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

0:00 When I grew up, everyone said to me that to generate wealth, get a job, get money, then get a mortgage. That's one of the worst pieces of advice you can give somebody. And your future self is gonna be poorer because of it. But that's what everyone's doing. Because we're not taught this stuff. So what do you think the biggest money mistake the average person makes is being saver. So just having your money sat in a bank account. Yeah. It's a guaranteed loss. To becoming poorer every single day. But there are plenty of ways to retire early and be financially independent. And that's including secret hack that makes people fortunate. So let's talk about making more money. This is the ultimate money making master class. As we are joined by three financial gurus with very different opinions and methods to build future wealth. So we're gonna talk about pensions, credit cards, renting, bad money habits, debt, passive income, spending money to look rich. So first, what is it that rich people know that the average person doesn't know? Rich people are more disciplined and they're doing little things that compound into huge results like investing. But for example, the average American spends more money on Netflix than they do on their investments. And if I invest $1,000 a month for 30 years in something like the S P 500. I will have about$1.9 million. Or there's no asset in all human history that's ever generated as much wealth in a short spirit of time than Bitcoin. There's one problem. Bitcoin is high risk.

1:12 And if any of those risks happen let me finish. Do you wanna have hope that you have the bitcoin or would you rather have more security? You can reduce risk. So if someone is a thousand dollars, what would you suggest they did? I have a different take on this if you're trying to make more money. I would what about bad money habits? Because when you look at the stats, money is the number one source of stress for Americans, top in work, family, and town. Well there's a three-step framework, because I want to get into that. Number one. Just give me thirty seconds of your time. Two things I wanted to say. The first thing is a huge thank you for listening and tuning into the show week after week. It means the world to all of us, and this really is a dream that we absolutely never had and couldn't have imagined getting to this place. But secondly, it's a dream where we feel like we're only just getting started.

1:58 And if you enjoy what we do here, please join the twenty four percent of people that listen to this podcast regularly and follow us on this app. Here's a promise I'm gonna make to you. I'm gonna do everything in my power to make this show as good as I can now and into the future. We're gonna deliver the guest that you want me to speak to, and we're gonna continue to keep doing all of the things you love about this show. Thank you. I think the the first place to start is people

2:27 want to know how they can make more money because it w if you don't feel like you have money Saving and investing in these kinds of things appear to be Pointness. I also understand that that's not necessarily true. I think you can you can start investing and saving with a very small amount of money. But for those people that are asking that question, if they're listening to this now and going, How does one make money?

2:47 Like you know, I've got this job, I'm working a nine to five, it's paying me thirty thousand pounds a year or Forty thousand dollars a year, whatever it might be. is the right question to be asking, how do I make more money? And if so, how do I do that? I always think it's it's a combination of making more money and also saving more money, but let's talk about the making more money piece. I think that everyone is unique in their own way, right? You've probably spent more hours doing

3:11 Some sort of hobby that I have no idea about. You play paddle, for example. I've never played paddle in my life. So let's say you were Steve Steven from age twenty, and you're a really good paddle player. You can start to monetize this type of skill which you have that I don't.

3:27 But perhaps you know more than me. I could take lessons from you. Even if you're not let's say the pro paddle player that you are. I might still be willing to pay you. twenty, twenty five pounds an hour for a lesson, right? Just'cause You're naturally better than I am.

3:41 And so I I would encourage people to to kinda lean into what makes them unique. And where where they've spent a lot of their time. I think everyone has something that they're good at. Inherently figuring out what skills you have internally and how you can kind of monetize those. I think

3:57 One of the The hidden things to do. Is you really are a function of who you're surrounded by. Invest in your network. And I don't mean that in a kind of cold hearted Yeah, I want to network with these people, but just surround yourself by people

4:12 Who are who are also trying to push themselves To push their income, push their opportunity set. And it makes it so much easier. If you're the only one doing it and you're Around a group of friends. You're the odd one else.

4:23 And you're castigated for it. Find other people who want to do the same thing and you kinda help each other in that journey. So at an early stage, that's just one of the key things is to find people who also want the same journey as you. Uh that really helps. Then it's still about The best leverage of your skill set?

4:41 And being honest with you what your skill set is. Just because you you're a doctor. Doesn't mean you should be a doctor just because you've graduated. Because you can do other things. And it's it's figuring that out. That's not an easy bit, but you figure it out over time by trying stuff.

4:55 You know, we've all done multiple jobs. And we know what we're terrible at and what we've been good at. And you kind of over index on the things you're you're better at. And that works. So if you're if you're early, it's the time to make bets in yourself. And your network and that gives you the foundational tools to then earn more income. And then invest more.

5:13 Was there a pointless uh seemingly pointless job you did that ended up in hindsight making you the most money? And what I mean by that is I think about my experience doing telesales between the age of sixteen and nineteen, as probably the most important thing I ever did. Like not only do I spend a lot of time talking now, but Sales is a transferable skill across raising investment, persuading employees to come and join you. And I think there's nothing I did that was more important than telescales. The single best skill you can acquire in life is is to learn how to sell. To be comfortable around people and to be able to get a message across is the single most powerful tool you can have in life. Everything you do, finding a partner in life, doing Anything you do is basically sales.

5:49 And it's all people. All people. So if I'm this twenty four year old and I a twenty five year old and I'm ambitious, I want something big. Yeah. You gotta find more income. You gotta have more income to do it. If I'm a twenty five year old and I just want to

6:03 Be okay, I don't mind my job, I just want to invest you know, whatever. You gotta find the right investments. You gotta have a system for your money. And then you got it. create a plan. Anytime you get paid, you know how much money you're going to save, you know how much money you're going to invest, and then you spend what's left. Because the difference between the person that becomes wealthy and everybody else

6:22 As wealthy people Save and invest their money first. Everybody else Especially in America, I spend all my money. I wonder where all my money went.

6:32 Then if there's anything left. I'll try to save and maybe invest and For me it's all around based around What is your Vision of your future self.

6:42 Now how do you see yourself living? Because that is what we do. It's one of the sources of unhappiness is if your current state is not moving on the path the way your future self wants to be, how you imagine yourself. So practically and tactically How do they do that? How do they create this this financial vision board? Is there do they need to know certain numbers? Do they should they get clear on if they want to be on a private jet or easy jet? Like Man, I think I think you know if if if the if you have to ask yourself, hmm, do I want to fly on spirit airlines or do I want to fly on a private jet, I think you already know that question. But is it important to be explicitly clear with yourself?

7:16 Because actually if I think of most of my life, I I wasn't entirely clear And so you either end up chasing Because it's generally not a materialistic outcome. It's generally an emotional outcome. Yeah. And that's why it's hard to

7:29 But you need to position yourself in that future self and say, what does it feel like? Do I feel secure? Do I feel this, do I feel that? So it's it's an emotional thing and not a

7:42 Material thing. Is that is that central to a lot of this? You talked about emotional Elements. Is being okay. W

7:51 What other people think of you. Yeah, that's the other thing is social pressure, right? So you may have the vision of yourself. And you just say I I want the The three bed.

8:00 House. You know, with the little strip of lawn and the barbecue. And that's great. And around you people like. You should try harder. Yeah. So they're questioning your own sense of happiness.

8:10 And society does that at scale. And then even the whole media complex is about kind of how unhappy and how miserable You are and should be Doesn't make it an easy place. We're talking about emotional and psychological barriers here. How do we get over people not just being scared of what other people think, but

8:27 So many people are scared of their own money. When you look at the stats around. Avoidance. Eighty two percent of Americans admit they avoid thinking about their own finances. And one in four Americans have avoided medical care because they're afraid of the the bill and Thinking about how much it might cost.

8:41 For Gen Z sixty seven percent of Gen Z and fifty eight percent of millennials say they avoid checking their own bank account because it's too stressful. Which is compared to only thirty percent of boomers. And On in terms of mental health, money is the number one source of stress for Americans, topping work, family and health. Thirty six percent of people with debt experience clinical anxiety, twenty three percent depression. So people avoid their own money. A lot of people avoid it.

9:09 Because The financial full of jargon. Yeah. You need to go to a professional For advice, that's what people think. Mm-hmm.

9:17 It's intimidating. You don't feel like you've got enough money. You're gonna let them down, yourself down, your family down. So there's this whole kind of thing around it. It's the confidence that you can learn. Because a lot of people say, No no, if unless you're from an investment bank or you're an uh RIA or something, you can't do this. Right. But just a little bit of confidence to say, Yeah, you can do this. A simple tip that I think people can do is just kind of Figure out how much they spend on a month.

9:43 track your expenses for thirty days, sixty days, or ninety days. And you're gonna learn so much more about Just your personal habits of What you do. 'Cause sometimes I'll forget that I door dash something for thirty dollars or I'll forget that fifteen dollar or twenty dollar Uber charge and I I I'll just kinda file it away because I'm s swiping my credit card. I don't really I'm not aware of it. It's like if you're going to the gym and you're not aware of your weight.

10:04 How are you gonna Where's your starting point? So you I like to give people a starting point because then they can kind of have that small step to kind of start working towards their finances in that sort of way. sixty five percent of Americans have no idea what they spent in the last month, according to the US Bank, and sixty percent underestimate their monthly spending by a significant margin. Right, and that's exactly what I found. I tracked my expenses for a month in twenty fourteen.

10:27 I thought I was spending fifteen hundred bucks a month. Guess what? I was spending twenty eight hundred dollars. And I wasn't making that much. And I was like, How am I off by an order of magnitude of I don't know, sixty, seventy percent. And I find that even like all my friends I issue this challenge to, mo most of them don't make it to the three months. But I think as long as you have an approximation of what you're Spending

10:47 that can help because that that means then you're gonna have a little bit of a difference of what you make and what you spend, and then you can save that money. And I think that's one of the bad money habits of Americans is they don't save, right? So It's really good point, which is a br a practical step to just heighten one's a awareness.'Cause you need to have sort of informational awareness of where you're at to even Understand what you need to do to to get to where you want to go. So Yeah, I think you need to start with the mindset.

11:10 You have to build the basics. You gotta get rid of the credit card debt. You gotta save a little bit of money. Like you gotta have some breathing room. Because investing is all about taking the extra money that you have Throwing it somewhere to grow that money. And this is where we're uh there's a three step framework

11:24 That I'll talk about. Because there's a lot of ways to invest. At the very simplest. is I can be completely hands off. I can work with a financial advisor. I can give them my money and they can do everything for me. If you don't have a lot of money, You're not gonna get a very good advisor.

11:39 But there's a con and a cost to a financial advisor, which is the amount of money you have to pay because they're going to charge a fee. So if I Invest my money, a thousand dollars a month with a financial advisor. I get a good financial advisor who beats the market. They get eleven percent a year. But have to pay one and a half percent a year. After thirty years I'm gonna have one point eight million dollars.

11:59 after paying six hundred thousand dollars to my visor. Stage number two is I can be a completely passive investor. So a little bit more involved than an advisor, but I can just put my money into S the stock market. Something like the S P five hundred.

12:13 Which is A group of the five hundred largest companies in the stock market. It's kinda like investing your money into the United States economy. This has historically averaged Ten percent a year.

12:24 Which means if I invest a thousand dollars a month For thirty years, I will have about one point nine million dollars. Completely hands off, but Still pretty passive.

12:35 Then we have the people that want to be more involved, what we call Is A Active investor.

12:43 And an active investor is somebody who now Wants to invest their money themselves. And I don't mean trading, I mean actually investing their money. And now I'm gonna be doing the research. to find which investments I want to own. Maybe it's real estate that I want to own. Maybe you want to invest in individual companies. So it's more

13:01 risk for more potential return a small edge. Can give you outsized return. Because If now I don't get a ten percent return I can get A thirteen percent return.

13:13 Which you know, we're not talking about two hundred or fifty percent returns. A thirteen percent annual return means that about one thousand dollars a month. Over thirty years, that's now gonna grow to three and a half million dollars. So about one point six million dollars more than before. Just with a slight edge.

13:29 And you gotta figure out w how involved you wanna be. On this point of the year. Being an active investor and picking stocks yourself versus being a passive one, the data shows that passive investors who invest in the S P five hundred, like you said, consistently outperform most stock pickers. Over a twenty year period, more than ninety percent of actively managed investors, so talking about funds there, underperform the S P five hundred after fees. So should people be actively investing, or should they just put the money in an S P five hundred and pe be patient? I say most people should not be active investors.

14:00 In fact, I say ninety eight percent of America should not be active investors. Just be a passive investor because if you don't want to put in the work You're not willing to put in the time and the effort to research. You're probably gonna lose. And many people do. So why do people want to be active investors?

14:17 If the if the probability is stacked against them. Well, if you get a little bit better returns, if you're willing to put in the work. You can Get better returns, and it is possible. We do see people that if are doing it.

14:27 Is there an element of fun and and entertainment? Absolutely. People like sports betting and That's the problem. Because the fun is I like researching versus Oh, I wanna see my money go up tomorrow. If I buy a house tomorrow morning.

14:43 Am I gonna go into Zillow in the afternoon and check what is my house price? Am I checking in the evening what's my house price? No, because you know that this is something I wanna own for the long term. Well When I go into the stock market because it's so liquid, I buy a stock in the morning I'm checking it fifteen minutes later, I'm checking at lunch, I'm checking away in the bathroom, checking in the evening, I know I'm getting anxiety because if it's going up or down, I'm I'm a very emotional and that's that emotional

15:06 control as an investor, which is just as important. As the research that you're putting in. See how fundamentally different all of this stuff? Is People are so screwed.

15:17 They are coming out of university with massive debts. We looked at the stat earlier. um off camera when we were talking about the fact that Th percentage of thirty year olds who have A mortgage and a f and a and a married.

15:29 It's gone from Fifty two percent in nineteen fifty to Twelve percent. Nobody can afford anything. So if you look at the average millennial in the US and a Gen Z, they generally have a four oh one K if they've got a job, right? They have some sort of savings.

15:45 But They're taking massive amounts of risk. This is ridiculous. Why are they taking risk for anyone that does. Because there is no way of closing the gap between buying getting the deposit on the house, getting into a house, realizing that future vision of themselves. However reasonable that is. Why? It's so far away. Because The ass the cost of assets has gone up so much versus that incomes would don't go up.

16:08 You mean the cost of buying like a house, for example? Yes. Or even However much percentage share of the stock market, the average salary does, you know, stuff like that. But you're you're getting less for your money. So your future self is automatically gonna be poorer because of it, because you could buy less of a house, et cetera. Explain that to me like I'm an idiot.

16:27 Like I'm like I'm in ten years old. And maybe in the context of This mug here. In terms of the how why is that Worth less now, based on what you said.

16:39 The way of explaining it Is Money is the medium of exchange, the thing that you buy something with. If we all have a lot of money. We've all got a stack of cash on this table.

16:51 And you wanna sell that. Mughts. pay anything for that mug'cause we've got a stack of cash. Mm-hmm. So that mug suddenly is worth

16:59 Not the ten dollars it's supposed to be worth, it's suddenly we're paying a hundred and fifty dollars for the mug. Why? Because that money has no value to us because we've got excess money. So when you create excess money in the system, it's the this debasement of currency, it's an optical illusion.

17:16 They're not. the value of your money's going down. And this is this pain point because Your earnings only grow with economic growth generally, plus your progression of your

17:28 career or whatever it may be. But those things. The scarce assets. Are going up. Optically.

17:35 By the amounts they're lowering the thing. So what you find is Salaries go up at about two or three percent a year. And the house of um the cost of the S and P is about twelve percent, thirteen percent, up every year. And a house price is about the same.

17:51 Gold is about the same. And that's because they're printing more and more money. Correct. Okay. That makes perfect sense to me. So I'm imagining you all have a big stack of paper in front of you, which you're using it to take some notes on. And if if I was saying I'm gonna sell you guys this mug for some of the paper you have there, But then my team said you guys can have unlimited paper. This mug loses value because you can all just offer

18:14 A gazillion. sheets of paper for this mark. Well it doesn't lose value. It optically will give you a gazillion for it as opposed to Yeah, three sheet sheets of paper because we've got so much paper. It matters not. So I'll be I'll be thinking, Wow, like this mug it's worth a gazillion sheets of paper. But actually the'cause th each sheet of paper is now worth nothing.

18:32 Correct. Okay, got you. And this is the problem that people are finding is they put money in a four one K, you compound it at ten percent. For my generation, yeah, that was that was how the world worked and it was great. And it worked. And now it doesn't work.

18:45 So they need assets that got fifty percent a year, hundred percent a year, which is ridiculous. But luckily we've been gifted a few. Um and so that's helped. Go on, say it. Well it's crypto.

18:55 Simplistically, it just outperforms all other assets. Even with the excess volatility. So Bitcoin, for example, produces About Since two thousand and twelve it's produced about a hundred and forty five percent a year returns.

19:08 So that's ten X the stock market. And that's including Three. Seventy percent drawdowns in the middle of it. A drawdown. Yeah.

19:18 Well, you feel like you're an idiot, you're losing money, it's all gonna go, you know, y y you've made the biggest mistake in your life, and it recovers and it keeps going because it's a it's a technological network ad adoption model that's happening. So It's just sucking in more and more people. So there's now six hundred and fifty million crypto brokerage accounts in the world. Which is more than all the stock market brokered accounts. added together in the world.

19:41 And we're seeing it all around the world because Everybody can buy a share of something. So as opposed to being able to buy Nobody can buy a fifth avenue apartment here. Everybody can buy a fractionalized share of

19:53 Bitcoin. Which is In theory, a hundred thousand dollar asset. But we can all put in ten bucks, five bucks, a thousand bucks. Ten billion dollars.

20:02 Let me challenge it then. So Bitcoin isn't based on anything though. Okay, I'm being I'm being a funny here. That's my job. Bitcoin isn't based on anything. It it is a database in the sky that isn't backed by gold or it doesn't produce any sort of valuable asset. as its byproduct. So why How can we have faith in Bitcoin? It's essentially it in its essence, before someone clips me, this is I'm playing devil's advocate because I know they're just gonna clip this part out.

20:28 It is essentially many would say a Punzi scheme. Mm-hmm. Which is it only goes up if other people take part in it. And if you Everybody decides that it's

20:36 Um not worth anything, then it's gonna go to zero. So All money. Is social consensus.

20:44 Everything. Gold has no real value. I can build a table with gold though. I can rest some things on it and it's a good it doesn't rust. If you're building a table of gold, then the value is going to be much less. If everybody's building gold tables. Trump has.

21:05 Ascribe value to. But the problem with the one hundred and forty five percent, like you mentioned, Bitcoin Has fallen. By seventy plus percent on multiplications. Mm-hmm. If we let's go back to the S P five hundred.

21:18 A lot of people invest in the SPY, the S P five hundred. And still lose money. Why? Because when the We go through any downturn.

21:28 People panic and they sell. Yeah. And and if we look at I mean Bitcoin's b I think Bitcoin's two thousand and nine, if when it started, if I'm not mistaken. I if we look at the crashes from you know recent history twenty twenty stocks fall by Thirty percent.

21:45 Bitcoin fell by fifty percent. Twenty twenty two. Stocks fell by twenty the S P Pell by about twenty percent. Bitcoin fell by sixty percent. So in those times.

21:57 People who are in the S P are Freaking out. Selling? Yep. But here's the thing. This is the risk reward that people don't understand. If you've got a time horizon

22:06 Let's say the average drawdown in the S P during a Uh yeah, a bear market. It's twenty five percent. Draw down being a a drop prices. A lot. Yeah, a drop. A drop in prices. You're getting compensated.

22:18 Fifteen percent a year returns for that. At best. In Bitcoin The average Drawdown over the same period will be about seventy percent.

22:28 But you're getting a hundred and fifty percent return. If you're on the winning side, though. If I buy it And I can sell it for higher prices. Just hold it. That's the key. All of these are in a nice trend channel. They go up. So

22:41 Anybody can buy something and hold it long enough, it'll go up. Well what about well let's look at housing. We can say the same thing about housing. Two thousand eight housing crashed. Just hold it. I have too much debt. I'm underwater my bank's taking it from me. People are buying Bitcoin with debt. Yeah, I mean that that would not recommend that. Housing's different because you can endlessly create more housing.

23:02 And we have a demographic problem in housing that makes it more complicated. demograph is Everyone's leaving the cities now. B. the generational gap.

23:12 Maybe can afford the boomer houses. We 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. I I think the part that we fundamentally differ is not that there's value In crypto.

23:30 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.

23:42 My speculative assets. And then a little bit of gold. to replicate what you've achieved in your amazing career. is for the average person listening to this. Buying one thing.

23:54 In your Coinbase account, your Robin Hood account, and doing nothing. And so it there's no cost? It's not like buying a house, it's not like servicing all the stuff, there's no debt involved. There's nothing in theory. But theory isn't reality.

24:06 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 a lot of the average person is I wanna get rich. I want to get rich quick.

24:22 It's I want to make money fast. Where is this the the average Person who's buying the S P five hundred, this is somebody who is I want to invest and build wealth for the long term. It's a very different mindset. The average investor of this is thirty two years old. And we said no, you need to invest for the long run. They're never gonna have a house. So their their whole vision of their future cells is

24:43 Utterly destroyed. But look, you said a logical thing. to actually take more risk. It's logical for them. 'Cause they've got nothing to lose. So Bitcoin you're saying is a hundred and Forty five percent a year. As the trend rate of adoption grows, it's probably down to about

24:59 A hundred percent a year. Let's call it that for easy maths. But now uh l let's think about this just from a practical long term perspective. Warren Buffett is Arguably. The best investor in the history of time. He has averaged About nineteen percent a year.

25:15 Over the course of his decades making him a multi, multi, multi billionaire. And so when we compare a twenty percent return from one of the top investors in the world versus hey, Bitcoin is gonna give you a hundred percent a year. There's there's some sense of something could be wrong. So even if I'm wrong by fifty percent

25:33 you still outperform buffet. To put it in perspective Bitcoin. Since Twenty Twenty ten.

25:41 Has done I think it's about ninety million percent returns. There's no asset in all human history that's ever generated as much wealth in the shortest period of time. And because it's not a random thing, it's actually a technology and it's a network model of technology. As more people use the network and we see with Bitcoin governments buying it and asset management firms buying and everybody else.

26:01 You have this network adoption model. And so what it creates is the same charts as Google or Amazon, all of these. It just goes up in a log trend over time with some volatility. So you've got a secular bull market. Which means that Over time prices go up.

26:17 For Measurable understandable reasons. And it's happens to be the highest performing asset of all time. There's one problem. And it's volatile. The psychological thing you're dead right about. It's r very hard when it falls seventy percent. I've gone through three of those, they're hard.

26:32 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.

26:42 When you sell. Or you lose money. If you sell. Uh ultimately it comes down to that. You make or lose money only if you sell. Well

26:50 What about everything along the way? And what if I need to sell? during the seventy percent crash. Because what happens during those crashes? A lot of times people lose jobs. A lot of times people lose their income. A lot of times people need that money during that time. And so now I'm desperate or I'm panicking. There's there's two things happening.

27:06 And now maybe it's the end. And I go in And now I lose money. Thinking that I'm gonna make all this money. Your love for cryptocurrency.

27:16 And your hundred percent concentration in cryptocurrency because you're in. the you know bottom of Maslow hierarchy of needs taken care of. I've got house, I don't have debt. You know, it's easy for me, I've got multiple sources of income that I can take that back. I'm not saying that for everybody, but I can also understand why a twenty five year old Can do that too. Because they've got nothing to lose. Mm.

27:38 But do you think that if a twenty five year old puts their entire salary and and savings into Bitcoin and they lose it, let's say they'd run through a seventy percent drawdown. Are they just putting themselves in a bigger hole? For their future as well. Like maybe before there was a a glimmer of a chance that they could that they'd buy a house, but now they can't.

27:57 Um part of financial markets is the least understood is time. Mm-hmm. It's not just price, it's time. So if you're twenty five years old. And you get wiped out. We've all done it.

28:07 We've all kind of screwed up and you know, had to move home to our parents. We've all done it. You can do that several times when you're young. And it's okay. You just don't want to do it. At age fifty. Sure. You really, really don't

28:21 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.

28:29 Wenn auf all das Thema Money. in Bitcoin or really anything. A lot of the value is but Some people refer to as like equity. It's it's I bought it for

28:39 Like I started buying Bitcoin when it was three thousand dollars. That other stuff is equity, it's invisible money, which In my view is It's theory. It's not actual money in my bank account. It's sitting there waiting for me to sell.

28:52 Hoping that when I go to sell it's gonna be a profit. Versus Cash flow. Mm-hmm. If I buy A dividend paying stock.

29:00 What's 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.

29:12 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 a dividend. So it's a cash payment for doing nothing except owning that investment. So if I buy something, whether it's the ETF stock or whatever, that's paying a dividend or a rental property, that's putting money in my bank account every single month or year, that's money I can use to By food.

29:39 Go on a vacation. Do something. Here's what let me tell you. Listen, so I started buying Bitcoin at three thousand dollars a coin. When it was at I I went through multiple crashes. I remember when twenty thousand dollars of bitcoin was the oh my god, we did it. And once they hit around seventy thousand. I looked at this and I said, Wow.

30:01 I have My real estate, my stocks, my speculative, which is crypto and startups, and then two percent gold, which is now looking extremely inflated. I need to Lower this Now we I can have some more income. So what did I do? I sold some Bitcoin.

30:15 About rental properties. That now rent a property. It's put in money. In my bank account.

30:21 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.

30:32 You can stake the cryptocurrency and make a monthly yield from it? And alone against it. Now that's adding risk. Well what happening to uh if I take a eighty percent loan. Seventy percent loan. Let's let's uh fifty percent loan. Yeah, it's very volatile. So you're gonna be able to do it. So let's take let's take a fifty percent loan. And Bitcoin falls by seventy percent, which it has.

30:52 Now I'm underwater. Now what? The bank comes knocking on the door, margin call, you're forced to sell. And a foreclosure. And really speaking, people should have The ability to have cash flow or cash for

31:08 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 startups or to v to invest in crypto or technology and all of this stuff. Um That makes sense. But I just don't think a dividend at four percent makes any difference to anybody. Well it does if you do it consistently, month after month, yeah after you're not gonna need huge capital to start with to be worthwhile. No.

31:33 Yeah. If you start investing For dividend income, I call it a decade of sacrifice, and this is why it's so hard. Yeah, but if you're thirty three years old now, you're sacrificing until you're forty three. You're going to become forty three at some point. And imagine if you're forty three and now you have the income to pay for that car, to pay for the house, you don't have to worry about it. Well

31:54 Do you want to have hope that you have the bitcoin or would you rather have more security? Bitcoin In my perspective High risk. Hi.

32:04 Potential return. And I'm not saying don't buy it. I'm saying allocate it in your portfolio in a way where you understand You are Arguably one of the top crypto experts in the world.

32:17 I'm not. I also am not the stock expert in the world. I'm also not the real estate expert in the world. But I don't I'm probably gonna be wrong. If my stocks crash, I have my real estate.

32:28 If realistic crashes like Amma stocks Crypto classes, well, that's part of my speculative portfolio. I really don't care. And if everything crashes I got some gold. So for me, I have to diversify against myself.

32:41 Биз Айно стакс краш. I know crypto краši. I know real estate краches. But if you're not starting with a lot of money. You're Y your strategy is the strategy of a rich person.

32:53 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 structure of the thing. I didn't start with all those at all. I started with one. Where did you make most of your money? Being an entrepreneur. Being an entrepreneur. I did. That was me. But if I'm making fifty thousand dollars a year. The first step let's assume now I'm putting Five thousand dollars a side seven thousand dollars a side a year.

33:20 I can take high risk, high potential return. Or I can be Conservative. Or a hybrid. And not everybody

33:30 should be taking all the risk. Because There's Bitcoin has risks. And again I'm telling you that somebody Who owns it?

33:38 The government could come in and change policies on Bitcoin. Quantum. Could change. Bitcoin. People could stop caring about Bitcoin.

33:49 And if any of those things happen. And all my money is in this Very speculative asset. I'm the one that's carrying all the risk. So if you if someone has a thousand dollars in disposable Income to invest.

34:02 What you what would you suggest they did, Humphrey? My take on a thousand dollars has as has changed over the years. I used to say you could invest a thousand dollars, but as as Rewold probably mentioned, I think I'm gonna do it Ten percent on a thousand dollars is is not that much, right? So like, you know, if you invest a thousand bucks in the S P five hundred, you get ten percent. Next year you'll have eleven hundred dollars. That hundred dollars is not gonna 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 uh still coming up, I was trying to take a lot of courses online. So I try to figure out different types of skills that I could that I could use in the marketplace. So I took a

34:39 AdWords course back in the day for like a hundred and fifty bucks that taught me how to do Google AdWords. And I would try to consult for for businesses out there to try to make more of an hourly income on the side. And Google AdWords, for anyone that doesn't know, is Google's advertising platform. Yeah. And now there's TikTok ads and Facebook ads, but You know, 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 like that would be great. So right now clearly that is AI. Because what what you saw there is like a knowledge arbitrage with a new technology where most people don't un didn't understand AdWords and you could be the young guy bridging the gap for

35:16 people's ignorance. So most businesses now would be Dr dramatically more efficient and effective if they understood even the basics of AI. Yeah. So a a kid could take a a course in AI and f do you know what's crazy? I if you read the top ten books on AI, you'd be in the top one percent in the world in terms of knowledge. Yeah, I mean if you just read the instruction manual of how ChatGPT or Quad works, you you could probably be in the top You know, one percent of prompt engineers, right? And

35:41 That could be a that can be a value to a business or service, right? So probably where my career came from was we were the Kids eighteen, nineteen, twenty years old. That new Social media.'Cause we've messed around with it. So we sold it to companies. Right. And that started my first business and then there was soon hundreds of us. And there's there's a lot of these apps right now coming out from eighteen, nineteen, twenty year olds. Have you seen that? That one profile of that guy who created Cal AI.

36:05 Uh Cal AI is this. This app where you take a photo of your food and then you know it sends to to AI and it tells you how many calories are in it. Well the guy's making fifty million bucks a year or whatever it is. Yeah, I saw that this morning, funnily enough, for four million dollars a month he's making from a Like Chad uh basically it's an AI rapper, obviously I think he has some you know, secret sauce that he puts into it. But a lot of a lot of kids these days are using AI to try to leverage that and and try to turn b turn them into businesses.

36:32 I do want to say though I think with a thousand dollars and with with what Jess Spreet said, I think you can still make a decent inc 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 Retired be Financially independent without

36:50 having to let's say bet your life savings on on crypto. I know that I personally h bought Bitcoin at a hundred dollars, but I've sold it many times you know, I bought and resold it so many times because, you know, when it's up ten X, you're like, oh like You know, if if you were giving me a ten X return when I first bought it, I've like, Yeah, I'm taking that any day of the week, right? Mm-hmm. And so I think that's why it's so hard. It's like Bitcoin does produce one hundred forty five percent return since twenty twelve, but in twenty twelve no one knew how to buy it.

37:16 I bought it on some random sketchy website. I got this like Yeah, this This string of character for my wallet and I I try to buy you know, I try to buy a coffee at a cafe in Palo Alto. And I didn't know that Bitcoin transactions took thirty minutes to go through. So I sent Bitcoin twice for a five dollar coffee. Now keep in mind this is 0.1 bitcoins, right? This is 10 K versus Bitcoin. I sent it twice and then didn't get it, and guess what? I still had to pay for the coffee with my debit card. So where do I make this one go? I spent twenty K on coffee. Yeah, that could be the title of this video. Spent twenty K on coffee. Yeah. I literally was sp I I sent it to Coupa Cafe in Pau Alto, if anyone wants to go there.

37:55 I think the average person psychologically speaking. It's really hard when it goes down eighty percent. And if Jaz Breed says you need money, like at that moment, you're gonna sell it. But you'll Your point about I mean. The m primarily important thing is income. Yes.

38:10 I mean and that And we talked about it last time I was on the podcast. It's like how do you just leverage the same skills in different ways that you can earn more money from it? Like the story I was told when I left university was Speaking to a f friend of my dad's he was like Well what are you gonna do? And my father was in marketing. And I liked Mark, seeing.

38:27 And But it was like Late eighties Wall Street. And I'm like, well I I'm thinking about either going

38:35 Uh to work for somebody like Mars, do marketing, you know. Great company. or or go and work in the city in London. And the guy looked at me and said, It's really simple, Ral. It's the same job. You're a salesman in both.

38:47 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. Mm-hmm.

38:57 Well I 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'cause that's enough. But If we look at time.

39:09 A thousand dollars compounded. Is. Decent. If I if you go back Nineteen seventy one. And my house deposit.

39:19 And I want to get married and have kids. You're telling me I can't do that. And for another twenty years. If I took a thousand dollars in nineteen seventy one, I invest that into the S P five hundred. And I did nothing else. I keep doing whatever I'm doing, my job, and I only invest a thousand dollars and I never invest another penny again.

39:37 Today That would be worth If I if we invest in my dividends, about three hundred and thirty thousand dollars. And I never invested another penny after the first one thousand dollar investment. Why? Because the SP five hundred has grown by

39:52 A little bit over ten percent a year from nineteen seventy one to now. It's something. Now imagine if I invest A thousand dollars a year. A thousand dollars a month. I can't say that about Bitcoin because Bitcoin didn't exist fifty years ago. I can't say that about Bitcoin because Bitcoin didn't exist

40:08 Twive years ago. And so Amazon. What about Amazon? That's that started trading and Two thousand. Or even better, Facebook, two thousand twelve.

40:18 How do I think it's not. Do we not invest in it because it wasn't around? It hasn't been around as long as gold. I mean it's been Facebook has been around less than Bitcoin has short of time. creates a profit. It has a tangible value that you can see and feel because I can go onto Amazon and order myself a brand new guacamole set. It'll be there in two hours. Until what, twenty eighteen? But that wasn't 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 five hundred?

40:49 Well I'm not saying you should. I think personal finance is personal. I think if it was me, um if I have a thousand dollars extra and I'm just trying to figure things out. I'm gonna go buy some books, I'm gonna buy a class, I'm gonna do something about how do I increase my income, going back to what you said. But If I'm saying I just wanna work my job, I don't wanna go out and do all that.

41:06 I would do half into the S P five hundred. Yeah. And I would go half into uh individual companies. So more risk than the S P five hundred. 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 and I understand This is something that

41:21 I could see Returns with like you talked about, Amazon, like you talked about Microsoft and whoever's There's potential. And what about you, Humphrey, if ten thousand dollars would does your strategy change?

41:32 Probably more. conservative or traditional, it's probably ninety percent index funds. Uh so tracking the SP five hundred and then ten percent speculative. And my whole goal for that twenty five year old would probably be to get to a hundred thousand dollars as quickly as possible, because at that point I think they had more options of flexibility. And they're able to kind of use that capital to Maybe take more risk after that six years. Yeah.

41:57 But that also assumes that they're only doing the ten ten thousand bucks a year. Maybe they they can save and invest a little bit more. That'd be nice. I think For a lot of people in America, if they can get a guaranteed hundred thousand dollars in seven point eight four years, I I think a a lot of people might So I agree, but I've remove the S P. You do all crypto. No, I just do Nasdaq.

42:16 Oh yeah, you do Nasdaq. So Nasdaq compounds at eighteen percent a year. What is Nasdaq? The Nasdaq is um the the Nasdaq one hundred, which is the top technology stocks in the United States. But we live in a world that Tomorrow will be more digital than today. Guaranteed. Um and so therefore these stocks tend to generate the most performance.

42:36 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 seven point eight years.

42:45 Two five and a half years, six years. Buy the Nasdaq one hundred. It's an ETF. Yeah, zero cost, easy. And then I would say and then do seventy percent that, thirty percent crypto. And you don't have to care about anything. You're fine. Now if you have a different risk tolerance You can tweak those dials.

43:02 Or if you are more Risk averse. Then he Up your cash style or or some other more stable flow, whether it's gold. Although gold is still driven by the debasement of currency. They'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, cause I just say one thing, but

43:20 Just like with Bitcoin. The difficult part with the eighteen percent is you gotta be willing to go through the downturns. And I wanna make sure that that's clear because I mean The big Show.

43:29 Two thousand. The Nasdaq fell by seventy. Eight percent. From its peak. During that time the S P five hundred fell by forty percent.

43:39 So it's a bigger drop. Not to mention. The Nasdaq didn't get to its level? Until twenty fifteen. Fifty.

43:46 It is still compounded more returns than the SP. Absolutely. If you held on the drop. in the risk adjusted returns versus the gains. But how many people can hold on for fifteen years and say, you're one, uh no big deal. You're two, okay, you're three, you're five, it's gonna go up. You're ten. It's gonna go up. And by the way, year ten was also another crash because All you have to do is dollar cost average. What's that?

44:15 So dollar cost averaging is If you're Young and you're you've got A bit of excess cash now, you know, you've sold your income a little bit. As opposed to just chucking everything in, or you do, you put your large sum in, you've saved up your ten grand.

44:28 But now You've got maybe five hundred dollars a month of of free capital that you want to put into your savings. So when you have these drawdowns You're actually

44:37 Keep buying. And what happens is it lowers your average cost over time. And you get to new all time highs in your portfolio much before the market does. So for example In the last crypto down cycle in twenty Two.

44:51 In twenty two. All I did was add as much as I could to my crypto. So I was at new all time highs in my portfolio. Well before the market was. because I'd lower my a average entry. That compounds your profits over time.

45:04 And is there something psychological there where If you commit to the habit Of just putting five hundred dollars in regardless of what happens. You remove emotion. You remove a bit of emotion from it. And the emotion is the thing that people struggle with. If you're investing in Things that are more volatile.

45:22 Um You firstly understand that you will see larger drawdowns. When markets go down. Usually they're all correlated, they all go down at the same time, all up at the same time. So you're gonna do that.

45:33 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 agree with that.

45:45 More companies In a bear market. Than in a bull market. Because I agree. Yeah, I I will hundred percent agree with that part. I call it poop.

45:54 Uh Panic. Leads to overselling. Leads to opportunity. Leads to profit.

46:00 So I am on board with that. But that requires a specific level of financial sophistication. No. Even a your Coinbase app can just you can dollar cost average.

46:12 But how many people can dollar cost average down seventy percent? Or fifteen years waiting to see that. It wasn't seventy percent in fifteen years. It was it was seventy percent in one year and then rallied ever since. Every single year after year after year it went up. And to sweep that down. Uh well no, uh after the two thousand eight crash, the Nasdaq also again crashed more than the S P five hundred. And then step back and look at the returns of the Nasdaq versus the five years. I agree. Over the long term it's a great investment, but

46:40 Volatility is hard for the average person who doesn't have the emotional IQ and the financial sophistication to understand. 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.

46:58 We have to help them and risk adjusted returns and time horizon. A two of the single most important thing. And so when I hear I mean, through history Contrarians have made The most money. Um

47:11 And also I think one the other thing 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 make decisions. Because it's in making decisions that your amygdala, the emotional centre of your brain, is gonna do make a bad one. And it's that I think that that self awareness emerges from what you're both saying, which is okay, my brain is going to panic, it's gonna poop or whatever you were talking about there. And I need a system which is panic proof. So you know the the best performing brokerage accounts

47:40 In the United States? A dead people. 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.

47:53 You are a hundred percent in crypto. In terms of your investment portfolio. Yeah. So you must be sat here thinking that Actually when I asked that ten thousand dollar question, what what what would should someone do with ten thousand dollars? You must be thinking that the right answer is to put it into crypto.

48:11 The right answer for me is that to his point. But you you you look I I actually would say But you know This is It's an audience of people and people misinterpret things, yes. The answer is we've been given the gift of the greatest performing asset.

48:24 The world has ever been given. That's not just Bitcoin, that's the the crypto complex. If you're very Careful in investing in like Top projects. You can even have a more a broader d diversified portfolio of that. But you've had Ethereum of

48:37 Bitcoin, Slama, Suey, all of these things. Great. They will definitely outperform. For a period of time. And that's based on macroeconomic factors, which is the debasement of currency, which we've talked about.

48:49 That means all of these assets go up by a certain amount and some outperform it. The only two assets that outform the debasement of currency is the Nasdaq. And crypto. This has been a persistent trend that is observable and measurable. So this is not a speculative asset. What it is, is a Metcalf Law adoption model.

49:07 Bitcoin is the adoption of let's say a money Most collateral layer, like gold. Digital gold we'll call it. While the rest of crypto is the new rails for the internet. So it's a tech technological investment.

49:19 It is growing at twice the speed of the internet in terms of adoption. And has been since the first five million IP addresses for The internet and the first five million wallets. twice the speed of the internet makes it the fastest adoption of any technology the world has ever seen. Aside from AI now, which is now.

49:35 Outpacing it. If if we sit here in twenty years time. Yeah. And you were wrong. Yeah.

49:42 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.

49:52 Not to keep reaffirming yourself. Sure, you end up reaffirming by questioning and then you 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.

50:07 There's there has to be a competitor to this. Because we're now in the game of nation. Nations are acquiring this. The Middle East nations, nations in Asia The US wants to acquire it. So we've got and we've got South American

50:21 Nations. So it's now the game of nations, geopolitics. This is a real thing. But what changes in twenty years time? Well, in twenty years time We're in a very different world. The economic engine is driven by robots and Infinite intelligence.

50:38 We don't know how the economic machine works. We don't even know what the value of money is when we go into that world. So I've talked about this before, the economic singularity, past twenty thirty, the economic model breaks down. So The the Economy generally grows. Bye.

50:55 A measure of Population growth. How many people are in the economy? Um or coming into the economy or being born. Productivity, how much output they create.

51:05 And then debt growth. Is is the other level. What's happened here is The population of the entire Western world plus Japan plus China has been aging. So the rate of change of population growth is shrinking.

51:20 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.

51:34 So we've got this mess and then we've got this debt and we've stopped that whole engine in two thousand eight 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,'cause we're not generating enough. output in the economy. But after twenty thirty.

51:50 This population part changes. We've got. Infinite. Artificial humans. You're talking about AI agents and robotics. Yeah.

52:00 Infinite. So what does that do for that? That the multiplier of that formula. Yeah, population growth plus productivity. Growth plus debt growth.

52:10 It breaks. 'Cause you can have twenty percent GDP growth. Because you've had a huge rise in the number of AI agents creating economic activity and robots. And so what does that mean for for me as a average person? For me it's 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 we

52:29 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. Investing. We were talking about this. earlier is like well does the The AGI, is that gonna be a better investor than any of us? Yes.

52:44 Artificial general intelligence. So that's the next stage where it's smarter than any human that's ever existed. And we're very close to that. So In which case well How do markets work?

52:57 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 has to been to look into the future. Sort of ten years out. And try and probabilistically understand Paths.

53:13 Here I get to like twenty thirty. It's like a Doc curtain. Just to flip that for a second, how could AI actually Positively.

53:23 Influence your hypothesis. 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

53:38 Whatever we want to do with it. value and price. How could AI make it even more Important. In the end, an AI Is a

53:51 It requires two inputs. It requires It's it's Maslov's hierarchy of needs is basically two things, compute and energy. And it needs to be paid. These agents can't you can't build all this agents of billions of agents running around doing things without pay for them.

54:07 And agents will use agents. So they will one agent will get another ten agents to do all this task. They're all gonna have to be paid. And the way of doing that is using pro T Rels.

54:16 Stable coins. Whether it's stablecoins, whatever it is, but that whole crypto rail. Yeah, all of this new infrastructure for the internet, the the blockchain. That's where it works. Often the difference between a company succeeding or failing isn't down to its product or strategy. It's down to the people on the inside. After all, the definition of the word company is group of people. And some of the best companies in the world have been largely built by A players because I'll let you in on a little secret.

54:43 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 in Anywhere else. Talent with the 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. The data supports this too. You'll actually get three times more qualified applicants than if you posted the same role for free. So if you're trying to build something truly great, you can get started by posting a job for free by visiting linkedin.com slash D Oac. That's linked in dot com slash D O A C and you can post your role for free there. Terms and conditions of course apply. Do any of you remember a conversation I had on this podcast with anthropologist Daniel Lieberman? It was one of our most viewed conversations of all time, and the most replayed moment in that conversation was when I talked about this product. These are what I call Barefoot shoes by Vivo Barefoot, which have significantly reduced support, which gives my feet. The opportunity that they desperately want and need to strengthen. If you've learned anything from this podcast, it might be that we're living in a comfort crisis and that at all times in our lives we're making this trade of whether to have more comfort now and therefore more discomfort in the future.

56:01 Or a little bit less comfort now, but to be stronger and healthier in the future. And for me, that is the choice to wear barefoot shoes. So if you want to start strengthening your feet. And your body visit Vivobearfoot.com slash Steven. And you'll get twenty percent off when you use code StevenB20 at checkout. That also comes with a 100 day money back guarantee. What have you got to lose? I wanted to ask you a question. I uh the reason I went and got my phone is because um I had someone contact me that I knew from my childhood. Used to be one of my best friends. Frankly not spoke to them and

56:34 Ten years. Sent me a text message and The text message they sent me is I wanted to get your opinion on this because I I said I ended up saying to myself, I'm not the guy to ask about this. I think you've misunderstood who I am. Hi, mate, I hope you're well. I got myself in a bit of trouble with some debt. About forty thousand pounds.

56:56 So more than a bit of trouble. After s I'm after some advice and direction in terms of maybe passive income. Slash an avenue to try and work my way out of it. Is there some material I should be reading, watching But you might No of. And I asked him, I said, What kind of debt is it? And he said, Personal loans and credit cards, mate. Um and I said like how I need to ascertain how urgent those debts are.

57:19 And if it's causing any any immediate issues. And he said, Well, they're not super urgent, but as a result of the high monthly outgoings, 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 pounds a month in repayments at the moment, and I can't get a consolidation loan. It's a perfect storm starting because I've just started a new job. And my partner is on maternity leave.

57:48 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

57:59 What to do and you're the man to ask for advice. I was like, I'm not sure. And then he messaged me again. within a m an hour and said, Hey, sorry, man, if you're busy, 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 He's kind of in a hard spot because forty thousand pounds in debt. with the interest payments of let's say your interest rate is fifteen to twenty percent, that starts to spiral out of control a little bit. Like if he was under ten thousand pounds in in debt, it's a little bit more manageable, but at forty thousand the interest starts to compound quite quickly. So you know, he you said he had a mortgage, he might even have to

58:37 consider moving, selling selling the home to at least get the interest payments under control or like reduce that amount of debt. It's kinda the one of those situations where you just need to reduce every single expense possible and start really pouring all your money into the highest interest rate debt that he owns. So like, you know, you can rank your interest rates of all your debts from highest to lowest and start start at the very top, right? If it has twenty two percent interest rate, you wanna get rid of that first because That's what's killing them.

59:04 At those levels of debt it's really tough. Because I think a lot of people consider bankruptcy at that point, just to kind of clear That amount of debt. Uh, depending on what his income is. I know I've known Let's say a waitress or server that had fifty thousand dollars in credit card debt and just

59:19 Unable to get over it because the interest payments were as much as their salary. So in those cases unless you can get a personal loan from, let's say, a a family member and, you know, kinda clear that debt, you're in a really tough spot. reduce your expenses as much as possible. Put any extra money you have towards that debt.

59:36 At the highest interest rate possible, the first the highest interest rate thing, and then consider selling some assets if he has assets. Bankruptcy. Bankruptcy. When should someone consider Bankruptcy and what's the trade off? The trade off is seven years. Uh I believe your credit is shot in America.

59:53 So um But I I believe that uh Actually I think if you pull up a chart Someone sent me a tweet the other day of like bankruptcy s lawyer searches in America on Google and it's like been kind of like going up and to the right, which is not a great thing. Uh bankruptcy just you know, there's different types of bankruptcy

1:00:09 But I do know that It usually clears. Some if not all your debt and you basically have to start over but as a result you lose a lot of your privileges, like, for example. No credit score.

1:00:22 I read some stat I'm not you might know if this is true, but I read a stat that People avoid. going into bankruptcy because of the stigma associated with it. the financial performance over ten years.

1:00:39 of people that did go into bankruptcy, those that did typically were better off than those that tried to avoid it. For the next ten years. Um so Yeah. I don't know. That could be anecdotal. I don't know. That's tough because If you have

1:00:53 fifty thousand dollars in debt and you make fifty thousand dollars a year it's yeah it's different. Bankruptcy in some ways Is a good thing'cause it forces you to Do crisis control. It's like your expenditure, what you're doing, what everything becomes hyper focused. Like you you led in the beginning with about You know, how people should

1:01:12 Look at their expense. Yeah. When you're forty thousand dollars in debt, you've not been doing that. Correct. And bankruptcy actually forces you to to actually discipline that for a p extended period of time where it becomes A habit.

1:01:25 So Steven, that's why they outperform in the end,'cause you've created the habit that you talked about Right in the beginning of this discussion. 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 uh that people who fall for bankruptcy typically get their debt wiped out and cleaned. And they um removing unpayable dirt.

1:01:51 Um And it's Bankruptcy can bring immediate mental relief, removing the crushing stress of unpayable debts. People who avoid it often live in chronic financial stress, which spills into their health relationships and work. So in short, those who fake face bankruptcy head on often recover faster and end up in a long a stronger position than those who keep limping along trying to avoid it. And I think uh somebody who's listening who may be in a similar

1:02:15 Or The same situation ultimately wants to know how do I get relief. Bankruptcy is one option, but at the end of the day. There has to be change. And that change is difficult.

1:02:25 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

1:02:33 Severe Extreme And quick sacrifice. What do I mean? Number one, you gotta cut back your expenses.

1:02:41 As fast as possible. In that situation, you have to sell as much stuff as possible. I mean, bankruptcy obviously 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, you have a kid I mean it's also a big reason people end up getting a divorce. So it can also

1:02:59 impact your 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 fifteen dollars 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? You shouldn't be sleeping eight hours a night. You better be getting up, going 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

1:03:31 А міні-т саундж, по реаліті із іффуан. Extreme change. It's not gonna happen without Extreme change. So could he sell his house, do you think, that assuming he's making the fifty K which I think is probably accurate, having a vague understanding of his job and where he lives, et cetera. Sell his house And then move in rent an apartment with that

1:03:50 I mean that would ave alleviate his current problem. Immediately, sure. After some advice direction in terms of maybe passive income. This word passive income. I know nuts. Why does it drive you nuts? It is a

1:04:05 There's like a passive income industrialization complex that is I mean it is literally every millennial's dream is I'm gonna get passive income. Mm-hmm. And it doesn't exist. We talked about property.

1:04:18 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. You're paying fees. And people think there's the there's a magic passive income. Everything comes with effort. There is no such thing as returns without effort.

1:04:36 Thanks. Well even robbery comes with effort, you know. There's there's no way of making money without effort or risking something. And so when you're forty grand in debt, how on earth do you think passive income is going to rescue you? But he's seen that On TikTok and uh on Instagram. Oh, we're we're uh millennials and our In our thirties, and we're now living in

1:04:58 in the in in Lisbon and we've got passive income from my house. It's like it's bullsh. It's social m social media Dream that doesn't really exist. And that's never gonna save him from Forty thousand pound debt. Passive income can exist.

1:05:14 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. Well that's not how it works.

1:05:27 You you take extra money. I'm going to work and I'm I'm I'm saving and investing some money. I take the extra money that I'm wanna put my two investments and I can put it into an asset, an investment that can pay me for owning it without actually working, without going to work to own it. Now let me ask you about your real estate, because I gotta I gotta keep coming back to you, man. Did you did you Manage a real estate yourself.

1:05:52 I've had management agent and a management myself. Managing yourself is probably a a absolute nightmare. That's terrific. And managing it with the manager was also probably a nightmare Just in a different Yeah, and because your yield is massively reduced as well. It is reduced. And then you take the trade off between whether you're going to do short term lets or longer term rentals.

1:06:11 And There's the volatility in the short term lets that You don't know what your yield's gonna be. long term different as well. Then you've got the tenants and how bad the tenants have been and the damage that they've done. Yep. By the end of it you walk away and think really it was just wasn't worth the effort. Well I would disagree with the short part. Yeah, I mean obviously people can do really well out of property. The work in real estate investment.

1:06:34 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.

1:06:51 How do I find good property managers? By going through a lot of bad property managers and learning that process. And 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 I invest in real estate. What kind of properties are we talking about? Single family houses and multifamily apartments. And you have lots of them? Not lots, but I have a decent amount.

1:07:14 How much of your portfolio is in Buying properties and then renting them out to families. Fifty percent. And what have your returns been like over So The way I look at returns, when I look to acquire property. Because I want seven percent

1:07:29 Cash on cash. on the money that I put in. So when I look at return, I don't care about equity. We talked about this kind of a lot that if I buy a house for let's just call it$100,000 and it goes up to$200,000, I don't care. My goal when I acquire real estate is not to sell it and flip it for a profit. My goal is to grow the cash flow that I'm generating month after month after month. From rental payments. It's really difficult though, because if I

1:07:52 Someone that hasn't done a lot of property rentals and stuff like that. The chance that I'm gonna fuck up. Absolutely.

1:08:01 And I'm one of those people that probably screwed up More than More than I could count. It does cost me a lot of sleep, cost me a lot of stress. So you have to kind of be an expert. Uh you don't have to be an expert but you gotta be willing to give.

1:08:15 In the beginning. Right, for the first number of years, it was extremely painful. But today, when I go and I 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 in 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 him the goals, and now I oversee the manager

1:08:39 Because I have a team now that is It's a business. It's a business. It's like starting a 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

1:08:56 Leading the meetings, I'm coming up with ideas, I'm leading the vision. With this, I acquire, I hand over the keys, I've already set the framework, and now you are doing the execution. That's some natural business. With my company there's hundreds of people in the UK. But you're not the one that's starting that startup. I was the founder. And 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 a startup, though. How big does a startup have to be in order to be able to displace you as a CEO, to pay for the staff, to make the money, and then to hire a new CEO and to lead it the way it depends. My friends 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's set up a team of four people, they do personal branding on LinkedIn for people.

1:09:47 And they're running it back for him in the UK. He's up in bloody The mountain with my girlfriend right now. That's beautiful. But how many startups Don't do that there. No, but I'm just going to start a business. I was like, oh that's just a it's just a business. It is a business. Steep learning curve to develop expertise. And then you put systems in place to make it sustainable. But it uh it the systems are kind of preestablished.

1:10:09 We're You need to rent it out. You need a good manager is gonna find a good tenant. They gotta pay the bills. And it's it's not like A start up where I have to innovate and create an idea. I don't have to go out and f build the blueprint. I am going out.

1:10:22 I'm acquiring an asset that people already need that's already existing. Mm-hmm. And then I'm going to But used to it. By having somebody live there or use it.

1:10:32 And then there's a team just maintaining it. So what do you think then in terms of passive income and But specifically let's do this point of housing. Do you advise people to buy rental properties and then Well you just heard Jess read of how much work it would take.

1:10:50 So I I generally don't advise people to 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. So If you were just trying to get started and actually make some money, I just think the stock market is the most liquid and easiest place to get started.

1:11:06 I personally rent. And I I plan on renting and just instead investing the difference of what my mortgage payment might be in my my rent. I think in on the coasts like San Francisco, New York, I think that Miami, that might actually be the more reasonable thing to do. I was reading the a New York Times article that just came out yesterday and it said more millionaires Than ever.

1:11:27 are renting in the United States and that it's tripled between two thousand and nineteen and two thousand twenty three. So in Just a couple of years. Millionaires are choosing to rent more. Then Ever before.

1:11:40 What's going on? 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 in, say, San Francisco, Seattle, New York, Los Angeles. In the New York Times article, it says they're choosing flexibility and liquidity over ownership. Um and they don't want to be bothered with the inconveniences of homeownership, which includes paying a real estate

1:12:04 tax and insurance, especially in markets like Florida and California, where we're seeing a lot of natural catastrophes. peculiar market'cause there's this high Real estate tax in owning real estate. So All the time your returns are being reduced.

1:12:19 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

1:12:34 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'cause they own the property outright, so you get cheaper rates. So it's to do with price.

1:12:51 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

1:13:06 It's understanding what the opportunities are. I mean, there's a lot of flexibility with renting. I mean I Finally bought a house in twenty twenty five. I've been renting before this. So you bought your first property to live in with your family this year? From yes, meet eleven was twenty twenty five.

1:13:20 Why Didn't you do it sooner? Well Because when I was renting I could take the capital and

1:13:27 By other rental properties, by other investments. So it was uh it made more sense for me to put that money to work somewhere else. So is buying a property As a w means to generate wealth, a terrible idea. As a means to generate to buy it for yourself to live in or to Well but you know, when you 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. That's still what the vast majority of people are doing, and I know that because I look at

1:13:57 I look at w my friends that um don't have the same financial advice that I have from like my brother and my financial advisors, my accountants. And the first thing they do when they get a bit of money. Is they're going to 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, Ron?

1:14:15 Yes and no. No I think These days with how the economy screen set up, don't forget when I was Twenty four, twenty five.

1:14:25 I was working in an investment bank, I wasn't the highest paid guy there, I was a twenty five 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.

1:14:37 Twelve times. So Rent makes much more sense now, and you might as well invest. Buy all the stuff that you think will Drive returns. But a house, a primary house, is not an investment, never will be.

1:14:49 Because when she bought You don't sell it. You don't realise the equity. Maybe your kids do. You've got kids. So

1:14:56 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, Well, 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.

1:15:18 If you go out. Today. I buy a half a million dollar house. I'll put twenty percent down. So I put a hundred thousand dollars down.

1:15:26 A finance four hundred thousand dollars. I get a six and a half percent mortgage. Thirty years. A mortgage payment is two thousand five hundred dollars a month. Now what am I doing? I'm not renting, I'm not giving money to my landlord. I'm

1:15:39 Building equity in my property. But banks also understand the same game. They front load your mortgage. What does that mean? When I pay two thousand five hundred dollars. It's not

1:15:50 twelve fifty going to principal to build equity in my house and twelve fifty for interest. It's Principle being buying your house back for yourself. It's not half and half. It's almost all interest.

1:16:02 In fact, If You go on and buy the half a million dollar house today at a six and a half percent mortgage. twenty percent down. For the first twenty years of that mortgage.

1:16:14 More than half. of that payment is gonna go directly to your banker's pocket with interest. It's not until year twenty one. But half the of your two thousand five hundred dollar payment is gonna go towards equity In your house. So it's

1:16:28 All interest Zero equity. And then slowly it moves like this. It takes twenty years to get there. And then what happens along the way for a lot of people for Um I not everybody, for a lot of people.

1:16:39 Is along the way Interest rates go down, I need some extra money, so what do I do? I refine it. As soon as I refinance That amortization

1:16:50 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.

1:16:59 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 like you said, don't treat your house like an investment, treat it like an expense, by Buy it because you can afford it. Because you want it. Because you're ready.

1:17:12 But not because you're gonna build wealth. Which I agree with both their takes. I think that um You know, a home is an asset that you can't sell very easily, so that's also a good thing. Like if you have a hundred thousand dollars to put into stocks or a hundred thousand dollars 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 two percent you're selling

1:17:32 Probably better to buy a house, right? You can't really sell your house in The type of Two swipes. But in terms of an investment, it's like Usually it's much more than an investment to people. They they buy them for psychological reason or emotional reasons or the s the sense of security.

1:17:47 So I'd just say like if you're interested in buying a house And you ha you can afford it, then that that's great. Yeah. And let's let's actually go with the best case scenario. So like I think you were mentioning this. I buy a house for let's call it half a million dollars. It goes up in value to a million dollars. Oh my God, I'm rich, right? Well it's invisible, but but

1:18:05 Yeah, I could take the cash I refinance, but now I had 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, I'd have to say. So insurance is one of these really hidden costs that you don't realise.

1:18:33 Um Particularly if like 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.

1:18:44 So just but you're thinking by Bitcoin, right? Go all in. You're one coin away from everything. Zero cost. Click that. But none no one at this table would adopt buying a house as a wealth creation strategy. No. You would all do many things before then. Yeah. Correct.

1:19:05 Would that be almost at the bottom of the list of things? It's part of his age cohort, who are you talking about? If you're kind of like thirty eight years old, you've got kid You kinda cleared up some of your Student that

1:19:17 Payments you're going to do. Uh okay, that security thing is fine, but it's not investment. Um anybody younger no. Yeah, if you're just talking pure dollar investment returns, I Probably would rank it lower on the list for sure.

1:19:30 Yeah. Is there any such thing as good debt? 'Cause I remember at the start you said clear up your debts. Is there is there a good debt? People make a lot of money on debt. But people lose a lot of money on that.

1:19:41 I just try to stay away from debt altogether. Yeah. I mean I think Th yeah, there is such a thing as like good debt if it's working for you and you're able to to leverage that money to make more money, but a lot of people you know, with leverage gets 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 the leverage? Leverage is

1:20:00 So for example, in Jazz Brit's example, you put twenty percent down on a house and you take an eighty percent The rest of it as a mortgage, that's technically leveraging your money because you're taking the hundred K that you have and now you're affording an asset that's five hundred worth five hundred thousand dollars. If your home goes from five hundred thousand dollars to A million dollars. You have a five hundred thousand dollar gain.

1:20:21 But you only put in a hundred thousand dollars. 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 known as decentralized finance. There's a whole bunch of companies that do this, where you can borrow against your assets.

1:20:47 You can even do it against digital arts. I mean I'm a huge digital art collector. Much like the art market, you can actually go and borrow Against the value of the art, maybe forty, fifty percent against the value. If I is if For someone that's like 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 I don't like it.

1:21:10 Okay. I understand why. But the issue is you've got an asset that does this. It's very volatile. And you're borrowing a certain amount against it.

1:21:20 And you don't know whether it falls below that that value and you get liquidated, then you've lost all of your bitcoin. The whole game is if you're in a secular bull market It's just don't lose control of your tokens. Own own your Bitcoin all the way through. And you have a risk of screening that up.

1:21:33 For the extra five percent income. or ten percent income. In in Ethereum, very different world because you're staking So you're getting naturally rewarded in the network. What does that mean, staking? In in Bitcoin you actually get miners basically get rewarded for solving the

1:21:51 the algorithm the computation. In Ethereum. And Solana And Suey and the other big blockchains, you basically get rewarded for securing the network. So you stake your tokens

1:22:04 Two secure the networkers the more people then have this n network connectivity between them and you get paid for that. So in Ethereum right now it's probably four percent yield. Okay, so just uh I'll try and summarise this. I can But there's no risk in that.

1:22:18 Leverage in that. I so if I choose to buy Ethereum, which is a form of cryptocurrency. I can take my hundred thousand dollars of of Ethereum. And on my phone in a couple of clicks. I can move it.

1:22:30 I can press the button and move it. And when 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 four percent.

1:22:45 Of it. As a payment. Every month. Well, not four percent a month, but monthly payments. Yeah. So you can you can get interest on your crypto.

1:22:58 Yes. And Then if you're a little more sophisticated, a little bit racier There were then. yield enhancements, and we talked about high yield bank accounts, there's high yield versions in crypto, and you can get

1:23:09 Up to twenty, thirty percent, 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 it anymore, but I t I had a thousand Ethereum and I and I put it um I Or a thousand dollars. I actually I switched it into Bitcoin a little while ago, it's a couple of months back, but

1:23:29 Probably bad timing. This is why Melanie I know Fuck Um. But yeah, this people are emotional. Um I had a loan against it, so I borrowed a couple of million dollars. at at one point to buy some more other crypto assets against my Ethereum. And it was s surprising to me that I didn't have to call anybody. I didn't have to ring a bank. I could just

1:23:52 click a couple of simple buttons on my phone, and this a thousand Ethereum I had, I managed to get a couple of million dollars paid straight away in cash straight to me. But I chose not to do that because the markets are super volatile. But but it is incredibly efficient, effective way of people If you were to let's say you had a hundred thousand dollars of bitcoin, one bitcoin To borrow. Twenty

1:24:12 Thousand dollars against it. Yeah. That's not very risky. 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. It's like lending to the US government, i.e. lending to the to the government of Ethereum, the Ethereum network.

1:24:29 That's pretty decent way of of of enhancing It's hard to do that with stocks. It's hard to get a loan against your stocks if you have Five thousand dollars of stocks. Isn't it? Yeah.

1:24:42 Typic I mean, when I was when I was younger and I had I bought ten thousand dollars of Facebook stock when I finally got some money I I couldn't think 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 Europe that my private investment bank were like, Do you want fifty percent of your Bluchip stocks is 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 four percent.

1:25:08 virtually risk free, but there are is are always going to be risks with you know the price of Ethereum, right? So like you're getting paid in Ethereum. And so if Ethereum is the key thing, right? Your Your risk is the is the currency you're staking in. So if Ethereum goes down fifty percent, then your fiat value of Ethereum uh of sorry, of your stake could go down versus you know if you're getting a four percent high yield savings account, it's backed by the FDIC, it's virtually this. And there there is another risk as well as Ethereum is actually annual staking. Oh I see. being done via a few businesses like LIDA, which are

1:25:44 Turn it into short term staking. And so there's a duration mismatch. Guys. Some elements of risk in the Go ahead, Sark. I was gonna say when do you get paid?

1:25:54 The with the Ethereum state you get paid every month or do you get paid on The year. I was getting paid monthly. Month, okay. What about pensions? Retirement. So in the UK we call it a pension. I think you guys a four hundred one K one K. But o across the world it's pretty much the same. Across the Western world anyway.

1:26:13 If I'm twenty five or thirty or whatever, should I should I be paying in to my pension as a way to generate To make myself wealthy someday. Is that a smart idea? I don't have a four hundred one K. I don't have an IRE.

1:26:26 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 now or later. The money will then sit there. Grow. And

1:26:42 I don't pay taxes until I pull my money out. But there's a couple problems. Problem number one. Is I have very little control over my money can be invested.

1:26:53 Maybe this will change uh the Trump administration has passed a new executive order on 401ks to change what you could potentially invest in 401ks, but that hasn't happened yet. Yeah, very limited options. They're primarily just mutual funds. And many of them have a fee. I think Nerdwallet said 92% of Americans don't know what the 401k fees are. So if you don't have know what your 401k fee is, this is your uh notice to go check what the expense ratio is, and you should know that. So you're very limited options, you're gonna have to pay a fee, which means somebody on Wall Street is gonna be paid

1:27:23 Forever until you retire. Number two, I can't touch this money until I'm sixty years old, fifty nine and a half. If I do have to pay a ten percent penalty. And number three, the whole discussion is you're doing this for tax benefits. But kinda 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

1:27:43 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 three percent match. So if you invest, let's just say a three thousand dollars in tier four one K and And they match it a hundred percent.

1:27:58 They might also just throw three thousand dollars into your four oh one K. But you have the same risks and concerns. Um along the way. I don't think most people even know what a pension is, to be honest. 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 was saying in the UK

1:28:17 I've paid into my pension my whole life. Um so I deserve it and it'll be the 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.

1:28:36 Sutom of social security. In the United States. Because a as an employee in the United States So Six point two.

1:28:47 percent of your income. So you you have a lot of taxes. You're gonna have to pay income taxes on what you make. And then you have social security tax. So on your income You're gonna pay six point two percent of that separately from your income tax, but six point two percent into the social security fund. And then your employer is also gonna pay six point two percent into this fund. Yeah. This money in theory is supposed to grow and 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. I mean you can choose when you pull it out, but

1:29:18 You don't get to do anything with it. The government's gonna be in charge. Yeah. This is what is running out of money in the United States today. Why? Because people that are in their twenties, thirties, and forties 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.

1:29:37 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. I 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 Th there is some truth to that.

1:29:55 The part In in the United States at least. That You are guaranteed what what the what the wording is that you're gonna get the social security until you pass away. They never tell you and does there's no asterisk about this either, is how much the value of the check will be.

1:30:12 So here's what's going on. People are paying into the social security fund thinking that they're gonna be able to fund their retirement. Every financial advisor historically has said that retirement is a three-legged stool. You have your four oh one K, your your personal retirement. You have Your own personal savings and then you have social security.

1:30:32 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 misconstrue that because they say, Oh, that means the government's no longer gonna pay social security. That's not true.

1:30:57 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 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

1:31:12 Based off what the United States government says, assuming that they don't default, you're going to get the social security check. It's just not gonna 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. They think they can access it whenever they like. Um The government will cover them when it runs out.

1:31:34 And I don't need to think about it until I'm older, and lastly my pension pot is tax free. So the big Shift that happened. Around twenty years ago was a shift from what's known as defined

1:31:45 benefit. To divine contribution. So to find benefit. Used to work for Ford. Or an American Airlines or whatever company.

1:31:56 You retired, you got sixty percent of your final year salary. Forever. Mm. That was bankrupting all of these pension plans. Because people were living longer, all the other stuff.

1:32:07 And so they kind of changed it to define contribution. Basically you get out what you put in. Plus the investment returns. But This phase. 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

1:32:20 bonds or equities, you like bonds and it didn't grow as much, or whatever it was. And in the end. you're just not sure that your the average four oh one K in the United States for a baby boomer, I believe is about a hundred thousand dollars. What age?

1:32:36 Baby boomer, like sixty five. Yeah. I think it's right now around two hundred thousand. Two hundred is not enough to retire. That's ten years of twenty grand a year. So there's so little money in the US pension system, particularly. Um that There is no hope for these people.

1:32:53 And 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.

1:33:04 And everyone's gonna have to change within this to to figure this stuff out. I think you said it earlier today. You're talking about a Ponzi scheme. Here you have one. But nobody wants to say that. Everyone is paying in.

1:33:17 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 the remember the remember we talked about at 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.

1:33:35 So and this keeps going in perpetuity because we're having Baby, so that's workers in twenty years time. The babies now workers in twenty years' time. We can forward project this It doesn't stop. So how the hell are we gonna pay for this

1:33:47 massive amount of baby boomers, which is In the United States it's seventy eight million of them. a largest cohort in history at the time. We can't pay for them. The proposals are

1:33:58 To tax your Bitcoin. the value of a bitcoin or tax the value of assets. Or tax just Western income. But the UK's got the same. There's whole wealth that everybody's got the same problem. Everybody. What do you think, Humphrey, in terms of the retirement crisis? I think that so I have a different take on well, I think first of all, I think Jess Breet and Row you guys were talking and you were talking about

1:34:18 Social security, right? Yeah. But I I I have a different take on retirement altogether, I think. Uh I think four one K's are good for the average person because it's a forced savings mechanism. lot of people wouldn't contribute to a retirement account unless they The employer offered it, right? And so The the whole match thing is a great thing for behavioral

1:34:37 Behavioral finance, it's like Okay, if I if I do this, I get some free money from my employer and at least I'm saving some money. Instead of nothing. And working for that money is completely free. A four one K for anyone that doesn't understand is you agree to invest in a investment pot alongside your employer. It is more like an individual retirement account.

1:34:58 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. Uh, which means that you pay taxes on it. later in life. And what's the difference between that and a social security A social security is a government program where you are

1:35:18 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 I still think that there are plenty of ways to retire and Retire with some sort of freedom, retire early. Have you heard of Coast Fire before? No.

1:35:38 Coastfire is another newer thing that's uh 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.

1:35:58 the investment returns if you're investing in the SP five hundred will get you to a full retirement by the time you're able to retire at sixty five. So it doesn't mean you retire early completely. But it means that if you get to your coast fire number, which is what it's called, maybe you have more freedom of choice in what you're working on. So 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 bit more suited to your lifestyle. You're still working. But you're not working too save for retirement anymore because you hit that coast fire number. So For example, at the age of thirty five I think the coastfire number is like 150,000 dollars.

1:36:33 If you can hit 150K by thirty five, if you have thirty years of investment returns at eight percent, you'll have one point five million dollars 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? They're not going to retire in that they're not gonna be kicking up their feet on the sand beaches of Aruba. But

1:36:54 You're still gonna be doing something. And I 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 idea is you just don't have to work For maybe the job you hate or something like that. So if I hit the hundred and fifty thousand dollars in savings and I put it into the S P five hundred and get the eight percent return. Eight percent return. By the age of sixty five, I'll have one point something million. What's that worth then? That's true. There that's it that is another part of the equation is With inflation, what is it gonna be worth? And is this what you're trying to do? Because I remember an hour ago you said

1:37:26 I'm just trying to retire earlier words to that effect. Yeah, I mean I'd like to be Coastfire. And uh Coastfire is, you know, however you would like to define it, but You know I already think I 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

1:37:40 I I think that my retirement nest egg will eventually grow to a point where By the time I hit sixty, sixty five, I'll be able to Coast. Did you Create a number, do the math on what you need to get to. Yes.

1:37:54 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. Okay. Yeah. Yeah. A lot of math involved, but you kinda have to do it.

1:38:09 Retirement crisis. Hm, that's concerning. That's concerning. So your approach is to do the coast fire thing. My approach is

1:38:20 Let's stay disciplined, consistent with our savings and investing, and actually get to a place where retirement might be possible. I l I love that idea. And that's the same as when I started with the manifesting your f your destiny. Sure. You say, Well, I need this goal, how do I do it? We do this and grow up our investments, right? It's it's brilliant to do that. And then you can take more risk. Sure. If you isolate that and say, Well, any capital I build now I can do whatever I want. Um

1:38:45 That was the same idea that I had with the home. It's exact 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

1:39:01 It's all risky than imagine, but yeah. And then you have extra dollars to do whatever you want with, right? So I also love that you've been disciplined. Unlike What You like and what you know. Yeah. And uh because you said I think ninety percent are in

1:39:15 Index funds and ETFs. That's what I would recommend for people. Oh sorry, for me personally I'm like fifty, sixty percent index funds. But still that's that's pretty high and and not having that, you know, shiny object syndrome or whatever you want to call it. I mean that that that's not accusing me of having shiny objects. I was just trying to ag everybody here. Yeah, yeah. But but whatever it might be, um Uh To be disciplined. I I think that's uh such a valuable trait.

1:39:39 And you know, you talked about the scarcity mindset. I think that's also a discipline mindset that you have that so I I would I would refraend that. I think you've done an excellent job. I think personal finance is personal. Alright guys, I think I got Steve, the guest is here. Ready? I'm in. Oh my god, Steve! What? We did! This is uh the Boncharge Face Mask. It's uh good for blemishes, wrinkles, uh clears up the skin, it's red light.

1:40:03 Have you not used it before? We've tried this before. It's really really good. Shines red light on your face, which helps increase and boost collagen production. Actually found it out because of the missus, seeing her wearing it, she terrified me a couple of nights in a row. Um I 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 uh I've been using it every day for about a year and a half now. While Steve's great. Yes. And now Bon Charge ships worldwide with easy returns and a year long warranty on all of their products, so visit boncharge.com slash diary for 25% off on any product site wide. But you have to order through that link. That's Boncharge.com slash diary with code diary.

1:40:45 Make sure you keep what I'm about to say to yourself. I'm inviting ten thousand of you to come even deeper into the diary of a CEO. Welcome to my inner circle. This is a brand new private community that I'm launching towards. We have so many incredible things that happen that you are never shown. We have the briefs that are on my iPad 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.

1:41:22 But remember for now we're only inviting the first ten thousand people that joined before it closes. So if you want to join our private closed community, head to the link in the description below or go to DOAC Circle dot com. I will speak to you there. On that point of discipline, Humphrey. I have seen a 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, or to save uh 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

1:41:53 Did you stop spending money on and what's your framework there? So I looked at I took a look at my expenses from twenty fourteen and onward and just kinda like s saw the differences in how my spending habits have changed. The first thing I stopped spending money on are Airbnbs. So Airbnbs used to be a great value. They used to be a unique experience, but these days they're all kind of commercialized. And I feel like with the cleaning fees and all these fees. You end up paying more for less convenience as a hotel? So that's number one. I stopped buying food in bulk.

1:42:22 I know that sounds kind of Random, but Uh I'm a single guy. Sometimes I I get two gallons of milk and I can't finish it. Right. So I'm pouring milk down the drain or I'm buying Forty eight eggs at a time from Costco and I'm just like, dude, like

1:42:34 I I c I mean I like the gym, but I can't eat forty eight eggs in like two weeks or whatever whatever that that time is, right? So that's w that's another and then um 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 fifteen thousand miles a year, I drive three thousand miles a year now.

1:42:55 And just by calling my car insurance, I was able to save like forty bucks a month. Just because my driving requirements are much lower. So Explain that. Yeah, so you know a car uh car insurance rates are dependent on how much you drive. And if you drive less and you 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. They're not willing to compare rates'cause it

1:43:18 painful. You don't really want to do it. It takes time. Uh, 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 kinda commoditized. So it's like You're gonna get coverage. From

1:43:34 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, uh I've done that as well. Yeah, and there was interestingly, I don't think people know this, but As I sat there in the The c

1:43:49 Insurance. Call center. There's this bar on the screen. That I can move in either direction. To basically give you a discount.

1:43:57 Based on how the sale is going. So if I really think I'm gonna lose your sale. All I do is slide the bar to the left and it brings your your upfront payment down and your monthly payment down. But If I thought uh the sale was easy. I could Bring the bar up in terms of the price like what you earned.

1:44:15 Give you breakdown insurance? And all these other upsells. And so I don't think people realise 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 you t you say you're gonna quit. And then suddenly they give you some great offer where they're gonna give you fifty percent off. Yeah.

1:44:32 Yeah. And the other way of approaching it is I never really sold for costs. A software income. Okay. And that is saying.

1:44:42 That is saying okay, you're Lifestyle as long as not being ridiculous, right? It's like Do I really want to not Go to a mi it go to a restaurant or

1:44:52 Understand. Yeah. Because that's Penalizing yourself. And that's not a nice thing to do always, right? It takes a lot of discipline and discipline is hard. But if you've got An equal

1:45:04 An opposite amount of discipline. In solving for income. You actually move your lifestyle. Further ahead. Yeah, the rise of I mean I do

1:45:13 three, four jobs, you do three, four we all do lots of different things now. You do as well. We all got different income streams. You're almost better off to spend your energy thinking about how do I increase my income stream. At a certain point, we agree, like Stephen's friend who sent him the message, he needs to Desperately rescue his cost base.

1:45:33 Um 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 solving for expenses, which is like everyone can cut back a little bit.

1:45:47 But everyone can't Just like say I'm gonna make two X more tomorrow, that's kind of a harder problem. And I think if you want Well do you just trade off your time? 'Cause you I mean, you can if you're in a lower earning job, you can drive an Uber and earn extra money or you can do a bar job. It's like multiple revenue streams is now the way the world works because the cost of living has become so expensive.

1:46:08 that everyone's having to do multiple jobs, but with technology we can actually do it much easier. I to Humphrey's point as well, though, you can get a thirty percent pay rise today. Just by maybe bringing a pack lunch or Sure. Walking somewhere or whatever else. And it's probably harder to get a thirty percent Pay rise. Not sure about the I think it depends on which stage of life you're in. Because now if you just stick with the lunch ex

1:46:31 If you're on the lunch example Pack and lunch cost time. And Depending on how much your time is worth, that one hour of time could be twenty dollars? It could be two thousand dollars. And I think that's the that key difference. And and I think

1:46:46 There's Definitely times and places you gotta cut. I uh fully agree with you. But I think At a certain stage, look, I'm st I have still

1:46:55 Chip. Uh but I have Uh on when it comes to time. So our office

1:47:04 is in downtown Detroit. And my commute there Forty five minutes. And but I don't drive.

1:47:12 What I do is I get driven there. Um and the reason why I do that is because I can sit in the back seat and work. And one of the things that W we publish Daily financial news. So Sometimes something will be happening in the with our market briefs where oh oh this is important. And if I'm driving, I don't want to be texting and driving. So instead I pay for

1:47:32 An Uber or whatever, and I go that forty-five minutes there, forty five 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. So I I think it depends on where you are in the stage of life, because I wouldn't do that if this was Way before.

1:47:51 What is the biggest m What for this is an open question to everybody. W what do you think the biggest money mistake the average person makes is They spend all their money. The the two S's. You spend all of your money. And if you get past that, then you're saving all of your money. Both of them are mistakes. Both of them are mistakes.

1:48:06 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.

1:48:13 I've got a friend who's steadily compounded his his bank balance over time. And I remember asking him, So how much money do you now have in your bank account? He's taken a really slow approach over time. He runs his business as a freelancer. And he goes, I think probably about a million dollars. And I was like sat in your bank account. He was like, Yeah. And because he's scared. But he's scared he doesn't know what to do with it, so he thinks just putting in the bank account is the safest possible thing to do. Well, it's a guaranteed loss.

1:48:40 Uh i if your if your bank account the average bank account at the United States today, not the high yield accounts, but the average account is paying Zero point one percent, zero point five percent, I don't know, something something super low. If we just say inflation is three percent Um

1:48:56 The cost you have to spend out of the bank account to buy something is going up by three percent. And that's the reported numbers, not the the real inflation that many people feel. Well that means there's a net loss of Two and a half percent on that. So if I have a million dollars there. That's twenty five thousand dollars of lost buying power. Well, do you think companies'cause a lot of my

1:49:15 Audience are companies, whether they're you know one person companies or big companies, do you think they should be putting their money That they have sat in their account into Bitcoin.

1:49:25 In essence. If you're Microsoft. They've huge cash piles. What does Microsoft buy? With that cash.

1:49:35 Really they buy. Some investment stuff, but it's generally cash. Peace. And then they're made by another company. Or they may buy real estate.

1:49:45 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 debasement of currency and they get more expensive every year. And they're holding a cash return of Three and a half percent.

1:49:59 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. But what about small companies? What if there's people listening now that have companies where they've got a million, two million in the in the bank They probably don't need it all for cash flow reasons.

1:50:18 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'cause Yeah, the the fear th you know, all of that stuff meant. I was super risk averse. And I was an investment banker. I was investing, but I didn't so I made money from being in that industry.

1:50:41 So I'm I'm just gonna s hoard cash. I did worse for doing that. And then once we saw the banking system fail, I'm like, I'm not doing this anymore. I'm going to take control of my own 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 gonna make your cash.

1:51:01 growth for you and your shareholders. Um and that's important. But 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. Yeah. Do you put some of the

1:51:17 the money into crypto. It depends. A lot of it gets reinvested for growth within the company. So you're making the decision is Does your how's your capital gonna grow? Is it gonna grow grow your share price via reinvesting in the business? Uh Is it better to use

1:51:33 the savings pool and 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 A cash generating regular non growth style business. Then you're gonna be generating cash.

1:51:49 You might have taken some divid dividends out and book bought a house and done all 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. What is it that rich people know that The average person doesn't know.

1:52:06 As it relates to money. Because there are money games that you discover when you get to see behind the curtain. What is it that they're doing with their money that the average person isn't aware of or isn't able to do with their money? Rich people are typically more disciplined. They're they're typically checking their bank account every day.

1:52:24 Right. They they're doing little things that compound into huge results at the end of ten or twenty years and they're they're thinking in decades, not just What am I gonna do? This week. Right. They're they're choosing investment.

1:52:37 choices for themselves in ten years, twenty years from now. Instead of choosing sports betting on on the football match for a thousand pounds, you know, uh that night. Because they know that their thousand pounds working for them today will be worth

1:52:52 Yeah. Ten thousand, twenty thousand in ten or twenty years. So it's more just like a long term mindset versus a short term mindset. Delaying gratification. Delaying gratification, yes. How the system is rigged. In the favor of rich people. Is it's extraordinary.

1:53:09 Because It's the it's the Charlie Munger quote of Show me The incentive and I'll show you the outcome. Well

1:53:19 People get once you get It's not the hundred thousand, but it's like People who've got ten million in their bank account. They get loans that are called non recourse loans. It's an extraordinary thing.

1:53:31 Because unlike your friend, they don't have to pay it back. So a non recourse loan means you're not legally liable for the loan in the end? Now there'll be some provisions on 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 offers? Because they pay fees. 'Cause they pay fees to the investment banks and the investment banks desperately want these people'cause they ha have a lot of financial activity and so they incentivise them. None of us get a look in at all of that. It's the same thing that I talked about with the hedge fund.

1:54:03 industry in the beginning. It's like they were incentivised by a fees to get information that was better than everybody else. And I think part of that is Is the ability That all we're trying to say to people

1:54:17 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 a coinbase thing or whatever It costs you nothing to run. And you're outperforming a v venture capital investor. This

1:54:29 Yeah, simple things like buying an index fund. You're not paying the Wall Street complex thousands of dollars for active management. There's ways of hacking this. And it's not that expensive to do. J before we move to just break, one of the things that I think you've kind of both alluded to a little bit and you said earlier on was about how

1:54:46 Relationships. Make money. And because what I was watching when I was sat in that apartment with this billionaire. Is his Friends and his contacts who had done business with him in the past.

1:54:56 We're 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 if there is a strategy to to build wealth, it goes back to what Rao said at the start. Being around people and having good relationships is actually, I think, really, really unappreciated. I've got a friend.

1:55:18 I can name my friend. Um called Harry Stubbings. He runs a podcast called Twenty V C. And on that podcast he sits with Extremely rich people.

1:55:27 The podcast, Harry's podcast, isn't as big as Joe Rogan's. But because Harry has had to our 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 twenties. I mean, I think he's raised, if I'm not m m mistaken, seven hundred and fifty million.

1:55:48 Just from the relationships. And he said to me, he said, You know, the biggest value leverage I've got in the last Five, ten years. Isn't like the views. People have more views than him. It's he ha he knows everyone rich. And and I think we underestimate that when we think about wealth creation,'cause 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?

1:56:09 There's a great guy called Divesh Makan who runs a firm, an investment firm in 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

1:56:22 He was hired into the Internet. Banking team. Uh in two thousand. He turned up the office.

1:56:31 But A month later, the entire thing was gone. Everybody was fired. And he was too young, he was kinda too junior to bother fired. They s fired all the senior bankers. And um Mm.

1:56:42 He thought well what might 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 happen to make friends with, with Mark Zuckerberg, Reed Hastings, Reed Hoffman All these people.

1:56:59 Their wealth advisor. at Goldman, moved to all to Morgan Stanley and then built his own firm Iconic. And Iconic is massive, 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 Yeah, th they'd gone through the big bust. And he made his entire life on that network.

1:57:18 Genius. Probably at that cafe where I spent all my Bitcoin. The one with the gold door. You were there at the same time sending with your mom 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.

1:57:43 And we Hope that will cross paths again. But I think I even think I'm thinking about it, obviously I do this podcast where I meet so many 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.

1:58:00 And uh not only would that be good for my mental health and m more friends, less like all these kinds of sort of social psychological things. But I'm in business terms, there's gonna be opportunities where it's six years from now where I need your advice. The the key to networks Is it's what you put into the network, not what you take out. Yeah. So the people who have the best network I've ever seen are always the people say, How can I help you? Yeah.

1:58:24 Hey, I've got something for you. You should meet so and so. Oh yeah, yeah, never. Hey, listen, what can you do for me? Yeah. That comes back, karma flow back always, give as much into the network as possible. And the network gives back. I 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.

1:58:44 Oh I know Insert name of this person who's the very top in investing in Europe. I'll put you in a WhatsApp group with him, put me in a WhatsApp group with this guy, sent a voice note, 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 who put me in the WhatsApp group, he goes, And this guy's also the best at what he does ever. Putting you two together, good luck. And immediately I thought, Fucking 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 missed her and like, listen, if there's anything I can do for you But that's the karma. I really believe in networks. I think it's the most important thing. Your community, your network is everything.

1:59:25 And The absolute answer is you have to keep putting into the network. 'Cause if you try and extr um extract from the network, it collapses. Yeah.'Cause then you're just that guy who's making the phone call after ten years saying

1:59:39 Stephen can I Get some money from you. Because I've run out of cash. The last thing I wanted to talk about is the UK and the US. And geographies generally and how much that plays a role, because right now there's lots of political, social conversations about the UK. People are a little bit doomer about the UK. Some people are optimistic about the US, some aren't.

2:00:00 How much do you think about geographies uh when you're thinking about your wealth creation, your finance strategy? Does it play a role? So I was fortunate enough to live in London. Or A little bit over a month or so.

2:00:13 And I did a number of podcasts out there. And well, 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. Comes from the United States. The majority of their sponsors

2:00:30 Come from the United States. It's not from the UK. I thought that was very interesting. Because it's a it's a huge market. But what they were saying is

2:00:39 People who are really looking to grow in the United Kingdom A lot of them at least. Just from what I heard. From the United States because the dollar figures are much higher.

2:00:50 Now I don't have a lot of global experience outside of that. But I do think that the United States is more friendly. for people that are interested in Well

2:01:01 Growth. Wealth accumulation. Uh maybe not the best there's tax free countries out there, but in terms of for somebody who is uh more entrepreneurial in that sense, I think you have a lot of opportunities here that you don't have other places. What do you think, R I'm a huge believer in

2:01:17 uh 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 living is even probably half that of the UK and a third of that what it is in the US or the Cayman Islands. Three hundred days of sunshine.

2:01:38 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.

2:01:50 In a globalized world now where we can work online. It's actually doable. So we've seeing 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 of life, relatively safe.

2:02:05 And if you're in a Business where you can work online. You 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.

2:02:18 In such high density as the US. Capital and intellectual capital. Asia has it, India has it, you know, it's all around, but they're all missing different forms of it. So it's using that. For your end goals. I

2:02:33 Can't do it. Because The UK His attitude now has become We just can't have nice things.

2:02:43 They don't want to. If I speak to my friends They don't want to invest. They they just want to have the bigger house and then and the next car on lease. People are institutionally unhappy in the UK right now. And that has been for a while.

2:02:57 And so we don't have A culture of entrepreneurialism left. been stamped out. Europe too. So it's not just the UK. Everywhere in Europe the same thing has happened. People just don't believe they can have nice things anymore. When you think about the narrative.

2:03:12 that you understand of the UK, like what is the the message so if it was like a marketing slogan The UK. You're an investor, you're an entrepreneur. What what's in your head when you think of the UK? What comes out? What is it in reality or what

2:03:25 How would you sell the UK to others? No, I'm saying like w what do you think what do you think the narrative of the UK is right now as an investor and entrepreneur? I think it just feels like a back water. Backwater. Yeah. What's an economic backwater. So don't forget, in the late nineties and two thousands, it was this entire center of the world's financial industry. It was the central of the world's advertising industry. It was some of the you know all the creative industries.

2:03:50 It was all based in London. We lost all of it. Why? Regulation. So you think it's the government's Government have

2:03:59 Misstep. Yeah, the government misstepped the and the US took the banking system back because How they treated uh capital requirements in the UK and Europe was different in the US. They managed to get the

2:04:10 Wall Street back to Wall Street. It all moved. I was working for Goldman Sachs. London was their biggest office. Same for JP Morgan, Morgan Stanley, everybody. And we just stopped it and now we're seeing it again, we've got new it industries rising. We've got AI, crypto. You know, AI came out of Cambridge. I think it was um you know, the Google Deep Mind. I think it was Cambridge University. For most of that stuff.

2:04:30 And we dropped the ball. We drop the ball in the finance industry, we've drop the ball in AI, we get this massive talent density coming out of Oxford and Cambridge. Imperial College and all these others and we We don't use it, they all move to the US. We had the crypto industry of which we were part of that, we'd we dropped that bull too.

2:04:47 We dropped the whole ball of everything. And Europe is Actively. Shutting the door on every opportunity. Um By saying we don't want to do this.

2:04:56 There don't forget they're a nation of old people now, most most of Europe. So they'd 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 in a it done in the right way. So they're blaming

2:05:13 That But the whole economic machine is because nobody's had kids. That's the problem. 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, they don't want to b take risk anymore.

2:05:34 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, everyone's like, What's going on? It's all been a function of demographics from day one.

2:05:49 Closing arguments, um Humphrey. Closing position. What's the most important thing people should be thinking about? How would you round off? Is there anything that I didn't ask you that I should have asked you? Yeah, I think that my my personal philosophy is just that Personal finance just comes down to your income. Minus your expenses. So know those two intimately, know how to drive both of those two.

2:06:08 And then just really watch what you spend your money on, right? Like the car pa the average car payment in America is seven forty five a month. Stay away from that if you can. Try to try to be reasonable. Everything is about about being consistent and reasonable. And I think those small decisions compound to a much Brighter future. Yeah.

2:06:24 For me First thing is educate yourself. You don't know yeah, we talked about What do your finances look like? What's your bank account look like? What are you trying to achieve? So you educate yourself, learn about investing. Invest above all things. Investing above saving is the only way you're gonna get there. Cause if not, your money goes down.

2:06:43 And then just do it. Make a trade, make an investment. Fail. Learn Do it again and do it again.

2:06:49 By a good network. Just Whether it's even on Twitter, on social media. Find a network of people that you can learn from. Add to the network.

2:07:03 And those things You will 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 buy bitcoin.

2:07:15 I'll delete the episode then. I um own mainly Suey, which is the Which is the um the crypto network that came out of Facebook. But I'm also on the foundation as well. But I actually put most of my liquid net worth into that. Uh and then I own a lot of Digital art on Ethereum.

2:07:43 Um,'cause that's a a long term store of value for me. N F T. And then m yeah, N F T. And so I've moved around a lot between Yeah. Bitcoin, Ethereum. Solana and Suey. I don't trade. So these are long term holds. I might change once every two years, change my allocation. So

2:08:00 But uh it's all generally all the big big tokens. Just pre Closing statements. Well first off, thank you, Raul Humphrey and Steven for putting this together. This is uh and 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.

2:08:14 Um on the internet of people Romanticising and f fantasizing how easy it is for passive income or for insane levels of wealth where it becomes uh 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 your background is, where you come from, but it's gonna take work

2:08:38 And I think the best thing to help your outcome to get to where you want to go is Hard work. Sacrifice

2:08:48 That way you can have uh what most people dream of. And the only reason why you're able to get there is because you're willing to do what the majority of people are not willing to do. And in a word. AI positive about it.

2:09:01 Oh pessimistic. Positive. Best tool we've ever been given. Optimistic. Yeah. Okay.

2:09:08 Good. Refreshing. Ref very refreshing too. Thank you all so much for giving me your time today. I'm I'm gonna link the top three things that you tell me we should direct the audience to below. So 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 um and have incredible channels, channels that I've followed for many, many years. Um, is there anything else that you guys would like me to link that you think is gonna be pertinent to the audience? Uh.

2:09:35 We have a free newsletter for investors that we publish every single day called Market Briefs. I think that would be a great one. I'll link that one as well. Anything else? Realvision is a simple place. It's a simple home for everybody to find what they need. The website, Realvision.com or Realvision.com Okay. Humphrey? And I'm building a website right now that's uh basically my My guide but it's my guide on different

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