No.1 Money Saving Experts: Do Not Buy A House! Putting Money In A Bank Makes You Poorer!

23:43We don't have enough cheap housing for young people people are relocating, moving around. So we've got a very interesting mismatch in real estate now that makes it more complicated than it used to be. Absolutely. And I do want to say, I think the part that we fundamentally differ is not that there's value in crypto. I own crypto. But the difference between you and I is you are all in crypto. For me, it's a speculative piece of my portfolio. So I invest in my own business. I have real estate, stocks, my speculative assets, and then a little bit of gold. Imagine how difficult to replicate what you've achieved in your amazing career is for the average person the things of this versus buying one thing in your coin -based account, your Robin Hood account, and doing nothing.

24:27And 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.

25:02It's a very different mindset. If the average investor of this is 32 years old, and we said, no, 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.

25:35Devorn 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 shortage period time.

26:19And 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.

26:54And 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.

27:30A 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. right? Right. I've got my bottom of Maslow Harak, who needs taking care of it. I've got house out, 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.

28:08But 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 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 you know, had to move home to our parents. We do whatever, we've all done it.

28:42You 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. It's not actual money in my bank account.

29:20It'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. It's called the dividend.

29:54So 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 a 2 % gold, which is now looking extremely inflated.

30:39I 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 into if I take a 80 % loan, 70 % loan, let's let's keep selling. Yeah, yeah, it's very volatile. So let's take let's take a 50 % loan and Bitcoin falls by 70 % which it has now under water, now what?

31:24Now the bank comes knocking on the door margin call your force to sell and for closure. My point being on my Bitcoin, when I don't disagree and really speaking, people should have the ability to have cash flow or cash for if things go wrong, right? That's really a super important thing to be able to have a long -term view, to be comfortable with drawdowns, to be able to invest in start -ups, or 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, month after month, the every year.

31:59You need huge capital to start with to be worthwhile. Well, 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.

32:37I'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 know, I'm probably going to be wrong. If my stocks crash, I have my real estate. If real estate crashes, I got my stocks. Crypto crashes, well, that's part of my spec of the 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.

33:17But 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.

33:58And 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?

34:44So 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 tried 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.

35:19And 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.

35:54So 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.

36:28And 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 Cal AI? Call AI is this app where you take a photo of your food and then you know 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 you know, I saw that this morning fun Layner for four million dollars a month. He's making it from like chat. It basically it's an AI wrapper obviously I think he has some you know secret sauce that he puts into it But a lot of a lot of the kids these days are using AI to try to leverage That and try to turn bit turn them into businesses.

37:01I do want to say though I think with a thousand dollars and with what Jess Breet said, I think you can still make a decent name. 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 a hundred dollars 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?

37:39And 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 in Paul Walto. 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 0 .1 Bitcoin. This is 10K. So where's the Bitcoin? Is it expensive? 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. So where do I make this one?

38:13You spent 20K on Bitcoin coffee. Yeah, that can be the title of this video. This is 20K on coffee. Yeah, I literally, I sent it to Koopa Cafe in Paul To So 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 and different ways that you can earn more money from it?

38:47Like 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? And my father was in marketing. And I liked marketing. And but it was like late 80s Wall Street thing was going on. And I'm like, well, I'm thinking about either game to work for somebody like Mars, do marketing, you know, great company or or going work in the city in London. And the guy looked at me and said, it's really simple. Well, it's the same job. You're a salesman in both one. You get free Mars bars and the other you get free money. And he realized, oh, there's actually arbitrage in what you can do with the same skill set.

39:27Well, I would say there is a point. So I agree. If it was me with a thousand dollars, I'm gonna go out and invest in my income, read some books, get whatever I gotta 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? Well, 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.

40:05I never invested another penny again. Today, that would be worth if I re -invested 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.

40:48How do I know? Do we not invest in it because it wasn't around? It hasn't been around as long as gold. Well, Facebook has been around less than Bitcoin. Amazon. Short of 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 brand new guacamole set. It will be there in two hours. make a single profit until what 2018? Well, but that wasn't because they weren't producing a value, it's because they were growing so aggressively. So you think if you had a thousand dollars, you should, you should invest it in the S &P 500. Well, I'm not saying you should.

41:20I 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 going to go buy some books, I'm going to buy a class, I'm going to do something about how do I increase my income, going back to what you said. But if I'm saying I just want to work my job, I don't want to 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.

41:50This 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 little probably more conservative or traditional. it's probably 90 % index funds. So tracking the SP500 and then 10 % speculative. And my whole goal for that 25 rule would probably be to get to $100 ,000 as quickly as possible because at that point, I think they get more options and flexibility. And they're able to kind of use that capital to maybe take more risk after that.

42:22That's still 10 years with the S &P, well, eight years of this. About 7 .84 years, yeah. But that also assumes that they're only doing the 10 ,000 bucks a year. Maybe Maybe they can save an investment a little bit more. That'd be nice. But I think for a lot of people in America, if they can get a guarantee $100 ,000 in 7 .84 years, I think a lot of people might opt for that. So I agree, but 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 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.

43:02And so therefore these stocks tend to generate the most performance. And we've talked about many of these names. 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. And then I would say, and then do 70 % that, 30 % crypto and you don't have to care about anything. 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 style or or some other more stable flow whether it's gold or that gold is still driven by the basement of currency.

43:42They're all the same thing. They're all driven by the same macro factors but so yeah similar kind of idea. And the NASDAQ is great. I've had to just say one thing but just like Bitcoin. The difficult part with the 18 % is you got to be willing to go through the downturns, and 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 is still compounded more returns than the S &P. Absolutely.

44:21If you hold on. You can't live your life in fear of loss. You can't live your life in fear 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 deals, you're two, okay, you're three, you're five, it's gonna go up, you're 10. It's gonna go up. And by the way, you're 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.

45:04So 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 your portfolio much before the market is. So 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 before the market was because I'd love my average entry. That compounds your profits over time incredibly. And is there something psychological there where if you commit to the habit of just putting $500 in regardless of what happens. You remove a motion.

45:44You 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. Usually they're all correlates, they all go down at the same time, all up at the same time. So you're gonna 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 wonder why he would have more companies in a bear market than in a bull market. I agree.

46:20Yeah, I, I will, I will. 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, even your coin base app can just you can sell it. 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 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, I crashed. The NASDAQ also again crashed more than the S &P 500.

47:05And then step back and look at the returns of the NASDAQ. 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. That'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, what I hear, I mean, through history, contrarians have made the most money.

47:40And 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 amygdala, the emotional center of your brain is gonna do make a bad one. And 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.

48:14True. 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, actually, When I asked that $10 ,000 question, what would should someone do with $10 ,000? You 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 misinterpret things. Yes, the answer is we've been given the gift of the greatest form of asset the world has ever been given.

48:55That's not just Bitcoin, that's the crypto complex. If you're very careful in investing in like top projects, you can even have a more to broad of the diversified portfolio of that. Like you've had Ethereum, Bitcoin, Slama, Sui, all of these things, great. They will definitely outperform for a period of time. And that'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 outperform the debatement of currency is the NASDAQ and crypto. So this has been a persistent trend that is observable and measurable.

49:33So this is not a speculative asset. What it is is a Metcastelot adoption model. Bitcoin is the adoption of, let's say, a money or collateral layer, like Gold. Digital Gold will call it. Well the rest of crypto is the new rails for the internet. So it's a technological investment. It 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.

50:06If we sit here in 20 years time, and you were wrong, 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. For 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.

50:49So we've got, 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. We're 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, or coming into the economy or being born, productivity, how much output they create, and then debt growth is the other level.

51:38What'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. So you've got the slowing economy. GDP growth has been slowing over time. Productivity, old people make less things. So it makes less economic output. So we've got this mess and then we 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.

52:29Yeah 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 in robots. And so what does that mean for me as an average person? For me is like the economic system starts changing. We get to this world of abundance. We don't know what has value, what we as humans do, we change and retool to become more humans because AI and robots can't be humans. So we have to figure all of this stuff out.

53:07Investing, 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 close to that. So 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 job, 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.

53:47Just 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 accreting it to humans or society or whatever we want to do with it. So I'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. It's basically two things, compute and energy. And it needs to be paid. These agents can't...

54:32You can't build all this agents, billions 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 gonna have to be paid. And the way of doing that is using crypto rails. Stable coins. Whether 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.

55:03After 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. I 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 on LinkedIn, I've been able to hire faster and of course better.

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56:52What 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. I think you've misunderstood who I am. But, hi, mate, I hope you're well. I got myself in a bit of trouble with some debt, about 40 ,000 pounds, 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.

57:35Is 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 media 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, so 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.

58:11It'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. 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. And then he messaged me again. Within an hour and said, hey, sorry man, if you're busy, he just wants to nudge this. Then messaged again an hour later because I was on a flight and said, hey, I really need some help in direction, man. I'm quickly running out of places to turn.

58:45He'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 selling the home to at least get the interest payments under control or like reduce that amount of debt But it'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.

59:23So like, you know, you can rank your interest rates of all your debts from highest to lowest and start at the very top, right? 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 see 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 a salary. So 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.

1:00:01Reduce your expenses as much as possible. Put any extra money you have towards that debt at the highest or 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? What's the trade -off? The trade -off is seven years. I believe your credit is shot in America. But I believe that, actually, I think if you pull up a chart, someone sent me a tweet the other day of like, bankruptcy lawyer searches in America on Google and it's been kind of like going up into the right, which is not a great thing.

1:00:37Bankruptcy, 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, for example, no credit score. I read some start. You might know if this is true, but I read a start that it said something to effect that people avoid going into bankruptcy because of the stigma associated with it. But 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.

1:01:18So, yeah. I 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 led in the beginning with about, you know, 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.

1:02:01Yeah, 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 are 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.

1:02:31So, 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, I don't know how to get relief. Bankruptcy 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.

1:03:14You 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 a divorce. 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?

1:03:49You 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 going to happen without extreme change. So could he sell his house, do you think? Assume he's making the 50k, which I think is probably accurate. Like 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.

1:04:21I 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. Oh, nice. 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.

1:04:57You're paying fees. And people think 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. And that's never going to save him from £40 ,000 debt.

1:05:41passive 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 works is you take an extra money. 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 on it. Now let me ask you about your real estate because I got to keep coming back to you, man. Did you manage and real estate yourself?

1:06:20Did you have a management? I've done both. I've had management agent and a management myself. Managing yourself is probably a absolute nightmare. That's horrific. And managing it with a manager is also probably a nightmare just in a different scene. Yeah, 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 and bad the tenants have been in the damage that they've done.

1:06:52Yep. By the end of it, you walk away, I think it really just wasn't worth the effort. Well, I would disagree with your work. Unless you're working. Yeah, I mean, obviously people can do really well at our 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?

1:07:26and 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 of 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.

1:08:02So 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 a list of call at $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 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. Like, you're so high. And I'm one of those people that probably screwed up more than, more than I could count.

1:08:37It 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 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, hand 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...

1:09:11It's a business. It'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 some material business. With my company, there's hundreds of people in the UK right now. But you're not the one that's the starting that startup. I was the founder.

1:09:41And now what have you done? You've acquired more employees to get there. Which is what you did with your property. It's much harder to do that with the 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 away? Depends, my friend's my friend Ash who's 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 And then they go for this hike and my girlfriend sends me photos What he's done is he set up his team of four people they do personal branding on LinkedIn for people and they're running it back from in the UK.

1:10:19He's up in bloody the mountain with my girlfriend right now. That's beautiful. Well, how many startups don't do get there? People are saying, they started business. They just grind it to me. I was like, oh, it's just a business. It's a business. The 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. I don't have to go out and build the blueprint.

1:10:51I 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? Is it source of income? Well, you just heard Jess read 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 and not everyone is built for that and not everyone has capital for that.

1:11:29So 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. So in just a couple of years, millionaires are choosing to rent more than ever before.

1:12:10What'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 having to go see Adel, 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.

1:12:39Yeah, 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.

1:13:19So 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.

1:14:00So 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.

1:14:35And 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.

1:15:16But 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.

1:15:48If 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 -load 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.

1:16:31In 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? For, I'm not everybody for a lot of people, is along the way interest rates go down. I need some extra money.

1:17:13So 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, so that's also a good thing.

1:17:51Like 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'd just say like if you're interested in buying a house and you can afford it and that's great. And let's actually go with the best case scenario.

1:18:26So 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 your 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.

1:18:59Insurance 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?

1:19:38It'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.

1:20:12other. 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.

1:20:44If 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 it instantaneously in what's the 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.

1:21:22You can actually go and borrow against the value of the art, maybe 40, 50 % against the value. Let me explain this to me super simply. If I, 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 liquidation, then you've lost all of your Bitcoin.

1:21:54The whole game is, if you're in a secular bull market, don't lose control of your tokens. Own 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.

1:22:40So 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.

1:23:22A 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.

1:24:00This 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.

1:24:33But 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 lending 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 against your stocks. If you have $5 ,000 of stocks.

1:25:12When I was younger and I bought $10 ,000 of Facebook stock when I finally got some money, I couldn't see a simple way of taking a loan against my Facebook stock. it wasn't until later when I had a private investment bank in your own that my private investment bank, do you want 50 % of your bleached -hip stocks as alone? Yeah, it's probably usually reserved for people with more assets. But I do want to push back a little bit on the staking yield. I do understand it's 4 % virtually risk -free, but there are always going to be risks with the price of Ethereum, right? So you're getting paid in Ethereum.

1:25:45This is a key thing, right? Your risk is the currency you're staking. So if Ethereum goes down 50%, then your fiat value of Ethereum, sorry, of your stake could go down versus, you know, if you're getting 4 % high, you'll savings account. It's backed by the FDICs virtually. And there is another risk as well as Ethereum is actually annual staking. Oh, I see. And most of it is being done via a few businesses like LIDA, which are turning into short term staking. And so there's a duration mismatch that has some elements of risk in. What about, go ahead. I was going to say, when do you get paid? With the Ethereum estate, you get paid every month, or do you get paid on the year?

1:26:28I was getting paid monthly. What about pensions? The retirement. In the UK, we call it a pension. I think you guys call it a 401k. But across the world, it's pretty much the same. Of course, the Western world anyway. If I'm 25 or 30, whatever, should I be paying into my pension as a way to generate to make myself wealthy someday. Is that a small idea? I don't have a 401k. I don't have an IRA. But the reason why people like these accounts and why they can work for some people is because they are tax deferred accounts. Meaning I can put my money in, whether I pay taxes an hour later, the money will then sit there, grow, and I don't pay taxes until I pull my money out.

1:27:15But there's a couple of problems. Problem number one is I have very little control where my money can be invested. Maybe this will change the Trump administration has passed a new executive order on 401Ks to change which you could potentially invest in 401Ks, but that hasn't happened yet. You have very limited options. They're primarily just mutual funds and many of them have a fee. I think Nerdwallets said 92 % of Americans don't know what the 401K fees are. So if you don't have no Witcher 401k fee is this is your notice to go check what the expense ratio is and you should know that See very limited options you're gonna have to pay a fee which means somebody on Wall Street is gonna be paid Forever until you retire.

1:27:55Remember to I can't touch this money until I'm 60 years old 59 and a half if I do have to pay a 10 % penalty and Number three the whole discussion is you're doing this for tax benefits, but kind of like we talked about earlier There's a lot of tax benefits that you can get outside of a 401k, which is why for me, I don't like it, but I'm not everybody. For some people it can be a great place because your employer might say, we're gonna give you a 3 % match. So if you invest, let's just say a $3 ,000 into your 401k and they match it 100 % They might also just throw $3 ,000 into your 401k, but you have the same risks and concerns Along the way.

1:28:35I don't think most people even know what a pension is to be a list I think we pay into it, but we don't really know what's working. And I saw this really interesting debate take place on X the other day, where someone was a guy who was saying in the UK, I've paid into my pension my whole life. So I deserve it, and it'll be there when I'm ready. And then everyone underneath it was telling him that by the way, it's not like some piggy bank that you get to break open. The money you paid into a pension was used to pay for the people that needed a pension when you were working. So you're talking about social security in the United States.

1:29:10Because as an employee in the United States, you have to pay into social security. So 6 .2 % of your income. So you have a lot of taxes. You're going to have to pay income taxes on what you make, and then you have social security tax. So on your income, you're going to pay 6 .2 % of that separately from your income tax, but 6 .2 % into the social security fund, and then your employer is also going to pay 6 .2 % into this fund. Yeah. This money in theory is supposed to grow when compound. That way, when you retire, you have this retirement fund that's going to pay you every single year. You don't get to choose.

1:29:45I mean, you can choose when you pull it out, but you don't get to do anything with it. The government's going to be in charge. Yeah. This is what is running out of money in the United States today. Why? Because people that are in their 20s, 30s, and 40s that are paying into it today, it's not paying for their retirement. It's paying for the people who are retiring today to pay for their social security benefits. And that's what people don't understand. They think they're paying into a piggy bank that they get to crack open. And that will pay for them as long as they live for the rest of their life.

1:30:14I was looking at the biggest misconceptions around pensions. And the first one was that my pension is guaranteed money for the entirety of my life. Once I retire, well, there is some truth to that. The part in the United States at least that you are guaranteed what, what the wording is that you're going to get the social security until you pass away. But the part that they never tell you, and there's no ask just about this either, is how much that value of the check will be. So here's what's going on. People are paying into the Social Security Fund, thinking that they're going to be able to fund their retirement.

1:30:49Every financial advisor historically has said that retirement is a three -legged stool. you have your 401k, your personal retirement, you have your own personal savings, and then you have Social Security. Well, you pay into Social Security by force because you don't get to opt out of it unless you are an investor. You don't have to pay your Social Security income or Social Security taxes on your investment income. But you pay into this until you hit retirement age and then you get to pull this money out. Well, the government is running out of Social Security money. But people misconstrued that because they say, oh, that means the government's no longer going to pay social security.

1:31:26That's not true. They'll still pay it, but they'll just print their way to pay it, which is what you've been talking about. So great, they're giving you a bigger check. The problem with that bigger check is that bigger check can't buy you as much stuff. So yeah, you're based off what the United States government says, assuming that they don't default, you're going to get the social security check. Is this not going to be able to buy you as much as you thought before. The other big misconceptions are that people think their employer is putting enough in to cover their full retirement. They think it's the same as a savings account.

1:31:59They think they can access it whenever they like. The government will cover them when it runs out. And I don't need to think about it until I'm older and lastly, my pension part is tax -free. So the big shift that happened around 20 years ago was a shift from what's known as defined benefit to divine contribution. So, defined benefit used to work for Ford or American Airlines or whatever company. You retired, you got 60 % of your final year salary forever. That was bankrupting all of these pension plans because people were living longer, all the other stuff. And so they kind of changed it to define contribution.

1:32:40Basically you get out what you put in. Plus, the investment returns. But this fees, maybe you didn't give it to a good manager, maybe you didn't know when they said, well, do you want to put it in bonds or equities? You're like bonds and it didn't grow as much or whatever it was. And in the end, you're just not sure that the average 401k in the United States for a baby boomer, I believe is about $100 ,000. What age? Baby boomer, like 65? Yeah. I think it's right now around 200 ,000. Or 200 ,000. 200 is not up to retard. There's 10 years of 20 grand a year. So there's so little money in the US pension system particularly That there is no hope for these people at this whole video on this called the retirement crisis became a huge kind of viral success Years ago just explaining there is no way out of this for the pensioners the boomers All the millennials and everyone's gonna have to change within this to figure this stuff out I think you said it earlier today.

1:33:39You were talking about a Ponzi scheme Here you have one, but nobody wants to say that, but everyone is paying in to keep funding this thing, but the only way it's running is because people are paying it in. The problem is there's not enough money coming in. Because remember the, remember we talked about the beginning, the demographics, just less and less young people. There's less and less young people because we're having less babies. But there's tons of these retired people. And this keeps going in perpetuity because we're having babies, so that's workers in 20 years time, the babies now work as in 20 years time.

1:34:12We can forward project this. It doesn't stop. So how the hell are we going to pay for this massive amount of baby boomers, which is in the United States, it's 78 million of them, largest cohort in history at the time. We can't pay for them. And this is where the proposals are to tax your Bitcoin. The value of your Bitcoin or tax the value assets or tax your investment income. But the UK has got the saying and this whole wealth that everybody's got the same problem, everybody. Which you think, for in terms of retirement crisis? I think that, so I have a different take on, well, I think, first of all, I think Jess Breedton, Rowe, you guys were talking, and you were talking about Social Security, right?

1:34:49Yeah. But I have a different take on retirement altogether, I think. I think 401Ks are good for the average person because it's a forced savings mechanism. A lot of people wouldn't contribute to a retirement account unless they, the employer offered it, right? And so the whole match thing is a great thing for behavioral, behavioral finance. It's like, okay, if I, if I do this, I get some free money from my employer and I at least I'm saving some money instead of nothing. You are working for that money, isn't it? I'm certainly free. A 401k for anyone that doesn't understand is you agree to invest in a investment pot alongside your employer.

1:35:24It is more like an individual retirement account that is awarded to you because you work for an employer. You have the option to invest within a 401k and that 401k is typically tax deferred Which means that you pay taxes on it later in life almost the difference between that I'm a social security A social security is a government program where you are Required to pay into it every paycheck that goes into this big pot and then when you do retire the government will send you a Social Security check every month. Okay But I still think that there are plenty of ways to retire and retire with some sort of freedom.

1:36:05Retire early. Have you heard of coast fire before? Coast fire is another, you were thing that's kind of on Reddit, but it's a variation of financial independence retire early. And it's essentially, you get your nest egg to a point where you don't have to invest any dollar into it after that. But because you get it to, let's say, a certain number, and that number is usually pretty reasonable. The investment returns if you're invested in the SAP 500 will get you to a full retirement by the time you're able to retire at 65. So it doesn't mean you retire early completely, but it means that if you get to your cost -fire number, which is what it's called, maybe you have more freedom of choice in what you're working on.

1:36:45So like maybe you don't have to work for the employer that you absolutely hate. You can maybe go do something that's a little more suited to your lifestyle. You're still working. but you're not working to save for retirement anymore because you hit that cost -firing number. So, for example, at the age of 35, I think the cost -firing number is like $150 ,000. If you can hit 150K by 35, if you have 30 years of investment returns at 8%, you'll have $1 .5 million by the time you retire, which is a little bit more palatable for people that are having a hard time wrapping their heads around. Am I ever going to retire?

1:37:17They're not going to retire in that, they're not gonna be kicking up their feet on the sand beaches of Aruba, but you're still gonna be doing something and I personally think if I was retired I'd be so bored out of my mind doing nothing, right? So I'd like to work on something. The ideas you just don't have to work for maybe the job you hate or something like that. So if I hit that $150 ,000 in savings and I put it into the S &P 500 and get the 8 % return. 8 % return. By the age of 65 I'll have one point something. 1 .509, yeah. What's that worth then? That's true. That is another part of the equation is with inflation, what is it gonna be worth?

1:37:52And is this what you're trying to do? Cause I'm in Bikko and I already go. You said, I'm just trying to retire earlier words to that effect. Yeah, I mean, I'd like to be coast fire. And coast fire is, however, you would like to define it. But I already think I'm pretty close or if not, I've already reached it, which is like I get to work on the things that I love and I think that my retirement nest egg will eventually grow to a point where about time I hit 60, 65, I'll be able to coast. So did you create a number, do the math on what you'd need to get to? Yes. Okay. So you can project out your expenses of what you think your expenses are going to be on an annual basis and then kind of work backwards to that number.

1:38:32Okay. Yeah. A lot of math involved, but you kind of have to do it. Do you want to try to be too interesting? Retirement crisis. That's concerning. That's concerning. So your approach is to do the coast five thing. My approach is let's stay disciplined, consistent with our savings and investing and actually get to a place where retirement might be possible. I love that idea and that's the same as when I started with the manufacturing your destiny. Sure. You say, well, I need this goal. How do I do it? We do this and grow our investments, right? It's brilliant to do that. And then you can take more risk.

1:39:09Sure. If you isolate that and say, well, any capsule I build now, I can do whatever I want. That was the same idea that I have with the home. It's like, I've de -risked my life. Now I can take risk and that's a really nice thing to do. And I love the way that you do it by saying, well, my future self wants this. For me to do that, I need to do this now. And then it should take care of that. Now, there's always risk in the imagine, but yeah. And then you have extra dollars to do whatever you want with. That's right. I also love that you've been disciplined on like what you like and what you know.

1:39:41Yeah. And I appreciate that. Because you said I think 90 % are index phones and ETFs. That's what I would recommend for people. Sorry, okay. For me personally, I'm like 50%, 60 % index phones. But still, that's pretty high. And not having that shiny object syndrome or whatever you want to call it. I mean, that's, that's, that's, I'm not using me having shiny objects. I'm not using me all the time. I'm using me as a age to everybody here. But whatever it might be, to be disciplined, I think that's such a valuable trait. And you talked about the scarcity to mind, I think that's also a discipline mindset that you have.

1:40:13So I would reframe that. I think you've done an excellent job. I think personal finance is personal. All right, guys, let me go get Steve. The guest is here. Ready? Come in. Oh my God, Steve! What are you doing? This is a Bond -Charged Face Mask. It's good for blemishes, wrinkles, cleans up the skin. It's red light. Have you not used it before? No. They've tried this before. It's really really good. It shines red light on your face, which helps increase and boost collagen production. I actually found that out because of the misses, seeing how wearing it, she terrified me a couple of nights in the row.

1:40:47I thought it was to scare people with, but actually it's really, really good for your skin. So they are a sponsor of the podcast, and I've been using it every day for about a year and a half now. Wow. Well Steve, I'm going on great. Yes, and their Bunchard ships worldwide with easy returns and a year long warranty on all of their products. So if you visit bunchard .com slash diary for 25 % off on any product site wide, but you have to order through that link, that's bondcharge .com slash diary with code diary. Make sure you keep what I'm about to say to yourself. I'm inviting 10 ,000 of you to come even deeper into the dioravocero.

1:41:22Welcome to my inner circle. This is a brand new private community that I'm launching to the world. We have so many incredible things that happen that you are never shown. We have the briefs that are on my pad when I'm recording the conversation. We have clips we've never released. We have behind the scenes conversations with the guests and also the episodes that we've never, ever released. And so much more. In the circle you'll have direct access to me, you can tell us what you want this show to be, who you want us to interview, and the types of conversations you would love us to have. But remember for now we're only inviting the first 10 ,000 people that joined before it closes.

1:41:58So if you want to join our private close community, head to the link in the description below or go to doccircle .com. I will speak to you then. On that point of discipline, I've seen a couple of videos from you where you talk about the things that you stopped spending money on. And there is a narrative that says, you know, in order to get rich, what's the safe, to get to where you want to go with your financial goals, you should not have the Starbucks coffee. Sure. You should not do these things. What, what did you stop spending money on and what's your framework there? So I looked at it, I took a look at it, my expenses from 2014 and onward and just kind of like saw the differences in how my spending habits have changed.

1:42:34The first thing I stopped spending money on are Airbnb's. Airbnb's used to be a great value. They used to be unique experience, but these days they're all kind of commercialized. I feel like with the cleaning fees and all these fees, you end up paying more for less convenience as a hotel. That's number one. I stop buying food in bulk. I know that sounds kind of random, but I'm a single guy. Sometimes I get two gallons of milk and I can't finish it. I'm pouring milk down the drain or I'm buying 48 eggs at a time from Costco and I'm just just like dude, I mean, I like the gym, but I can't eat 48 eggs in like two weeks or whatever that time is, right?

1:43:11So that's another and then another thing I did was I started to switch my car insurance because I moved into San Francisco, the city. I'm driving less. So I used to drive 15 ,000 miles a year. I drive 3 ,000 miles a year now. And just by calling my car insurance, I was able to save like 40 bucks a month just because my driving requirements are much slower. So those were like. Explain that. Yeah, so a car insurance rates are dependent on how much you drive. And if you drive less and you move to a city, then your rates should come down. But I think some people are a little bit too loyal to their providers.

1:43:46They're not willing to compare rates because it's painful. You don't really want to do it. It takes time. But I think doing that, spending an hour calling your insurance provider, looking at different insurance providers, not just for cars, but for homes too, you can save a lot of money. Because insurance is kind of commoditized. So it's like, you're going to get coverage from many different providers. You might as well put them kind of in a bidding war for your business. I used to work selling car insurance, you know, you still. It was one of my telly sales jobs. I've done that as well. Yeah, and if there was interesting, no, I don't think people know this.

1:44:16But as I sat there in the car insurance call center, there's this bar on the screen that I can move in either direction to basically give you a discount based on how the sale is going. So if I really think I'm going to lose your sale, all I do is slide the bar to the left and it brings your upfront payment down and your monthly payment down. But if I thought this sale was easy, I could bring the bar up in terms of the price like quite you and give you breakdown insurance and all these other upsells. And so I don't think people realize how negotiable all of their insurances are, even their phone insurance and all these other things and sometimes you don't figure out until you say you're going to quit and then suddenly they give you some great offer where they're going to give you 50 % off.

1:45:02Yeah, yeah. And the other way of approaching it is I never really sold for costs, a soul for income. Okay. And that is saying, that is saying, okay, your lifestyle is not being ridiculous, right? It's like, do I really want to not go to a restaurant or get that Uber Eats or whatever? I understand. Yeah, because that's penalizing yourself. And that's not nice thing to do always, right? It takes a lot of discipline and discipline is hard. But if you've got an equal, an opposite amount of discipline in solving for income, you actually move your lifestyle further ahead. So, you know, the rise, I mean, I do three, four jobs, you do three, four, we all do lots of different things now.

1:45:47You do as well. We all got different income streams. You're almost better off to spend your energy thinking about how I increase my income stream, then your cost basis. At a certain point, we agree, like Stephen's friend who sent him in the message, he needs to desperately rescue his cost base. But generally, if you're looking at a life plan, you'll get to your coast fire or whatever it's called quicker by solving for income than you will for cost. I just think lower hanging fruit is selling for expenses, which is like everyone can cut back a little bit, but everyone can't just like say, I'm going to make 2x more tomorrow.

1:46:21That's kind of a harder problem and I think if you want what are you just trade off your time because you I mean you can if you're You're a lower -ending job you can drive an Uber and then extra money or you can do a bar job I do what you're saying. Yeah, it's like multiple revenue streams is now the way the world works because the cost of living is become so expensive That everyone's having to do multiple jobs, but with technology we can actually do it much easier I tongue -freeze point as well though you can get a 30 % pay rise today Just by maybe bringing a pack lunch or Sure. Walking somewhere or whatever else.

1:46:51And it's probably harder to get a 30 % pay rise. Not sure about the day. I think it depends on which stage of life you're in. Because now if you just stick with a lunch, if you're on that lunch example, pack and lunch cost time. And depending on how much your time is worth, that one hour of time could be $20, it could be $2 ,000. And I think that's the key difference. And I think there's definitely times and places you got to cut. I fully agree with you on that. But I think at a certain stage, look, I'm still cheap with my money in multiple places. But I have, when it comes to time, so our office is in downtown Detroit.

1:47:36And my commute there is 45 minutes. But I don't drive. If what I do is I get driven there. And the reason why I do that is because I can sit in the backseat and work. And one of the things that we publish, Davey Financial News. So sometimes something really happening with our market briefs where, oh, this is important. And if I'm driving, I don't want to be texting and driving. So instead I pay for an Uber or whatever. And I go that 45 minutes there, 45 minutes back. And it's money out of my account every single day. but I get back an hour and a half of my time, which is worth way more than whatever I'm paying in my driver fees.

1:48:15So I think it depends on where you are in the stage of life, because I wouldn't do that if this was way before. What is the biggest, this is an open question to everybody. What do you think the biggest money mistake the average person makes is? They spend all their money. The two S's, you spend all their money, and if you get past that, then you're saving all their money. Both of them are mistakes. Both of them are mistakes. So just having your money sat in a bank account doing nothing. You're becoming poorer every single day. I don't think most people know this. I've got a friend who's steadily compounded his bank balance over time.

1:48:49And I remember asking him, how much money do you know have in your bank account? He's taking a really slow approach over time. He runs businesses of freelancing. He goes, I think probably about a million dollars. And I was like, he's just sat in your bank account. And he was like, yeah. And because he's scared, he doesn't know what to do with it. So he thinks just putting it in the bank account is the safest possible thing to do. Well, it's a guarantee loss. If you're bank account, the average bank account in the United States today, not the high yield accounts, but the average account is paying 0 .1%, 0 .5 % I don't know, something super low.

1:49:22If we just say inflation is 3%, meaning the cost you have to spend out of the bank account to buy something is going up by 3%. And that's the reported number. It's not the real inflation that many people feel. Well, that means there's a net loss of 2 .5 % on that. So if I have a million dollars there, that's $25 ,000 of loss buying power. Bro, do you think companies, because a lot of my audience are companies, whether they're one person, companies, or big companies? Do you think they should be putting their money that they have sat in their account into Bitcoin? In essence, if you're Microsoft, they're huge cashpiles.

1:50:00What does Microsoft buy with their cash? Really, they buy some investment stuff, but it's generally cash -based. And then they may buy another company, or they may buy real estate, data centers, let's say, or they may buy their own shares back. All of those three things that they buy are driven by the debatement of currency and they get more expense every year, and they're holding a cash return of 3 .5%. So it's stupid what they're doing because actually all your shareholder cash is not buying the equivalent of the actual things that drive the value of the company. So what about small companies?

1:50:40What if there's people listening now that have companies where they've got a million, two million in the bank, they probably don't need it all for cash flow reasons? And so I do think that investing versus saving is misunderstood to go back to your original question. I think investing is much more important. I made the mistake of being a saver when I was young because you know the fear that all of that stuff meant I was super risk of us and I was an investment banker. I was investing but I didn't so I made money from being in that industry so I'm like I'm just going to hoard cash. I did worse for doing that and then once we saw the banking system fell I'm like I'm not going to do this anymore.

1:51:18I'm going to take control of my finances. So the same is true of a business that they're generating cash They shouldn't be sitting on a massively large amount of cash, but some liquid investments, I think, massively help, because you're going to make your cash grow for you and your shareholders. And that's important, but don't let go of your liquidity, because when you really need it, and you don't have cash, that's the worst thing in the world, particularly when you've saved the money. So in your business bank account for real vision, do you put some of the money into crypto? No. It depends. A lot of it gets reinvested for growth within the company.

1:51:53So you're making the decision, how's your capital going to grow? Is it going to grow your share price via reinvesting in the business? Or is it better to use the savings pool and buy other investments and diversify away? That really depends on your business where it is in the growth cycle. But if you're like a cash generating regular non -growth style business, then you're going to be generating cash, you might have taken some dividends out and booked bullet house and none of that thing. Yeah, there's no reason not to do some relatively conservative investment strategy. Humphrey, you worked with lots of rich people advising them.

1:52:31What is it that rich people know that the average person doesn't know as it relates to money? Because there are money games that you discover when you get to see behind the curtain. What the average person isn't aware of or isn't able to do with their money. Rich people are typically more disciplined. They're typically checking their bank account every day. They're doing little things that compound into huge results at the end of 10 or 20 years. They're thinking in decades not just what am I going to do this week. They're choosing investment choices for themselves in 10 years, 20 years from now, instead of choosing sports betting on the football match for a thousand pounds that night.

1:53:17Because they know that there are thousand pounds working for them today will be worth 10 ,000, 20 ,000 in 10 or 20 years. So it's more just like a long -term mindset versus a short -term mindset. The laying gratification. The laying gratification, yes. Well, you're right down there. I was writing down how the system is rigged in the favor of rich people. is it's extraordinary because it's the it's the choney munger quote of show me the insensitive and I'll show you the outcome. What people get, once you get, it's not the hundred thousand, but it's like the people who've got ten million in their bank account, they get loans that are called non -recourse loans.

1:53:59It's an extraordinary thing because unlike your friend, they don't have Re -course alone means you're not legally liable for the loan in the end. Now, there'll be some provisions in how to do it, but why are they doing this? Why are they getting these favorable terms? Why are they getting the private placements in stocks before they go public? Why are they getting all the best to offers? Because they pay fees. Because they pay fees to the investment banks, and the investment banks desperately want these people, because they have a lot of financial activity, and so they incentivize them. None of us get a look in at all of that.

1:54:30It's the same thing that I talked about with the hedge fund industry in the beginning. is like they were incentivized by a phase to get information that was better than everybody else. And I think part of that is the ability that all we're trying to say to people is you don't have to play the same game. You don't have to pay anybody's fees. You buy a Bitcoin, stick it in your Coinbase thing or whatever. Because you're nothing to run, and you're outperforming a venture capital investor. There's simple things like buying an index fund. You're not paying the Wall Street complex $1 ,000 for active management.

1:55:06There's ways of hacking this and It's not that expensive to do Before we move to just speak one of the things that I think you kind of both alluded to a little bit and you said earlier on was about how Relationships Make money and because what I was watching when I sat in that apartment with this billionaire is his friends in his contacts who had done business with him in the past were getting the allocation, the prime allocation of being able to invest just before this company went public, which means that the next day it would multiply. But those were relationships. So if there is a strategy to build wealth, it goes back to what we're outside at the start, being around people and having good relationships is actually, I think, really unappreciated.

1:55:46I've got a friend, I can name my friend, um, called Harry Stubbins, who runs a podcast called 20 VC and on that podcast he sits with extremely rich people. The podcast Harry's podcast isn't as big as Joe Rogan's but because Harry has had two hour conversations with the richest people on planet earth and continues to do so he's built one of the biggest investment funds in Europe especially as like a guy in his 20s I mean I think he's raised if I'm not mistaken 750 million just from the relationships and he said to me he said you know the biggest value He'd never jarged out in the last five, 10 years.

1:56:24Isn't like the views. People have more views than him. It's he hat he knows everyone rich. And I think we underestimate that when we think about wealth creation, because if you can do what Raoul said and get around rich people, help them in some way build those relationships. It pays dividends, what, forever? There's a great guy called Divesch Macchan who runs an investment firm in San Francisco called Iconic. He was a young investment banker at Goldman. Around the same time when I started there as well. But he was he was hired into the internet banking team At in 2000 he turned up the office But a month later the entire thing was gone everybody was fired and he was too young He was kind of too junior to bother the fire list.

1:57:08So I fired all the senior bankers and He thought what do I do? I think he had no bosses left. So he just basically went to Silicon Valley and hung out in coffee shops and made friends. The people he happened to make friends with, with Mark Zuckerberg, Reed Hastings, Reed Hoffman, all these people, but he then became their wealth advisor at Goldman, moved to Ultimorgon Stanley and then built his own firm, Myconic, and Myconic runs all the wealth for these Silicon Valley people from this network of meeting these random dudes building businesses when nobody else wanted to speak to them because they'd gone through the big bust and he made his entire life on that network genius.

1:57:50Probably at that cafe where I spent on my Bitcoin. The one with the gold door. You were there at the same time. Is sending was your phone on Bitcoin? It's interesting because when we talk about systems and all these things for money, nobody ever talks about a system for managing your relationships. And the way that most of us manage our relationships is we get someone's number. And we hope that will cross paths again. But I think, I even think about it, obviously, in this podcast where I meet some great people, I should have a much better system for understanding those relationships, how I can be of service to those people, understanding their birthdays, and all these other kinds of things.

1:58:30And not only would that be good for my mental health and more friends, less like all these kinds of sort of social, psychological things, but in business terms, there's going to be opportunities whether it's six years from now where I need your advice, just be. The key to networks is what you put into the network, not what you take out. Yeah, so the people who have the best networks I've ever seen, always the people say, how can I help you? Hey, I've got something for you. You should meet Sunso. Oh yeah, it's an actor. It's never, hey, listen, what can you do for me? That comes back. Karma flows back always to give as much into the network as possible and the network gives back.

1:59:07I think that's what, in the case of Harry, he's also done. because, funnily enough, about a month ago, I said, oh, I've got this idea to do this thing. And Harry turned around to me 30 seconds within WhatsApp and said, oh, I know insert name of this person who's the very top in investing in Europe. I'll put in a WhatsApp group with him. Put me in a WhatsApp group with this guy. Santa voice notes, he said, Steve's the best ever. Then he said, he said, Steve's way better than I am, everything. This is literally what he said. And then he said about the guy he put me in. WhatsApp group, he goes, and this guy's also the best at what he does ever.

1:59:34Putting you two together, good luck. And immediately I thought, fuck, and hell, Harry's what a great guy. And then the guy he'd introduced me to goes, isn't Harry such a great guy? And so I mentioned Harry and Nick, listen, if there's anything I can do for you. But that's the calmness. Honestly, I really believe in networks. So that's the most important thing your community, your network is everything. And the absolute answer is you have to keep putting into the network. Because if you try and extract from the network, it collapses. Because then you're just that guy who's making the phone call after 10 years, saying, hey, Steve, can I get some money from you because I'm run out of cash?

2:00:14The last thing I wanted to talk about is the UK and the US. And geographies generally, and how much of that plays a role, because right now there's lots of political social conversations about the UK, people learn a little bit, do more about the UK, some people are optimistic about the US some aren't. How much do you think about geographies when you're thinking about your wealth creation, your finance strategy? Does it play a role? So I was forced to end off to live in London for a little bit over a month or so. And I did a number of podcasts out there. And I guess I could just ask you. The interesting thing about these podcasts is when I was talking to them, what they told me is that the majority of their listener base is in the United States.

2:00:55The majority of their money comes from the United States. The majority of their sponsors come from the United States. It's not from the UK. And I thought that was very interesting because it's a huge market. But what they were saying is people who are really looking to grow in the United Kingdom, a lot of them at least, just from what I heard, would prefer to earn from the United States because the dollar figures are much higher. Now, I don't have a lot of global experience outside of that, but I do think that the United the accumulation, maybe not the best. There's tax -free countries out there, but in terms of for somebody who is more entrepreneurial in that sense, I think you have a lot of opportunities here that you don't have other places.

2:01:45But you think, I'm a huge believer in geographic location for a number of different reasons. So I've lived in the UK, India, Spain, and the Cayman Islands. I spent most of my working career on this side of the pond in the US. Spain is lifestyle arbitrage. The cost of that of the UK and a third of that what it is in the US of the Cayman Islands. 300 days of sunshine, incredible people, culture, climate, cost is very cheap, rent is cheap, to buy is cheap, everything. Perfect lifestyle arbitrage, problem is network. You're not surrounded by people who are ambitious doing different stuff. In a globalized world now where we can work online, it's actually doable.

2:02:24So we've seen a lot of Americans moving down to Latin America. That's the arbitrage here, or Columbia as well. So into South America, Latin America, It's cheap high quality alive, relatively safe. And if you're in a business where you can work online, you can get to your end goal, your coast -fire thing super fast by doing that. If you want to your point, if you want intellectual capital, there is only one place in the world that has it in such high dens as the US, capital and intellectual capital. Asia has it, India has it, it's all around, but they're all missing different forms of it. So it's using that for your end goals.

2:03:00What about the UK? I can't do it because the UK's attitude now has become, we just can't have nice things. They don't want to. If I speak to my friends, they don't want to invest. They just want to have the bigger house and the next car on lease. People are institutionally unhappy in the UK right now and it has been for a while. And so we don't have a culture of entrepreneurialism left. It's been stamped out. You're up to, so it's not just the UK, everywhere in your, the same thing has happened. People just don't believe they can have nice things anymore. When you think about the narrative that you understand of the UK, like, what is the message?

2:03:45So if it was like a marketing slogan, the UK, you're an investor, you're an entrepreneur. What's in your head when you think of the UK? What comes out? What is it in reality? or what, how would you sell the UK to others? No, I'm saying like, what do you think the narrative of the UK is right now as an investor in entrepreneur? I think it just feels like a backwater. Backwater? Yeah, what's it? Economic backwater. So don't forget, in the late 90s and 2000s, it was this entire center of the world's financial industry. It was the central world's advertising industry. It was some of the, you know, all the creative industries, it was all based in London.

2:04:23We lost all of it. Why? Regulation. So you think it's the government have misstepped? Yeah, the government misstepped and the US took the banking system back because how they treated capital requirements in the UK and Europe was different in the US and they managed to get the Wall Street back to Wall Street. It all moved. I was working with the Goldman Sachs. London was their biggest office. Same for JP Morgan Morgan, Stanley everybody. And we just stopped it. And now we're seeing again, we've got new industries rising. We've got AI crypto, AI came out of Cambridge. I think it's the Google Deep Mind.

2:04:57I think it was Cambridge University for most of that stuff. And we dropped the ball. We dropped the ball and the finance industry dropped the ball in AI. We get this massive talent density coming out of Oxford in Cambridge, Imperial College and all these others. And we don't use it. They all move to the US. We're at the crypto industry of which we were part of that. We dropped that ball too. We dropped the whole ball and everything. and Europe is actively shutting the law and every opportunity. By saying we don't want to do this, don't forget there are a nation of old people now, most of Europe.

2:05:29So they rather just not have any change. But if we go back to that economic formula for GDP growth, population growth is the key driver. You need a growing population over time, but it just needs to be done in the right way. So they're blaming that, but the whole economic machine is because nobody's kids. That's the demographic problem is the structure of everything. And the problem is is nobody's had kids, so you don't have economic growth. So then you try and bring in new workers to create growth. You don't want that. So they get thrown out. Meanwhile, the economy slows down. People get pulled back.

2:06:01They don't want to big take risk anymore. The whole system is now having to pay for the national health service to pay for these old people. There's not enough kids to support all of that. The government's getting more in debt. Bond yields are going up. People are like, what's going on? It's all been a function of demographics from day one. Closing arguments, um, Humphrey, closing position. What's the most important thing people should be thinking about? How would you run off? Is there anything that I didn't ask you that I should have asked you? Yeah, I think that my personal philosophy is just that personal finances come sounds here, income, minus your expenses.

2:06:34So know those two intimately, know how to drive both of those two and then just really watch what you spend your money on, right? Like the car, the average car payment in America 745 a month, stay away from that if you can. Try to try to be reasonable. Everything is about being consistent and reasonable and I think those small decisions compound to a much brighter future. For me, first thing is educate yourself. You don't know, you know, we talked about what do your finances look like. What do you bank account look like? What are you trying to achieve? So you educate yourself. Learn about investing, invest above all things.

2:07:08Investing above saving is the only way you're going to get there, because if not, your money goes down. And then just do it. Make a trade. Make an investment, fail, learn, do it again, and do it again, and keep learning, educating, and then surround yourself by good network. Just be whether it's even on Twitter or on social media, find a network of people that you can learn from, add to the network. And those things, you'll get ahead. You can't fail. If you educate yourself, just get started and then learn, keep doing it then and just grow a great network. And my Bitcoin? Obviously. What coins do you own in crypto?

2:07:48So this is going to get more contentious now. So I actually don't own just one Bitcoin for postero's to say. Oh, fuck. So I don't delete the episode. Right. Right. I am mainly Sui, which is the crypto network that came out of Facebook, but I'm also on with net worth into that. And then I own a lot of digital art on Ethereum, because that's a long -term store of value for me. NFTs. And yeah, NFTs. And so I've moved around a lot between Bitcoin, Ethereum, Slana and Sui. I don't trade. So these are long -term holds. I might change once every two years, change my allocation. But it's all generally all the big tokens.

2:08:33In just three closing segments. Well, first of all, thank you, Rahul Humphrey and theme of putting this together. This is a to add on to everything that you guys said for me. I think there's a lot of, for lack of a better word, crap on the internet of people romanticizing and fantasizing how easy it is for passive income or for insane levels of wealth, where it becomes sometimes hard to see how you could actually do that. And what I'd like to say is look, nothing comes easy, but change can always be made regardless of where you are, what you're back on as where you come from, but it's going to take work.

2:09:08And I think the best thing to help you out come to get to where you want to go is hard work, sacrifice, put in what I call a decade of sacrifice, that way you can have what most people dream of. And the only reason why you're able to get there is because you're willing to do with the majority of people are not willing to do. And in a word, AI, positive about it, will pessimistic. positive. Best tool we've ever been given. After Mystic, yeah. Okay. Good. Refreshing. Refreshing, dear. Thank you all so much for giving me your time today. I'm gonna link the top three things that you tell me we should direct the audience to below.

2:09:49So I'll ask you after this conversation to give me three things where people can find you. The first is gonna be your channels, so your channels on YouTube, you're all very large YouTubers and having credible channels. Channels that I followed for many, many years, is there anything else that you guys would like me to link that you think is going to be pertinent to the audience. Well, we have a free newsletter for investors that we publish every single day. Yeah, all market briefs. I think that would be a great one. I'll link that one as well. Anything else? Real Vision is a simple place. It's a simple home for everybody to find what they need.

2:10:16So the website, realvision .com or realvision .com? Okay. And Humphrey? And I'm building a website right now that's basically my guide, but it's my guide on different By Inter.