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we've got about 6 years before everything changes and we thought money in the bank was safe we thought our
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house was safe but none of that true and the moment you put your money and your savings in the bank you don't own
00:00:11
anything and your future self is getting poorer by 11% every year and that's the problem for Financial Security and
00:00:17
wealth creation but I know where the opportunities lie and I thought answers so could you explain it to me through the context of this okay so Raul pal is
00:00:25
one of the most influential voices in the Ever Changing world of modern Finance unpacking the secet of crypto
00:00:30
and how to build wealth in an uncertain future people know their Futures they can't afford to buy house they have less
00:00:36
savings debts from University people in their 30s the first generation that won't be as rich as their parents so
00:00:42
what advice would you give to set myself up for wealth in the future you start investing but what about the people that
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no matter how hard they work they still don't have that excess income to invest you don't need huge savings you just
00:00:52
need to understand how to look for opportunities for example the S&P 500 is not worth your time real estate doesn't
00:00:58
really make you any money those days are gone gold actually lost you money but investing in crypto like Bitcoin gives
00:01:04
us stupidly High returns in shorter periods of time growing at 150% a year scaling at twice the speed of the
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internet so now the guy with $500 can get rich a couple of questions here then so I'm now 30 years oldish have I missed
00:01:17
the boat no much of the reason why I think people don't invest in crypto is they've heard stories where people have put too much in and they've lost it all
00:01:23
what if you're wrong we're going to talk about how lot to it up and then how do I invest in crypto it's really simple you're going to start somewhere so
00:01:30
do that and you'll make money this has always blown my mind a little bit 53% of you that listen to the show regularly haven't yet subscribed to the show so could I ask you for a favor
00:01:43
before we start if you like the show and you like what we do here and you want to support us the free simple way that you can do just that is by hitting the
00:01:49
Subscribe button and my commitment to you is if you do that then I'll do everything in my power me and my team to
00:01:54
make sure that this show is better for you every single week we'll listen to your feedback we'll find the guest that
00:02:00
you want me to speak to and we'll continue to do what we do thank you so much well from a very high level perspective and I'm being unspecific
00:02:12
here so I'm looking for an unspecific answer what exactly is the mission that you're on in this season of your life
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like who what are you doing and who are you doing it for so obviously you do it for yourself
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but really I think that I've been armed with tools and knowledge over the years my 30-year career that I kind of have a decent sense of where the world is going
00:02:37
where the opportunities lie and where the risk lies for people and I can see the problems people are facing and I
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think I've got answers so what I want to do is help as many people as possible in
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that journey and why that happened to me was I was in Spain back in 2012 and also during the fin finial crisis 2008 and I was writing macroeconomic
00:03:04
research for my research service Global macro investor and I had seen it coming I predicted it I knew it was coming I knew the problems I warned all of my friends that nobody listened we
00:03:17
understood about the financial crisis what was going to happen and most of them because I was living in a Beach town in Spain they were in real
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estate they all went bust but worse than that was that when we got to the European crisis when basically the governments of Europe ran out of money
00:03:36
the banks also ran out of money and as opposed to being bailed out they got what known as bailed in which means that they took your savings to pay the
00:03:48
debtors and Friends of my parents and friends of friends were wiped out and they were like why didn't we know I'm like that was a question that
00:03:59
sat with me for a while why didn't we know and I saw that everybody had lost total faith in the system so Occupy Wall Street happened at the same period and
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it was people angry it's like we thought money in the bank was safe we thought our house was safe we thought the system
00:04:17
was there for us and suddenly they all wake up and realize the system was not there for them it was actually for other
00:04:24
people you know people talk about Bankers never went to jail no there was there was that sense that it it was
00:04:29
never concluded and it sat with me for a long time thinking what can I do about this
00:04:36
because I was writing super high-end kind of research for hedge funds and you know big Asset Management firms and so
00:04:44
it wasn't accessible to people um and then I wrote a couple of Articles one got leaked in Zero Hedge in its early
00:04:50
days and it became super viral um and I thought maybe there's something here that I could reach a broader audience because then I can help these people and that's when we came up with the idea
00:05:01
of real Vision which was the idea of interviewing the people at the very heart of the system and kind of sharing
00:05:07
the details because these people weren't hiding it they wanted to help people as well everyone had that sense that we
00:05:13
could help people so I'm still on that journey and that Journey kind of has taken a multitude of paths starting businesses but also just trying to educate people on why they feel the way
00:05:27
they do you know why politics is so polarized never used to be this bad you know what's really going on and who really to blame and what to do about it if I stop
00:05:39
the average person on the street that knows you and watch is real vision and I ask them what has R and His Channel and
00:05:46
his information done for you what do you think they would say the average person they just say thank you because we've
00:05:53
helped demystify it the world of finance and you see we all have the root of unhappiness and happiness often comes from does your vision of your future self match where you are
00:06:07
today can you see that path whether that's finances whether it's Health they're all very similar
00:06:14
Journeys and when people can't see the vision of their future self and they can't see how to get there they get
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upset and what we've tried to do is unfuck people's future which is an expression we use which which is a way which is a A mimetic or a meme or just a
00:06:33
short phraseology to help people understand we understand that you feel like you can't get to where you want to get to but there are options to do it and I think people are immensely
00:06:44
grateful for that in general if you're on a mission to help people unfuck their future can you explain to me specifically the things that stand the
00:06:55
chance of [ __ ] their future from a macro perspective and when I say macro we have to pause and just Define what I
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mean by the word macro when I think of the word macro I mean big picture yeah perspective so from a big picture
00:07:07
perspective what are the things that stand a chance of [ __ ] my future okay so and we can we can dig into why these things have occurred but generally
00:07:18
speaking wages in real terms adjusted for inflation haven't gone up for decades so nobody's getting richer if
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you're an American you have this powerful meme which is the American dream but that is not a reality for most
00:07:33
people the reality is you grind it out your savings are not worth what you thought they'd be this whole promise of your pension and swanning around on a cruise ship around the Caribbean when
00:07:47
you're older living in a nice house none of that is true and it's because wages haven't gone up so okay so let's cut to somebody who's in their 30s now
00:08:01
because this is the really important cohort I think for this they can't afford to buy a house if I go
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back to when I was 30 I bought a house in London and it was it was a nice place in a good area and it was three and a half time salary yes I was in finance I was earning a high salary you can't buy
00:08:22
anything for three and a half times your salary now that same place if I took the
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same kind of young investment banker salary is probably eight or 10 times so it's tripled in how expensive it is to just buy your first house so what is a house first it's your
00:08:41
quality of life particularly you know in England the UK uh in the UK sorry in the
00:08:47
US we're home buyers you know we think of our home as our Castle it's it's like the thing that solidifies our security but you know if you're in Germany for example they don't they rent
00:09:00
but if we think about the mindset of owning a house it's an asset that you can then pass on or you can sell if you
00:09:06
need to and an asset is really a future Savings Plan it's something you save now that in the future you can consume you can buy stuff with but what you're doing is for the
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average 35y old the average Millennial is 36 years old they can't afford to buy the house
00:09:26
so therefore their future self is poorer if they think of how much of the stock market they can buy they can buy less with that money they have less
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savings they they've got debts from University so they don't have the ability to get out of this trap and then what we are finding is because of this
00:09:50
they're having to live with other people into their 30s they're having to they don't have
00:09:55
kids and they don't get married and these numbers have collap since 1983 you've seen these numbers come down from um people living on their own so I you
00:10:06
could get your job get yourself an apartment has gone from 80% to 62% you're seeing the marriage rate Harve you're seeing um the home ownership rate
00:10:17
go from 50% to 30% these are all expressions of the same problems which is people know their
00:10:26
future is [ __ ] and they can feel it they have a sense of of desperation you see then the same cohort of kids in
00:10:33
their 30s doing two jobs three jobs four jobs that's not because they want to nobody wants to work 12-hour days seven days a week it's because they have
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to and their parents the Baby Boomers who are in their 70s and retiring never had that they were the richest generation in the world had ever seen so this is the first generation that won't
00:10:57
be as rich as their parents and that's a weird thing because we're all used to human progress the American dream if the
00:11:05
American dream is well you never be as wealthy as your parents and they were middle class people and I'm now less
00:11:11
well off than them that's kind of [ __ ] so look here's some stats about a 30-year-old today versus a 30-year-old
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in 1983 so a 30-year-old in 1983 85% of them lived on their own they could afford a house or an apartment to rent or to buy now it's 64% so people living
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having to live with other people marriage rates they've gone from 80% of 30-y olds in 1983 who were married to
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47% now kids having kids gone from 60% to 32% population growth is collapsing because people can't afford it and H ownership for a 30-year-old has gone from 50% to
00:12:04
32% it just shows that dramatic change that's happen happened over the decades and why each generation has found it more and more difficult to be like their
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parents so I am 30 years oldish yeah I like to hang on to 30 for as long as I can um what advice would you give to someone like me that's my age or maybe even
00:12:29
younger you know mid 20s as to how to play the game over the coming years to make sure that I don't find myself in a position where I'm having to work two jobs I'm poor I don't have assets I don't have anything to show for it like
00:12:42
if you take it right back to being like maybe let's say a 20-year- old to 25y old how do you play the game and when I
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think about this I'm thinking like wealth creation how to then preserve my wealth like what's the game so the first
00:12:55
part of the game is income okay without income you don't have the cash to do the
00:13:02
other things to invest or to look for opportunities so first thing is income but even that's changing and how we earn incomes these days you know it used to be you go and work for a big firm you
00:13:14
get paid you get the benefit that's all going and nobody wants to do it so you kind of end up having to be a
00:13:20
entrepreneur work two or three different things the point being if your 20s do all of that work day and night really do
00:13:27
as many things learn as much as you can fail as often as possible what about work life balance in your 20s [ __ ]
00:13:33
it because that's the time to put in the hard work your work life balance actually comes out
00:13:40
later I'm a big believer in yes if you're straight out of University go traveling for a year or two you know
00:13:46
that a gets rid of the pent up need but also gives you a much broader perspective on the world than any other single thing that you can do in your
00:13:52
life after that you get your head down and you get your head down probably to the mid-30s okay so what when you say get my
00:13:59
head down I'm guessing one of the most important things in that season of your life is knowledge acquisition yeah and
00:14:06
then if that's true then the next question is what type of knowledge should I be acquiring to set myself up
00:14:12
for wealth in the future because I could go acquire knowledge of you know how to clean a toilet or how to uh be a
00:14:19
gardener but what what is the most high returning knowledge for me it is firstly
00:14:25
be an expert on something okay and then a generalist on as much as possible Right be that expert because somebody will pay you for that at least for the time being and we'll talk about
00:14:36
how the world may change in the future but for the time being if you're an expert in whatever it may be whether
00:14:42
it's driving a taxi or whether it's a computer scientist doesn't matter be an expert compete with yourself day and night to be the best that you can so at
00:14:53
least it's going to give you the chance to earn some money okay so just to drill down on that before we continue to move
00:14:59
forward how does one become an expert like what are the like how do I have to show up to become an expert you're an
00:15:04
expert on many of okay so this to me is there's a trick that I learned and it's called manifesting your own destiny and what you do is what I've always done my whole life is I envisage
00:15:18
myself five or 10 years in the future what do I want to be and you look around you and say okay what are the things that I want to have
00:15:29
Future Vision of myself as opposed to the 30 40 year path it's too difficult give it five years where do I want to be
00:15:35
in five years okay and you look around that future world and you think okay well how would have I got here you know
00:15:44
if I've built a business cleaning windows and I've got 20 people working for me well how did I get there well I
00:15:52
would have had to have figured out okay how do I make this scale how do I employ people how do I train them to have the
00:15:58
right standards all of that you ask yourself your question of what that success looks like and you kind of deconstruct it and go back and make it happen so you
00:16:10
reverse engineer it back from that that fiveyear reality so window cleaner with 20 employees I need to learn management
00:16:17
skills I need to learn how to clean a window accounting accounting I need to learn probably marketing yeah so that I
00:16:23
can spread the message of my business I probably need to learn potentially like how to speak like public speaking
00:16:31
because that's sales so I need to I need to learn sales technology you know what what um solvents detergents that people
00:16:36
using what are the ways of doing it more efficiently and faster so I can beat the competitor oh so I might go and work for
00:16:43
a big window cleaning company to see how they do it to try and see the opportunity in what they're not doing
00:16:50
yeah or even somebody who manufactures stuff for that sector it can be anything where you can glean knowledge to give
00:16:57
yourself an unfair advantage now on podcast it always makes it like easy everyone becomes an entrepreneur and before you know everybody's Rich doesn't work that way but all I'm trying to do is stack the odds in your favor of
00:17:10
getting Clos to that that image of your future self and you can reverse engineer
00:17:15
it so I'm now an expert in whatever I'm I'm 29 and I'm an expert in window cleaning or whatever it might be and I'm a generalist in many things you're saying that's going to enable me to start to build wealth in something so
00:17:27
that I can go to the next season of My Life so when you become an expert or when you
00:17:32
become good at something if you're careful in your expenditure you will produce excess
00:17:40
income right because people are going to pay you for your expertise so if you manage yourself carefully in those first
00:17:47
few years that excess cash you can then choose what to do with it now maybe you want to build the real business that you wanted to build in the first place the crazy idea you've had and if if you're
00:17:59
in your 20s you can take the risk and blow your savings on that crazy idea because you've actually learned how
00:18:04
to do build a business already by building the one that you started or you start investing
00:18:13
now the world of Investments was this world of weird financial advisors and they would tell you something like well you do this and then you're a 25y old in
00:18:24
45 years time you'll get some money I mean [ __ ] that I mean what am I going to get out of it when I'm 65 years old I
00:18:31
suddenly get a lump suum that I've spent my whole life saving for I don't feel it
00:18:36
it's got I've got no emotional attaching to my pension plan and I've got real world problems to
00:18:44
solve I can't buy a house I can't get married I can't have kids so I need to solve these in a
00:18:51
shorter time period than my pension my pension was suitable for a different generation that just needed enough after
00:18:57
they stopped working so I got to solve that and the answer is investing then most people roll their eyes and go really stocks and bonds it's boring yeah but the world has changed
00:19:09
the world has changed in many many ways but it's offered us opportunities whether it's investing in technology
00:19:15
investing in crypto that gives us much higher returns stupidly higher returns in shorter periods of time okay that's a magic that's magic for young people it
00:19:28
may be too risky for their parents but if you're young and you can take some risk okay here's your chance so now you
00:19:35
can build a business use some excess savings put them in Investments now you're on the path so
00:19:42
let's get on to investing then but just before we get on to investing um I was playing through the different sort of
00:19:47
personas of my audience and I was thinking that some of them are working really really really hard at the moment
00:19:52
they're doing you know they might be a cab driver they could be you know doing some sort of manual labor and it feels
00:19:59
to them that no matter how hard they work they still don't have that excess income to invest so for those people and
00:20:06
this is a little bit of a maybe a contentious question like is there something that they're doing wrong as it
00:20:12
relates to the game no the game is the game and you have to play the game so okay so maybe you don't have thousands to
00:20:25
invest I've seen many many people in Market like crypto go from $500 to $500,000 now there's a lot of people who don't either but all I'm saying is the
00:20:42
opportunity is there you don't need to bet your house you don't need to have huge savings you just need to focus on what you're doing understand how to
00:20:53
manage risks a bit and how to look for opportunities and it's the self self teing is how do I become that guy who's
00:21:00
got a half a million dollar portfolio considering I've only got $500 today or $1,000 today is that possible still yeah very much so haven't I missed the boat
00:21:11
no no it's happening again right now in mean coins this is Fascinating People watching this will go what a bunch of nonsense these are coins tokens we'll
00:21:23
talk about blockchain and and this later but these are investments based on a meme a joke a joke something that grabs attention on the
00:21:35
internet and you can bet on those well what is that that's about betting on attention itself if you think about a business like Facebook or Google or any
00:21:46
of these Twitter they're all based on attention and now we can bet on attention do people find that funny are they going to find it funny in six months time or six weeks time and we can
00:21:59
bet on this stuff okay this is the super speculative end but it's also very cultural it's not about investment
00:22:05
bankers it's not about Gatekeepers it's about you pitting yourself thinking is this going to catch on viral and if it is is it going to grow bigger now some of those might do a thousand X in six
00:22:22
months now 99% go to zero but all I'm saying is returns are there and then you've got different levels of return if we look at
00:22:34
Bitcoin well actually let's compare it the S&P 500 and this is this will be an important number later what's the S&P
00:22:41
500 that's the US Stock Market it's the broadest measure of the stock market and you can buy shares in it now that grows
00:22:49
at about 10% a year 11% a year so let's imagine you've got your $1,000 well 11% a year it's going to take you a [ __ ] long time to make any money right so it
00:23:01
is not worth your time the financial advisers will say yes you must do this start now I'm like I'm sorry it's just
00:23:08
not going to change your life okay then we go to technology stocks NASDAQ does about 18% a year okay that's starting to
00:23:15
add up because these numbers compound after a while you know it goes from a th000 to 1,200 and then you know it's another 20% on top of that 20% these numbers add up
00:23:27
fast Bitcoin since 2011 been 145% a year even with it falling 80% three times in the middle of that so
00:23:41
145% A year as long as you're in it long enough okay now that's really starting to pay off and then as you get slightly more
00:23:53
speculative I take a bit more risk in things well the returns go up but they become riskier so once you start moving
00:23:59
into that world okay this is a whole different world now now the guy with $1,000 can get rich what about buying a
00:24:06
house because I think most people think the minute they get some excess income and no for sure when I say most people
00:24:12
it's like 95% of people that walk the streets think that the minute you get some excess income you should take it
00:24:19
and put it in a savings account and buy your first house get your first mortgage now as a strategy for wealth
00:24:26
creation and is that a good approach no because it's not wealth creation people think of houses as like an asset but in the end you barely ever
00:24:38
will sell your house to take the money out you might downsize later in life if absolutely needed you might sell it but generally speaking your house is the
00:24:51
lifestyle bank now that is super important and I think it is the most important trade of all is the lifestyle
00:24:58
bank so what do you do this All For You Want lifestyle so do you sacrifice your future self having more money by having a house and having security earlier I
00:25:10
would argue those days are gone what do you mean so I could do it because it was
00:25:16
three times income yeah so a house was not expensive for me so I could stop paying it off a bit sooner and it became not a big deal but now your mortgage is
00:25:27
likely huge amount versus your income you'll spend the rest of your life paying it
00:25:33
off and most of the time you're just paying off the interest so you don't actually you're not getting anywhere you
00:25:38
don't own that house anything goes wrong the bank takes it away from you so you've got to get more
00:25:45
control of your life and that is by having savings that are growing then you can make the choice you know let's say that example of the person gone from $1,000 to5 00,000
00:25:59
maybe on Route they say well I'm going to take some money off the table and put it in my lifestyle bank and I'm going to buy a house that's what I've done my whole career and I find the lifestyle
00:26:11
bank that that's the reward because now it's like okay nobe you can take my house away so if I'm trying
00:26:18
to build wealth buying a house is not a good idea it's not the best approach to take to build wealth you're telling me that it's actually not about psychology and about
00:26:30
emotion the house and it's not about making myself wealthy um I I wanted to read some of the comments that people often post when we talk about these
00:26:43
subjects because I think you're probably the guy to address some of them I bought a house and it's the best thing I ever did it launched my mindset in New Directions remember that having your own
00:26:54
space has profound psychological impact and can be lifechanging in for some that don't live in a healthy environment I
00:27:01
guess that speaks to your point about um it being a psychological but you would also get the same feeling if you rented
00:27:08
that was in a nice place and you knew that you know your rent was Secure it wasn't going to go up whatever it was I
00:27:14
don't think there's any difference to that as long as you can feel that you've got security you can take risk and do
00:27:19
other things I purchased a house in 2014 and I sold it seven years later for 66k
00:27:25
profit um I've put a large amount of the Equity into a financial Investment Portfolio with my bank and it's been
00:27:31
down 2% since I also put some money into different shares based on war buffit strategy and that's now up 18% a friend
00:27:39
of mine also lost about 30 to 40K on investing in the stock market you have to be careful I don't think there's a
00:27:44
correct solution some house purchases do amazing this idea that some house purchases do amazing and some people
00:27:50
make returns as a as a sentiment I often see about buying a house yes and you know we're here today the UK there's a big idea about buying two or three
00:28:03
houses getting a mortgage renting them out using the cash flow to pay for the other one right that's a lot of people's
00:28:09
dream portfolio idea you know I've rented out houses in the past generally it's if you're not in a big city like London it's generally often a terrible business because you got to repair them
00:28:22
there's a lot goes on headache headache tenants yeah it's you know PE people think it's easy money I just I just do nothing and it all makes money it there is no easy money in this world and
00:28:34
there's risk right because that little pyramid of mortgages are all backed by your income being a to P pay the mortgage on the first house if you lose your job what
00:28:46
happens then it becomes problematic because if you're losing your job maybe the economy is slow and other people are
00:28:53
losing their job and suddenly before you know none of these mortgages are getting paid and guess what you don't know any of the stuff houses are not a safe
00:29:01
investment they feel safe because the price doesn't go up and down every day it's not on the screen it's not on
00:29:08
CNBC but they're IL liquid which means they don't often trade but sometimes something happens in that equation either the price goes down or your ability to pay that mortgage goes and
00:29:22
then the whole thing collapses in seconds and 2008 was that double everyone lost their jobs so they
00:29:28
couldn't pay the mortgage and the house prices collaps and so I don't think houses are the paner they're not the perfect answer yes they can be real
00:29:38
estate is a decent opportunity and we'll talk about debasement and currency and how that all works and real estate is
00:29:46
okay it's certainly not the best but but you know yes if you're rich and you can
00:29:52
own these things without mortgages you can be the Duke of Westminster and own half of London and
00:29:58
just collect rent you can do that for X generations and be rich forever I get it
00:30:05
but most of us don't get into that situation my brother who has been an investment banker for about 10 years now
00:30:10
works in my company in my fund he said to me when I was young when it comes to creating wealth what you want to do is
00:30:16
focus on games that very few people can play but you have a unique advantage in because he because everyone can buy a
00:30:22
house so the you can you should assume that the returns from doing it aren't going to be amazing so he was like go find a game that you have high leverage
00:30:28
you have a unfair Advantage be the expert in something yeah be the expert in something where you because of your
00:30:33
knowledge your expertise your experience your contacts you can play that game but very few other people can because that's
00:30:39
where you'll yield your highest returns and I always thought about that just very logically thinking if everyone can play the game don't play that game if
00:30:46
you're expecting High returns because the returns are going to be very low and I tell you the first game everyone plays when they get a bit bit of income is byy
00:30:52
a house so logically you can go okay that's not going to yield me the best returns unless I get lucky unless I get
00:30:58
exceptionally lucky and I buy some Barn in an area and then they build a bloody Whole Foods next door and it becomes the
00:31:04
the center of the world um which isn't again the probability is still not great so what do you think of that as a theory
00:31:11
well the same Theory as I said is be an expert in something and you can find more opportunity if you're just a generalist it's really hard because you're competing against average people
00:31:23
doing average things right if you're just working in an insurance office I mean there's thousands of people plus you're competing with AI you know H how are you ever going to be something
00:31:35
within that how do you become an expert now you could teach yourself okay if I don't mind this industry and I think I know it maybe I need to learn management skills maybe I spend all the time listening to podcast and learning
00:31:46
management maybe it's and that's I can then manifest my destiny but as you say doing something other people aren't doing is a superpower to know what's
00:31:58
really interesting with that is this idea of becoming an expert um I think is critically important but then there's
00:32:03
this other step I found which is knowing what Market to apply your expertise to to yield the greatest return and the very simple analogy I'll give you is for the first portion of my career I was I
00:32:14
became an expert in social media now with that skill set and expertise you can do a number of things you can help a
00:32:20
fashion company sell more dresses and that will yield X return a smaller return then in the second portion of my
00:32:26
career I realized that that expertise was highest value and most rare if I applied it to helping public companies tell their story before their IPO because the variance and outcome for the
00:32:38
public company that I was applying my social media expertise to was billions so in the second sort of sort of era of
00:32:46
my career I worked with companies that were about to IPO about to go to the public markets where there performance
00:32:52
could be you know their market cap could be 1 billion or if they were really good at telling their story in a world where retail investors are now so interesting
00:32:58
to everyone because of Wall Street bets their market cap could be three billion then that means they would pay me seven
00:33:05
figures for my skill set and I often think about it you think about the stock market if you put a company on the stock
00:33:11
market in London it's valued at let's say 1 million if you put it on the stock market in America the same company is
00:33:17
valued at four million the same company if you think of your skills like that where are you applying your skills to re
00:33:22
re reap the highest return let's go back to the window cleaner who's now decided to build this business business and he's
00:33:28
got 20 people yeah okay so he's now got the hassle of managing all these people they turn out sick and then this happens
00:33:34
and then the customers are unhappy so maybe the right answer is to create a program to train other people to build their own window cleaning companies free yourself from the rat
00:33:45
race and build this business you'll make more money doing that than you will from
00:33:51
actually cleaning the windows 100% because you're going up the knowledge curve the further up the more of an
00:33:56
expert you are and there's two things that people need to think about you either have a very broad market for
00:34:04
something candy bars well then you've got to sell massive scale and it's really hard or
00:34:12
you go through an area that has a very specific group of users buyers whatever and particularly ones that have a lot of money so let's go back to the
00:34:25
house idea again the guy speculating on houses so there's two house speculators there's the guy or girl who's hustling and renting them out
00:34:37
finding the cheap bargain doing them up renting getting the cash flow doing that and then there's the guy who's buying a place for 10 million making it
00:34:48
Ultra Luxury and selling it to the billionairs and flipping it for 50 that the difference in the turns is staggering why because one group is
00:35:01
price insensitive in fact the more expensive it is the more they want it the other group is trying to compete
00:35:08
with everybody else you know the two the two-bedroom apartment in the city right
00:35:14
there's thousands of those being done up and sold and everything else so to your point earlier the returns are less but
00:35:20
no if you're doing super highend then there is a defined group of buyers of which you probably know them all yeah personally you can count to their taste
00:35:33
and they have unlimited money that's the big thing isn't it's like who you're solving the problem for because you can
00:35:38
clean like Dorothy's Windows lives in a bungalow in Plymouth or you can clean Google's windows and there you get a bigger contract you get guaranteed work probably get retain you get more windows to clean it's still one contract it's
00:35:50
still one sell it's the same skill set same skill set they're going to pay you a lot more and and then and so I just
00:35:55
don't think I always find that bit Miss missing when we talk about like become an expert but then like who do you sell
00:36:01
to and your idea of selling to people that are more price and sensitive and that aren't going to and less people are trying to sell to or
00:36:08
they're super defined right like like Tom Bilu who we both know Tom's a good friend yeah he made his money because there was a rise
00:36:19
in high protein ketogenic foods and it was difficult to have that snack bar because people still have a sweet tooth but they can't have sugar so him and his Partners built quest which
00:36:31
is now everywhere so what you found is a trend and this is really really really important is you find a trending Market where people are
00:36:43
underserved and they'll pay a lot of money because it's Health it's like wealth and health people pay Fortunes in
00:36:49
our industry and so you make a fortune very quickly now now it's a saturated market so it's not that easy but this is
00:36:56
the other key key thing is if you've got a clean slate do one thing follow a trend a secular Trend a secular trend is a long-term Trend
00:37:09
something that's happening right so everything is being digitized you wrode that Trend right social media was new
00:37:16
from about 2010 right now it's a saturated market and we've got AI coming in but you rode a secular Trend in the hyper acceleration pH phase yeah that's why
00:37:29
you did well so you look for a trend that's big meaningful and provable and use your skill set in that we've seen something in America I don't
00:37:39
know if you just saw the trend finally the Obesity numbers tick down I didn't know that yeah first time in 50 years
00:37:47
obesity starts to fall in the US right this is a zic effect and it's probably some Diet effect my belief is the more people would take a Zen Pig the more they also
00:38:00
think about diet and understand that something went wrong for them and my guess is there is going to be huge
00:38:07
opportunities in that Trend towards healthy eating the other one is in an increasingly Aid driven online digital world there's two things that are going
00:38:18
to happen one the rise of digital communities you see this in what you do I see it what I do they become more and
00:38:25
more important uh communities online they're meaningful for people the other is the
00:38:31
entire flip side I spend 12 hours down Zoom calls what is the most single valuable thing to me nature nature and experiences so let's say you're that
00:38:43
person that loves the outdoors well start a guiding company because your job is not going to be taken by the robots
00:38:48
anytime soon sure you'll have drones with you so you can take photographs of the guests you're going with or or look for
00:38:56
animals or whatever you're doing you'll be leveraging technology but your job will not be
00:39:01
replaced okay what I'm about to say is a mish mash of ideas that came to mind as
00:39:06
you were speaking the first one was how do I spot a trend and when I say that I mean how does it feel in the moment
00:39:13
because the trends that you capitalized on and the trends that I capitalized on they feel a certain way at the time and
00:39:20
here I'm talking about like how disruptive they are contrarian what people will say to you they'll tell you you're an idiot and then with that as
00:39:25
well you talked about um how right now in the world we live in betting on things like nature is a good
00:39:31
idea and I actually did a post on my LinkedIn about exactly this I said my investment fund is backing two things at
00:39:37
the moment Ai and Automation and the exact opposite because I saw this viral video of people and I think it was like a cafe in Amsterdam who come now every week no phones allowed they read books
00:39:48
and they knit and this Cafe in Amsterdam is like exploding I'll put the video of these people on the screen for everyone
00:39:54
to see and it made me realize and that that overlap with what a two billionaire friends of mine said to me in private
00:40:00
they said these are billionaires that invest in AI they invest in crypto you probably know one of them and they invest in psychedelics they said to me
00:40:07
if you want to invest right now invest in AI if you can but if you can't invest in entertainment and Community because
00:40:13
in a world of AI where productivity is so high and we maybe move towards some form of universal basic income where the
00:40:19
government just hands people money people are going to have so much free time on their hands that they're going to need something to do with it so they
00:40:25
he said to me this is why you're seeing this rise in people buying football clubs uh and these sporting franchises
00:40:30
because that's one of the that's community and its entertainment at the same time so I throwing all of that at
00:40:36
you yes the equal and opposite idea is I think very important I just came back from three weeks off-roading in Zambia living on a
00:40:50
tent on the roof of a Toyota Land Cruiser that is off-road prepared and going out into total wilds and I can't
00:40:58
express how in the present you become how it cleanses your mind from all of the Clutter all of the things you worry about the broken car or the whatever's
00:41:09
going on online the politics it all goes and it all becomes about you wake up who's going to make the coffee who's going to put the fire on who's going to do you know and so the more time we
00:41:21
spend online the more we desperately crave I saw it in the Cayman Islands where I live so it's a Caribbean isand
00:41:29
and it was 2022 and the world hadn't really recovered you know there was the high inflation people were losing jobs everyone was really uncomfortable with
00:41:40
the economic situation it was painful for a lot of people we're at a record tourist season I'm like what the hell's
00:41:47
going on here normally discretionary spending goes down in times like that and I realized holidays had not become discretionary spend they become necessity as a reaction to work from
00:42:00
home if you're on your own at home working for a startup or a company or doing whatever it kind of feels a bit lonely and so you start seeking out
00:42:11
like-minded people who have like-minded Pursuits now that could be sporting teams it could also be Chihuahua lovers because you happen to have a chihuaha and you love it and
00:42:24
you will talk to other people around the world you now have no borders this is this buudy idea of the network states
00:42:31
where you can create large groups of Interest so if you look at the largest group of interest in all of social media
00:42:38
it's actually crypto why because we feel like outcasts we're new to something where something's happening and you want to get together because you speak to 90% of your friends that don't care and they
00:42:50
don't know what you're talking about but you think this is the most exciting thing you've ever seen so you will aggregate online with others
00:42:58
and this whole rise of people thinking they need to that the the the security of working for a large insurance company whatever it may be your whole life getting paid and retiring has gone which
00:43:11
is why the rise of your podcast success because people are searching for answers new solutions to their way and they film
00:43:18
they form communities around it they want to share their ideas share their stresses and
00:43:24
strains this is becoming bigger and bigger and more solidified and the more we go into AI the more we'll see that now there's another player in this game
00:43:37
which is the AI itself we're already seeing the rise of AI I follow several on on X where it's an AI posting but it's they're forcing it to
00:43:49
try to break free but it's it's got character Mark andreon actually backed it by sending it
00:43:56
a Bitcoin to develop its business plan I mean there's some crazy stuff going on with
00:44:01
AI um but soon if you think what you and I do is communicate with people in a to
00:44:10
an audience one to many right that's a very old business model it's from town squares or the souk
00:44:18
in maresh it's the same thing it's a Storyteller telling to a group of people and you have a shared
00:44:24
experience where we're going is one to one and you know I'm developing a a r video
00:44:31
bot where you can just have conversations like this with me one to one and it's trained on all of my
00:44:37
information my all my YouTube all of my writings all of my Twitter all the books
00:44:42
I've read everything and so it's essentially a replacement way of speaking to me but just on that rbot
00:44:49
thing we'll keep moving forward but um the reason why I haven't trained a Steven bot even though my team have said oh this is a good idea is because I wonder
00:45:00
if people care about Steven or they just want the information and in a world where you can get the information from a very Advanced large language model like the chatu PT 1.0 or whatever I go why
00:45:12
would they want it from me when you can get it from the entirety of the world's like trust okay you've built trust
00:45:19
that's what you've built people come to watch you and your interviews because they trust you so people know me as an entrepreneur um in one area of my life
00:45:31
and they come to me for say like business advice let's say but if you could get business advice from Steph or
00:45:37
you can get it from Steph Elon Steve Jobs every business person in the world to suit your specific problem why would
00:45:43
you just want Steven's Point of View because we're humans and I just want to ask you that question and you won't
00:45:49
believe it if it's Steve Jobs because he's dead but yes that's all coming okay how long is that window going to last
00:45:55
where people will use Steven bot versus the world's greatest expert on everything it takes a bit of time for people to adjust to that but within 10 years maybe that's not there
00:46:06
but let me go a little bit further on this have you seen character Ai No nobody has character AI builds Bots
00:46:18
which are characters like anime characters and they're really specific like the cool kid who's the bully at school that I fancy sort of
00:46:31
thing 150 million conversations there's some of these anime ones like you know hero figures 450 million
00:46:43
conversations and it's young people if you go to Reddit uh I think it's R character AI they changed the model and
00:46:50
there was uproar it doesn't love me like it used to people are building personal
00:46:55
relationships with these things scale this is Tik Tok happening all over again but you're too old to see it and I'm too
00:47:01
old to see it I stumbled across it I'm like holy [ __ ] this is happening all over again is something that we will
00:47:09
just think is the most ridiculous awful Society toxic thing in the world is about to scale to the billions in front
00:47:16
of our eyes and we're all talking about chat GPT and how we can get knowledge out of it when actually the big problem
00:47:21
to solve is teenage loneliness how disruptive do you think AI is going to be it's the it's how do I put
00:47:34
this it is the single greatest innovation of humanity ever the only thing that comes close is
00:47:47
probably the splitting of the atom this is so big everything we've talked about is based on scarcity of knowledge why do lawyers get paid a lot suest of
00:48:00
knowledge either cesty of knowledge of capital those two things what you've created is infinite
00:48:09
knowledge right knowledge is now worth zero not people that can't see it yet but it's going to be worth zero this is like water what what the hell does that mean
00:48:24
and it's something you know a topic will come on to later but this is happening really fast
00:48:30
it's going to break the entire economic model for good and for bad it's going to change our understanding of how Society
00:48:36
functions what humans do it's going to change our understanding of what humans are and will
00:48:42
be because you can either have the choice and Society will take the two paths you either merge with the machines
00:48:49
or you reject the machines we are going towards two different species one group like we had for a about 100,000 years I think 50,000 years we
00:49:03
had the anderl man and homosapian and one died out we will have people who will utterly reject this and
00:49:09
we'll have other people who will be EMB breeding neuralink into their brains and
00:49:14
using every part of this to enhance themselves wearing the goggles so they get the information well as soon as you embed into your brains you've now merged
00:49:21
with the machines entirely and you are now a super creature and I know this sounds like science fiction but this is happening
00:49:29
faster than anybody can imagine so to understand the issues we have even dealing with some of these things is humans think in a linear fashion we kind of understand the
00:49:41
passage of time right that's how we think about things every year is the same amount of time that goes forwards
00:49:47
it never accelerates might perceive that it accelerates or slows down occasionally but it's not it's a it's a
00:49:53
constant the problem is with things that go exponential is they keep doubling every year or tripling every year and before you know
00:50:00
it every graph looks like this go straight up just go straight up vertically now the issue is with this
00:50:09
technology is it's kind of an exponential squar it's it's happening so fast and the faster AI becomes powerful is the more it's used
00:50:23
to create AI which creates more it solves its own problem s right we're not prepared for a super being that solves its own energy problems compute problems
00:50:35
and how to improve its model at an exponential rate if you look at the speed of innovation coming out of open
00:50:41
Ai and that whole Space perpetually everybody it's ludicrous every three months Everything Changes completely
00:50:49
changes whether it's video models or whether it's spoken models or whether it's the models themselves in what they do I mean they're nuking every startup that
00:51:00
tries to build a business no company you're a big giant pharmaceutical company and you're trying to use AI you
00:51:08
can't plant a flag because you can't see past six months I mean we're going into a world that is incomprehensible when you said that much
00:51:19
of our society sort of functions and is based on the scarcity of knowledge I really think we should just course to make that real for people because we all get it okay lawyers yeah they they rely on knowledge but D like I was thinking
00:51:32
about how I got here in the morning so if you think about my whole day today I woke up this morning and my my Executives some of the CEOs and my
00:51:38
companies had asked me a couple of simple business decisions and I'd replied to them then I got in a car and
00:51:43
I drove here that's knowledge at the end of the day it's someone seeing with two eyes my driver outside sees with two
00:51:48
eyes and drives me here the biggest emplo employer I think in the world the biggest sort of profession in the world is driving and
00:51:55
that's knowledge based and the if you go to San Francisco now the wayo cars are driving themselves there's no driver in
00:52:01
them you can get you can book a car that takes you from A to B in San Francisco right now that has no driver I then got
00:52:07
here and what am I doing I'm I'm sharing I guess we're probing to find knowledge
00:52:13
and to share knowledge I think about my whole day today I'm like and then after this I'm going and speaking on stage to share knowledge I'm like I don't
00:52:18
understand if that's all knowledge okay so then do that the next time you're going around London or any City look out
00:52:24
the window myself and Julian battel who works with me do this all the time just go around and say what job is going to be replaced by a robot or the AI right one thing I was in I was in
00:52:37
Manhattan and I just looked out I was in an Uber board you know driving Uptown to
00:52:42
downtown I looked around and I was like holy [ __ ] every car here is a professional driver there's virally no people who drive into the city to go to the office or whatever right so it's all
00:52:53
Uber drivers limo drivers yellow drivers delivery drivers truck drivers all gone and this Stacks up in pretty much everything you
00:53:05
do uh and that's how disruptive it is and when the things that created value the services economy and the manufacturing economy don't need
00:53:19
humans okay what does that mean Amazon already employs more robots than humans now the robots work 24 hours a
00:53:27
day seven days a week never take a break never complain never ask for a pay rise in fact they get cheaper every
00:53:33
year who's not gonna do that so for the four and a half million people [ __ ] themselves as they listen to this yeah what what advice can we including
00:53:44
myself um I'm not actually [ __ ] myself I've got to be honest because I just I see opportunity in all these
00:53:50
things and I think that's you kind of have a choice when you hear information like this you can either let the cognitive dissonance get over overwhelm
00:53:57
you and then reject it which a lot of people will be doing now they'll be saying well you're wrong this is not going to happen you're wrong you're
00:54:02
Scarry that's what one group of people be doing the other group of people will be I guess open-minded and the third
00:54:08
group of people will be leaning in to see where the opportunity here lies and it all comes down to your like
00:54:13
disposition as a human are you scared are you excited or are you paralyzed if something is so clearly going to be your demise not demise as in
00:54:25
you're going to die but your current way of doing things is going to be forced to
00:54:30
change well you can either fight it as you say be indifferent to it or you can invest in it this goes back to the question I asked you earlier which is how does it feel in the moment when a
00:54:41
trend is coming in usually there was culture around it so if you remember I talked about when I got into Finance there was Gordon gecko the film Wall Street the
00:54:53
there were books coming right there was Barbarians at the gate famous stuff happening it became
00:55:01
cultural and that usually tells you it has now become a trend that's going to be persistent if we think
00:55:13
about the rise of software and Technology the culture of Silicon Valley and the mythology around it becomes something that everybody wants a part of
00:55:26
cryptocurrency is another one that has a mythology you see people getting rich it has this feeling of being Outsiders but
00:55:35
you know you see it AI is another one you see it online people experimenting you
00:55:41
can see what's going on you can see everybody starting to talk about it doesn't mean you can just buy some share
00:55:47
that that's exposed to it and you'll be hilariously Rich doesn't work that way but you know something really big when
00:55:55
you're when you're trying to acquire knowledge you know people watch you and I to try and glean knowledge you know
00:56:02
build their worldview you'll hear that every single person is talking about this and trying to figure out what it
00:56:08
means the issue is is AI will build businesses right so we're six months away of agentic AI and agentic AI means it's like having Fiverr a website of
00:56:21
experts that you can ask any question and it will go away and do the task and by using a number of Fiverr experts you can build a online business well the agentic AI will do
00:56:33
that very very soon it'll buil design the website code it register the domain name figure out the branding figure out the marketing figure out the email list figure out what the the whole thing so
00:56:45
then you and I are in competition now you've built this incredible new website and it's a new supplements formula um
00:56:53
thing but it's a cool website new experience kind of 3D whatever is right it's got AI in it I just go to my Ai and
00:56:59
say love Steven's website can you just build it better and make it in Hindi as well because I think there's a big Market there what do you think it'll
00:57:05
come back say not Hindi I think there's an undersaturated Market in in Indonesia boom three
00:57:11
minutes what how how can we be entrepreneurs in software so now there's this Theory going around that AI is going to eat software and I kind of get
00:57:25
it because it build anything in seconds so and again whether it could do it six months or 12 months it's it's of that magnitude that what the hell does that
00:57:37
mean but yet the 23y old who's learned guiding in the jungles of Latin America and is building a luxury Lodge for people and uh you know some ecotourism I don't give a [ __ ] about any
00:57:51
of this it's so interesting this idea that we might be at the the CSE of the digital opportunity in a sense because when I say the digital opportunity I'm talking about content creators I'm talking about entrepreneurs that built
00:58:03
you know after the.com era I'm talking about stock Traders you know people that trading stock markets and if we're at the collapse of the digital opportunity and that the value is all
00:58:14
going to ACR to these big sort of tech Giants or the AIS imagine if this is the moment in
00:58:20
history where actually the best play was to go be build the backpacking company in I don't know the himalay players or
00:58:26
whatever maybe like that's the opportunity but it's not scalable yes you can do it and find people will spend more on it to go back to our earlier conversations people spend a lot of
00:58:37
money on it so it's quality attention because everything in the world is attention attention is Upstream of
00:58:43
everything so you get the attention of these people in a rainforest they want to spend money on doing this particular
00:58:49
thing fantastic um how scalable is it difficult because then there's people management it's not like software right so they're not SC but you can do very
00:59:02
well and not be concerned about this other world how does one invest in AI something that I think about a lot because I believe the things you say I believe many of your predictions out around the impact that AI is going to
00:59:15
have on the world the economy on all of us and as someone that's an investor I want to like take part in that I want to take part on the upside so I'm wondering
00:59:21
do I just go buy Microsoft stock because they own a bit of chat GPT do I buy meta stock because they own a bit of because
00:59:28
they own Lambda do I buy Google stock because they have Gemini and their models so here's the problem of the
00:59:35
financial system the average person watching this has no chance of making the money they'll make normal returns not super normal returns so Microsoft is whatever it is
00:59:48
two three trillion dollar company what what could it be worth who knows 10 trillion 15 trillion doesn't really
00:59:53
matter right that's a 5x but for the most revolutionary technology the world has ever seen you
00:59:58
make five tons your money that's not but somebody else in VC or earlier in some way shape or form or the entrepreneur will make all of the
01:00:11
money and this is the thing I don't like about the system as it is it's kind of rigged against the ordinary person so we're going to have your jobs
01:00:21
replaced you're going to have this societal change and yet they don't get a chance
01:00:28
so yes invest in technology don't own in any other stocks own technology and you
01:00:36
will capture some of this you're investing in your own demise at least you'll get some high quality
01:00:43
returns but otherwise the only way I can come up with again and we keep referring to
01:00:49
it is crypto what is crypto crypto is just a technology you know it's a lot of things to many people it's just a database that's better than databases in the
01:01:02
past so right now your database might be in your spreadsheet and let's say you and I have a bet you put it you write it down there and we get a third person to
01:01:13
say yeah that was the bet they had and this is what's happened okay that is how databases that's Banks that's pretty much everything we do in
01:01:24
society is in this Ledger system system it's called I've got a suitcase here which is maybe maybe a good way to kind
01:01:31
of explain this this is a bank and inside the bank which is I guess the middleman you got money yeah so could
01:01:43
you explain it to me through the context of this we'll call it the Central Bank how the system currently works as it
01:01:50
relates to transactions the public Ledger Etc so okay in the old world we both had our gold yeah and we'd stick it in our safe or bury it in the ground
01:02:04
that gold was your gold this was my gold and I might try and fight you for it that's what Pirates did okay and then we
01:02:09
invent Banks and Banks we put it in there and they give you a note to say Stephen you've got one of those coins R youve got one of those
01:02:20
coins okay so we' both got a note now saying that yeah and now we trust this Bank
01:02:27
to give us our coins when we want them because they're our coins okay that makes sense safe as safe as a bank as
01:02:34
people would say the issue is is in this world of smoke and mirrors what's known
01:02:40
as fractional Reserve banking they have taken those coins and given them to somebody else they've given my coins to someone else yeah they've lent it for money so now
01:02:53
that coin is not in there but they've been given the money so usually when you're just you know if everybody pulls all the money out there's not enough money it's called a bank run we've seen those recently but
01:03:06
that's a classic thing so it's not your money because you don't actually own your money the moment you put it in the bank what you've become is in fact a
01:03:17
debtor to the bank or a credit sorry creditor to the bank so you've lent them money and you get some legal address that if you've got less than 100,000
01:03:28
euros pounds whatever the currency is generally that's protected by the government that if the bank goes
01:03:35
bust then you get your money back but anything beyond that you don't get anything but I've got a piece of paper yeah mean [ __ ] you don't own anything
01:03:47
now it's so big as a problem that 2000 so that was 2012 European crisis exactly this people didn't own their money that person walked off where they asked the bank for it the bank didn't have it
01:04:01
nobody's got any money where it's all gone that's the same Ponzi scene we talked about when you've got you buy a
01:04:06
house and use the cash flow to buy another house another house right somebody takes away what's known as the collateral suddenly it's all
01:04:12
gone but the issue was actually bigger because 2008 proved another thing is that nobody owns anything so the whole system itself
01:04:26
is leveraged so for example back in that time the average US Government Bond which is the safest thing in the world was leveraged up to 30
01:04:39
times what does that mean that means 30 people thought that that was theirs oh so I say that this is the bank in front of us the suitcase and it had
01:04:53
one coin in it when we put that one coin in it created 30 more coins and gave out
01:05:00
30 pieces of paper yeah so there was actually only one coin in the bank yeah but they made 30 pieces of paper and
01:05:06
that's all well and good if the collateral the thing that it's secured on the coin maintains
01:05:16
value okay or isn't pulled by one person if you were the lender and you're original lender and you get it out and something happens then all of these 29 other people are like I want my coin
01:05:31
back they're like doesn't exist doesn't exist so we just made it we just created
01:05:36
the coin correct we just sorry we just gave you a piece of paper but there was no coin backing it yeah and the issue is
01:05:41
so that's one issue with the banking the other issue is is pretty much everything we do is created on this it's called a
01:05:48
ledger system a ledger was invented in the Renaissance in the 1500s 1400s where what would happen happen is you have this on a on a accounts or balance sheet
01:06:00
you'd have these dual entry ledgers and what it's basically saying is I agree with you and often we'd have a third party agreeing it okay issue is is
01:06:11
that's known as the bantine General's problem it's actually a philosophical mathematical problem that has been
01:06:17
unsolvable until Bitcoin came along and what it is is we are generals on a war you are way away from me we can't communicate with each other but I need to send somebody to tell you
01:06:30
something there is no way of making sure that that person tells you exactly what I've told them and no way of you of
01:06:36
proving it and that's what a three-party system does I may go to a notary but how do you know I haven't bribed the notary
01:06:43
to lie I see that all the time we see it with accounting firms and audits we see
01:06:48
this in everything there's always one of these trusted parties that is not trusted the bank classical trusted
01:06:56
counterparty that suddenly may not be trusted we saw it with Silicon Valley Bank recently in the
01:07:02
US so what blockchain did really cleverly was said okay well the way of solving this is to get thousands tens of thousands hundreds of thousands
01:07:14
millions of people to confirm it okay so let's throw away the bank take my paper back because that's
01:07:21
worth zero um if you pick up this chain here on floor yeah this is our hypothetical uh blockchain yeah now explain to me the difference between the bank we just saw and this blockchain so
01:07:36
this blockchain so this let's say is a Bitcoin this slot on the blockchain is confirmed by every other part of the blockchain which is all the
01:07:49
computers that that solve this mathematical problem we don't need to worry about that but what it is is tens
01:07:56
of thousands of people reporting on all of the activity so if I transfer this ownership to you yeah it will know that you are the owner you can either hold it
01:08:07
yourself like the gold coin MH as a bearer asset or you can ask somebody to custody it for you but still your name so if I want to send you a
01:08:19
Bitcoin how is how are tens of thousands of people or hundreds of thousands of people confirming that that transaction
01:08:26
is legitimate without a middleman checking so they're essentially taking a snapshot of the
01:08:33
blockchain and they all have to agree and they're not actually called it's called a consensus mechanism they're not
01:08:40
actually at their computer saying yes I agree well the computers agree okay so the computers are checking yeah or the
01:08:46
the blockchain itself will say well that doesn't agree with all the others and it gets rejected and that whole block will
01:08:53
get rejected until resolved like there's a a problem here and that's called consensus so what you're doing is a
01:08:59
multi-party consensus that this is truth so now what you've created is what a friend of mine calls the security truth machine so at first we all know it for
01:09:11
Bitcoin I can own a Bitcoin it's proven that I own the Bitcoin I don't need anybody to tell me that I own the
01:09:16
Bitcoin because it's publicly acknowledgeable and verifiable on the blockchain it's immutable which means can't be broken MH
01:09:29
okay but this is where it gets really interesting is we've suddenly find that after the invention of the smart contract so right now let's say we're
01:09:41
200 there's a contract in here yes it says I've sent one Bitcoin to R okay so this is the world pre ethereum okay the world post ethereum would say I'm going
01:09:55
to send r one Bitcoin if the sun shines 13 days in a row in London and something
01:10:01
else happens whatever it is and it will automatically settle verified on the Chain because there's 10,000 computers and there's code in
01:10:13
that to make the settlement okay okay so all well and good nobody really knows what that means yet what it means is that everything we do as humans is
01:10:26
actually contracts me turning up here today a contract literally everything we do is a contract every ticket you buy every purchase you make everything is a
01:10:36
contract it's how Society functions money's a contract isn't it money is a contract government's a contract
01:10:42
religion is a contract everything is a contract it's how we create a social construct and social order now what we
01:10:49
can start doing is using this very powerful chain and putting other stuff on it the first random thing that came on it was actually art because it's
01:11:02
valuable called nfts nonf fungible tokens there single pieces of art that were stored there and we can have ownership but that's really experimentation really your Taylor Swift
01:11:14
concert tickets can be on chain why would you do that because now this has solved another big thing that didn't exist we talk about before in a digital
01:11:26
world everything goes to zero in value so R what's the point of this this is just like cloud cloud storage just goes
01:11:33
to zero and cost no because what we've created is digital scarcity you can only create a certain amount we can make that one asset be that one
01:11:44
asset and so therefore it can't be replicated at all so now in this digital world where every day is more digital than the next we've created scarcity and scarcity is what gives value it's what
01:11:58
humans assign value to and that means that scarcity of knowledge means that knowledge was valuable lawyers because not that many people come out of law school that then now with AI not
01:12:11
valuable so to make sure I I and everyone listening understands what what the blockchain is it's this public can
01:12:19
think of it as this database in the sky and the database in the sky is checked by everybody who has their computer on
01:12:27
and is interacting with the database in the sky so you no longer need a government or a bank checking the transactions and the and the contracts
01:12:33
in the database in the sky because now all of our computers that are on interacting with it are in the background checking that if I send you
01:12:41
one Bitcoin if I do something on this database in the sky it is um in accordance with the history of
01:12:50
the database and um it is in line with that database yeah what and to to make it less complicated it just makes it a
01:13:01
source of Truth okay in a world where we don't even know who is who online who owes each other what any of these things we now have source of truth that
01:13:12
everybody can agree on and everyone can see and everybody can see and you don't need to trust anybody and so that as a
01:13:22
technology solves many things problems that we don't even know we've got because they're so part of how we
01:13:29
exist so the technology is not about money the technology is about truth and exchanging value and creating value
01:13:43
in a digital age now what is interesting and Powerful about this technology is we've seen Technologies
01:13:51
similar before the internet we've seen Broadband we've seen these big Global infrastructure things most of those the internet was a
01:14:04
public service good Broadband was all built private sector we didn't get to make money out of these things really Amazon made the
01:14:17
money or or whoever it was building the Broadband they all went bust as well what we've got here is this very clever thing that everybody in this Block Chain
01:14:29
gets rewarded for the role that they play in maintaining the blockchain in maintaining the blockchain and because these things are scarce and let's say Bitcoin being the most classic example
01:14:42
there's only 21 million that will ever exist you've created this scarce asset that is a reward system so the people
01:14:49
who mine the Bitcoin they use the electricity to solve the algorithm to get the Bitcoins to make sure there's
01:14:55
only 21 million well they get rewarded the people who verify the chain get rewarded and then we can buy the asset
01:15:04
which is actually us investing in the future use cases of this thing are people going to use it for storing wealth or building stuff so
01:15:15
now you get this Global infrastructure layer of which people can invest now let's go back to the example of AI AI 99% of people listening to this will
01:15:30
not be able to invest in it apart from buying some of those big public companies because they're not accredited
01:15:36
investors they're not allow they don't get to see it Insider all of this stuff this is the
01:15:42
inverse it is fractionalized so a Bitcoin you don't have to buy one at 60 whatever, is today
01:15:50
you can buy a fraction so remember remember we talked about property and the guys who own the
01:15:57
big high-end property make all the money none of us can buy the $50 million apartment in Manhattan and then do it up and flip it for 250 million now
01:16:10
blockchain we can all put 10% of our paycheck in it do you think people should yeah and more but the point being is this is the only globally homogeneous
01:16:25
asset on Earth it's the same in Nigeria as it is in Brazil as it is in London as
01:16:32
it is in Silicon Valley as it is in India as it is in Papu Guinea and everybody is on an equal
01:16:40
footing you can put the same percentage of your worth in it okay that is mind-blowing and it bypasses the banking system The Brokerage system and all the
01:16:54
other incumbent things that get in the way of a Nigerian buying an International
01:17:00
Investment so we've got a playing field that's leveled in the fastest growing technology of all time in the fastest
01:17:07
apprting asset in price terms of all time in the shortest period of time that is globally available to anybody and then you realize holy [ __ ]
01:17:20
okay this is important now why that's important is because having more investors in it means the asset becomes more valuable which means you're more likely to secure it people
01:17:32
want to join the network to earn some of these tokens to secure it the more use cases get built upon it because people
01:17:38
are making money and it bootstraps it behavioral economics it's an incentive based system to bootstrap the most
01:17:46
ridiculous startup idea of all time which is I'm going to entirely disrupt money and create a new internet I mean
01:17:53
that's laughably stupid and that's what's happening one of the I run a company called um third web which is a
01:17:59
web 3 infrastructure business we we've raised quite a lot of money for the company about $30 million now and we
01:18:05
have a big team and it's interesting for me to observe the use cases because people come to third web to build on the blockchain and one of the really interesting use cases we've seen over
01:18:15
the last I'd say 12 months that's really exploded is is gaming people building uh web 3 blockchain based games because if you think about games like FIFA which is a huge game obviously in
01:18:28
the UK where we're big soccer fans or other games like you know um RuneScape back in the day where you have Assets in the game in FIFA you have a messy card
01:18:39
in RuneScape you might have a sword the thing that the blockchain now enables us to do is to take those assets from the
01:18:45
game and actually trade them outside the game so I can if the if the sword was on the ethereum blockchain even though I'm
01:18:51
not inside the game I can trade that sword on the ethereum blockchain and so one of the most exceptional use cases
01:18:57
we've seen at third web is people building AI games sorry people building web 3 games because these assets are now
01:19:04
valuable it's great for the game developer they've now got this brand new economy for their for their company and
01:19:09
it's great for the people that own those assets in the game because they've now those assets are now more valuable because more people can access them and
01:19:15
I don't think people realize the extent to which this disruption is already taking place people think of crypto and web 3 and they think of buying coins and
01:19:22
hoping the price goes up but it was interesting you know everyone knows like DocuSign and Adobe like eign and those
01:19:28
things and I went on one of their websites I think it was DocuSign because I just I thought surely physical contracts should be on the ethereum
01:19:35
blockchain now and there was this little paragraph on the docine website which says every time like a contract is
01:19:41
signed on docu sign we do like there's a hash on the blockchain so it's like recorded on the blockchain and I thought
01:19:47
people don't even know that the blockchain has now pated world to I was um I've got an asset management company
01:19:52
exponential age Asset Management we invest in hedge funds that just invest in crypto to capture this trend of going from $2
01:20:00
trillion do where it is today in value I think it's going to 100 trillion in let's say 2032 2034 okay that's stupid that's that's more wealth than the than
01:20:14
has ever been created in that period of time on Earth by but it's twice the amount of value of the S&P 500 the inar
01:20:21
US Stock Market took to build in a hundred years I think we'll do it in 20 so this is staggering that wealth which is why we'll talk about why people
01:20:33
should be involved and how they should be involved later because I'm passionate about that but I was one of our
01:20:38
investors I was in Switzerland and she is the head of trading at one of the soft commodity companies So Soft Commodities like cocoa sugar corn all of
01:20:49
this stuff agricultural Commodities and um I'm like surely you guys is should be thinking about building on blockchain you know because
01:21:00
there's a lot of letters of credit and stuff that happen shipments she goes a whe all the commodity trading houses built on ethereum in
01:21:11
2020 she goes so every shipment we make the shipping contract the quality of goods contract the letters of credit everything is on
01:21:24
chain so we don't have to trust these others because commodity indust is full of sharks and you're dealing with
01:21:31
countries that are not easy to deal with she like we got this verifiable source of truth it's completely revolutionized
01:21:36
our industry and nobody knows about it and if if I own ethereum yeah if I own an ethereum token yeah which I Do by the
01:21:44
way I've been stacking it and refusing to sell um good much to my brother's dismay who's like Steve you're a bit too
01:21:50
emotional about this stuff and I was like bro I was like if there's any asset that I own that I well we're going to talk about how not to [ __ ] it up later
01:21:56
that's another thesis but how do I benefit from the fact that games are now being built ethereum and it's really
01:22:02
simple if we'd have all been given shares in Facebook when it started we'd have all been hilariously rich but we didn't the VC's got it and then it went
01:22:13
to the public market and then you have to have a brokerage account you have to be approved right what this is happening
01:22:19
you buy an ethereum token today if ethereum ends up becoming bigger and more uses your token value goes up it's as simple as that so you
01:22:31
get to participate in an entire technological Revolution really simply from your mobile phone and you don't
01:22:38
need anybody to approve it or do anything yes there's regulation stuff but simple stuff like that it's pretty
01:22:45
straightforward for almost everybody in the world so therefore we talked about how do you invest in your disruption and
01:22:52
the future of technology okay here's one where you can really do it and it's easy to do a couple of questions here then so you said it's
01:23:03
easy to do yeah let's talk practicalities how do does one do it I can do it on my phone I have to call someone how do I invest in crypto you just open a crypto account yeah um with
01:23:16
one of the big crypto providers coinbase Kracken crypto.com who are a gem and I what about this though my bank my digital bank is offering me to buy crypto on there should I do that yes you
01:23:28
can and you can do it by PayPal start somewhere I'm not going to say no but you will go down the journey that everybody goes down which is the easiest on ramp is the best revolute whatever I
01:23:41
don't care just do it get a feel for what it's like to own an asset that goes up and down a
01:23:47
lot particularly down when it goes down it makes you feel terrible and you got to learn about how to deal with it and
01:23:54
then because it goes up over time if you don't do anything and you've chosen a good quality asset that's provable as a
01:24:02
as an asset in itself it'll probably go up over time in fact highly likely to go
01:24:07
up a lot and then you'll start thinking do you remember Ral saying that the bank
01:24:13
owns the stuff and I don't own it and then you might say oh but the magic here is unlike the bank where I can't take more than 10 grand out I can put it all on my little Ledger
01:24:26
device because what's a ledger device a ledger device is it's actually it's a company that provides it but what it
01:24:33
is because this is just an address on a blockchain and think of it it's like your mailbox you can send stuff to it but you
01:24:45
can't actually take it out like your email somebody can't read all your emails but they can send you
01:24:50
emails well that that part that's private that secure Pass Key essentially well you keep that to yourself and it's stored on a device and
01:25:05
there's a complicated way of doing it and you'll have to go through that which is you have to have this seed phrase that does it this technology will change
01:25:11
quite soon you know fingerprints face prints and a bunch of other stuff but basically a little USB stick will secure
01:25:20
that you can go and put in safe or go and take it to your Nan's house or whatever it is can
01:25:25
secure your money that it's only yours and nobody can take it out I have mine on a ledger so I have my ethereum on a small it's kind of like a small USB stick and then that USB stick is
01:25:38
protected by like 24 words or whatever it is that's right and those words are on pieces of paper in different
01:25:44
countries at the moment that's right um and it means that no matter what happens no matter where I am in the world no
01:25:49
matter who comes for me I can always retrieve the x th000 ethereum that have on this Ledger device yeah um unlike a bank where my my account could get Frozen by the government or they could
01:26:01
empty my bank they could freeze my bank I can I will always have that value and also you know there's a famous example of the conversation of gold in the United States and it's been done in many
01:26:12
countries in the past the good thing about this magic internet money is you have to physically cross borders with it yeah yeah think of all the Jewish people who had to take money and diamonds and
01:26:27
gold out of Nazi Germany and out of Europe it was hard to do here you don't have to do anything you just need to remember a seed phrase a seed phrase being basically a string of words yeah
01:26:41
yeah so which blockchain which coin do you think people should invest in I have only ever invested in one I've only ever backed ethereum and I think part of my bias there comes from the fact that when
01:26:54
when we were building third web I had a window into the blockchains that people were actually building their applications on and ethereum was the was
01:27:02
the one and obviously there's layer twos which are people then you know build blockchains on top of ethereum Etc but
01:27:08
for me ethereum was just the dominant blockchain that I thought would solve for most of the use cases outside of
01:27:14
maybe um what they call a store of value outside of like money necessarily so contracts and other things what did you
01:27:20
say this is where my this this is my 30 years of expertise is this one thing which is
01:27:27
asset allocation so firstly the average person watching this is you need to allocate to this end of story if you're going to start
01:27:39
somewhere start with Bitcoin it's just easy to do it's widely available you know
01:27:47
through different you know whether it's a credit card anything just do that I don't care do that and do it with
01:27:55
as much money as you can afford to see go down 60 70% and don't care and expect that to happen because that's what you have to see to see the
01:28:07
long-term 150% a year it's included within that is these downsides then I want you to put in some money every month regardless of price to
01:28:21
build your savings in this exponential asset set that goes up a lot okay now you're set you're on the journey and then you want to figure out how do I make the most money like you I
01:28:34
switch I had Bitcoin to start with I switch all of my Bitcoin into eth in 2020 in
01:28:40
ethereum and so I was I just owned that plus some nfts and a few other bits and pieces but generally it was that and then in 20202
01:28:54
in the bottom of the bare Market I started to see the price of salana seeing like it it wanted to
01:29:01
outform ethereum now salana much like your thesis I saw this massive developer Community passionate retail and a difference in the technology because these are all basically distributed
01:29:14
companies that sell block space so you want to look for attractive block space Bitcoin it's the secure one ethereum
01:29:22
it's like the world computer you know and everybody's building on top of it salana faster
01:29:29
cheaper feels more friendly efficient yeah it feels more retail and I saw that and the speed of which they can do
01:29:40
things and The Innovation and the developer Community meant that I started switching
01:29:46
and then switched all of my eth outside of my nfts where I collect a lot of art into
01:29:52
salana and and I've now been switching part of my salana into Su sui and as a disclaimer I'm actually on the board of the foundation but it's
01:30:04
like the next big chosen one it's the group that came out of Facebook that built Facebook Libra so what I'm trying
01:30:10
to do is maximize my return I'm a mercenary around I'm passionate about this space and what it means the technology and how it empowers people
01:30:21
how it can change the third world how it can change the internet but I'm also a mercenary for my own capital and for
01:30:28
anybody else I can help now doesn't mean I always get it right so to in your particular circumstance I would like
01:30:35
look you'll probably be fine over time but you're not maximizing your returns but do you want to take the risk do you
01:30:40
have the bandwidth to do that and these are the questions we were talking about with work it's the same thing how much
01:30:46
do you want to go down the rabbit hole how much time do you have to invest versus the expected upside I don't have
01:30:52
time I'm spending all my time doing podcast building businesses and then just do what you're doing unless
01:30:57
something says that ethereum usage is falling off a cliff and developers are leaving
01:31:03
intire then don't worry about it right you're going to be directionally very right will you capture the best returns
01:31:10
no nor will I some other Rando will get by luck something right but the average person so I have this thesis that trying to help as many people with this is from my own learnings I'm watching everybody
01:31:23
else [ __ ] it up is what happens is you're given this incredible asset class and at first you do intelligent thing like own some Bitcoin or some eth and then you want to go out the risk
01:31:35
curve because you see somebody else making more money you understand you can that's okay and then the bull market really
01:31:42
hits the banana Zone period when things go bananas prices go vertical and you will see people online saying well I
01:31:48
made a million dollars today because I bought this meme coin and you will lose your mind
01:31:54
and you will start buying all the stupid [ __ ] and you'll go so far out the risk curve and then when the Music
01:32:02
Stops the stuff you own will be worth nothing and the more quality tokens will retain their value the other thing that people will do in that journey is use Leverage What what is leverage Leverage
01:32:16
is when you borrow more money to buy more of the asset so I now borrow money to buy more ethereum because I want to outperform I want to make more money cuz I'm really greedy the 160% a year that
01:32:28
ethereum does as returns since 2015 is not good enough for me I want to make it 400 500% a year stupid right and what happens is you borrow money to do
01:32:40
it it's leverage Futures markets perpetuals there's a whole bunch of ways of doing this or even borrowing on your
01:32:46
bloody credit card whatever way people will do this and you really have to know what you're doing because the whole game
01:32:53
if this technology is going to last over time and it's going from two trillion to 100
01:32:59
trillion you have one job not to lose your tokens one job you can do nothing like
01:33:07
you're doing and you will make an extremely good amount of money out of it your one job is to not [ __ ] that up I
01:33:15
have a have a bit of a theory and this theory is very naive and narrow and based on the smallest sample group in
01:33:22
the world it is I have six friends um actually I'm one of the six so I have five friends five of my best friends and
01:33:28
we've all taken different attitudes towards crypto and my friend who is most heavily involved in crypto has made the
01:33:35
least money and is arguably the least rich and it's his life and I think it's because of what you've described whereas my position has always been I invest in this one coin I
01:33:48
don't sell it and I just buy more when I can over the last six years I don't really pay attention frankly if you ask
01:33:53
me to log in to see I the last time I checked what it was worth I couldn't tell you couldn't tell you what it was worth actually I'd struggled to log in
01:34:00
it's been so long since I've logged in and looked at it and I think my returns have outpaced his because of that
01:34:05
yeah I think that's right and so you know this is all the conversation we've been having the secular Trend the opportunity the skill set then it's the
01:34:17
execution of that thing then it's not to [ __ ] it up and what you've done is not [ __ ] it up he invested in your seed
01:34:24
phases elsewhere so nobody can you've got no single point of failure you've got it stored privately yourself you have it in a large one of
01:34:36
the top two there's probably three that or low risk in terms of the chances that
01:34:42
the use gets abandoned in the next five years Bitcoin Ethan salana they're pretty safe so everyone should knock their socks off 80% of their portfolio do that and you'll make
01:34:55
money 90% of portfolio don't use leverage then we're all humans give yourself 10% and do the [ __ ] what you want most of the time you'll find out that that 10% goes to zero which is fine
01:35:07
it's a good lesson you don't care because you've made plenty of money on the rest but if you are that genius who
01:35:13
can find the Thousand X meme coin knock your socks off here's why I think that genius ends up because it's funny
01:35:19
because the friend I'm describing he's around he's in Dubai so there's a lot of them out there that the I said duai you
01:35:26
understand what I'm talking about um they all invested in Luna they lost their [ __ ] shirt he was telling me about his boy who he works with who made
01:35:32
I don't know tens of millions betting on these meme coins and then now he tells me that exact same guy is broke and is
01:35:39
in a a lot of trouble because the mentality that makes you go in pursuit of these real
01:35:44
high-risk bets these like meme coins and stuff is also the same mentality and mindset that makes you lose the THX
01:35:52
return the 10 million million dollars you made um on the other side and I think the psychology of money book talks
01:35:58
about that as well like case studies Morgan H's book case stud's the guy who like bet against like the contrarian
01:36:04
that made the billion is also the same contrarian that ends up losing it again in the next cycle so I feel like I've
01:36:11
seen that a lot the problem with the mean coin thing it is a casino yeah what is good is there are periods of time where where everybody in the casino makes money yeah right which is unlike
01:36:23
knows because there's Trends in financial markets and now taking out it's paper returns and then a lot of
01:36:30
this stuff goes to zero we saw that with nfts last cycle we've seen it with a whole bunch of tokens which is where you need to be very careful of latching onto
01:36:37
a token and just keeping hold of it because some of these won't survive you're luckier in eth and not in
01:36:43
something else EOS that was around in 2017 right it's like you're stuck so you need to be careful um speculation does work for periods of time it's better than
01:36:56
actually lottery tickets and generally better than the casino but only for periods of times and then you will lose
01:37:02
everything somebody's going to come into that casino and sweep every table and only 5% of the people are going to be
01:37:08
left with money so just think of it that way so if you want to have fun people but the people who do it the most are
01:37:14
the people who live off adrenaline yeah right it's the Adrenaline Junkies they're usually
01:37:19
terminally online they probably like to get gambling other ways sports betting it it's you know it's an inh I'm not really that person so I don't trade yes
01:37:32
I own a few mean coins because I enjoy the fun of the culture and seeing that culture develop but just keep it simple
01:37:40
stupid is this why men are so drawn to this I was thinking about the gambling statistics and like it's like something
01:37:46
like 95 or 98% of gambling addicts are men and I was thinking you know how does this overlap with like their sense of purpose Community much a deeper question
01:37:56
I think men feel hugely Under Pressure to be successful to provide there's a societal
01:38:06
thing about what a man does and what he should do and how you measure success that even in sports it's kind of it's
01:38:18
very competitive to be a man but it's also somewhat of a lonely pursuit in that respect because men aren't very at
01:38:23
talking about their feelings and their fears and all the [ __ ] you bring in your head so some
01:38:30
gambling is to do with that desperate need to get ahead I I need to make this work but then it becomes somewhat of an addiction because of the adrenaline
01:38:41
dopamine is a very very powerful drug and we search for it all day which is what the internet's all about behavioral
01:38:47
economics this is what they discovered is you trigger dopamine and you can make all animals do something
01:38:54
famously Skinner and the Rats but humans and the internet and like buttons and anger and all of these things so there's part of that it's partly
01:39:08
also male Society is about betting improving your prowess gladitorial so it's a whole complicated thing of what makes men do it but the reason for example in crypto
01:39:21
it's so male it because we're driven by that need to be the breadwinner even though Society has moved on from that and we're seeing
01:39:33
fantastically a rise of women in the blockchain space um and a changing of that crypto bro
01:39:40
culture that was there if you follow some of the crypto Bitcoin Twitter pages that are the confession Pages yeah
01:39:47
people can write in and confess what happened to them it's often really sad and heartbreaking hearing about this father who has three young kids under the age of seven who invested in some meme coin
01:40:00
lost it all and now his wife wants to know where the money is and he's got nothing to show for it and I've seen these documentaries I've even kind of
01:40:06
heard of these stories in in my extended Network where like my personal trainer put 6,000 of his very scarce money into
01:40:14
some coin and it went to zero and he's lost it all and it the suicides in the in the bare Market when people have put too much in and they've lost at all much of the reason why I think people don't invest in crypto anymore is either
01:40:26
they've heard one of these stories or they are one of those stories and I think there so there's kind of a disclaimer and kind of a warning here
01:40:32
which needs to be heard well this is the don't [ __ ] this up thesis buy Bitcoin ethereum and salana one of those three
01:40:40
preferably all three and that will stop you going to zero but it will go up it will crack could crash 70% or something okay so that's a conversation about time Horizon
01:40:52
how long should I be prepared to hold it for to make a return well it depends what return and for what remember we talked about you know what part of your destiny you trying to to manifest here
01:41:04
which part of your lifestyle chips are you trying to cash in so if you're trying to get rich quick I I want to
01:41:10
make loads of money by next year I'd rather you didn't do this um I don't think that is a sensible intelligent way living your life you're
01:41:24
going to take too much risk and you're going to subsal to lose it all if you said hey R listen what I want is I want
01:41:31
in five years time to have made a decent return on my money you know three four five times my money I'm like yeah that's fine okay I'm going to ask you for a price prediction
01:41:43
no you you don't do price predictions not anymore and the reason being is because a lot of people listen to what I
01:41:50
say and therefore they then build a mental model around a priceh and what you do is then you create a
01:42:01
false comfort in what you're doing but R says it's going to X and that stops you doing the work to make yourself test anything and then you start
01:42:13
extrapolating well I've put 10 grand in and if R's right I'm going to have a million dollars like the whole thing becomes this emotional Journey
01:42:24
and so I tried to stop doing it because the the best thing I can say to people is listen 2032 2034 that is not long away 10 years this asset class is going to go
01:42:36
from 2 trillion to 100 trillion right that is a huge return now some of the coins in that space will do a multiple of that that
01:42:50
simple thesis is why I built xam the ass management company exponential age was just to capture this trend to let well
01:42:57
unfortunately it's only for high net worth investors and institutional investors but just let them go on that Journey get the hedge funds to take the
01:43:03
risk and figure it out and do that but if people just do that give me 10 years just give me 10 years and if you do it 10 years and
01:43:15
you're sensible you'll be able to take a whole chunk of money out every few years because it's quite cyclical it moves
01:43:22
maybe every four years years and so you can take a chunk out cash cash it in the lifestyle
01:43:28
bank and keep moving towards that goal well as you were speaking I figured out your price prediction based on your
01:43:35
prediction of how big the asset class will get so you gave me enough time to ask AI to do the math for me and it says
01:43:43
if Bitcoin has a 40% market dominance the market cap of Bitcoin will be roughly 40 trillion if there are approximately 19 million Bitcoins mine
01:43:49
the price would be around 2.1 million per Bitcoin at a 50% dominance the price per Bitcoin would be 2.6 million per
01:43:56
Bitcoin today as we sit here the price of Bitcoin is $622,000 so if your prediction that the asset class gets to 100 trillion and if
01:44:07
ethereum is 15% of that then each ethereum will be worth $125,000 per ethereum and today it's worth about 2,00 what I do when I face with something like this when I first
01:44:19
bought Bitcoin in I first wrote I wrote the first ever Bitcoin strategy piece and made a price prediction based on what I understood about Bitcoin back in
01:44:30
2013 12 it was the first ever a piece written by anybody and I said listen I think
01:44:36
it's worth a million dollars and it was trading at $200 and I had some basic maths but same kind of
01:44:44
idea using Trends and everything else and I said I'm assuming I'm Wrong by 90% still worth 100 Grand and it's currently $200 it's the best tra TR you'll ever do in your entire life and that proved that
01:44:55
to be true so let's assume that R is more and I'm 50% wrong it's a $50 trillion asset class you get to a million dollar Bitcoin is right and assuming whether
01:45:09
it's that dominant or less dominant and what happens to but you can see the magnitude of the
01:45:15
returns so that's a what 15x return in Bitcoin what if you're wrong you've St so much of your life on this you've invested so much of your own
01:45:27
money in it what if you're wrong about this asset class you couldn't have predicted Bitcoin would be so dominant
01:45:33
20 years ago we couldn't have predicted even five years ago that AI would take hold these things come out of nowhere and they change the Paradigm what if
01:45:39
you're wrong I'm an investor so being wrong is part of the thing what's hard is via helping so many people at real
01:45:47
vision and elsewhere it is a weight I carry on my shoulders because I'm trying to bring as many people across the line and unfuck their future and all of these
01:46:01
things and I ask myself those questions and I go back to the simple thing there is the graph of the adoption of this if
01:46:08
that's going to stop we've got an issue but then how are we going to solve problems of digital Identity or contracts in a globalized
01:46:19
world or any of these things with without this technology I I can't do it right it's
01:46:27
like a magic technology the bantine General's problem was a real complicated problem that nobody had solved until Bitcoin maybe AI creates a better
01:46:39
blockchain maybe AI creates a better system yes it could do but how long away is that before we adopt it it adopts that technology you know some Quantum
01:46:51
cryptographic whatever right right is there a need for it yet why are we disrupting a new industry that's not
01:46:57
been disrupted but yes no investment comes with that risk crypto comes with that risk the risk that governments were trying and shut it down even though they've tried and it's like a cockroach
01:47:10
because it's distributed and it's everywhere yeah there's the r the risk the blockchain you invest in becomes less valuable there is the cyclicality
01:47:22
of this asset that can 70% 80% every three every four years you have to deal with that there's the risk that you lose your coins there's the there's all the risks in the world and that's why you
01:47:34
get paid the return so I don't there was no certainty in this world I live in a probabilistic
01:47:40
world but if you can show me the world is going to be less digital than today and you can show me a better way of
01:47:46
dealing with a lot of these structural problems that we have and you can show me that the community the ground swell
01:47:54
of individuals don't forget this is driven by individuals we front run the institutions the institutions weren't allowed to invest in it but we've been
01:48:05
able to put our money in before they did we've created it if I see any of those factors changing then I'll worry about
01:48:11
it so you're telling me that if I'm earning an income right now I shouldn't hold these pieces of paper that the
01:48:19
central bank my bank is giving me I shouldn't keep cash in my bank account everybody has different needs and I'm not saying don't you know have wear your tin hat and look everything up to about
01:48:30
100 Grand is protected so you're okay you're not going to lose your money that way but you're losing another way and that's the debasement of currency it's time to take a moment to
01:48:44
reflect on our sponsor whoops sober October challenge I know thousands of you got involved in the sober October
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docomo so what's the debasement of currency really simply we talked about in a digital
01:50:38
world everything goes to zero in value that is De basement what it means is too much of
01:50:49
something makes it less valuable I can come out of the desert I will pay you anything for a
01:50:57
bottle of water give me a million bottles of water I'll pay you nothing for them right there's too much of it now how you say well how can there be too much
01:51:08
money but what happens is the economic system revalues things in this weird world in this weird
01:51:19
way by debasement so debasement in the old times was if we take one of those gold coins the basement was that was let's say 1 o of gold then I was the
01:51:31
Roman Emperor I would just snip off a little bit of the gold you wouldn't notice and you'd still value it try and
01:51:39
pretend it was the 1 oce but somebody else would say no no it's actually worth less I've taken that slither as the emperor and I've used it and spent it on
01:51:53
sports cars and you've now got a less valuable coin and the country has less value so
01:52:00
the money is less valuable it's called de basement the more of it that's around in an electronic age where you just press the button and you create money then what happens is the value of
01:52:15
money goes down so let's say people can understand it simply as let's say you go on holiday and you go to
01:52:23
a country that has a a very weak currency let's say it was it used to be Mexico let's say you're an American you
01:52:28
went to Mexico everything was cheap because the currency kept going down but for Mexicans it actually got expensive
01:52:36
because the value the purchasing power of your um peso went down and you couldn't
01:52:44
buy as much with your peso what we're doing is ever since 2008 the whole world world all the big economies in the world Hit 100% all the governments hit
01:52:58
100% of GDP in debt so 100% of the economic value of that country was in debt and that means that just paying the interest on that debt starts to become a
01:53:12
burden so let's say your your economy is growing at 2% a year let's say your interest rate was 2% well 100% of the economic growth basically goes to pay the interest
01:53:24
payments because somebody needs to generate the money to pay them but at the time corporations were over 100% of GDP in debt and so were
01:53:35
households 2008 everybody was in a debt ory the financial system was just lending everybody and then it all fell apart and so what they stopped doing was
01:53:47
really corporations and households stop um borrowing as much money they in fact restricted money to us so in these Economic Times we've actually been able to borrow less money while house prices
01:53:59
have gone up by debasement I'll show you that in a sec and the governments have taken on
01:54:04
this obligation so they've been massively growing their debts and they reset interest rates to
01:54:10
zero to kind of give them a chance of paying debts back in 2008 and only recently have they have they really risen but they've still got all of these
01:54:21
interest payments to pay for now the US economy is 4 well 380 per of GDP in debt I mean staggering considering the size of this
01:54:32
economy the world the entire world is 400% of GDP and debt but we've gone so far beyond what is sensible anymore that it's become incredibly fragile so the
01:54:45
management of the payments of the debt and the debt itself is the number one Focus Fus of
01:54:53
the government and the central banks because if it all goes to [ __ ] it all goes to [ __ ] everyone's going to lose their savings every business goes under every government goes under
01:55:05
there's no payment of services the retirees lose everything it is unfathomable and I know many people
01:55:11
online talk about yeah we should just let it all go they have no comprehension of what that will do in a world that's 400% in debt it's basically a 75% Wipeout of every single
01:55:25
asset and all the braries and all your savings and all your pensions and everything so the answer is well let's
01:55:33
just print some more money to pay the bills that's you taking a credit card to pay off your credit card payments now when you control the money
01:55:43
you can kind of do that because nobody's going to tap you on the shoulder so what they do is they start
01:55:50
printing money first they used to used the the balance sheet which meant that the Federal Reserve or the bank of
01:55:55
England or whoever would buy bonds from the market and kind of basically take them off the market so it meant there was less debt around in the market but they've changed the thing they they now
01:56:07
have something more pentious called liquidity you can't see it they got different mechanisms that they put this
01:56:13
into the system and basically everybody all of the central banks are doing it at the
01:56:18
same time and they're also all in agreement that they have to do it and this is is all driven by the Aging demographics and the debt problems that
01:56:25
it all caused and so what we've got is every government having every four years or so
01:56:34
to print a lot of money why four years because in 2008 they all reset their interest rates to zero they then went
01:56:41
and borrowed money three to five years out and every four years the cycle comes up and they start injecting money liquidity Okay so what does this
01:56:52
all mean you know people watching this like yeah I kind of know what you're talking about what it means is that on
01:56:59
average your money goes down in purchasing power versus scarce assets by 8% a year and then you've usually got let's say a 3% inflation
01:57:12
rate you've got 11% of your money is being devalued every year your future self is getting poorer by 11% right remember we we talked about the future self and if you buy the S&P
01:57:23
500 what was it making about 11% a year so if you buy the S&P 500 your future self is not going to get any richer for the risk you've taken locking up your money for 10 years or 20 years because
01:57:36
of this inflation because of this debasement debasement now people confuse inflation and
01:57:41
debasement I would call this debasement of currency and so this is happening 8% a year which is why we're all feeling so [ __ ] it's happening all these assets keep going going up real estate keeps
01:57:53
going up to offset this now what I did once I realized this something I call the everything code it's a big thesis
01:58:00
around how this all happened and what it all means and what's happening is basically the Aging population is
01:58:05
driving debt to GDP it's driving the government debt and then the liquidity is paying the interest payment so it's this economic machine that the world has become it's perfectly cyclical it's
01:58:21
perfectly predictable it's not going away until we have this technological Revolution we talked
01:58:27
about and so everybody has to protect themselves so once I found this thing called the everything code I started
01:58:34
thinking okay if this let's say 11% rate the hurdle rate of money that my future self is getting poorer every year by what do I invest in so I started
01:58:47
dividing everything by that and the S&P 500 doesn't make you any money real estate doesn't really make you any money
01:58:53
gold actually lost your money supposed to maintain your purchasing power I'm like holy [ __ ] there were only
01:59:00
two Assets in the world that outperformed this technology crypto the NASDAQ was doing 18% a year and crypto was doing 150 plus you know salana is
01:59:13
done 250% a year even with three 80% draw Downs so this is what got me to change my entire investing game from being a broad-based
01:59:24
investor with you know a balanced portfolio to okay there's only two bets in the world there are literally two bets in the world technology and crypto and the NASDAQ is down
01:59:39
99.97% versus Bitcoin since 2012 how much of your personal money did you invest in crypto 100% of my liquid net
01:59:47
worth and it has been five years have you done well yeah yeah very well I've I've not made any major mistakes I mean I've been in
01:59:58
this journey since 2013 I I have made mistakes my mistake was I bought it at 200 I put not bad size bet in considering how unproven it was in 2013
02:00:09
it was how unproven it was and it went up it went up 5x or something in the first three months of me buying it I'm like I'm the best investor in the world is amazing
02:00:23
then it fell 87% and I'm like I had this long-term view it was going to 100,000 and that um I would just not look at the price as you're doing right and fine and
02:00:36
then 2017 it was now at 2 a half th000 I was up like 10 12x which was amazing I'd
02:00:44
never had a bet up 10 or 12x and and there was some weird stuff going on there was another Bitcoin it was going to be the code had been forked and I was like I don't really understand this I'm
02:00:55
going to take my money so that was about March April 20 17 by December it had hit 20,000 it had gone up another 10x that
02:01:09
year then it collapsed down 85% and then I bought it in 2020 during the pandemic into that big sell where it fell 50 % so I bought it
02:01:23
cheap I sold it on the way up I then bought it when it sold off if I'd have just held on to my original bet I'd have made five times as much money and if I'd have listened to
02:01:36
myself which is every four years when you have these big sell-offs you just try and add as much money as possible
02:01:42
I'd have made 25 times as much money so I've even though I got it right I [ __ ] it up
02:01:48
too well youve said that the best trade is always quality of life yes if your account is full of quality of life and quality of life experiences that's the greatest trade on Earth and I'll
02:02:02
continue to do that trade until the day that I die what do you mean what is the purpose of life now we can get very existential
02:02:14
about stuff and you actually go down these paths a lot with AI and Universal Consciousness and a lot of other stuff
02:02:21
but basically let's just assume we're humans let's just assume maybe we've got one shot on
02:02:27
this Earth well you might as well make the best of it and people have got to remember money
02:02:34
is just a scoring system that allows you Privileges and people lose track of that and think money is the privilege itself the privilege is freedom the
02:02:48
privilege is being able to live where you want to live the privilege is being surrounded by the people you want to be
02:02:53
surrounded by the privilege is being a bring up a family whatever your value system is those are the
02:03:01
things so for me it's I like living in nature and that's probably key thing number one but being connected so when I bought a house in
02:03:16
Spain like that was a huge quality of life thing because I've got a security of a house that I
02:03:23
in nature in good climate okay I'm I'm fine but really experiences are even more powerful if there is a true currency in the world it's experiences you know as I said I've just come back
02:03:37
from living in the remote world of Zambia that is an experience that is incredibly valuable to me and I've done
02:03:43
a lot of these that is what it's all for this understanding and seeing of how the
02:03:50
world is and the beauty and the Marvel the people understanding people and not being fearful of people and and not
02:03:57
thinking about cultures accept in terms of oh well that's their culture and that's their culture as opposed to
02:04:03
culture good culture bad friends you know all of these things these are the valuable things you can't buy any of them you have to physically
02:04:14
go and spend the time and be uncomfortable I've always said there is your comfort zone and where the magic
02:04:21
happen and these two ven diagrams don't intersect you have to be outside your comfort zone to feel the magic if not you're just doing Life by Numbers do I
02:04:33
need money to have those experiences no so so what's the point in me doing all this you know Bitcoin
02:04:40
investing focusing and sacrificing my 20s you need some money you don't you can solve for it without but it's hard if you're living in Ohio or Birmingham or wherever you are
02:04:53
right to get some of these things it might be I want to be warm and dry I want to you know grow my own fruit and veget whatever it is doesn't matter right you can solve it by a number of
02:05:07
different ways but really for the average person I say this is like if you want to live on a beach you can either become a billionaire and live in some
02:05:17
Barts or you can go to Latin America and live on the be for virtually nothing and
02:05:23
if you're living in an inent age you can make it happen but then what happens is maybe you want some more Creature
02:05:28
Comforts maybe you do this look I don't say that we should all be the Buddhist zen master and say we need nothing we can reject everything but if we break it down to
02:05:40
what is the feeling that I want then you can solve it with money or without money and you won't be disappointed because
02:05:46
remember the very beginning of our conversation is what makes people unhappy is when their vision of their
02:05:53
future self and their current state don't meet now if your vision of your future
02:05:59
self is remember I said I want that that peninsula in Spain where that family so
02:06:06
what are the component parts that I like C I like uh social life of people uh I like natural beauty and with somebody I love okay that can be solved hundred
02:06:18
different ways but in your life did you have to shift from from the building Zone the building season of life to then
02:06:25
the kind of enjoyment season of life I did in the middle which was the lesson I learned is I had done the investment banking in the
02:06:36
hedge fund thing I then opted out the rat race I wasn't the richest guy in the world but I thought you know what if I
02:06:41
can get a source of income I can live and I can grow my olives and Armond and I lived in a beautiful house on the side
02:06:47
of a national park near a beach town in Spain I've won the lottery and I started Global macro investor that ended up becoming a um a much bigger thing because the financial crisis and
02:06:59
predicted it and got all that stuff right um and so what I found is I'd semi-retired and I was surrounded by people who weren't really stimulating
02:07:12
intellectually stimulating I made some great friends but he wouldn't have a conversation like this and so I felt
02:07:20
isolated and then then you know you live on adrenaline if you're an entrepreneur or you're in financial markets and so
02:07:25
you end up going out to bars and Nightclub you know and I'm like I looked at it and I've been there 10 years I'm
02:07:31
like I got to get out of this because I'm excited by life I'm excited I want to do the entrepreneur thing I love
02:07:37
investing I just want to be around people who also did it and but by chance I ended up building a house in the
02:07:43
Cayman Islands um because it was one of my dreams I wanted a trop a house on tropical beach I love diving all of this
02:07:49
stuff and that was the signal to me to go [ __ ] it I'm moving to cman I started
02:07:54
real vision and I started the entrepreneurs journey and now I've got four companies and I'm busier than I've
02:08:00
ever been in my life I'm very happy doing it but it's a chapter again and it'll give me the life style ratchet but also the intellectual ratchet that I wanted to prove to myself that I can do
02:08:12
some of these things we have a closing tradition on this podcast where the last guest leaves a question for the next guest not knowing who they're going to
02:08:18
be leaving it for I've never revealed the last question in terms of who's written it
02:08:24
but I'm going to reveal it in this case this question is written by Boris Johnson and the question was have you
02:08:31
ever tried to sack someone and ended the meeting having accidentally promoted them Boris is speaking from experience there you know I
02:08:45
think I probably have I think I probably have and that goes back to one of my things that I've had to learn is how to have difficult
02:08:57
conversations I'm English and my mom's Dutch we're also quite evasive we don't like drama my wife's American so she's taught me that like just go straight in
02:09:09
for the kill and I've avoided tough conversations and so I've probably ended up in that situation or something close to it does not per I have as well of course I have and
02:09:24
I'm just like but it's the lesson I'm trying to learn is you need to be more if it's a tough conversation just
02:09:31
do it amen thank you R um I think everybody should go and check out your channel
02:09:37
which I've watched for many many years now I think it's the in fact it's the only Channel I go looking for when I'm looking for advice on anything crypto
02:09:44
related the macro environment inflation all of these things the only Channel that I trust and that I go looking for and I really really mean this when I say
02:09:50
it has always been yours because I think you've provided um Nuance in a way that's incredibly accessible to the
02:09:56
average person and a lot of these Finance channels are very difficult to like understand the terminology they kind of skipped past that part but what
02:10:02
you've done so well is made all of these subjects so accessible for everybody um and I can't imagine how many millions of
02:10:08
people you've um helped open their eyes to the state of currency debasement and you know some of the myths around how to create and and save your wealth and I think that's um a mission that is so
02:10:20
incredibly important because a lot of this Insight unfortunately historically has been reserved for the elites however you want to Define them the elites intellectually or the those only the
02:10:31
people that work in finance and I think what real Vision has done is blown those doors open and you're you've been a a
02:10:36
champion for me in my life um and and an educator for me in my life so that's why I was very excited to speak to you today
02:10:42
so thank you for what you talk appreciate that and also for everybody watching this look I'm genuine in trying
02:10:48
to help as many people and so we've that the this whole everything code thesis to
02:10:53
make people understand it more we've made a whole special uh error for you guys in real verion go to real
02:10:58
version.com diary and there is all for for you guys watching this it's the everything code the document so you can read it watch the
02:11:11
video you get free real verion subscription because it's free to join and honestly there's so many tools
02:11:17
and if you don't understand something ask the AI the bottom right of the screen there's a little button you ask the AI the real Vision bot it'll explain
02:11:24
it to you everything you need is there it's free there's no reason not to unfuck your own future I'll link that
02:11:31
below so everyone's got it that's realvision tocom diary there'll be a link below in the description wherever you're listening to this um thank you
02:11:38
thank you I really enjoyed it thank for your time every single time you eat you have
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an opportunity to improve your health that's why I love Zoe because it helps me to make the smartest food choices for
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my body as you guys probably know Zoe is a sponsor of my podcast I'm also an investor in the company which is
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important to say I invested in the company because Zoe combines My Health Data with their worldclass science using
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these two things Zoe guides me to Better Health every single time I make a food choice and eat which means I have more
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smarter the week after and if you haven't joined Zoe yet I'm going to give you 10% off when you join Zoe today just
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use the code stepen 10 at checkout so many of you have asked me for a bloody code for Zoe and here is your
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opportunity Steven tenet checkout there may not be another one [Music] ah [Music]