Chris Hutchins, Founder & CEO of Grove: Financial Planning with Bitcoin

Chris Hutchins is the founder & CEO of Grove, a personal financial planning product. In this conversation, Chris and Anthony Pompliano discuss the biggest mistakes people make in financial planning, how Bitcoin compares to other assets, and where Bitcoin should fit in your portfolio. -----If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:12Anthony Pompliano?

  Chris Hutchins is the founder and CEO at Grove, a personal financial planning product. In this conversation, we discuss the biggest mistakes people make in financial planning, how Bitcoin compares to other assets, and where Bitcoin should fit into your portfolio. I really enjoyed this conversation, and I hope you do as well.

• 0:33Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 0:59Anthony Pompliano?

  Alright guys, bang, bang. I've got Chris here, super excited to have this conversation because he comes at a lot of the crypto world and kind of financial education in a very different perspective than most people we've had on the podcast before. But Chris, thanks so much for taking the time to do this.

• 1:17Speaker 02

  Yeah, thanks for having me, I'm excited.

• 1:18Anthony Pompliano?

  Sure. Maybe before we get started, like just a quick overview of your background. I know you've spent time building companies, working at big companies, and then also investing, but maybe just give us an overview?

• 1:27Speaker 02

  Yeah, sure. So, let's see. Yeah, I started out at a college taking the traditional path, when worked investment banking and management consulting, realized that wasn't for me, and kind of decided I had to be out in Silicon Valley, loved technology, wanted to work, you know, and be a part of building companies. So, worked freelance for a couple of companies, joined a startup, and then ultimately ended up starting a company with a few friends in 2011 called Milk. We built a mobile app, you know, had some traction, but ultimately a year in, ended up selling the company to Google, spent a very short stint as a product manager there, and got an opportunity to transfer over to the Google Ventures team to be a partner on the investing team.

• 2:08Speaker 02

  So, invested in early-stage companies for the better part of three years before transitioning over to be an entrepreneur in residence, and ultimately spinning out to start Grove, my latest company.

• 2:20Anthony Pompliano?

  Got it. And so, what were some of the lessons you learned while working at Google Ventures? Just given, you know, it's a very kind of... Different seat uh in in the venture community, you know, kind of being part of a larger company, but also obviously still having to uh to bet, find, win deals, etc.

• 2:38Speaker 02

  Yeah, I mean, it was such an amazing educational experience. I I'm not sure the exact number, but I want to say in the three years I was there, we probably invested in 200 to 300 companies. And so, you know, I we all sat, all of us sat in on all of the the pitches for, you know, significant investments, sometimes some of the earlier stage seed deals, we didn't have the the team come in and pitch, but man, we sat in on so many deals, got to see so many companies, got to see companies that didn't work, got to see companies that worked, got to see the pitches of companies and see where they ended up going. You know, everyone kind of tracks the the list of, oh, let's see where that company ends up. Let's let's see how it goes. And so it was amazing

• 3:20Speaker 02

  experience watching some founders, you know, try things and and try and try and then ultimately end up finding success on a totally wild pivot. And some other companies, you know, the thing they started doing, they just, you know, started working at one point and some people were lucky and, you know, crushed it from the very beginning. You know, there's there's kind of, you see it all. But I, you know, I think the biggest lesson was, um, you know, the people, building a company's hard, right? If no one's, if anyone's listening to this and doesn't know that, let me tell you, the farther and, you know, the farther along the journey your company goes, the harder it actually gets. And so, you know, I've seen that with Grove, uh, you know, it's definitely this

• 4:02Speaker 02

  company's harder than the last one. Um, and so my biggest takeaway was when things are hard, the the thing that gets you through all of that is that you actually care and connect with the mission and the vision of what you're doing, you know, at a at a wild, crazy level. And so, you know, what I kind of tell most people is if you don't love what you're doing so much, unless you're so lucky and everything just works out perfectly for you forever, right? When that hard time comes, it's going to be really tough. So really make sure you love what you're doing. And and that was one of the criteria I used as an investor was, you know, I wanted to invest in founding teams that, you know, felt like they were put on the earth to solve the problem they were solving, not found something that seemed like a good business.

• 4:44Anthony Pompliano?

  Yeah, it's um, what's the uh, the framework people use like missionary versus mercenary? Right? Is there some people who are companies that they just wanna be an entrepreneur and it's cool and sexy? And then there's some people who's like, literally you couldn't pay me to go do something else. Right?

• 4:59Speaker 02

  Yep. I like the latter.

• 5:02Anthony Pompliano?

  Yeah, for sure. What, any other um, kind of uh, aspects or uh, points um, that while you were there just seeing so many different deals, so many different entrepreneurs that you picked up as like, you know, the best entrepreneurs, the entrepreneurs who seem to be most successful um, shared?

• 5:18Speaker 02

  Yeah, it's funny. So, you know, we saw so many deals, um, you know, we tried to look at all the data and all the signals that we had to try to figure out. You know, are there, are there indicators? And it was super interesting, you know, we did some research and found that, you know, if a founder was successful in the past, does that, you know, drive future success? And all of the indicators that you think might have wild impact, you know, I, we couldn't find any data that supported. You know, obviously, if there, there are some subtle indicators about, oh, companies, who, who the previous round was done, usually, you know, not necessarily the investor is the indicator, but those investors tend to look at indicators that probably matter.

• 5:59Speaker 02

  So honestly, I, I would say the three criteria I use to invest were, I wanted a team that was capable of building the thing. So a lot of times you get founders that are like, this is my vision, I wanna raise a round and hire a team to do it. And, you know, just hiring a team is hard. So if someone doesn't have the expertise in-house or experience growing teams, that's a, you know, that's something. They have to be passionate about what they're building. Um, and there just has to be a big, wide open area of opportunity from, from a market size. The product doesn't actually have to be, um, you know, perfect. Obviously, if you, if you have some traction, that's great. But the market has to be there because, you know, I expect any company from where they start to where they end is gonna pivot.

• 6:41Speaker 02

  And, you know, we've seen, you know, all kinds of crazy pivots, you know, in the last, you know, decade. And so I think you have to have someone that's passionate about an industry that's big and, and can, can actually do it. And that- You know, those are my criteria. You know, there's a lot more nuance you get to as you get later and you look at the unit economics and you look at, you know, customer acquisition costs and all that kind of stuff. But at the beginning, it's like, if you're passionate about an industry that's really big and there's, there's opportunity, and I feel like you could build that product or, or bring the team in. Like, I was pretty excited.

• 7:12Anthony Pompliano?

  Yeah, it's funny you talk about like the right team and hiring. When I first started investing, a, a well-known investor told me that you want to follow the talent, but talent isn't just who's sitting at the table pitching you. It's also, you want to make sure that that person has the ability to recruit capital and recruit team members, right? And so their ability to not themselves only be kind of driven like you're describing, but it's also, they can't do it alone, right? And so it's almost a filtering mechanism to some degree. If they can get other people who have different skill sets to get excited about the mission and, and go build the company, obviously is a positive sign, it sounds like.

• 7:53Speaker 02

  Yeah, sometimes it's funny. You see a founder pitch, you're like, wow, this is amazing product, but like, this person's just not doing a good job selling it to me. And the cra- the crazy thing in that environment is that might be something you'd want to invest in, but they're going to have to hire a team and raise more money and, you know, close partnerships. So, you know, it's a tough one when you're like, the product looks like it's here, there's some unique piece of technology. And that's when a lot of times you see VCs try to play matchmaker and say, look, really want to do this deal, but you know, I really think you're, you're missing this key component. Let's see if we can help you find this person to lead this part of the team or something.

• 8:32Anthony Pompliano?

  That makes sense. And then, so what was the, the thought process? You, you just learned a lot as an investor and then eventually wanted to go start trying to think through what you were going to build next, the switch to go to entrepreneur and reference? What was the logic there?

• 8:43Speaker 02

  Yeah, so my whole life, I've been kind of like the biggest personal finance nerd, right? I've always been obsessed with, you know, manipulating and figuring out all the hacks and trying to maximize everything and optimize everything. And so naturally, my friends kind of always came to me for financial advice. And I didn't really understand the landscape of the industry at all, but you know, I, I'd always kind of given advice and then, you know, I'd kind of put in my three years and you know, you kind of get to a point of reflection every kind of year, especially at a company that like Google where there's annual bonuses where you're like, okay, I got my annual bonus. Like if ever there's a time to move, it's now. If I wait six months, then I'm just going to want to wait six more months to get the bonus. So now's the time to think about it.

• 9:23Speaker 02

  And as I just started reflecting, I thought, you know, the last time we started a company, we, you know, we, we didn't start it with a vision and a mission for what we wanted to build. And so I felt like I'd learned what kind of company you'd want to build, but I knew that it had to be something that I was passionate about. I didn't have the idea yet. So I started talking to friends in general, just about life and, and it just, people kept coming to me with financial questions. And then one day, a good friend of mine said, can you just start you as a service? Cause I have a lot of questions and I don't know what I'm doing. And I thought, what does that even mean? And that like took me down a rabbit hole that over the course of three or four months ended up, um, you know, where we are now.

• 10:00Anthony Pompliano?

  Yeah. So there's a couple of things to unpack there, right? The first is, uh, this idea of, you know, you've already talked about just kind of following what you're interested in, um, which is pretty cool. Being able to do that every day. Cause it definitely makes the hard times easier, I think. But, uh, this idea also of like productizing, um, things that you're already doing in a non scalable way. Uh, I think those that have spent a lot of time around, uh, what I'll call the professional investors of Silicon Valley, uh, or have built companies before you eventually realize like this is the way that you build a company. But it sounds like you kind of got pulled that way. Uh, you were just helping friends and then eventually said, hey, I probably should productize this because they were asking.

• 10:38Speaker 02

  Yeah. I mean, I think one of the craziest things that, uh, happened is if you ask basically anyone that's known me for the last, anywhere from like, it doesn't even have to be long. And say like, you know, what do you think of the founder market fit here? You'll find like every single person will probably tell you like, this is the company I was meant to build. This is the thing I was meant to do. Um, you know, and if, and if there were a thing about the company that could be more me, it's only like a tiny, you know, pivot away. It's not, you know, it's not anything fundamentally different. So, but that's, it makes it seem like it was so obvious to me, which it actually wasn't. Because sometimes the things that you're so passionate about personally, never feel like it could be something professional.

• 11:20Speaker 02

  And so for me, it took a whole bunch of research asking, oh, like. Where do people get financial advice? What does that industry look like? Why is it bad? Why aren't people even asking me questions? Why don't they ask other people questions? What are options are out there? And after digging and digging and digging and digging, I was like, oh, like, I have to do something in this space. I didn't even know if it was venture scale, but eventually it was like, yes, I have to do this.

• 11:47Anthony Pompliano?

  Yeah. And so before we get into what you're exactly building right now, when you were at Google, this is what, like 2012 timeframe through like 15? Is that right?

• 11:58Speaker 02

  Yeah, I was there, got there 2012, I think, March 2012, and ended up leaving May 2016, but switched to be an entrepreneur resident somewhere 2015.

• 12:09Anthony Pompliano?

  Got it. So let's call like 2014, 2015, when you were working on the Google Ventures team, any interest or conversations around crypto at the time? Or was it still so early that it hadn't quite steeped into investment conversation?

• 12:24Speaker 02

  Yeah, so my co-founder in my last company was a guy named Kevin Rose, who we moved over to Google Ventures together. And he and I had both kind of had a light interest in crypto, but I would say, you know, not much, but definitely some. And so that kind of came, you know, so we were talking, but man, as a company thing, there wasn't much there, right? Like, it was just so early.

• 12:54Speaker 02

  Yeah, so I think there weren't that many startups. There wasn't like a business model around it. But I do remember, you know, we did two deals. I'm trying to look back. I want to look back to when. There was a company called Buttercoin, and there's a company we all now know called Ripple. And, you know, those two things, you know, there were some deals that happened along the way, but they certainly weren't, you know, things that... You know, we knew going in was going to be a focus area and I wouldn't even say it evolved to a focus area, but it was definitely something that, you know, we did a few deals in, but it felt like about 2013 was when people started talking about crypto companies in the venture scale.

• 13:34Anthony Pompliano?

  So let's switch gears and talk about Grove and kind of what you're building today. You know, when you first started trying to productize the advice that you're giving friends, like maybe talk a little bit about what was the first couple of things that you built? And then how has that evolved into the product today?

• 13:50Speaker 02

  Yeah, so it's funny, when I started thinking about this company, I didn't think, oh, we gotta go raise money and hire a team. I was like, I need to understand this problem because I've come at it in a way that's, you know, not a product, it's not a service, it's not something people paid for. And, you know, so my co-founder now actually is a guy I went to middle school with, we were on the math team together. And every time a friend of mine asked me a question, if it got a little technical on the investment side, I would reach out to my, my old friend Chris and say, hey, like you've, you've worked in investments for the last, you know, decade, like, help me think through this thing. And he was like my thought partner. And, you know, we just kept talking so much. At one point, we were like, hey, like, seems like a lot of

• 14:30Speaker 02

  people are asking you questions. Like, you know, does anyone know what they're doing? And so the first iteration of it was while I was entrepreneur residence, he was still working part-time. We went and created an RIA, which is a registered investment advisory firm. And we took the Series 65, which is what you need to do to be able to be an investment advisor. And we just brought on clients to a business that was just an LLC with, you know, a handful of clients. And we said, let's just work with these people. Let's like, let's just charge $500 and we're going to figure out whatever you're stressed out about related to your money and we'll help you figure out what to do. We didn't have a product, we didn't have a service. We said for $500, you get, you know, unfettered access to me and Chris.

• 15:11Speaker 02

  And people were like, great, we'll do it. And so through that process, we realized that, okay, so the thing people need or are confused about is that everybody has these things in life that they care about, you know, goals. But sometimes people don't think of them as goals where it's like, you know, I want to. Pay off my student loans, or I want to be able to take a sabbatical for a year, or I want to retire early, or I want to buy a home and start a family and send my kids to college. Whatever it is, everybody has things that they want to do. And there's no system for knowing whether you're on track for them. And so what we found out was that the thing causing the most stress and anxiety for most people was that they just didn't feel like they were on track for what they cared about.

• 15:53Speaker 02

  Right? They said, I'm saving a little money, or I'm not, or, you know, I put some money in my 401k, but like, I have no idea if it's enough. I have no idea if I'm setting myself up. You know, I feel like all my friends are going out and spending money, so I feel like I should spend more money and have more fun, but I don't know if I'm putting future goals at risk and help me figure it out. And so, you know, we started building these future cash flow models. It was like, well, if you save this many thousand dollars a year, and you do this every year for the rest of your life, and you would make some assumptions about inflation and investment returns, like, do you end up running out of money when you're 60? Or do you end up with enough money that you can last as long as you want? And when you give people that answer, all of a sudden, they're like, oh, wow, I can't do everything I want. That's the inspiration to change behavior. But if you just tell someone that they could save a hundred dollars more a month,

• 16:38Speaker 02

  they're going to be like, okay, cool, but they're not going to do it. But if you show them why it matters, I've seen that drive behavior change much differently.

• 16:48Anthony Pompliano?

  Got it. And so as you've seen this, I want to talk a little bit about what I'll call the kind of just very generalized best practices, right? Because when it comes to crypto, I think we see a lot of

• 17:04Anthony Pompliano?

  uneducated decision-making is probably the best way to do it, where people just literally, they're all in or they're all out. Maybe talk a little bit about how you see, you know, what are risky speculative assets, right? Not necessarily just crypto, but just in general, fitting into portfolios and kind of how you think or the product kind of incorporates that into financial plan.

• 17:26Speaker 02

  Yeah, so when we think about financial planning, it's, you know, how do we help make sure people are on track for what they care about? And knowing whether someone's particular investment or anything they're, you know, doing financially puts them on track. You know, you have to base it on something. And so the best thing that we have to base it on is, you know, historical data about how certain things perform. Real estate prices, you know, stock market, bonds, cash, inflation, that kind of stuff. And so the challenge is there, there's all these new investment types, you know, crypto being one of them, where there's just a very short window of data of what happens to these things in the long term.

• 18:05Speaker 02

  And in, in some of them, crypto, you know, in particular, like the data we do have is very, very, very fast, you know, fast moving, up, down, up, down, volatile. And so, you know, if someone comes to us and says, hey, I want to buy a house in, you know, 10 years, and I need to save $200,000, I have $100,000 now, you know, I just feel like it's very, you know, risky to say, here's a thing that we know how it's performed in a very short window, and that performance has been very volatile and unpredictable. Or here's something where we know how it's performed and it's done a lot, you know, and, and, you know, we have a lot of data to show that this is what happens over that timeframe and we can plan around it.

• 18:46Speaker 02

  So ultimately, we're, our, our goal is to put someone on the track for what they want. If they come to us and say, that's fine, but I believe really strongly in this one thing, we'll say, great. Like, it's not crazy for someone to say, I want to keep some money in a single stock, or I want to make a couple angel investments, or I want to hold crypto assets. We just try to help keep the volatility, you know, to be a small enough concentrated part of their portfolio that it won't affect the overall risk of their ability to achieve their goals. And so that number could be 5% of all of their investment assets.

• 19:21Anthony Pompliano?

  Got it. And so as you're seeing this, how do you think about, let's say that somebody follows the advice, right? They gain kind of what we'll call responsible exposure to crypto, and they look at it as kind of a speculative asset that they have, you know, long-term belief in. If we see these bull markets like we saw in 2017 or previously with Bitcoin, how do you think about rebalancing the portfolio? Right? So let's say I put 1% to 5% of their assets in and all of a sudden it 10x is in price. Right? And now they're sitting there and they've got this speculative asset that is a material part of their portfolio. What's the best way for them to usually think through that rebalancing? Or maybe they shouldn't rebalance at all?

• 20:03Speaker 02

  No, no, this is a question we get all the time, especially with people who work at companies that get granted equity in their companies. And that company is successful. And they're like, hey, you know, now I happen to have $500,000 and 470,000 of it is in stock in the company I work at. And we, you know, or the same thing happens with crypto, you know, I put $5,000 in Bitcoin and now that's worth half a million dollars. And outside of that, I've got five grand. You know, we kind of tell them two things. The, the main thing is look at your situation. Pretend you sold it all and you're sitting on cash. Right? What do you want to do now? And, and every day you're not selling is a day you're effectively buying. Now, sure, you could argue that taxes might change the strategy.

• 20:46Speaker 02

  And if you have enough money that that's the case, talk to an accountant and get some feedback. But at the end of the day, like if you have $500,000, do you want to invest all of it in Bitcoin right now? Right? Like knowing what you care about in the world, is that the bet you want to make? So in my mind, it doesn't matter how you got there. It doesn't matter what happened. All that really matters is where you are now. And if your net worth of investable assets is, you know, half a million dollars, well, you decide for yourself how much you want to have in any particular asset. Whether that's stock at the company you work at, whether that's, you know, a cryptocurrency or, or anything. And almost every time the answer after people think about it is, yeah, I should probably not have as much in that one thing. You know, I should probably be more diversified, even though I didn't start there.

• 21:30Speaker 02

  And the second thing is when you make that change, definitely don't forget about the fact that you're going to owe taxes. Someone that works at the company had a friend that invested a lot of money into crypto. Or actually now, I said a small amount relative to the dollar amount that grew a lot. Ended up making a ton of money, sold it. In in one tax year and then invested it later into a bunch of other like new coins trying to, you know, predict what would happen. They all went to basically zero, had a huge loss the next year, but had no money to pay the tax bill. So anytime someone sells

• 22:13Speaker 02

  an asset, crypto, stock, real estate, you you're gonna probably owe a lot of taxes if you made a lot of money. Hold that aside because the IRS doesn't care if you take that money and lose it. Like, they still want the tax bill. So that's the two things are treat every day as if you have everything in cash and you have to make your decision over again. And or at least every decision like that. And then the second is if you if you decide to sell, hold back for taxes because a lot of these asset sales will not hold back for you. And so the last thing you want to do is is end up in a situation where, you know, you've sold $300,000 of crypto and then all of a sudden, you know, you've spent it all and the IRS is knocking.

• 22:55Anthony Pompliano?

  Yeah, that that was not a good situation. Um, this tangentially related to this is this idea of diversification. Uh, I hear all the time people in crypto say, uh, well, I used to own just Bitcoin, but I've diversified it. Now I own 10 cryptos. And I think that there's some confusion between true diversification and just like buying more of the same stuff that's all correlated. Maybe talk a little bit about the difference there and kind of how you guys think about it.

• 23:22Speaker 02

  Yeah, look, if someone came to me and said, you know, I have $100,000 and I want to bet on crypto, but I have all these other goals in mind, I would say, great, like, I would try to keep that exposure to $5,000. And so then they say, okay, now I've got $5,000 I'm investing in crypto. Do I put it in one coin? Do I put it in 10? Honestly, like, I I don't feel like I could make an opinion on that because I don't have enough data on, you know, I haven't read all the white papers. But like, it certainly seems from the data I can tell that no one seems to be able to consistently say this one's going to perform better today than this other one, you know, it's it's definitely still pretty speculative. So, you know, from a rational standpoint, I'd be like, oh, yeah, if you want to go put $5,000 to work and you want to put it across two or three things

• 24:07Speaker 02

  instead of one thing, you know, that seems to diversify the bet on that industry. But 10 crypto coins doesn't diversify a portfolio for your future. Uh, because, you know, all of them are still quite volatile and correlated.

• 24:23Anthony Pompliano?

  For sure. The uh, my favorite one so far has been uh, oh, they're not all cryptocurrency. Some of them are currencies and some of them are commodities and therefore I have both of those buckets in my portfolio, which uh, gave me a pretty good laugh. Um.

• 24:37Speaker 02

  Yeah.

• 24:37Anthony Pompliano?

  As.

• 24:38Speaker 02

  That is, I would buy that as a, as a defense of proper diversification.

• 24:43Anthony Pompliano?

  Yeah. So, you know, there's this uh, there's this saying that I hear a lot um, in the crypto community uh, that concentration builds wealth and diversification protects it. And so I think that uh, there's probably some truth to that, but there's also a uh, trade-off with the responsibilities you have at whatever point in life you are. So maybe talk a little bit about how you think, you know, concentration builds wealth, diversification protects it, fits into personal finance and portfolio management.

• 25:14Speaker 02

  Absolutely. So, you know, if you had, there's no doubt that there's like this balance between risk and reward, right? And, and when we look at the risk reward tables, you know, you, if you've ever taken an investment risk tolerance questionnaire, it's like, how would you feel about this portfolio that could go up, you know, a hundred percent, but could also go down ninety percent versus this one that could go up twenty percent, but might only go down ten percent. So there's an inherent balance for risk and reward, right? Certain people are willing to, you know, if you're willing to take more risk, why wouldn't you want more reward for it? And so the more volatility, you know, you have to assume that there's some more benefit, otherwise it wouldn't make a good investment at all, unless it has some utility. So let's not get into the crypto utility thing, but you know, people argue that art should provide, you know, less return,

• 25:58Speaker 02

  because while you have it, you can hang it on your wall and get benefit from it. So the way I look at that is very similar. I mean, you said it well. It's like, yes, you could inherently, you will build faster in things that grow faster and things that have higher risk, you know, historically have grown faster. They've also gone to zero a lot faster, uh, or at least a lot more regularly. And so, you know. I hear this thing where people are like, well, I'm young, I should be building wealth, not, you know, not protecting the wealth, but at the same time, you have something. And you need to compare what you feel that thing could certainly be. If you've saved $200,000, um, you know, do you want to put it all at risk for the hopes that you might

• 26:40Speaker 02

  get to a million dollars faster? Or, you know, or, but the downside of that is like, maybe you lose it all. And that was, you know, the ability to pay off your student loans, or that's the ability to pay for, you know, the child that your wife's expecting, uh, or your, you know, like, those kinds of situations, you have to ask yourself, like, is what you have now, something you want to protect? And, you know, you might be really young and say, I've got a hundred thousand dollars from this, you know, crypto investing, and if it all goes to zero, I don't care, but I want to let it all ride and try to get it to a million, you know? In my mind, that's the equivalent of being like, I'm just gonna go to the casino and I'm gonna put it on some, you know, some place, except you, unless you have knowledge that you feel the market doesn't have, and, and then maybe it's a

• 27:23Speaker 02

  little different, but it's still super risky. So, you know, I tend to think that people that have saved money are still, you know, are trying to balance protecting what they've saved with growing it. And you've just got to choose how much you're willing to, to take a risk. It's not really a choice as much as it is a spectrum, right? If it's 5% crypto, 70% stocks, 25% bond, you know, like, you could change the levers all you want to get to wherever you want on the, on the spectrum.

• 27:48Anthony Pompliano?

  Got it. And then my last question around portfolio construction is, um, you know, one thing that I talk a lot about is, uh, Bitcoin's non-correlation, or low correlation to other assets. Um, maybe just, you know, talk a little bit about how you guys think about that. Is that something that is important in portfolio construction? Um, but I think it's a, a component that, uh, definitely the uneducated investor doesn't understand or pay attention to, uh, but then also non-correlation. Um, there's a little bit of a debate at how important that is for personal finance as opposed to maybe a professional portfolio.

• 28:22Speaker 02

  Yeah, I mean, I think it's important if you're building a portfolio and you want to diversify, like inherently to diversify and get benefit from it, the things you diversify in have to not. Be correlated. If you diversify in, you know, 10 tech stocks and the tech market crashes like you diversification didn't serve you very well. But if, you know, historically, we found the bond market to not be perfect, you know, perfectly correlated with the stock market or the real estate market. And so, you know, there are things that you can diversify with. I will say that, you know, there's just not enough, you know, yes, you know, there isn't a perfect correlation between the stock market and the cryptocurrency market right now. There's also just not a lot of data, right?

• 29:02Speaker 02

  You've got stock market data going back, you know, a century and you've got, you know, crypto data going back a decade. And there's, you know, a lot of speculation in that first decade that makes it really hard to even understand whether the data that we've seen from what's happened is what we feel like will be a true indicator of the future performance of, of that asset. And so, you know, yes, it, you know, if you want to build out a portfolio, having something in that portfolio that doesn't isn't correlated with everything else is good. And, you know, you could make that case. I just, I worry that there's not enough data to make that case, you know, as much as you could looking at real estate versus, you know, fixed income versus stocks.

• 29:46Anthony Pompliano?

  For sure. What, um, going back to growth for a second, uh, what's like the average net worth of individuals on a platform?

• 29:53Speaker 02

  Yeah. So our core customer is in their 30s, um, but that, you know, we also have people in their twenties and forties and, you know, across. But I'd say the core customer is someone 25 to 45, uh, able to save a little bit of money. So you're not at the point where you're just trying to pay down credit card debt, um, living paycheck to paycheck. You've figured out, oh, I have some money to save and I'm trying to figure out whether I put it in my 401k or I open a Roth IRA or I pay off my student loans or I save for a down payment or, you know, I start funding the future. Maybe can I take a sabbatical or how big of a house can I buy? And you're so overwhelmed with all these questions. You know, it's hard to peg a specific net worth, right? There are some people that's net worths because of their student loans might be negative. But, you know, they're in a pretty positive cash flow situation right now. And there's some people that might have,

• 30:35Speaker 02

  you know, 100, 200, 300, 400, $500,000 saved or more. And so, you know, I'd say, The average customer is probably in the, you know, high five to low six-figure net worth. But, you know, we've had, you know, people way outside that range that, you know, we're definitely able to help, help and help figure out how to make a plan for. And, you know, that process is the same for everyone. It's first, let's start and understand your entire situation. And then, um, let's pair you up with a certified financial planner and do a strategy session on what's important to you and where you want to go and what that money's for and how you feel about it. And, you know, where you want to take your life. And then let's put together a plan of what you need to be doing to be, you know, as optimized as possible and, and get on track for what's most important to you.

• 31:19Anthony Pompliano?

  For sure. And then as you kind of move into the portfolio construction, uh, piece of this, do you find that different either age groups or situations in life, people are, um, kind of more adverse to certain assets? And the reason I ask is I always go back to this story. Shaquille O'Neal, when he first joined the NBA, he was interviewed years later. And, uh, he did quite well with managing his wealth early in his career, uh, when a lot of his teammates didn't. And they asked, you know, kind of what was your secret? And he was like, I put it in CDs, right? And, and the problem was my teammates didn't think that was cool. And so there's this element of like, it's not just what's the smart decision.

• 32:01Anthony Pompliano?

  It's also like the psychology where a financial planner had been able to convince him that, uh, the math trumped what he thought was cool and he listened. Uh, versus teammates who they probably got the same advice. They were probably told to do the same thing. They just didn't necessarily, uh, necessarily listen. So maybe talk a little bit how you guys think about that. If you've seen any trends there or, or even things that the product might do that can, uh, kind of save people from themselves.

• 32:26Speaker 02

  I mean, I think the good news is that, and this is actually terrible news, but for this particular problem, it's good news is that people don't talk about money. It's such a taboo subject in society. I wish that weren't the case because I think a lot of the problems that people have are caught up in thinking that they're the only ones, that they're the only ones that haven't saved enough, they're the ones behind and all their friends are living these amazing lives. When in reality, you know, the odds are that your friend that you think is living a more luxurious life than you is probably worried that you're doing the same thing and both of you are probably worried you're not saving enough and off track for your goals. And so when you, when you kind of think about that, because people aren't talking about it, I think it's a little bit less rare. I think in the basketball player wealth level, everyone probably goes around

• 33:09Speaker 02

  and says, oh, where you, where you spending your money? You invested in a restaurant? You doing this? And so I think there's a lot more expectation that people might ask what you're doing because everyone knows you have a boatload of money and it's all public. But, you know, very rarely have I overheard a conversation at dinner about, oh, what kind of things are you investing in? And, you know, if anything, you know, you hear the opposite, which is like, do you know anything about what you're doing? And, and I honestly think if someone said, yeah, no CDs are the best thing, that'd actually be a great conversation and they'd kind of be applauded for having a clue. That doesn't mean that, you know, so the peer pressure thing I think is less relevant. But I do think that everyone, you know, in some way is trying to figure out like, is there an edge I can get? Like, is there a way that I can do better than everyone else? And, you

• 33:52Speaker 02

  know, it's like this human nature, right? Like, it's the reason why people probably still play the lottery. They're like, I want to see if I can get ahead the, the quick way. And so the funny thing is you look at people that have built, you know, large amounts of wealth and some of them were lucky and some of them weren't. And, you know, some of them are the Warren Buffets of the world, which are still, you know, penny pinching for no reason really, but because it's who they are and it's the way they built their wealth. And I think there's no surefire way, right? In order to, to be the, for every person that, you know, made it quick and fast, there's probably two, three, four, some number of people that's greater than one, that tried the same method and it totally failed. And so we don't talk about those people as much, right? We talk about the

• 34:34Speaker 02

  people who made these amazing moves and made lots of money and all the people who made the wrong moves and went bankrupt, you know, we don't, we don't celebrate them at all or, or talk about it. So, you know, I think it's, it's sexy to feel like you found the thing that's going to let you make more money faster than everyone else. It's just the reality is if such a thing were, were so certain and so obvious, I'm fairly certain there are people that run hedge funds that have access and way bigger pockets that would be putting all the money in such that you'd never get access to it. And that's kind of some of the skepticism I bring to a lot of the alternative investment products right now in the market, whether it's real estate or anything like that is, you know, there are people that have billions of dollars and, you know,

• 35:15Speaker 02

  at their disposal to invest. And if the risk reward nature of a, of an asset is actually better, you know, than all of the other options, there are very smart people whose full-time jobs are to deploy billions and billions of dollars in those things. And so, you know, you have to ask yourself every time, like, do I really think I know more than people who spend their entire lives looking for opportunities to do this? Like, do I really think I'm just the lucky person that stumbled across this thing that's, you know, rare and the best opportunity ever? And if you are, like, maybe that's an argument to, to put a small piece of your portfolio there. But, you know, that's where, that's where I often catch myself up and say, you know what? There are way smarter people that have probably seen this and decided that it wasn't good for reasons that I might not even understand. So,

• 35:57Speaker 02

  maybe I'm not, maybe I should just like not try to win here and, and take the area in the industry, whether it's building companies or, you know, whether, you know, something else and, and apply all of my core energy into adding value to my life and my wealth through the thing that I know best, uh, instead of looking for the edge.

• 36:16Anthony Pompliano?

  Yeah, it's what you're describing reminds me, um, yesterday, actually, uh, Forbes did an article on, uh, Jay-Z. And it said, you know, he's the first billionaire, uh, that comes from, uh, from music. And, uh, or I think from hip hop music specifically. And, uh, this guy, Med Faber, uh, on, on Twitter tweeted something that just said, you know, look, he was able to build this brand, and I'm paraphrasing, but, uh, build a brand from his music, uh, but if you want to get really rich, he didn't do it from his music. What made him a billionaire was three things. It was own a business, be the bank and hold the keys. And he was basically saying, that's wrong in real estate. Uh, and so it's funny how, um, you know, there's a, an analysis of even the people who you would think, oh, that guy just has a talent that you and I don't have, uh, and he made a billion dollars with it.

• 37:00Anthony Pompliano?

  When you actually dig underneath it, it's through savvy investing, right? And, and it's kind of a diversified portfolio, uh, owning equity and things, um, actually having access, uh, and exposure to different asset classes. Uh, and again, just kind of following the rules that have been around for decades, uh, and they usually last because they work.

• 37:18Speaker 02

  Yeah, I mean, I. Do this, right? This is my job. I, you know, spend a lot of time thinking about alternative investments and my portfolio is a bunch of index funds, you know, like that's, that's what I think is the, you know, way to invest for me because, you know, I wanna, I wanna increase the likelihood that I can do what I care about on the world, not maximize the highest possible number I could get to with my money. Because to do that, I've also got to maximize the lowest possible number I can get to. And like, I'm just not interested in that.

• 37:50Anthony Pompliano?

  Yep. It's one of my favorite quotes of all time, Howard Marks from Oaktree Capital. You know, in order to be in the top 5% of all returns every year, you gotta take enough risk that you're willing to be in the bottom five, right? So if you never want to be in the bottom five, you should never end up in the top five.

• 38:04Speaker 02

  Exactly. Which is why if you look historically at hedge funds, you know, they, performance year to year, net of fees is, is not, you know, does not beat the market. That doesn't mean that the best hedge, if you can pick the best hedge fund every year, like, you'd have a killer return. It's just no one could do that because, like, you know, being in the best, you know, they take that same risk, right? They've got to take the risk to be the best, and that means they won't always be the best. And so, layer on the fees there, and it's pretty difficult.

• 38:35Anthony Pompliano?

  Yeah, the, the thing I always joke about with, with friends is, the very, very best, the top, you know, 50 basis points of any strategy, you probably can Google it and find out who the best is. Good luck getting in. Right? Because your point about the people who have billions of dollars and that's their job, that those people have no problem raising money, because everyone knows they're the best. But there's very few of them, and the everyday investors are unlikely to, to get access.

• 39:03Speaker 02

  Yep, exactly.

• 39:04Anthony Pompliano?

  Got it. So, before I finish up, I always do rapid fire. I'm gonna edit a little bit so that it is not so crypto focused for you. But what is, what's your favorite book that you've ever read?

• 39:16Speaker 02

  Wow. Vagabonding by Rolf Potts.

• 39:18Anthony Pompliano?

  What is that about?

• 39:19Speaker 02

  It is, uh, it's a story about traveling, like, long-term travel. It's something I think everyone should experience in their life. Um, you know, my wife and I, uh, before we got married, took a seven-month trip around the world. Um, and just out of a carry-on backpack each, and it was the most eye-opening, amazing experience we've ever done. We did it for, you know, $7,000 for seven and a half months. So it's not something you have to spend as much money as some people think, but, you know, the, the title is-

• 39:48Anthony Pompliano?

  How did you do that? People are definitely going to be interested in how you travel for seven and a half months on $7,000.

• 39:53Speaker 02

  Yeah. So the short answer is we couch surf for a living. We didn't go to expensive countries. Um, you know, you could stay at a hostel in Africa, India, Southeast Asia for under five bucks a day. Um, you know, we eat street food, which is actually, in my opinion, the better, you know, way to experience a world, a country. Uh, we did it slowly. We took buses and trains. We barely took a single flight on the whole trip.

• 40:16Speaker 02

  And, you know, it was incredible. We didn't go stay, you know, at overwater bungalows and we didn't go, uh, live in the lap of luxury. We like, lived with the people and we, you know, on couch surfing, we literally stayed with families and then we met their uncle and we'd stay with their uncle and then we'd meet their cousin and we'd stay with their cousin. And, you know, we didn't really have an agenda and we didn't have anywhere to be and,

• 40:35Speaker 02

  it was amazing. Yeah. I think the, I think the title of the book is Vagabonding, An Uncommon Guide to the Art of Long-Term World Travel, which is like, something that is, you know, it's like, it's super uncommon. There's a way to do it and I think it's, it's an incredible experience. Anytime someone's considering, you know, what, what they would do after they quit their next job or, or take a sabbatical, I buy them this book and I'm like, read this and, and go explore.

• 40:58Anthony Pompliano?

  I love it, man. That is awesome. Um, before I, before I let you ask me a question to finish up, uh, I always ask people about aliens, uh, believer, non-believer, think we'll ever, uh, discover it during our lifetime?

• 41:11Speaker 02

  Yeah. I mean, it seems impossible, given the way our world evolved, that some other world didn't evolve somewhere. Uh, whether we'll discover it or not. Sure, right? I mean, we're living longer than ever before. You know, someone here is probably going to freeze themselves for 100 years. So, you know, we'll wake up and and and maybe we'll have found something then. But do I think they're going to land in a ship and pull us all up in some weird hovercraft next month? Yeah, probably not.

• 41:39Anthony Pompliano?

  It is so funny to hear your answer, because when I talk to my friends who are not in the technology world, they usually think of life as a finite. So if they're, let's call it in their 30s, they usually think they got, you know, 30 to maybe 50 years on the planet left. Whenever I talk to my friends who are technologists, immediately they go to life extension, all kinds of different technologies that may accelerate our our space travel, etc. So it's, it is definitely something where I agree with you, likely that aliens or some kind of sentient life exists somewhere. The big question is, you know, are they going to find us? Are we going to find them? And is that a good thing or not? Right?

• 42:18Speaker 02

  Yep.

• 42:19Anthony Pompliano?

  Makes sense. What? You got one question for me to wrap this thing up?

• 42:23Speaker 02

  Yes, movie that I haven't seen, or that I probably haven't seen.

• 42:26Anthony Pompliano?

  A movie that you haven't seen or probably have not?

• 42:29Speaker 02

  That I assume you think is good, not just any movie. I got a long flight. I got a long flight to Israel on Friday for a wedding. So, you know, don't let me down.

• 42:39Anthony Pompliano?

  Yeah, that's a, that's a great question. You want to, so I'm going to cheat. It's not necessarily a movie. It's on Netflix, though. It's a series. I don't know if you've seen My Next Guest Needs No Introduction. It's David Letterman's new series where he interviews everyone from George Clooney, Melinda Gates, Kanye West, etc. Fascinating in the sense of if you have any sort of interest in like human interest stories.

• 43:11Anthony Pompliano?

  He does a great job, I think, of getting people out of their comfort zone and really talking about things that other interviews don't cover. And then also, he's got this weird humor where I think people just. They are willing to not only tell you what happened in their life, but they explain how they were feeling and why. And so when you watch this, you know, he gets everything from like Kanye to talk about uh, mental health and what it was like to literally be in the hospital room strapped to the bed when they took his family away, to Melinda Gates and you know, when she's in Nairobi and somebody hands her a child. And so it's just kind of very uh, very eye-opening, I think. And when you were talking about um,

• 43:55Anthony Pompliano?

  the book uh, about Vega bonding, um, it's not anywhere near the same as actually getting to travel yourself, but just kind of hearing other people's stories, uh, in these condensed kind of thirty, forty-minute interviews, I think is uh, is a way to kind of, you know, just gain more exposure to the world and the way other people think and experiences they've had.

• 44:13Speaker 02

  Awesome. I will, do you have one that I should pick? If I'm gonna pick one to start with?

• 44:17Anthony Pompliano?

  Um, this is gonna sound weird, but I'm personally fascinated by uh, by Kanye, more as just like, he is a multi-dimensional person that uh, I think the public perception is like, this guy's crazy and he makes good music type thing. And then when you listen to it, uh, I walked away from the interview saying, I still think that he's probably a little crazy. He obviously makes good music, uh, but he is incredibly intelligent, thoughtful, and he probably has a better sense of what he's doing than we all give him credit for. Uh, so it's just pretty cool to see, you know, David Letterman kind of unpack Kanye and the reason behind a lot of the things that he's done. Um, and so uh, that was just top of mind and probably some recency bias, but uh, but that's what I would say.

• 45:01Speaker 02

  Yeah, no, okay. I'll queue it up for Friday.

• 45:05Anthony Pompliano?

  All right, Chris, man. Listen, I appreciate you doing this. This was a, this was a ton of fun and I think a lot of people will uh, will learn from this, so uh, we'll have to do it again in the future.

• 45:12Speaker 02

  Yeah, if anyone's interested uh, in checking us out, we're at HelloGrove.com.

• 45:17Anthony Pompliano?

  Hey everyone, Pomp here. If you liked this episode of Off the Chain and want to help us take crypto to the top of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.