Scott’s Thoughts on Bitcoin, How to Stand Out When Applying to a Job, What to Do With an Inheritance

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1:23If you'd like to submit a question, please email a voice recording to officehours at propgmedia.com. Again, that's officehours at propgmedia.com. So with that, first question. And also, I have not heard or seen these questions.

1:38Hi, Professor Galloway. Thank you for your time. My name is Mike. I'm 35 years old. I live on Long Island in Nassau County. I have a modest job and my wife's a teacher in Brooklyn. My question is, what will happen to the value of my limited wealth and that of other Americans that don't have Bitcoin when the U.S. buys a strategic reserve and there's more widespread adoption. Will the value of my retirement portfolio collapse? I'm worried about losing everything in my family falling behind. I feel like I'm gambling on which currency will be more prevalent or even exist in 20 to 30 years. What should we do?

2:14Thanks. Hi, Mike from Long Island. So you're 35. It sounds like you're in a good relationship. You both are working. Your wife's doing something important as a teacher. So the first thing is to recognize you're young. Sounds like you're in love. You're both employed. Things are pretty good for you. So, OK, so the honest answer to your question is nobody knows. I talked to Michael Saylor and when I leave his I had lunch with him when I leave the lunch, I think I should put everything into Bitcoin. And then an hour later, I'm like, wait, what is Bitcoin again? Anyway, so the bottom is nobody knows.

2:49Trump recently announced that his administration will be considering the creation of a national digital asset stockpile. While this really isn't quite a strategic reserve, it could still have a massive impact on America's involvement with cryptocurrency, specifically if the U.S. government weighs in and buys the shit down, the price would go up. Currently, America holds more Bitcoin than any other government as a result of large-scale asset seizures, about$5 billion as of 2023. Even so, they've sold none of it. Countries including Germany, Hong Kong, Russia, Brazil, and Poland are all taking steps to review Bitcoin as a reserve asset.

3:21In the past 10 years, Bitcoin is up over, Jesus Christ, 48 ,000%. In the past year, it's up 140 % since the election, it's up 50%. So, okay, what do you do? The genius of Bitcoin in my mind is they've come up with this incredible means of creating a somewhat credible sense of scarcity. What do I mean by that? We keep printing more dollars. We've had inflation, so you could argue that the value of the dollar goes down every year. Every house I bought 30 years ago is worth, I wish I'd never sold it, is worth six to 10 times what I bought it for, more than inflation. Is that because the asset's got them in value and it's producing more rent?

4:04No, it's because there are more dollars chasing fewer assets. That's the definition of inflation. Or simply put, the dollars you throw into your mattress get worth less and less every year because we keep producing more of them. Bitcoin has created this credible feeling that because of the algorithm or the structure where it requires more and more numbers to be thrown at an algorithm or at a math problem, that it takes more energy, it limits the supply, and they say they're going to stop mining Bitcoin at 21 million coins. And the market believes it. So the market says, all right, this is a credible store of value and a place to hedge inflation.

4:42It's also a place to hedge currency risk. If you're in Argentina and your pesos are worth 30 % less every month, you immediately get them. And there's currency controls, meaning you can't trade it for dollars. You immediately go into Bitcoin. So there is real use cases here, right? It's not a payment system. I've never been paid or paid anyone in Bitcoin. I don't see it as having a lot of utility. I just don't use the blockchain. Call me old-fashioned. So the question is what do you do? I think it's highly unlikely, and I wouldn't wring your hands too much or spend too much time worrying that your assets are going to go to zero because of Bitcoin and America's decision or not decision to create a strategic reserve of Bitcoin.

5:24What you might want to do is maybe put 2%, 3%, 4 % of your net worth into Bitcoin. That way, you're a little bit hedged, and if it does go up 2%, 3%, 10-fold, you feel as if you've participated in the upside. I would not go all in on this, much less really anyone asked that. If you're making some money, my guess is your wife has good benefits. Max out your 401k, anything that's matched or tax deferred, try and match that out. Try and get money taken out of your paycheck so it's never in your hands. And make sure you're diversified and in low-cost index funds. So if you're worried about crypto or you think that, in fact, it's going to be something that might take off.

6:03Put a little bit of money in. Don't put all three or 4 % or 5 % in at one time. Dollar cost in because it's a highly volatile asset. But if you want to hedge a little bit against the upside or the downside of your current portfolio, then yeah, put a little bit of your money into, I would just probably do Bitcoin. I think some of the other shit coins are just too volatile and you end up staring at your phone all day. But sure, dip your toe if you think if that's going to make you feel a little bit better. But I wouldn't lose sleep thinking that all other assets are going to crash. Thanks for your question.

6:35Question number two. Hi Prof G, I'm Peter from Boston. I got my first job out of school nearly four years ago at a small firm, and for the first time I'm looking to change positions to a larger company with a deeper talent pool for mentorship and better growth opportunities. In my current role, I was able to take on a lot of responsibility early on due to the fact that we were a small team and grew rapidly since I started. As someone who has been on the other end of the hiring process, Do you have any advice on how to stand out when my experience and abilities are greater than what the number of years on my resume might suggest?

7:08Phrase another way, how do I know if I'm just a big fish in a small pond aiming too high? Thanks for your time. Everyone thinks they're aiming too high until they hit the target. I've never been qualified to do anything I've ever done. I wasn't qualified to get a job at Morgan Stanley. I definitely wasn't qualified to get into business school. I wasn't qualified to start a strategy. I've never been qualified to do anything I've ever done. So just put that away thinking that you're aiming too high. You may not hit the target. You may apply to be a VP somewhere and they say, sorry, you really aren't qualified.

7:38But the way you do this is you start interviewing. And the easiest questions are the hardest to answer. And that is, you know what they're going to ask you. Why should we hire you? What's different about you, right? What do you bring to this company that's unique? Why do you want to work here? and what do you do to try and improve your, you know, your sustainable advantage or these assets that are differentiated, right? In some, what differentiates you? Why is it relevant to us? And how do you, what practices or what do you do that makes it sustainable? So you literally want to show up and kind of act like they'd be crazy not to hire you, right?

8:15I also find it kind of a hack in interviewing to get the person to like you because a lot of this is based on relationships and how they feel about you after the interview is start asking them questions. People are narcissists or they're self-involved and they love talking about myself. So Lisa, how did you get involved at Salesforce? Or what do you like about working here? Or when you look at my skills, what do you think? Do you think I'd be a good fit here? So what you wanna figure out and you wanna be confident is to say, okay, I think I'd be great at this, but is this the right fit for me?

8:50Start asking them questions. Who does really well at Salesforce? Or I'm just using that as an example. But the key here is you miss all the shots you don't take. Just start interviewing and find out if in fact you're in that weight class. But circling back, everyone's an imposter. Everybody thinks they've fooled people. Not everybody. Most people think they've fooled people when they get the job or get into graduate school or get a high character boyfriend or girlfriend. So yeah, aim high. If you miss, don't take it too seriously. keep aiming. And if you really want to see what your currency is in the marketplace, then go into the marketplace and try and start interviewing.

9:27Thanks for the question. We have one quick break before our final question. Stay with us.

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10:59Welcome back. Question number three. Hey, Prof G. I'm Josh, a 27-year-old from Mexico working in marketing for a large multinational company. Thank you for everything you do. your content really inspires and helps my day-to-day, so I really appreciate it. Sadly, my father passed away last year and left me with an inheritance that I will just receive. This has left me with a financial question. My first thought was to buy two apartments, since it's money that I didn't really work for and so it is securing something my dad left me. However, I know today renting and investing the money in the market might make more sense.

11:35This would also leave me the opportunity to use the money for grad school if I needed it. since I know it's something that could boost my career. I've been lucky enough to land a job that makes good money and have advanced quickly in the corporate world. So my question is, what's your stance on renting versus buying? And what would you do if you were a 27-year-old male that suddenly received a lump sum like this? Again, thank you for your thoughts and all the content. Cheers. So the first thing you want to do is you want to put it in a bond fund or a treasury fund that's getting 4.5 % or 5 % right now.

12:10If it's$100 ,000, that's$5 ,000 a year, low risk or no risk. So you're getting$400 a month. But don't just let it sit there. Put it into some sort of T-bill fund or what do they call it? Certificate of deposit, whatever you want to call it. Basically, if you put money in at Interactive Brokers or Schwab, I think you get between 4 % and 5 % while you're trying to figure this out. Okay, so in terms of where to put it, you want to lean into your advantage. If you understand the local real estate market and you or someone in your life could manage those apartments and you're scrappy and maybe know how to fix up an apartment, buying real estate, fixing it up and turning it into rental properties is a fantastic way to build wealth slowly.

12:53I own almost 30 rental units in Delray Beach, Florida, and they've been one of my best investments. It's obviously a lot about when you buy, where you buy. And I bought in Florida when no one else wanted to buy, which is the time you want to buy because prices were really, really low. I bought these things for about an average of$100 ,000, sometimes$120 ,000. They produce really good rental income. And my guess is they've tripled in value since then. But I don't want to sell them. I want to have cash flow as I get older. So I think rental units, if you have some advantage, do you understand the local market so you don't overpay?

13:29Do you have the ability to manage them? Do you have some skills to improve them, to upgrade them? Otherwise, you'd be better off just buying REITs than managing your own real estate, because there really is some headache around managing these things. I would suggest, if you don't have those advantages or market knowledge around real estate, that you just take the money and you put it in low-cost ETFs. Not only SPY or QQQ, the NASDAQ, but start thinking about maybe putting half of it even in some sort of diversified low-cost world index sans the U.S. Why do I say that? The U.S. has become very expensive.

14:06And while, I mean, what do you know? You want low-cost, you want diversification, you want an index fund or an ETF. But you're still, to a certain extent, trying to find alpha and pick stuff. So even though you're picking all of the S &P with SPY, I think the S &P, I would argue, is historically expensive, maybe even overvalued. I was with a buddy of mine who runs private wealth for JP Morgan. And he was saying, I said, the market cap of the US right now is equivalent to half of the total market cap of the globe. And he said, actually, it's worse than that, because if you counter in debt, 70 % of the capital markets are in the US.

14:43So if you add up the money corporations have borrowed and US borrowing or consumer borrowing, plus the value of our stock market, 70 % of the value is supposedly registered in the US. So if someone said to you, you can buy the US for$70 or you can buy the rest of the world for 30, I would argue this more upside to buying the rest of the world for$30. So I would use a robo-advisor, spend some time on AI and say, I want low cost index funds. And I also want to make sure that I'm not only diversified within the US, but I'm diversified to a certain extent around my investments from the U.S. But low-cost ETFs or index funds.

15:26Also, it sounds if you're doing well, I'd be reticent or careful to blow that money or invest that money in grad school unless you really think it's going to pay off. Because you've been given a gift from your father, his hard work, his time. And at your young age, at 27, say, I don't know, say it's$50 ,000. By the time you're 67, which will happen much faster than you think, with a low-cost ETF, you're probably going to have a really nice nest egg or something to fall back on. And I would imagine that's what your father wanted. So I'm not saying don't invest in yourself, don't go to grad school, but maybe be very selective if you're doing well at your job and make sure you can get some financial aid.

16:13Just because I hate to see kids borrow a lot of money or spend a ton of money on grad school when it may not provide the pop that they're anticipating. That never used to be an issue. It always used to be worth it. Now you actually have to do the math. Let me back up. This is a really good problem. Congratulations to you, but again, low-cost ETFs, and I would do say 50%, 60 % U.S., 40 % international. If you want to lean into real estate and make sure you know what you're doing and you have some advantages there. But again, this is a good problem. And I'm sorry about your father's passing. It's something we all deal with, but it's something I don't think any of us are prepared for.

16:49It's heartbreaking when it happens. So I'm sorry about your dad. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehours at propgmedia.com. Again, that's officehours at propgmedia.com.

17:14This episode was produced by Jennifer Sanchez. Our intern is Dan Chalon. Drew Burrows is our technical director. Thank you for listening to the PropG pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn. And please follow our PropG Markets pod wherever you get your pods for new episodes every Monday and Thursday. day. Support for this show comes from Airbus. It took 100 years for electric vehicles to catch on. Modern solar panels? Half a century. Lithium batteries? Decades to go from their debut to daily use. It's a pattern. Energy tech breaks through, stalls, and then something tips the scales.

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