Bitcoin. Amazon. It's daughter time. Creates a profit. It has a tangible value that you can see and feel because I can go on to Amazon and order myself. Amazon. If brand new guacamole set, they'll be there in two hours. They make a single profit until what, 2018? Well, but that wasn't because they weren't producing a value. is because they were growing so aggressively. So you think if you had a thousand dollars, you should invest it in the S &P 500. Well, I'm not saying you should.

41:18I think personal buy and S is personal. I think if it was me, if I have a thousand dollars extra and I'm just trying to figure things out, I'm gonna go buy some books, I'm gonna buy a class, I'm gonna do something about how do I increase my income, going back to what you said. But if I'm saying I just wanna work my job, I don't wanna go out and do all that. I would do half into the S &P 500. And I would go half into individual companies. So more risk than the S &P 500, not as much risk as the Bitcoin. And the reason why I would do this is because this is something I enjoy. I like that research side of things that I understand.

41:48This is something that I could see returns with like you talked about Amazon, like you talked about Microsoft and whoever. There's potential. And what about you, Humphrey? $10 ,000 does your strategy change? My strategy is a probably more conservative or traditional. It's probably 90 % index funds. So tracking the S &P 500 and then 10 % speculative. And my whole goal for that 25 year old would probably be to get to a hundred thousand dollars as quickly as possible Because at that point I think they get more options flexibility and they're able to kind of use that capital to Maybe take more risk after that's still 10 years with this and pay you well eight years of this and people about 7 .84 years Yeah, but that also assumes that they're only doing the $10 ,000 a year maybe they they can save an invest a little bit more that'd be nice But I think for a lot of people in America if they can get a guarantee a hundred thousand dollars and 7 .84 four years, I think a lot of people might opt for that.

42:40So I agree, but I'd remove the S &P. You do all crypto. No, I just do NASDAQ. Oh, yeah, you do NASDAQ. So NASDAQ compounds at 18 % a year. What is NASDAQ? The NASDAQ is the NASDAQ 100, which is the top technology stocks in the United States. We live in a world that tomorrow will be more digital than today, guaranteed. And so therefore, these stocks tend to generate the most performance. And we've talked about many of these names. times. That is all in the NASDAQ. So, a little arbitrage is, if you want to shorten your 7 .8 years to 5 .5 years, six years, by the NASDAQ 100, it's an ETF, Q0 cost, easy.

43:20And then I would say, and then do 70 % of that, 30 % crypto, and you don't have to care about anything. Sure. You'll find. Now, if you have a different risk tolerance, you can tweak those dials, Or if you are more risk averse, then you up your cash dial or some other more stable flow, whether it's gold, or that gold is still driven by the basement of currency. They're all the same thing. They're all driven by the same macro factors. So yeah, similar kind of idea. And the NASDAQ is great. I've had to just say one thing. But just like with Bitcoin, the difficult part with the 18 % is you've got to be willing to go through the downturns.

43:53And I want to make sure that that's clear, because I mean, the big drop 2000, The NASDAQ fell by 78 % from its peak during that time the S &P 500 fell by 40%. So it's a bigger drop. Not to mention, the NASDAQ didn't get to its level until 2015, 15 years later of no money. It has still compounded more returns than the S &P. Absolutely. If you held on, you can't live your life in fear of loss. It's 10 years of loss. 100%. It's got to be in the risk of just returns versus the gains. But how many people can hold on for 15 years and say, you're one, nobody deal, you're two, okay, you're three, you're five, it's gonna go up, you're 10, it's gonna go up.

44:36And by the way, your 10 was also another crash because... All you have to do is dollar cost average. What's that? So dollar cost averaging is, if you're young and you've got a bit of excess cash now, you know, you've soldering come a little bit, as opposed to just chucking everything in or you do, you put your large sum in, you've saved up your 10 grand. But now you've got maybe $500 a month of free capital you want to put into your savings. So when you have these draw downs, you're actually keep buying. And what happens is it lowers your average cost over time. And you get to new all -time highs in your portfolio much before the market does.

45:14So for example, in the last crypto down cycle in 22, all I did was add as much as I could to my crypto. So, I was at new all -time highs in my portfolio where we thought the market was because I'd love my average entry. That compounds your profits over time incredibly. And is this an psychological there where if you commit to the habit of just putting $500 in regardless of what happens, you remove a motion. You remove a bit of a motion from it. And the emotion is the thing that people struggle with. If you're investing in things that are more volatile, you firstly understand that you will see larger drawdowns when markets go down.

45:56Usually they're all correlates, they all go down at the same time, all up at the same time. So you're going to do that. But if you tell yourself, that's an advantage for me because I can buy more. That's a secret hack that makes people fortunes, compounding. This is Warren Buffett's thing. I'll find a buyer. with that. More companies in a bear market than an bubble market. Agreed. Yeah, I was 100 % agree with that part. I call it poop. Panic leads to overselling, leads to opportunity, leads to profit. So I am on board with that, but that requires a specific level of financial sophistication. No.

46:36Even your coin -based app can just can dollar cost average. But how many people can dollar cost average down 70 % or 15 years waiting to see that? It wasn't 70 % in 15 years. It was it was 70 % in one year and then rallied ever since every single year of the year of the year it went up. And to see them down. Well, no, after the 2000 crash, the NASDAQ also again crashed more than the S &P 500. And then step back and and look at the returns of the NASDAQ first thing. I agree. Over the long term, it's a great investment, but volatility is hard for the average person who doesn't have the emotional IQ and the financial sophistication to understand the other question.

47:15That's our job to educate them. Yes. Our job is to help people in this journey and not get them to make decisions that compromise their future. We have to help them. I agree. And risk adjusted returns and time horizon are two of the single most important things. And so why here? I mean, through history, contrarians have made the most money. And also, I think the other thing that I've really pulled out from what you both were just saying there is, you need to set up a system that removes emotion and requires you to not to make decisions. Because it's in making decisions that you're a meagre like the emotional center of your brain is gonna do make a bad one.

47:54And it's that, I think that self awareness emerges from what you're both saying, which is okay. My brain is going to panic. It's gonna poop whatever you were talking about there. And I need a system which is panic proof. So you know that the best performing brokerage accounts in the United States are dead people. That's true. It's a known fact because they don't do anything. So they have these accounts that haven't been closed and they're inactive, they outperform all the active people. You are 100 % in crypto in terms of your investment portfolio. Yeah. So you must be sat here thinking that, And actually when I asked that $10 ,000 question, what would should someone do with $10 ,000?

48:35You must be thinking that the right answer is to put it into a crypto. The right answer for me is that to his point. But you look, I actually would say, but you know, this is an audience of people and people missing to have the things, yes, the answer is we've been given the gift of the greatest before me asset, the world has ever been given. That's not just Bitcoin, that's the crypto complex. If you're very careful in investing in top projects, you can even have a broader diversified portfolio of that. You've had Ethereum, Bitcoin, Slama, Sui, all of these things, great. They will definitely outperform for a period of time.

49:13That's based on macroeconomic factors, which is the debatement of currency, which we've talked about. That means all of these assets got by a certain amount and some outperform it. The only two assets that outform to the basement of currencies are the NASDAQ and crypto. This has been a persistent trend that is observable and measurable. So this is not a speculative asset. What it is is a Metcast Law adoption model. Bitcoin is the adoption of let's say a money or collateral layer, like a digital gold will call it. Well the rest of crypto is the new rails for the internet, so it's a technological investment.

49:46It is growing at twice the speed of the internet in terms of adoption and has been since the first 5 million IP addresses for The internet and the first 5 million wallets twice the speed of the internet makes it the fastest adoption of any technology of the world has ever seen Aside from AI now, which is now outpacing it If we sit here in 20 years time. Yeah, and you were wrong. Yeah What happened? Do you think? Well, firstly, in terms of investments, you have to always, once you have a high conviction bet, your entire job is to question yourself, not to keep reaffirming yourself. Sure, you end up reaffirming by questioning and then you figure it out.

50:26For it not to have been true, what would have happened the AI would have had a new system of money that it created? There has to be a competitor to this, because we're now in the game of nation. The United Nations are requiring this, the Middle East nations, nations in Asia, the US wants to acquire it. So we've got South American nations, so it's now the game of nations' geopolitics. So this is a real thing. But what changes in 20 years' time? Well, in 20 years' time, we're in a very different world. The economic engine is driven by robots and infinite intelligence. We don't know how the economic machine works.

51:08We're only not the value of money as when we go into that world. So I've talked about this before, the economic singularity past 2030, the economic model breaks down. So the economy generally grows by a measure of population growth, how many people are in the economy, economy or coming into the economy or being born, productivity, how much output they create, and then debt growth is the other level. What's happened here is the population of the entire Western world plus Japan plus China has been aging. So the rate of change in population growth is shrinking. They tried immigration, but that became politically unacceptable, So that stopped.

51:52So you've got the slowing economy. GDP growth has been slowing over time. Productivity, old people make less things. So it makes less economic outputs. So we've got this mess and then we've got this debt and we've stopped that whole engine in 2008 and we need to service this debt. So, okay, so that's the system we're in and this is why we're printing money to service this debt because we're not generating enough output in the economy. But after 2030, this population part changes. We've got infinite artificial humans. You're talking about AI agents and robotics. Yeah. Infinite. So what does that do for that, the multiplier of that formula, population growth plus productivity growth plus debt growth, it breaks because you're going to have 20 % GDP growth, because you've had a huge rise in the number of AI agents creating economic activity and robots.

52:46And so what does that mean for me as an average person? For me is like, the economic system's such changing. We get to this world of abundance. We don't know what has value. What we as humans do, we change and re -tool to become more humans because AI and robots can't be humans. So we have to figure all of this stuff out. Investing, we were talking about this earlier, is like, well, does the AGI is that going to be a better investor than any of us? Yes. artificial general intelligence. Yeah, that's the next stage where it's smarter than any human that's ever existed. And we're very close to that.

53:20So, in which case, well, how do markets work? And when businesses are agents selling stuff to other agents, where do we play a role? So all I'm saying is, my whole life is to be into looking to the future, sort of 10 years out, and try and probabilistically understand paths. Here I get to like 2030, and it's like a dark curtain. Just to flip that for a second, how could AI actually positively influence your hypothesis? I'm very positive about AI. I think humanity will come out this just fine. I think economic growth that explodes is, we can work a way of accruing it to humans or society or whatever we want to do with this.

54:07I'm not a my dimmer. Specifically on Bitcoin's value and price. How could AI make it even more important? Well, in the end, an AI is a... it requires two inputs. It requires... It's Maslow's hierarchy of needs is basically two things, compute and energy. And it needs to be paid. These agents can't... You can't build all this agents, millions of agents running around doing things without paying for them. And agents will use agents, so they will, one agent will get another 10 agents to do all this task. They're all going to have to be paid. And the way of doing that is using crypto rails. Stable coins.

54:46Whether it's stable coins, whatever it is, but that whole crypto rail, you know, all of this new infrastructure for the internet, that the blockchain, that's where it works. Often the difference between a company succeeding or failing isn't down to its product or strategy. It's down to the people on the inside. After all, the definition of the word company is group of people. And some of the best companies in the world have been largely built by A -Players because I'll let you in on a little secret. When you hire an A -Player, they go on to hire more A -Players and it perpetuates. The challenge is finding those first few A -Players.

55:19I found the majority of mine on LinkedIn, who are a sponsor of this show. LinkedIn provides talent I could not find anywhere else. talent within necessary skills and culture fit that I'm looking for. Whenever I've paid to promote a role in LinkedIn, I've been able to hire faster and of course better. The data supports this too. You'll actually get three times more qualified applicants than if you posted the same role for free. So if you're trying to build something truly great, you can get started by posting a job for free by visiting linkedin .com slash DOAC. That's linkedin .com slash DOAC. And you can post your role for free there.

55:53Terms and conditions of course apply. Do any of you remember a conversation I had on this podcast with anthropologist Daniel Lieberman? It was one of our most viewed conversations of all time and the most replayed moment in that conversation was when I talked about this product. These are what are called barefoot shoes by Vivo Barefoot, which have significantly reduced support, which gives my feet the opportunity that they desperately want to need to strengthen. If you've learned anything from this podcast, it might be that we're living in a comfort crisis. And that at all times, and our lives were making this trade of whether to have more comfort now and therefore more discomfort in the future, or a little bit less comfort now, but to be stronger and healthier in the future.

56:33And for me, that is the choice to wear barefoot shoes. So if you want to start strengthening your feet and your body, visit vvobefoot .com slash Stephen. And you'll get 20 % off when you use code Stephen B20, a checkout that also comes with a 100 day money back guarantee. What have you got to lose? I wanted to ask you a question. The reason I went in got my phone is because I had someone contact me that I knew from my childhood. Used to be one of my best friends, frankly not spoke to them in 10 years. Sent me a text message and the text message they sent me is, I wanted to get your opinion on this because I ended up saying to him, I'm not the guy to ask about this.

57:15I think you've misunderstood who I am. Hi, mate, I hope you're well. I got myself in a bit of trouble with some debt, about £40 ,000, some more than a bit of trouble. After some advice and direction in terms of maybe passive income, slash an avenue to try and work my way out of it, is there some material I should be reading watching that you might know of? And I asked him, I said, what kind of debt is it? And he said personal loans and credit cards mate. And I said like how I need to ascertain how urgent those debts are and it fits causing it any immediate issues. And he said, well, they're not super urgent, but as a result of the high monthly outgoing, I'm a month behind my mortgage payment this month.

57:57So it like is, but it's not because I don't want to keep being in that position moving forward. It's costing me circa $1 ,000, $800 a month in repayments at the moment. And I can't get a consolidation loan. It's a perfect storm starting because I've just started a new job and my partner is on maternity leave and I have this debt mountain It's starting to affect my family Hmm if I can't pay the mortgage, you know, so I've got to change moving forward and figure out What to do and you're the man to ask for advice? I was like, fuck me. I'm not like that. And then he messaged me again Within an hour and said, hey, sorry man.

58:35If you're busy just wants to nudge this then message to get an hour later because I was on the flight and said, hey, I really need some help in direction, man. I'm quickly running out of places to turn. He's kind of in a hard spot because 40 ,000 pounds in debt with the interest payments of let's say your interest rate is 15 to 20%. That starts to spiral out of control a little bit. Like if he was under 10 ,000 pounds in debt, it's a little bit more manageable. But at 40 ,000, the interest starts to compound quite quickly. So, you know, you said he had a mortgage. He might even have to consider moving, selling the home to at least get the interest payments under control or reduce that amount of debt.

59:12It's kind of one of those situations where you just need to reduce every single expense possible and start really pouring all your money into the highest interest rate debt that he owns. So you can rank your interest rates of all your debts from highest to lowest and start at the very top. If it has 22 % interest rate, you want to get rid of that first because that's what's killing them. At those levels of debt, it's really tough, because I think a lot of people consider bankruptcy at that point, just to kind of clear that amount of debt. Depending on what his income is, I know I've known, let's say, a waitress or a server that had $50 ,000 in credit card debt and just unable to get over it, because the interest payments were as much as their salary.

59:51So in those cases, unless you can get a personal loan from, let's say, a family member and kind of clear that debt, you're in a really tough spot. Reduced your expenses as much as possible, put any extra money you have towards that debt at the highest interest rate possible, the highest interest rate thing, and then consider selling some assets if he has assets. Bankruptcy. Bankruptcy. When should someone consider bankruptcy? And what's the trade -off? The trade -off is seven years. I believe your credit is shot in America. So, but I believe that, actually, I think if you pull up a chart, someone sent me a tweet the other day of like bankruptcy of these lawyer searches in America on Google and it's been kind of like going up into the right, which is not a great thing.

1:00:35Bankruptcy just, you know, there's different types of bankruptcy that you can file for, but I do know that it usually clears some if not all your debt and you basically have to start over. But as a result, you lose a lot of your privileges. Like, for example, no credit score. I read some stat, you might know if this is true, but I read a stat that it said something to be fact that people avoid going into bankruptcy because of the stigma associated with it. When they looked at the financial performance over 10 years of people that did go into bankruptcy, those that did typically were better off than those that tried to avoid it for the next 10 years.

1:01:16I know, that could be anecdotal, I don't know. That's tough because if you have $50 ,000 in debt and you make $50 ,000 a year, it's different. Bankruptcy in some ways is a good thing because it forces you to do crisis control. It's like your expenditure, what you're doing, everything becomes hyperfocus. Like you you led in the beginning with about how people should look at their expense. Expenditure, right? When you're $40 ,000 in debt, you've not been doing that. Correct. And bankruptcy actually forces you to actually discipline that for an extended period of time, where it becomes a habit to Steven, that's why they are performing the end, because you've created the habit that you talked about right in the beginning of this discussion.

1:01:59Yeah, so I just found the stat here. It said, yeah, this is one of the uncomfortable truths in finance, and the answer is often yes. Those who file for bankruptcy end up in a better place long term than those who try for prolonged periods of time to avoid it. And the research shows that people who file for bankruptcy typically get their debt wiped out and cleaned, and they removing unpayable debt. And it's bankruptcy can bring immediate mental relief removing the crashing stress of unpayable debts. People who avoid it often live in chronic financial stress which spills into the health relationships and works.

1:02:29So, in short, those who face bankruptcy head on often recover faster and end up in a stronger position than those who keep limping along trying to avoid it. And I think somebody who's listening who may be in a similar or the same situation ultimately wasn't know how do I get relief. Bank of C is one option, but at the end of the day, there has to be change and that change is difficult. And that's the part that I think a lot of people have hard time talking about or comprehending. There is relief, but it comes with severe, extreme, and quick sacrifice. What do I mean? Number one, you've got to cut back your expenses as fast as possible in that situation.

1:03:12You have to sell as much stuff as possible. I mean, bankruptcy works, but you also lose your house. You also lose other things along with it. There's a lot of emotional toll with it. You have a family of a kid. I mean, it's also a big reason people end up getting divorced so it can also impact their life in many different ways. So you have to make extreme sacrifices. And I mean, get rid of the Netflix subscription, not because it's just costing you $15 a month, but because the average American is spending more than two hours a day watching Netflix. And if you're in that type of situation and you're spending two hours sitting there watching whatever the heck is on Netflix, how do you sleep at night?

1:03:47You shouldn't be sleeping eight hours a night. You better be getting up, go and try to get some more money. I don't care if it's Uber. I don't care if you're working at McDonald's, find some extra money and learn how you can earn some more money. And I mean, it sounds harsh, but the reality is if you want extreme change, it's not What can happen without extreme change? So could he sell his house, do you think, assuming he's making the 50k, which I think is probably accurate, having a vague understanding of his job on where he lives, etc. Sell his house and then move in rent and apartment with that free capital.

1:04:19I mean, that would alleviate his current problem immediately, sure. He says here, after some advice, direction in terms of maybe passive income, this word passive income. I know. He's trying nuts. Why does it drive you nuts? It is a, there's like a passive income industrialization complex that is, I mean, it is literally every millennial's dream is, I'm going to get passive income and it doesn't exist. We talked about property. Property is the least passive income you can imagine. It is awful. Every time I've tried to rent out property, there are so many costs, everything goes wrong. It's just endless.

1:04:55You're paying fees and people think that there's a magic passive income. everything comes with effort. There is no such thing as returns with that effort. That's where even robbery comes with effort. There's no way of making money without effort or risking something. And so when you're 40 grand in debt, how on earth do you think passive income is going to rescue you? But he's seen that on TikTok and on Instagram. Oh, we're millennials in our 30s and we're now living in Lisbon and we've got passive income from my house. It's like it's bullshit. It's social media dream that doesn't really exist.

1:05:35And that's never going to save him from 40 ,000 pound debt. Passive income can exist. The perception of what it is is the problem. I am struggling with money. I have no money. I got bills to pay. I need passive income. That's not how it works. That's not how it works. The way it The work is you take an extra money, right? I have, I'm going to work and I'm saving and investing some money. I take the extra money that I want to put my two investments and I can put it into an asset, an investment that can pay me for only yet without actually working, without going to work to own it. Now let me ask you about your real estate because I got to keep coming back to you, man.

1:06:16Did you manage and real estate yourself? Did you have a manager? I've done both. I've had management agent and a management myself. Managing yourself is probably a absolute nightmare. Terrific. And managing it with a manager is also probably a nightmare just in a different scene. Yeah, and because your yield is massively reduced as well. It is reduced. And then you take the trade off between whether you're going to do short -term lets or longer -term rentals. And there's the volatility in the short -term lets that you don't know what your yield's going to be. Long -term, different as well. Then you've got the tenants.

1:06:48Sure. And bad the tenants have been in the damage that they've done. Yep. By the end of it, you walk away, I think it really just wasn't worth the effort. Well, I would disagree with you. Unless you're... Yeah, I mean, obviously people can do really well at a property. The work in real estate investment is learning the process. When I first started investing in real estate, it was a complete nightmare. And it was not passive, anything close to passive, it was a nightmare. What you don't know when you start is that there's a good property manager. There's also a bad property manager. How do I find good property managers by going through a lot of bad property managers and learning that process?

1:07:24And that is a painful process, a very time -consuming process. But when you do have the right team, it can be extremely passive. So I invest in real estate. What kind of properties are we talking about? Single family houses and multi -family apartments. And do you have lots of them? Not lots, but I have a decent amount. And how much will your portfolio is in buying properties and then renting them out to families? 50%. And what do your returns been like over a year of year for the last decade? So the way I look at returns when I look to acquire property is I want 7 % cash on cash on the money that it put in.

1:07:59So when I look at return, I don't care about equity. We talked about this kind of a lot that if I buy a house for let's just call it $100 ,000 and it goes up to $200 ,000, I don't care. My goal when I acquire real estate is not to sell it and flip it for a profit. My goal is to grow the cash flow that I'm generating month after month from rental payments. From rental payments. It's really difficult though, because if I, someone that hasn't done a lot of property rentals and stuff like that, the chance that I'm gonna fuck up. Absolutely. So I did. And I'm one of those people that probably screwed up more than I could count.

1:08:35It does cost me a lot of sleep, cost me a lot of stress. So you have to kind of be an expert. You don't have to be an expert, but you've got to be willing to give it. In the beginning, right? For the first number of years, It was extremely painful, but today, when I go on and acquire a property, I will look for the property just like I do research on a stock or whatever I want to do. I do the work to research a property. And today's economy, it's much harder, not impossible, to find those returns. Acquire the property and over the keys to the property manager, give them the goals. And now I oversee the manager because I have a team now that is, it's a business.

1:09:10It's a business. It's like starting a startup. But it's not like starting a startup. Why? Because starting a startup, when I work in my company, I am working in my company and I work a lot of hours. So I'm meeting with my employees. I'm leading the meetings. I'm coming up with ideas. I'm leading the vision. With this, I acquire a hand over the keys. I've already set the framework and now you are doing the execution. That's a mutual business. With my company, there's hundreds of people in the UK right now. But you're not the one that's starting that startup. I was the founder. And now what have you done?

1:09:40You've acquired more employees to get there. Which is what you did with your property. It's much harder to do that with a startup though. How big does a startup have to be in order to be able to displace you as a CEO, to pay for the staff, to make the money, and then to hire a new CEO, and to lead it the way? Depends, my friend's, my friend Ash, who was just with me last week in LA, has four people in his startup. He's out in LA right now, in my house in LA with my girlfriend and my other best friend, who's still there. And I watched, he's in the hot tub right now. I know that because every day at the same time, he goes in the hot tub.

1:10:09And then they go for this hike and my girlfriend sends me photos. What he's done, he's he's set up as team of four people, they do personal branding on LinkedIn for people, and they're running it back from in the UK. He's up in bloody the mountain with my girlfriend right now. That's beautiful. Yeah. How many startups don't do get there? No, but I'm saying that. People start a business. They just write it to me. Oh, that's just a business. It's a business. It's a steep learning curve to develop expertise, and then you put systems in place to make it sustainable. But the systems are kind of pre -established, where you need to rent it out, you need a good manager, it's going to find a good tenant, they got to pay the bills, and it's not like a startup where I have to innovate and create an idea.

1:10:46I don't have to go out and build the blueprint. I am going out. I'm acquiring an asset that people already need. This already existing. And then I'm going to put use to it by having somebody live there or use it. Then there's a team just maintaining it. So what do you think then in terms of passive income? And is it real? But specifically, let's do this point of housing. Do you advise people to buy rental properties and then generate rental fees from them as a source of income? Well, you just heard Jess breathe at how much work it would take. So I generally don't advise people to get into that business just because of the steep learning curve.

1:11:24And not everyone is built for that. And not everyone has capital for that. So if you were just trying to get started and actually make some money, I just think the stock market is the most liquid and easiest place to get started. I personally rent and I plan on renting and just instead investing the difference of what my mortgage payment might be in my rent. I think on the coast like San Francisco, New York, I think Miami that might actually be the more reasonable thing to do. I was reading the New York Times article that just came out yesterday and it said more millionaires than ever are renting in the United States and that it's tripled between 2019 and 2023.

1:12:01So in just a couple of years, millionaires are choosing to rent more than ever before. What's going on? My guess would be a lot of the millionaires are probably living on the coast because they invest a lot or they have higher paying jobs. And maybe it's slightly unaffordable for them to buy a house and say, you're going to just go Seattle, New York, Los Angeles. In the New York Times article, it says they're choosing flexibility and liquidity over ownership. and they don't want to be bothered with the inconveniences of home ownership, which includes paying a real estate tax and insurance, especially in markets like Florida and California, where we're seeing a lot of natural catastrophes.

1:12:37Yeah, so the US is a peculiar market because there's this high real estate tax in owning real estate. So all the time your returns are being reduced by that you pay, so whether it's like one and a half percent or two percent, whatever the number is, There's that and then there's the other real estate taxes that come on top of it. Interest rates have been high. They've been high for a while now. So a lot of people have just been priced out of the market just in interest payments. But now because of mortgage payments are here, the difference is actually with the rental is a lot of rental people aren't trying to cover a mortgage cost because they own the property outright so you get cheaper rates.

1:13:17So it's to do with price, the US economy's not been super strong yet. At Main Street level, Wall Street's had a great period of time, but Main Street hasn't, so people don't have excess earnings yet. So I think it's a function of that, but it's probably a larger trend as well. I think also it's understanding what the opportunities are. I mean, there's a lot of flexibility with renting. I mean, I've finally bought a house in 2025. I've been renting before this. So you bought your first property to live in with your family this year? From yes, Meet a Living was 25. Why didn't you do it sooner? Well, because when I was rent in, I could take the capital and buy other rental properties by other investments.

1:13:58So it made more sense for me to put that money to work somewhere else. So is buying a property as a means to generate wealth, the terrible idea? As a means to generate, would you buy it for yourself to live in or to? Well, but you know, when I grew up, everyone said to me that you get money, get a job, then you get a mortgage. And so like that's what you did. That's one of the worst pieces of advice you can give somebody. But that's what everyone's doing. That's still the vast majority of people doing. And I know that because I look at my friends that don't have the same financial advice that I have from like my brother and my financial advisors, my countenance.

1:14:33And the first thing they do when they get a bit of money is they go and get a mortgage. And that's because that's what their parents did. And that's what everyone's always done. Is that a good idea, right? Yes and no. No, I think these days with how the economy screen set up, when I was 24, 25, I was working in an investment bank, I wasn't the highest paid guy there, I was 25 -year -old, and to buy my first flat in London was three and a half times my income. That equivalent flat and the equivalent income is 12 times. So rent makes much more sense now and you might as well invest. Bial of stuff that you think will drive returns.

1:15:14But a house, a primary house is not an investment, never will be, because once you buy it, you don't sell it. You don't realize that equity. Maybe your kids do. If you've got kids. So it's not an investment, but it can be an investment in your future. But there's like some optical illusion going on here, because when I think about renting, I go on that money, I never see it again. But with buying a house, I'm paying into it. So it's like me depositing the money in a piggy bank. So logically, of course, renting is wasting money. It goes to someone else I never see it again. But that's not exactly true.

1:15:46If you go out today, I buy a half a million dollar house. I put 20 % down. So I put $100 ,000 down. I finance $400 ,000. I get a 6 .5 % mortgage. 30 years, I'm mortgage payment is $2 ,500 a month. Now, what am I doing? I'm not renting, I'm not giving money to my landlord, I'm building equity in my property. But banks also understand the same game. They front -loids your mortgage. What does that mean? When I pay $2 ,500, it's not $1250 going to principal to build equity in my house and $1250 for interest. It's principal being buying your house back for yourself. It's not half and half. It's almost all interest.

1:16:30In fact, if you go out and buy the half million dollar house today at a six and a half percent mortgage 20 % down For the first 20 years of the mortgage more than half of that payment is gonna go directly to your bankers pocket with interest It's not until you're 21 that half of your $2 ,500 payment is gonna go to its equity in your house. So it's All interest, zero equity, and then slowly moves like this. It takes 20 years to get there. And then what happens along the way for a lot of people? I mean, not everybody for a lot of people is along the way interest rates go down. I need some extra money.

1:17:11So what do I do? I refinance. As soon as I refinance, that amortization starts all over again. And so now I'm paying all this interest again. and my real equity that I'm building is not there. This is why I say it's not bad to buy a house. I think it's great if you buy a house, but don't treat your house like you said, don't treat your house like an investment. Treat it like an expense, buy it because you can afford it because you want it because you're ready, but not because you're gonna build wealth. Which I agree with what their takes. I think that a home is an asset that you can't sell very easily.

1:17:48So that's also a good thing. Like if you have $100 ,000 to put into stocks or $100 ,000 to put on a down payment, and you know you were just such an emotional person that the moment that the stock market goes down 2 % you're selling, probably better than a buy house, right? You can't really sell your house in the tap of two swipes. But in terms of an investment, it's like usually it's much more than investment to people. They buy them for psychological reason or emotional reasons or the sense of security. So I just say like if you're interested in buying a house and you can afford it and that's great.

1:18:21And let's actually go with the best case scenario. So like I think you were mentioning this, I buy a house for, let's call it half a million dollars. It goes up in value to a million dollars. Oh my God, I'm rich, right? Well, it's invisible, but yeah, I could take the cash out refinance, but now I have to pay all that. But here's the problem. You now own a million dollar house. What does that mean? You have to pay property taxes on a million dollar house. So you got to pay a lot more property taxes. You have to pay insurance on a million dollar house. And so now if you pass this house down to kids, great, they got a million dollar house, but if they can't afford the property taxes or the insurance on a million dollar house, now they have to sell insurance.

1:18:57Insurance is one of these really hidden costs that you don't realize, particularly if you're in a hurricane area like Texas or Oklahoma or something, suddenly your house insurance costs are prohibitive. On top of the taxes you pay, people don't think about that. So, Jasper, you're saying by Bitcoin, right? Go all in, you're one coin away from everything. Zero cost. They just clicked that. I clicked that. That's good viral. But none know when at this table, we're adopt buying a house as a world creation strategy. No. You would all do many things before then. Yeah, correct. Would that be almost at the bottom of the list of things?

1:19:36It's part of it's age cohort, who are you talking about? If you're kind of like 38 years old, you've got kid, you kind of cleared up some of your student debt payments, you're okay, that security thing is fine, there's no investment. Anybody younger, just no. Is that if you're just talking pure dollar investment returns, I probably would rank it lower on the list for sure. Yeah. Is there any such thing as good debt? Because I remember at the start, you said clear up your debts. Is there a good debt? People make a lot of money on debt, but people lose a lot of money on debt. I just try to stay away from debt altogether.

1:20:10other. Yeah, I mean, I think that yeah, there is such a thing as like good debt if it's working for you and you're able to leverage that money to make more money. But a lot of, you know, with leverage, it comes a lot of risk. And I know a lot of people got wiped out because they took on quote -unquote good debt, right? What's leverage? Leverages. So for example, in J .S. Breets example, you put 20 % down on a house and you take an 80 % the rest of it as a mortgage. That's technically leveraging your money because you're taking the 100K that you have. And now you're affording an asset that's worth $500 ,000.

1:20:42If your home goes from $500 ,000 to a million dollars, you have a $500 ,000 gain, but you only put in $100 ,000. So technically your profit or your return percentage is much higher. It was leveraged by that debt that you carried. Well, I don't think most people know that they can leverage their crypto. That's right. You can borrow against it. So anyone can, you don't need to go to a bank. No, you can do instantaneously in what's known decentralized finance. or there's a whole bunch of companies that do this, where you can borrow against your assets. You can even do it against digital art. I remember a huge digital art collector, much like the art market.

1:21:20You can actually go and borrow against the value of the art, maybe 40, 50 % against the value. Explain this to me super simply, if someone that's never even bought a Bitcoin before and is thinking about potentially buying one, but they would also like some way to have a little bit of cash. Look, I don't like it. OK. I understand why, but the issue is you've got an asset that does this. It's volatile. It's very volatile, and you're borrowing a certain amount against it. And you don't know whether it falls below that value and you get liquidated, then you've lost all of your Bitcoin. The whole game is if you're in a secular bull market, don't lose control of your tokens.

1:21:57Own your Bitcoin all the way through, and you have a risk of screwing that up for the extra 5 % income or 10 % income. in Ethereum very different world because you're staking. So you're getting naturally rewarded in the network. What does that mean staking? What it means is in Bitcoin you actually get miners basically get rewarded for solving the algorithm, the computation. In Ethereum and Solana and Sui and the other big blockchains, you basically get rewarded for securing the network. So you stake your tokens to secure the network because the more people then have this network connectivity between them and you get paid for that.

1:22:38So in Ethereum right now, it's probably 4 % yield. Okay, so just I'll try and summarize this like a 10 -year -old. There's no risk in that. You're not getting leverage in that. So if I choose to buy Ethereum, which is a form of cryptocurrency, I can take my $100 ,000 of Ethereum and on my phone in a couple of clicks, I can move it, I can press the button and move it so that it is staked. And when it's staked, I am basically using my Ethereum to secure the network to make the whole thing more secure so it can run properly. And in return, they'll give me 4 % of it as a payment every month. Well, not 4 % a month, but monthly payments.

1:23:20A 4 % annualized. Yeah. So you can get interest on your crypto. Yes. Yes. And then if you're a little more sophisticated or a little bit racier, there are then yield enhancements. So we talked about high yield bank accounts, there's high yield versions in crypto and you can get up to 20, 30%. But now you're taking risks. And I can also loan against my Ethereum. So I actually did this at one point. I don't do any more, but I had a thousand Ethereum and I put it, I took $1 ,000 or a thousand Ethereum. I switched it into Bitcoin a little while ago. So a couple of months back, but probably bad timing.

1:23:58This is why Mel and I were terrible at it. You should have called me first. I know. Fuck. But you know, this is people are emotional. I had a loan against it. So I borrowed a couple of million dollars at one point to buy some more other crypto assets against my Ethereum. And it was surprising to me that I don't have to call anybody. I didn't have to ring a bank. I could just click a couple of simple buttons on my phone. And this 1 ,000 Ethereum I had, I managed to get a couple million dollars paid straight away in cash straight to me. But I chose not to do that because the market's a super volatile.

1:24:31But it is incredibly efficient, effective way of people. If you were to let's say you had $100 ,000 a bit coin, one bitcoin, to borrow $20 ,000 against it, yeah, that's not very risky. Or $5 ,000 against it. Well, $5 ,000, whatever it is, it's not very risky. Or if you're in a different currency where you can stake it, very little risk, very, very little risk is like lending to the US government I lend it to the government of Ethereum, the Ethereum network. That's pretty decent way of enhancing. It's hard to do that with stocks. It's hard to get a loan again.