#11 - Clawing Back From $250K Debt at 20

Aleks Svetski (@AleksSvetski) wanted to be a millionaire by 20... and he was on that path. He turned his $5K textbook money into more than $50,000 in the stock market! Until the 2008 global financial crisis hit... he didn't just lose all his money, he was negative quarter of a million. This setback ignited his entrepreneurial spirit where he started a door knocking hustle to get out his debt and make that cool million. Again, until the government betrayed his business and he went back to square one becoming a hippie on a sabbatical... and now he's back again with the lessons he's learned with his newfound passion: Bitcoin. See acast.com/privacy for privacy and opt-out information.

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

• 0:00Shaan Puri?

  So you take 5,000 bucks from textbooks, you invest it, you get a run up up to 60,000. What happens from there?

• 0:08Speaker 01

  August the 16th, 2007 happened there.

• 0:11Speaker 02

  The stock market is now down 21%.

• 0:14Speaker 03

  43%.

• 0:16Speaker 02

  What in the world is happening on Wall Street? In the blink of an eye. I have never seen a 600 point loss.

• 0:22Speaker 03

  Who knows where this is going to end up? Completely wiped out.

• 0:25Speaker 02

  The Dow traders are standing there watching in amazement. I don't blame them.

• 0:28Speaker 03

  There's Apples under pressure, Yahoo down 8.5%, Cisco 6.5%. Every day they're pounding it.

• 0:34Speaker 04

  What started in America last year has now spread to every part of the world.

• 0:38Speaker 01

  And I woke up that morning and everything was in the red and my account was down about 70, 80%, something ridiculous.

• 0:43Speaker 05

  It was the worst day on Wall Street since the crash of 1987.

• 0:47Speaker 06

  And that means life as most Americans know it is about to change, in some cases dramatically.

• 0:53Speaker 01

  Within four, five months, I was about a quarter of a million in the hole.

• 1:01Shaan Puri?

  All right, I just sat down with Alex Svetzky, or Angry Alex, as he's known in the Bitcoin world. And we talked about a whole bunch of things ranging from Bitcoin itself, his story, trading stocks and ending up a quarter million dollars in debt, as well as how he got out of the hole, built himself back up, made his first million and what he's doing in the crypto space today. It's a pretty fun conversation. I think you'll enjoy it.

• 1:33Shaan Puri?

  Thanks for coming, man. I appreciate you came. You came a long way. I like to think you just came for this podcast.

• 1:38Speaker 01

  I did.

• 1:39Shaan Puri?

  I know. There was also that other little conference, the Bitcoin 2019 conference going on.

• 1:43Speaker 01

  No, no, no, no, no. I just came for this. I swear.

• 1:46Shaan Puri?

  So this is gonna be an interesting one because so far, the people I've talked to are people that I know super well. Like we hang out on the weekends, we blah, blah, blah. I met you five minutes ago. And you came highly recommended. So I said, okay, let's do it. Let's chat. And the thing that I find interesting is I know that you're pretty heavy in the Bitcoin space. And so we'll talk about that, but I just want to know a little bit about you first. What's the TLDR on your life story? So let's give me the, give me the, give me the one minute version first.

• 2:16Speaker 01

  Yep.

• 2:16Shaan Puri?

  And then I know we'll go.

• 2:18Speaker 01

  We'll touch on.

• 2:19Shaan Puri?

  Unless the one minute's good and then we'll just end the podcast. That can also work.

• 2:21Speaker 01

  Easy. Done. Shortest podcast in history. The TLDR. Went to uni, really academically strong, dropped out, thought I was a genius on the stock market. I got taught a few lessons in the GFC. Dug my way out of that door knocking, built like a successful business when I was 22, 23, made my first mill, then got taught another lesson from government mismanagement of money. I lost a lot of money there. Sort of went on this random sabbatical. I said, they're never going to do business again. I became a hippie.

• 2:46Shaan Puri?

  Are we talking silent retreats?

• 2:49Speaker 01

  Yeah, that kind of stuff. Exactly. I went and did yoga. I went and did like, all that stuff before it was kind of like, cool.

• 2:57Shaan Puri?

  Before Jack Dorsey did it?

• 2:58Speaker 01

  Yeah, exactly. So about seven, eight years ago. And then, and then, yeah, while I was in the States, I spent a bit of time in Venice Beach and up in San Francisco, I sort of, I ended up going to Singularity University for a couple of days for like a little short course thing there. Thought tech's the way to go. Went back, muddled around in tech, built a few little software things. And yeah, and then ended up down the Bitcoin rabbit hole about three and a half years ago. And never, never came back.

• 3:23Shaan Puri?

  All right. So we're going to go through each of those in order, because I think that's the way to do it. But how old are you?

• 3:29Speaker 01

  Thirty one. I look younger.

• 3:30Shaan Puri?

  I'm thirty one as well.

• 3:32Speaker 01

  Oh, really?

• 3:32Shaan Puri?

  I look older, I think. The last startup, when I started, I was fresh, 24 years old, baby faced, and now I have this like grisly beard and gray hairs and all kinds of things.

• 3:45Speaker 01

  The shit ages you, man. Like, if you think I've got a slight baby face now, if I show you my photo when I was 20, just before I'd gotten down the path of running businesses, I look six.

• 3:56Shaan Puri?

  Yeah, I saw a picture of Obama before and after and I was like, damn.

• 4:00Speaker 01

  Yeah.

• 4:00Shaan Puri?

  They got to him.

• 4:01Speaker 01

  Yeah, dude, it kills you, man.

• 4:02Shaan Puri?

  No one gets out alive. Alright, so you went to university, you said you dropped out. Which university were you going to?

• 4:08Speaker 01

  University of Wollongong, so it was kinda like.

• 4:10Shaan Puri?

  Oh, I've been to Wollongong. I went to a party at the University of Wollongong. It was an epic night. So, Wollongong's like a party school.

• 4:16Speaker 01

  It is. I mean, that was my rationale, right? So it was the one offering me the lowest scholarship, but it was the beach and it was girls.

• 4:24Shaan Puri?

  Yeah, perfect. Okay, cool. So you had your party straight. So you go there, you're studying. What are you studying?

• 4:29Speaker 01

  Civil engineering.

• 4:30Shaan Puri?

  Civil engineering, okay, cool. And you dropped out. Why drop out?

• 4:33Speaker 01

  Oh, this is gonna sound arrogant, but I just thought everyone was an idiot. I was like, they're not here to study engineering because they wanna do engineering. They're just here because they got the appropriate final year of school results. And that was sort of disillusioning. So I was like, I wanna do more, I wanna be better. So I took that money that I had for the scholarship that they gave me to buy textbooks. I was like, fuck it, I'm gonna do two things. I'm gonna beat everyone with no textbooks and I'm gonna take that money and I'm gonna trade derivatives.

• 4:59Shaan Puri?

  Your textbook money?

• 5:00Speaker 01

  Yeah, basically. And it wasn't much, it was like five grand. But within six months, I turned it into like sixty. So like from a percentage return standpoint, I thought I was the king.

• 5:09Shaan Puri?

  And how do you even know what a derivative is at this point?

• 5:10Speaker 01

  I didn't. I was on asx.com.au trying to learn how to trade shares. And my family was like totally anti that stuff, gambling, this, that. So I kind of ran away from home, did my own thing, right? And yeah, I literally just self-taught myself. The first trade I actually placed was not a derivative. It was this small company called GYG. It was like some genetic bull crap that I got sold by this broker. And this was back in the days before your, you know, online trading became, you know, mainstream. And yeah, I lost money on that and I was like, this guy's an idiot. So I just went and did my own thing. And I was just trading options and warrants.

• 5:49Shaan Puri?

  And what was the goal? The goal was like, I wanna get rich? Or what were you trying to do?

• 5:53Speaker 01

  I'm gonna make a million by the time I'm twenty and I'm gonna go back to my family and prove. I had this vision in my head that I'd turn up on their front door with a Ferrari and I'd be like, told you so. You know, nineteen year old kid.

• 6:05Shaan Puri?

  It's kind of amazing how much motivation people have of proving other people wrong.

• 6:10Speaker 01

  I know, man. I know.

• 6:12Shaan Puri?

  What did your parents think you were gonna do? They thought you were just, you know, fuck up? Or what did they think?

• 6:16Speaker 01

  Oh, no. Look, they all wanted me to be a civil engineer. They wanted me to, you know, cause, cause I didn't live with my parents at the time either. So like my parents had split when I was young, so I sort of moved out and went and lived with my grandmother and my uncle. So, um, and my, my uncle was very patriotic and he wanted me to be a civil engineer. So then we could go back to Eastern Europe, to Macedonia where I'm from. And then we would like sort of build a town there and all this sort of stuff. And I mean, it was really, yeah, I know, right? And it was really appealing when I was young. But, um, I, I, I read, I read Rich Dad, Poor Dad and some other book when I was like sixteen, seventeen. It sort of made me view the world a little bit broader. Yeah, it was a good book.

• 6:53Shaan Puri?

  Okay, so if, if somebody hasn't read that book, what was the epiphany you had when you read it?

• 6:57Speaker 01

  I, I, I think that EBS side of the square was really important and, and just figuring out which side of the quadrant you wanted to be on.

• 7:04Shaan Puri?

  Yeah, the, the way, um, the way I understood it or the way, you know, just explaining it, if you are lazy and don't want to read the book is, there's these four boxes that you can belong to. E is like employee, which is everybody sort of knows. And, and in fact, society sort of steers you to it's like, you know, go to, go to school, get a degree so you can get a good job. And you want to go from a good job to a great job. So that's the E bucket.

• 7:25Speaker 01

  Yep.

• 7:26Shaan Puri?

  Then there's the sort of like self-employed, which is basically like doctors, lawyers, that sort of thing.

• 7:31Speaker 01

  Civil engineers, that, that's exactly where my family wanted me to be.

• 7:34Shaan Puri?

  And so, uh, considered, you know, it's like a better version of a job.

• 7:37Speaker 01

  Yep.

• 7:38Shaan Puri?

  And then you get to sort of business owner, uh, which is good because at that point you're not trading hours for dollars. You're, you, you own some entity and, uh, but you still have to operate it and you still own it. A better quadrant to be in. Uh, and the last one, I, and this is the goal, you know, the story of Rich Dad, Poor Dad is that, his real dad, who he calls the poor dad, tells him, go get a job. And his rich dad, which is his friend's dad, is making all this money and living a different lifestyle and does, seems to be working less and earning more. And so he was looking at him like, how do you do that?

• 8:07Speaker 01

  Yep.

• 8:07Shaan Puri?

  And basically it was you take the money from a business you own and you jump into the I bucket. You start investing. And then your money makes you money, which is even better than you, you know, your hours or your ideas making you money. And so I think when you read that book, you sort of can't help but you put yourself in one of the buckets and ask yourself, you know, do I want to be here?

• 8:24Speaker 01

  Correct.

• 8:24Shaan Puri?

  Um, and he paints a pretty good picture where you're like, uh, hell no, I don't want to be in any bucket, but the, the eye bucket.

• 8:28Speaker 01

  But the eye bucket. And well, and that's why I think that was the, the thing that drove me down thinking about the stock market. I, I just wanted to, you know,

• 8:36Shaan Puri?

  Start investing.

• 8:37Speaker 01

  Exactly. In my infinite wisdom at the time, right? I'm an I, that's what I'm going to do.

• 8:41Shaan Puri?

  Right.

• 8:41Speaker 01

  And here, here we are.

• 8:42Shaan Puri?

  So you take 5,000 bucks from textbooks, you invest it, you get a run up, up to 60,000.

• 8:46Speaker 01

  Mm hmm.

• 8:47Shaan Puri?

  What happens from there?

• 8:48Speaker 01

  Uh, August the 16th, 2007 happened there. I, I still, I still remember the date because I woke up, it was, it was a week before my birthday. About a week before that, I placed all these trades and I thought I was, this is it. You know, I'm going to make, I levered the hell up. You know, if my trades go the right way, I won't be a millionaire by the time I'm 20, but I'll have about a quarter of a million.

• 9:07Shaan Puri?

  Yeah.

• 9:07Speaker 01

  Um, and I woke up that morning and everything was in the red and my account was down about like 70, 80%, some ridiculous amount. And I was like, sitting there like refreshing the fucking page, thinking there's something wrong with.

• 9:16Shaan Puri?

  And what had gone wrong? What was the issue?

• 9:18Speaker 01

  Oh, I, I can't remember if it was Bear Stearns or Lehman or something, something like that. But one of those collapses happened, right? And then the entire market tanked and I was, um, I was levered long financial institutions.

• 9:27Shaan Puri?

  A kid sitting in Australia who's, you know, trading textbook money derivatives ends up feeling the burn of something happened on Wall Street.

• 9:34Speaker 01

  And I had no idea, right? I had no idea. Cause the way I was trading at the time was I was just, I, I didn't give a shit about the companies or the macro situation or any of that. Or, or, or all I looked at was these charts.

• 9:45Shaan Puri?

  Yeah.

• 9:45Speaker 01

  And I was just swing trading and I was just looking at things. If they were too overextended, I'd go, I'd buy a put option. If they were too, um, underextended, I'd buy a call option. And, you know, if they were breaking out of a pattern or something, I'd, I'd go long or short or whatever the case was. And, and, and that's how, and, and I mean, the, I'm listening to a book now called, uh, Thinking in Bets by, um, I think Annie Duke or whatever her name is.

• 10:06Shaan Puri?

  Poker player.

• 10:07Speaker 01

  Yeah, that's it. Exactly. Really, really good book. And she talks about, um, uh, the idea of resulting, which is, uh, confusing a good decision with a good result.

• 10:16Shaan Puri?

  Right.

• 10:17Speaker 01

  And, and looking back on it, that's what I was doing. I, I was thinking, I'm a genius. I know how to make money.

• 10:22Shaan Puri?

  Right.

• 10:22Speaker 01

  You know, this is how, this is how it works. So then on the way down, what did I do? I just doubled down the whole way. Until I lost everything. And then I, you know, got some loans because I had an okay history of trading. So then I then, yeah, within, within four, five months, I was about a quarter of a million in the hole. So I kind of went the wrong way.

• 10:41Shaan Puri?

  How old are you at this point?

• 10:42Speaker 01

  Well, I just turned 20, yeah.

• 10:42Shaan Puri?

  So you're 20 years old, a quarter million dollars in the hole.

• 10:45Speaker 01

  Yep.

• 10:47Shaan Puri?

  This is not the game plan.

• 10:48Speaker 01

  This was not the game plan.

• 10:49Shaan Puri?

  I wanted to, I wanted to drive up in my Ferrari to my parents' house and tell them I made a million bucks before 20 and instead I'm down a quarter million bucks. What's, what is that realization like when you wake up that day?

• 10:59Speaker 01

  But.

• 11:00Shaan Puri?

  You know, thank God, knock on wood, I have not felt that.

• 11:03Speaker 01

  Yeah.

• 11:03Shaan Puri?

  I've felt a lot of things, but I haven't felt that.

• 11:04Speaker 01

  Yeah. Well, I mean, that morning when, you know, the, the chaos started happening, I remember, um, walking around this, cause I was living in this little shitty apartment, cause I was putting all the money on, on, in the, um, trading account. And I walked around and I kicked the hole in the wall. And I was like, oh, fuck, I need to pay for that as well and fix it. So, so that's sort of my memory of it. It was like, woke up, shit, I kicked the hole in the wall and felt worse. And, um, and yeah, and just, I mean, I, I just think I was in reactionary mode for the next three or four months, just trying to like, you know, I, I couldn't fathom how, and, and I mean, this is one of the, the downsides of paper wealth, right? Is that you don't appreciate it as much. And, and, you know, I was running around trying to figure out how to get back to where it was, you know, and then,

• 11:49Speaker 01

  you know, I, I remember as I was going below the zero mark, I was like, oh, I wish I could just get back to zero. You know, like, I was, I was thinking in my head, I don't want the 60, you know, the 60 grand that I made, not even the 20 grand that I made. No, just get me back to zero. And then when I, you know, got down to a hundred grand, I'll be like, look, I'd be happy if I just lost 50.

• 12:07Shaan Puri?

  Right.

• 12:07Speaker 01

  And then all the way down until like.

• 12:09Shaan Puri?

  Well, this is, have you ever, have you heard Chris Sacca tell his story about, um, do you know who Chris Sacca is?

• 12:14Speaker 01

  I do, yeah.

• 12:15Shaan Puri?

  Sort of legendary investor now, um, you know, he was, he has, I think probably the best early stage investment portfolio of all time. Like he has Uber, Instagram in there. Um, he has, uh, oh my God, a whole bunch of companies. Kickstarter's in there. He's got maybe eight of the billion dollar companies that came out during that era in his portfolio. But he tells a story where he did almost the same thing, went to law school, started trading stocks. And you know, at one point, he had levered his way up to where he thought he was going to be up about 12 million bucks. And he had turned a few hundred thousand dollars into 12 million dollars. And then in the course of about a week, swung down to negative 4 million dollars. And from there, like clawed his way back and he has this great line, which you remind me of, which was,

• 12:58Shaan Puri?

  I've never felt richer than when I had zero dollars of net worth. Like when he got out of the debt and got back to zero, he's like, I've never felt richer.

• 13:05Speaker 01

  Yeah.

• 13:05Shaan Puri?

  And the guy's a billionaire now. So like, is that kind of?

• 13:09Speaker 01

  Yeah, it is. Yeah, the contrast, man. There's nothing like that sort of contrast because it was the same. So my, my reaction, you know, despite being initially very reactionary was, um, you know, I, I then dropped out of uni and I looked for the first thing I could do to make some money. And I, I got myself what's called an ABN in Australia, which is um, kind of like, I, I went into the S bucket. So I got myself my own little business number. And I went and door knocked for any company that would have me. And I just went and there was one that I did all, basically all the work for was um, selling pay television in Australia.

• 13:43Shaan Puri?

  So door to door sales.

• 13:45Speaker 01

  Basically door to door sales. And maybe this was also inspired by Rich Dad, Poor Dad. I don't know. But you know, I was very introverted, but it was the only thing I could get on short notice that I could make some money straight away without having a skill, without having to do anything.

• 13:57Shaan Puri?

  And so how does that work? Because I've, I've never met anyone who actually did door to door sales. So what happens? You, you wake up, you just drive to a neighborhood or?

• 14:05Speaker 01

  No, no, you come to the office in the morning at about nine o'clock. You've got, so, so door to door companies are effectively two types of businesses. They, they do sales and they do recruitment. Because they have the highest turnover of any kind of business you can imagine.

• 14:17Shaan Puri?

  Right.

• 14:18Speaker 01

  Because you're getting paid commission, right? That's it. Well, it's not only you need more salespeople, but everyone leaves after the first two weeks, basically. It's only a rare few that actually stick it through.

• 14:26Shaan Puri?

  I see.

• 14:26Speaker 01

  Because it's such a shit job. If you could go out and work all day and get nothing. But it's a really good primer for business. And I think that's why, you know, Kiyosaki talks about it in his thing, which is, you can go out and you get paid for the result, not for the time you put in it.

• 14:38Shaan Puri?

  Right.

• 14:39Speaker 01

  And um, so yeah, so you go, go to the office at nine o'clock, you know, people are recruiting and then, you know, you as, if you've been there for, you know, long enough and you're a good enough salesperson, you become what's called a leader and you know, all this sort of stuff.

• 14:51Shaan Puri?

  But when you started, what was it like? You go there, what happens?

• 14:54Speaker 01

  I went there, I'm like. Fuck do we do now? And then, um, you know, there's some dude coming in training, salespeople in the morning and then sort of revs everyone up by about eleven AM. We go out, uh, we get a map. This was sort of before we had smartphones and GPS and shit. And, um, you know, get sort of, you, you draw out, you, you mark out with a texter, sort of the blocks that each person has. And then, you know, we all go out and you're not allowed to step on each other's turf. You know, so we all had our own turf and we'd go, you know, knock on doors and it was just luck of the draw.

• 15:22Shaan Puri?

  And did you, uh, what's the sales pitch? So knock, knock, I open up.

• 15:25Speaker 01

  Oh, dude.

• 15:26Shaan Puri?

  What would you say?

• 15:27Speaker 01

  I, I think the reason I was successful was because I, I never, um, I never had the same pitch. So what they, what they taught us there was, there was this five steps, this eight steps principle of, you know, smile and this and this and this, and this is how you take people through it. I, I threw all that shit out the window.

• 15:43Shaan Puri?

  Yeah, no smiling.

• 15:44Speaker 01

  Yeah, yeah, exactly. Um, no, but I, I spent some time really digging deep on like neuro-linguistics, NLP and all that sort of stuff. Um, and I managed to go to a Robbins conference, you know, just around the time when, just before I lost everything, like the last bit of money I had, I went to a Robbins conference and then I paid for a, um, an NLP certification, um, practitioner's thing. So I use that and, and that is all about not.

• 16:06Shaan Puri?

  So give us an example. How do you, how do you use that in a sale?

• 16:08Speaker 01

  I, I'd knock on the door and someone would say, get the fuck out of here, you know? And I'd be like, I'll get the fuck out of here in a minute. And I, I would match their tonality, um, match the speed at which they said something. And, and I'd say something that would shock them. They're like, what? And I'd be like, you heard me? And then they'd come to the door and then I'd start a conversation. I, I used to use a lot of body language. So instead of standing face to face, I'd lean on the door to the side. So, you know, slightly more on their side and, um, and then just ask them about themselves. Or I'd, I'd pick something out about, you know, what they're wearing or, you know, the, the neighborhood that they were in. Exactly. And, and I'd, I'd open up. So it was all, it was, had nothing to do with the product. And, and I got to learn this in the early days about sales having very little to do with product. Cause I didn't have a TV. I didn't know what was on the

• 16:51Speaker 01

  channels. I didn't know any of that shit. I just could pick things out and just talk really quickly and build, the, the key thing was to build rapport inside thirty seconds. Um, so, so I'd, yeah, match their body language, match, um, do, doing a lot of mirroring and matching at the door with, with whoever the person was and be suggestive in the process of letting them, letting me inside the house. And then that was sort of the key. As soon as you got inside the house, it was game over. You could, you could make the sale.

• 17:16Shaan Puri?

  Gotcha.

• 17:16Speaker 01

  Yeah.

• 17:17Shaan Puri?

  So what sort of thing gets you in the house? What do you, hey, you've got some water?

• 17:20Speaker 01

  The water was a big one. Um, fuck, it's cold out here. It's hot out here. Um, can use the bathroom.

• 17:26Shaan Puri?

  Right.

• 17:26Speaker 01

  Um, so that was sort of like the, the, the sneaky tactics, but then also, um, when I was younger, now I'm an old ugly fucker. But when I was younger, I was kind of half good looking.

• 17:36Shaan Puri?

  Yeah.

• 17:36Speaker 01

  And, um, and that used to always work. So most of the people ended up buying off me were, were mums.

• 17:41Shaan Puri?

  Gotcha. Okay, cool.

• 17:42Speaker 01

  And, and I, and I really played up the sort of the, um, the son sort of card.

• 17:45Shaan Puri?

  Right.

• 17:45Speaker 01

  It's like, hey, how you doing, you know?

• 17:47Shaan Puri?

  Okay. All right. So, so you, you start selling. Uh, were you good at it there? It sounds like you were pretty good at it.

• 17:52Speaker 01

  Dude, I, I, within three weeks, I was the third best in the country and I was living on some dude's lounge, you know, paying 20 bucks a week rent. Um, and, and my sort of motto was this, I, I'd, I'd carry two cans of tuna in each pocket. So four cans of tuna, I would only eat if I sold something. Um, and I would sprint between doors because then I could get to doors faster. And.

• 18:11Shaan Puri?

  Did you want to eat like warm tuna in your pocket? Was that like a motivating thing?

• 18:15Speaker 01

  I didn't give a fuck. I was just like, I'm getting the sale, then I get to eat. And yeah, my, my, my, my cost of food budget daily was $4 because it was a dollar a can of tuna.

• 18:25Shaan Puri?

  Right.

• 18:25Speaker 01

  And I just funneled everything towards paying, paying the debts off.

• 18:28Shaan Puri?

  Yeah.

• 18:29Speaker 01

  And during the day I would knock on doors and at nighttime I would read and study, uh, economics, markets. And what, what the hell did I do wrong? And how was I so stupid to have lost so much money?

• 18:39Shaan Puri?

  Right. And so how much were you making doing door to door sales?

• 18:43Speaker 01

  Two grand a week. Yeah. And, and the, and the average person would make about four, 500. So like I was about four times above average.

• 18:48Shaan Puri?

  So you start paying off the debts and you, it sounds like you sort of, because you got humbled, you started looking at the science of business.

• 18:54Speaker 01

  Yeah.

• 18:54Shaan Puri?

  And the, you know, how, how this thing works. How do you actually make money reliably and repeatedly?

• 19:00Speaker 01

  Correct.

• 19:00Shaan Puri?

  And what was, what came out of that? So, so that period ends, uh, what happens after that?

• 19:04Speaker 01

  Well, I, I ended up, so I, I door knocked for my, for somebody else for a little while. And then I was like, um, why am I building this guy's business? So I kind of moved myself from the S to the B. If we're going to use this, um, mental model. And then I set up my own sales company. And then I got a lot, a lot of the people that were selling under me that I would get a comm off if I trained them.

• 19:22Shaan Puri?

  Mm-hmm.

• 19:22Speaker 01

  Um, they came and worked for me. I gave them better commissions and all this sort of stuff. And we started competing with that company. And we did really well because I just had a different style, a different. Method of um teaching people to sell and all this sort of stuff and we've got our hands on more products. And um and yeah, and then like I I went from leaving that place with um two or three people that came and followed me to about. You know, within within six months, we had thirty people running around door knocking for me.

• 19:46Shaan Puri?

  And you're selling the same thing, pay TV or something else?

• 19:47Speaker 01

  Uh we were selling like um a little bit of pay TV, we were selling this car wax stuff and then um. And then that was sort of the segue that I I said, I I wanna sell things that are more meaningful, so uh. We looked at renewable energy, um so selling solar systems. That was a real culture shock because, you know, going from selling a forty dollar product at the door to like, hey, do you wanna give me twelve grand for a um? Who the fuck are you? Get out of here.

• 20:13Shaan Puri?

  E- even the charming, uh, good-looking son uh is is not gonna do a great job of selling that one.

• 20:17Speaker 01

  I I remember the the first couple of weeks of trying to do that, zero sales, like and I'd never in my life gotten zero sales, like more than two or three days in a row, like. Like the the and I I was so disillusioned, I was like, fuck, this ain't gonna work, we're gonna be stuck. Yeah, yeah, dude, I was like, we're gonna be stuck selling shit to people for the rest of my life, like. And then I it just happened over four, like, four or five sales just came back through, like, from people who were thinking about it, all in one day. And and that was like hundred grand in turnover and I was like, holy shit, and and and that sort of changed it for me. And then from there, I transformed that. Sales company into actually, cause the the solar companies that I was selling for, again, I have this recurring theme in my life, I felt they were incompetent. Um, you know, so I was like, I can do this better.

• 20:59Shaan Puri?

  Right.

• 20:59Speaker 01

  Um, and so I uh went and met with different suppliers, with um installers and be- and because I also had a um engineering background. I was able to just design the systems like bespoke for people's houses and and so we went for quality over quantity. And um and and we built a really good business, so by the time I turned twenty-two and a half, twenty-three, roughly that. And I I'd everything was paid back, I'd made my first million, um I had about thirty staff across three different states. Um, we're turning over maybe. You know, in a really, really good week, maybe half a million a week, um, at about a 10, 20% margin. Um, so we're, so we're making good money.

• 21:35Shaan Puri?

  It's really good business.

• 21:35Speaker 01

  Yeah.

• 21:36Shaan Puri?

  And so, so this answers the question of the podcast, right? The, the pod, this podcast is a promise where I basically said, I'm going to go study the rich.

• 21:44Speaker 01

  Yep.

• 21:44Shaan Puri?

  Um, because from a young age, I've wanted to be rich.

• 21:47Speaker 01

  Mm hmm.

• 21:48Shaan Puri?

  I know a lot of people want to be rich and I know that the, there's two things that come out of when you talk to rich people. You, you do understand strategies, tactics, tips, those sorts of things, but you know, more than that, you hear the stories and the ups and downs and the started from not knowing anything and just worked my way forward. So I want those stories to come out and I appreciate you telling yours. Uh, but this is, this answers the question, right? How did you make your first million? And for you, it was, you were selling solar panels.

• 22:11Speaker 01

  That's it. Yeah. Seriously. And, and, um, and we, we got a really big boost from the government. So, so they came in and they started handing out rebates to everybody. And I mean, in typical government fashion, incentivizing the wrong layer of the stack, like what they should have done in hindsight was they should have gone and incentivized manufacturers or importers or whatever to bring the stuff in. And as a result, that would have, um, trickled down to the consumer via, you know, natural competition. They instead gave the money to the consumer. And then what ended up happening was all of these morons, um, who had never been anywhere near solar, didn't understand electronics, that they were literally just either random electricians or even roofers or even just morons had never had a job before became solar companies. And we went from being one of two companies

• 22:56Speaker 01

  in our entire region to being one of 30 in like, so X amount of months. And so, I mean, that ate into margins and things like that. But what, what the, um, you know, and this is what I call the next big lesson of my life is, um, don't trust the government. Um,

• 23:12Shaan Puri?

  Now we're getting to the crypto part.

• 23:13Speaker 01

  Yeah, very, very shortly. Um, is they, it, it was June, I think, oh man, I think 2000, 2012. Uh, I can't, I can't remember if it was 11, 12, 13. It was one of those years. And they sort of made an announcement in June that, that they realized that this thing had taken off like way too, way too fast in terms of what they were anticipating. And they said, all right, anyone who hasn't, uh, done their installation by the end of this month, which was three weeks away, misses out on the rebate. And so from a consumer perspective, they were going to miss out on all this money. So everyone went apeshit. Like, I mean, that day that they announced that, like, I sold, like, I think probably A million and a half worth of systems on the phone in my fucking desk. I didn't even get up.

• 23:56Speaker 01

  Like, I just called through everybody and just close, close, close, close. It was the best day I've ever had. And I thought, fuck, we had just made a killing. Like, you know, we were high fiving each other. We were like, you know, all we gotta do now is install these over the next three to six months. And, I mean, whilst the solar industry wouldn't go away, like it'd be subdued, this would give us enough to, you know, manage our, our way through. So everything was all good. Um, so we went ahead and the, and the way it worked was basically the customer would pay half the money upfront and um, the government would effectively pay the other half in about, you know, two, three, four, five, six months later, whenever, you know, the, all the certification, all that sort of stuff went through. So we got the money upfront. We would basically carry the, the cash flow um, until we got that money in. Um, margins were about, you know, say,

• 24:39Speaker 01

  at that point in time, because of the, the competition, it was probably about a thousand bucks a system. So we were waiting on all this money. And then when it came time to pay the money, the government was like, we're gonna give you all fifty cents of the dollar. And we were like, what? And like overnight, every job that we'd done just.

• 24:55Shaan Puri?

  Became negative.

• 24:56Speaker 01

  Yeah, became negative. And like, it was a fucking kick in the nuts. Like, I was lucky because I was like trying to build an empire here. So I hadn't spent money on stupid shit. Um, so I was um, I had enough money there to like pay everything out. Um, wh- where I had made some mistakes was I bought a half a container of LEDs, LED lighting, because I thought that was gonna be the next big thing. It didn't need rebates and everything. And that was sort of half paid for and it was sitting on a dock in China. I didn't have the money to pay that off, so I kind of burnt a hundred and fifty grand there. I had a half-built gym because I was trying to sort of get into the twenty-four seven fitness craze at that time as well. And um, and we couldn't finish the gym because we didn't have enough money and like. So, so I was lucky in some senses because I had enough sort of cash to, to sort of wind up the solar business, but then I didn't have enough. So, so I kind of had to.

• 25:41Speaker 01

  Make this decision of what I was gonna keep, what I wasn't and what I was gonna try and do. Anyway, about a year and a bit of torture, I um ended up shutting everything down and I kind of had a little bit of money left.

• 25:53Shaan Puri?

  This is where you went on the sabbatical?

• 25:55Speaker 01

  This is where I went on the sabbatical. So, so just before I went on the sabbatical, I'd um I'd put the balance of my money, cause during this entire time of running this business and building this business, I I didn't take my eye off the ball with respect to the markets and what was going on there. So I was very, very early in gold and silver, um you know, studying Austrian economics and understanding how money works, inflation and QE and all this sort of stuff. And so I I could see that the US dollar was gonna get pummeled and that, you know, we needed something. It was a prudent decision to invest into some more sound sort of money. So I bought a shitload of gold and silver. And my brother and I made a lot of money out of that. Like, that that sort of saved my ass during that period. And that's what sort of what funded my sabbatical. Um, and yeah, I I came to California, um spent some time here.

• 26:38Speaker 01

  I was in Venice Beach, California for a little bit. That was an experience.

• 26:42Shaan Puri?

  Saw some interesting things.

• 26:43Speaker 01

  Yeah, enough said.

• 26:44Shaan Puri?

  Saw some parts of bodies.

• 26:45Speaker 01

  Yep, basically. And um I was actually living right on the boardwalk for about a month and I couldn't handle it after like that month. Like the the it was this cool loft. It was like funky and shit and it was, you know, when I got there, it was like typical tourists, you know, like came to Venice. I thought, oh yeah, Muscle Beach, Gold's Gym around the corner. I thought I was in heaven. And I realized it was such a shithole. One night, I remember walking back in from the um from the boardwalk. There was some dude inside my fucking apartment. And he's like sitting there like shaking on the floor. I'm like, what the fuck are you doing? He's like, oh, you got some money, man? And I was like, get the fuck out of my apartment. Like, I was, it was like the weirdest thing, cause like that kind of stuff doesn't happen in Australia, right?

• 27:24Shaan Puri?

  Welcome to America.

• 27:25Speaker 01

  I know, man. I was like, holy crap. So, yeah, man. And that sabbatical was like an interesting period.

• 27:31Shaan Puri?

  So you. When you came in, you handed me this. I'm looking at this thing. If you're listening, you can't see it, obviously, but it says, it says, "Breaking news, blockchain is dead." And it looks like this is a, is this real? Is this a mock newspaper? What is this? Is this your business plan? Like, I see, I see an ad for your company at the end. What am I looking at? Because this looks kind of genius, but I don't know what it is.

• 27:50Speaker 01

  All right. So, um, about-

• 27:52Shaan Puri?

  Is this what you were giving away at the conference?

• 27:54Speaker 01

  It is. Not, not this conference, though. At another conference. This conference, I gave it away to a couple people because I had a few printouts left. But basically, at a conference earlier this year, I'm sort of known as either Angry Alex or Contrarian Alex back in Sydney, or back in Brisbane, or Australia, whatever you want to call it. And that's because I generally have a very contrarian viewpoint to, to norms that I find stupid. And one of the latest norms that I find stupid is this whole blockchain thing. The norm that I found stupid before that was crypto and ICOs. So, there's this, there's this capital raising conference called Wholesale Investor that happens, you know, they do multiple events and they basically get investee companies who are looking to raise capital in front of, you know, wholesale, high net worth, angels, et cetera, and funds,

• 28:38Speaker 01

  right? So, you get the opportunity to get up on stage and pitch your, your business. And as part of that, some of the more well-known people in the industry get to also do what's called an educational session. So, you know, this, this little publication actually started the year before, which was, I got invited to speak at that event, and it was right during the ICO craze, right? Everyone was making money off ICOs. And we consciously made a decision not to fucking do an ICO with Amber because I just found it fraudulent, stupid, moronic, and every other word I could give it, because people were effectively using the narrative of what Bitcoin is, which is about creating symmetry in society and being the money of the people. They were using that sort of narrative to print money

• 29:21Speaker 01

  and do what the bankers just did in, you know, 2000, just to dump, you know, your worthless tokens on people. And that pissed me off so much. So, I was like, we are categorically not doing that. So, I got up at this conference.

• 29:30Shaan Puri?

  Well, so, I want to, I want to pause for a second because I want to have a, I want to test the Contrarian Alex, or what was the first one? Angry Alex?

• 29:39Speaker 01

  Angry Alex, yeah.

• 29:39Shaan Puri?

  I want to test Angry. Okay, so, so, for people who are listening, I want to hear your views, okay, on a couple things. I'm going to give you the prompt, you give me the answer. Prompt is, why should I care about Bitcoin?

• 29:51Speaker 01

  Uh, the world needs a better form of money and fundamentally, uh, if money is the basis of society, the current form within which we know it is fucked up.

• 30:01Shaan Puri?

  Okay, cool. How's it fucked up? What's wrong with money today?

• 30:04Speaker 01

  Money is owned and controlled by a few and if we look at money as a form of communication, we, you know, we all believe in freedom of speech. Um, we should all believe also in uh, freedom of owning and doing, you know, what we want with money because it is a fundamental form of human, it's, it's, it's a tool of human collaboration. That's what money was designed for and you cannot have a collaborative, cooperative, complex society without having money. And um, so in today's day and age, the, the way, the way money works is it's uh, owned and controlled by the few.

• 30:35Shaan Puri?

  Who are the few here?

• 30:37Speaker 01

  The few is like the central banks and basically sovereign nations. Um, that, that's, that's the lever that they use to basically run society. And we all know that society has some fundamental problems. You know, you don't have to walk far in San Francisco to see some issues, right? So in business, you and I know, we go out and we set up a business, we do something. If we fuck up or if we get it wrong, the consequence is you lose money, you go bankrupt, you, you have a negative consequence. If you get it right and you do well and the stars align and you know, you're lucky and all this sort of stuff, you get a nice payout, something good happens. In government and central banking and you know, that sort of side of the world, and this is the asymmetry that you get when you own money, when you own the world's most important resource. If you make a good bet

• 31:18Speaker 01

  and you invest and you do the right thing, you make a bunch of money. If you fuck it all up and you do dumb shit like two thousand eight, or if you're a government and you just print your way, you know, into as much debt as you want, it doesn't matter. Guess who pays for it? Everybody else.

• 31:32Shaan Puri?

  So it's all the power without the consequences?

• 31:34Speaker 01

  Zero consequence. So there's no, so what, what happens is you get this asymmetry in society where the very few, the rent seekers effectively get to do whatever the fuck they want and there's zero consequence. Um, and the, the rest of us, we either pay for it in taxes or through a hidden tax of inflation. You cannot do that in a sound money type society, something that would could potentially be built on Bitcoin.

• 31:58Shaan Puri?

  And here in America, you know, inflation is not, we're not a hyperinflation, right? It's three percent a year, that sort of thing. What, if I'm an American, I'm sitting here, I'm saying, what's the big deal? Money seems fine. Money's never did me wrong. I don't have enough money, but, but money itself is not sort of treating me wrong. I think most people don't feel the consequences of what you're talking about. But in some countries, that's different. So like, give us an example of a country where.

• 32:22Speaker 01

  Venezuela, Zimbabwe, you know, people have heard about that. I mean, I, I don't have my wallet here, but I've got like a Venezuelan, like I've got a hundred million, you know, bolivars or whatever it is. So, so like.

• 32:31Shaan Puri?

  Like a bill.

• 32:31Speaker 01

  Yeah, yeah, it's a bill, exactly, right? And, and.

• 32:34Shaan Puri?

  And what happened there? The government, you know?

• 32:36Speaker 01

  That's, well, hyperinflation is a function of the loss of confidence in the currency of a, um, of a jurisdiction. Whether that's a nation state, whether it's whatever. Right now, I mean, in, in the, in the world we live in, the jurisdiction is always the nation state, effectively. So money's supposed to be this thing that performs three functions. Store of value, medium of exchange, and a unit of account. Now, when people lose confidence, it loses the first one, that idea that it's, that it's a representation or a store of value. And if it loses that, the fact that it's a medium of exchange or a unit of account basically goes out the window. And people don't trust it anymore. They don't want to hold it because what it's supposed to do, like, you would rather than hold goods or you would rather hold anything else other than this worthless paper.

• 33:16Speaker 01

  And, and that happens more so in countries that, you know, have weak governments or a weak social system or, um, you know, all that sort of stuff. It hasn't happened in a place like the US. And I don't think it's likely to happen here because of how entrenched the US dollar is. I mean, maybe not for another fifty or a hundred years, right? So, so that's sort of not the argument. But I, I want to touch on the thing that you mentioned, how, you know, three percent inflation, right? So, I mean, I think M two money supply inflation is like six percent, but irrespective, it's an amount that not many people feel that much. But a friend of mine puts it, he calls it crystallized life force. It's like, we in society as human beings, we perform work or we add value. Um, it's the, it's, you know, by inputting energy of some sort into the world.

• 33:58Speaker 01

  And what that's measured in is this unit, which we decide to call money. And then we trade this unit around and that's how we build society, right? That unit, it doesn't make sense for that unit to just depreciate for some, you know, nonsense. Because it's, it's, um, if you go and work for twenty years and you've saved that. Money, the money that you worked for at the beginning of that twenty years is now worth less in purchasing power. If you compound that three percent, it's worth about sixty percent less than it was when you began. But is your work technically worth less sixty percent than it was? It's not. And I was talking with this lady who was not a Bitcoiner. We were talking about all sorts of stuff and she sort of brought up Trump and all this sort of stuff. And anyway, I kind of, you know, got me down the Bitcoin rabbit hole.

• 34:40Speaker 01

  And she she mentioned a show and I think it's Seth Seth Rogen. Is he the dude that does those?

• 34:45Shaan Puri?

  Funny guy?

• 34:45Speaker 01

  Yeah, the funny guy. Yeah. So it's kind of remember if it was him or someone else, but it's a Netflix show and it's like a parody of Star Trek. And and, you know, they're all on this ship and and they've got that machine that can replicate anything, right? And, you know, whether it's a, you know, wallet or this or that, whatever they want. So they have abundance. But the only thing they cannot replicate is the value of the contribution to their, you know, mini society. Because that's the, you know, that's the one thing that's unique. That's the one thing that's fundamentally scarce. So when she said that, I was like, holy shit, you have just basically described what money is at its fundamental. The the basis of what money is, it's something that cannot be replicated, cannot be diluted.

• 35:28Speaker 01

  And it's it's a measurement of work. It's a measurement of energy. And and what Bitcoin represents is this uninflatable, you know, unit that cannot be compromised. Or confiscated or, you know, or changed by any particular party with, you know, asymmetric power.

• 35:47Shaan Puri?

  Right.

• 35:48Speaker 01

  And as a result, we can map that directly to the input that human beings put into society. So the only way in a sort of Bitcoin denominated system, let's say in the future, that's what it looks like. Or at least a parallel economic system that's sort of run on Bitcoin. The only the only way to get ahead in a world like that would be to add more value or to put more time in. That's it, and that's how an economy should function, exactly. Not rent-seeking.

• 36:14Shaan Puri?

  Right, okay, I'm with you on all those things. Part of why I'm interested in Bitcoin, but I like hearing it from you. And so you've got this app that's, is it coming out or already out?

• 36:25Speaker 01

  It's already out in Australia.

• 36:27Shaan Puri?

  Already out, called Amber.

• 36:28Speaker 01

  Yep.

• 36:28Shaan Puri?

  And tell us, tell us about Amber, because I think it's pretty clever. It's, there's like an equivalent app like that for fiat currency, but it looks like you're doing it for cryptocurrency, for Bitcoin specifically, but tell us, what is Amber?

• 36:40Speaker 01

  Really simply, I believe that everybody should be buying and holding some Bitcoin at the moment. Because when, when a new asset emerges, there is incredible upside. So, you know, and what you want to do is you want to, if you picture, I'll give you a really good example to picture Bitcoin. There's, there's going to be 21 million Bitcoin, and that's sort of like a fixed upper limit. It's infinitely divisible, which means everyone can hold some at some point in time, but the, the upper limit is fixed. So if you look at it kind of like the planet, there's so much land. It's kind of like, holding some territory in Bitcoin is like holding some territory in the physical world, right? So, so you want to accumulate now while the fucking thing's cheap. You don't want to hold minimal territory, you know, in a hundred years from now, when, you know, everyone's got a large chunk.

• 37:22Speaker 01

  So what Amber does, it helps you dollar-cost average into Bitcoin by, you know, you, you download it, you link your bank account, and you forget about it. And you, you've got options, whether you want to just do spare change, or whether you just want to do a recurring sort of buy. But it effectively just purchases an amount of Bitcoin, you know, from as little as five bucks a day, whatever it is. And it stores it for you in cold storage.

• 37:43Shaan Puri?

  So this is for the person that says, I'm interested in Bitcoin. I don't have a ton of money to go buy, you know, 10 G's worth of Bitcoin right now, which would, as of today's price, get you less than one Bitcoin.

• 37:52Speaker 01

  Correct.

• 37:53Shaan Puri?

  So I don't have a ton of money to go, go invest in this, but I, I don't want to sit on the sidelines, I like to be in the game.

• 37:59Speaker 01

  Correct, this is about accessibility.

• 38:01Shaan Puri?

  And so you're trying to put people in the game by saying, do no work, just download the app.

• 38:04Speaker 01

  Yep.

• 38:04Shaan Puri?

  And it will passively say, the spare change use cases, I buy something, you know, let's say for, for $5.60.

• 38:12Speaker 01

  Yep.

• 38:12Shaan Puri?

  And it can round up and take the last 40 cents and buy some Bitcoin with it.

• 38:16Speaker 01

  Correct.

• 38:17Shaan Puri?

  So that's one thing you can tell it to do. And cool, you'll just accumulate little, little by little, every time you're buying something, just round up the spare change you kind of would have forgot about anyways.

• 38:24Speaker 01

  Correct.

• 38:24Shaan Puri?

  The other thing you could do is set up a recurring buy, five bucks every Monday type of thing.

• 38:27Speaker 01

  Yep.

• 38:28Shaan Puri?

  Uh, that gets you in the game. And so you're trying to help the person who is interested, but on the sidelines today, get in the game.

• 38:34Speaker 01

  Well, there's three main reasons. It's too risky, it's too volatile, it's too hot. So we alleviate all of those, you know, volatility is uh smoothened out via dollar cost averaging, that's what it does. So what happens is when you're dollar cost averaging, when it's um, when the price is, you know, exorbitantly high, you're buying a little bit less, when it's exorbitantly low, you're buying a little bit more, and particularly in emerging asset classes, they're all over the place.

• 38:57Shaan Puri?

  So if you're not a finance nerd, dollar cost averaging just means you don't have to time, when's the right time to buy?

• 39:02Speaker 01

  Correct.

• 39:02Shaan Puri?

  You're just always buying a little bit.

• 39:04Speaker 01

  Exactly.

• 39:04Shaan Puri?

  So as things swing, uh, you're sort of, you're riding the ups and downs, it smoothes out the, the, the problem of trying to time the market, which nobody can do.

• 39:11Speaker 01

  Hundred percent. So it's about, so you nailed it there. So it's about time in the market instead of timing the market. So the only thing you've got to do in that sense is you've got to look for opportunities which have long-term upside, and ideally, you want to look at the opportunities with not only long-term upside, but with asymmetric upside. So Bitcoin is the only asset that I know of today that is uh likely has an opportunity to be worth a hundred X. We don't have many of those today, unless you're a Chris Sucker and you can get yourself into it, right?

• 39:42Shaan Puri?

  Don't invest in it.

• 39:42Speaker 01

  Exactly. Yeah.

• 39:43Shaan Puri?

  Yeah. So the most you can lose is, you know, the five bucks you put in.

• 39:47Speaker 01

  Correct.

• 39:47Shaan Puri?

  But the most you can gain is a thousand times the five bucks.

• 39:49Speaker 01

  Exactly.

• 39:50Shaan Puri?

  That's the asymmetry you're looking for.

• 39:52Speaker 01

  Exactly right. And that's how most people should invest. So after all the years of trading and all the years of stuff that I've done, if I just dollar cost averaged into things that had some asymmetric upside, I would be a hundred or a thousand times further ahead than I am now, instead of trying to be a genius and try and fucking trade my way through.

• 40:12Shaan Puri?

  Right. Okay. Well, that's the wisdom. All right. So uh, how's the app doing? Are people using it?

• 40:16Speaker 01

  It's great, man. So we've um, we actually, what's today? Today's Friday. So it's Saturday in Australia. So we, we just finished our public beta yesterday, which is um, so we, we go like fully, fully live on Monday next week.

• 40:28Shaan Puri?

  And why only Australia? Why not the rest of the world?

• 40:30Speaker 01

  It's um, dealing with a product like Bitcoin, it's um, you know, it's less a tech problem. There's the tech problem of connecting to the bank and getting direct debit services because, you know, banks inherently don't like Bitcoin because you're pulling money out of their system into a new economic system, right? So number one, so they're not very friendly. Number two is, you know, governments don't like it. So they're like, you know, make it jurisdictionally difficult. So, you know, compliance licensing and all this bullshit is different in every single place. Like, we might not even come to the US because here you guys have a different set of rules for every single state. It's a complete nightmare. So, you know, we might just like skip over to your friends in Canada and give them the service.

• 41:11Shaan Puri?

  They get all the nice stuff now.

• 41:12Speaker 01

  I know, right? So, um, so yeah, man, so it's, that's sort of the lay of the land.

• 41:17Shaan Puri?

  Gotcha. And so the price today is what? Like, we looked it up on our Uber ride over here. It was twelve thousand, I think, three hundred sixty-one.

• 41:25Speaker 01

  Yep.

• 41:26Shaan Puri?

  I know you're not trying to time the market, but I'm curious what you think the price trajectory looks like. Do you think this is a temporary rally? Do you even care about the price? How do you think about the price? Because everybody's focused on the price, price, price.

• 41:38Speaker 01

  Yeah, correct. Um, look, I, I try and be a little bit more long-term in my viewpoints, right? So everyone has this tendency to gamble. So there's, there's a popular website called Bitmex, which lets you trade leveraged versions of Bitcoin, you know, uh, long and short and all that sort of stuff. And I've had a play on Bitmex. You know, I started with one Bitcoin, got down to zero point two Bitcoin, traded my way back to one Bitcoin and, you know, I've like, been like, I ain't touching that shit anymore because it's just unnecessary, right? So, um, so, so short term, I don't think it matters. Like, if I had to take a guess, I'd say short term, we're probably a little bit overextended. But hey, I could be wrong, you know? I might, I personally think in the medium term or during this wave or during this run-up, we'll probably see Bitcoin peak somewhere between a hundred and fifty to two hundred K, maybe even more, uh, US.

• 42:23Speaker 01

  Um, and then it'll probably correct from there. So we're probably going to see another mania. Um, it'll correct from there, probably to twenty. And then it'll probably do another run-up, you know, during the next

• 42:31Shaan Puri?

  Cycle.

• 42:31Speaker 01

  Four-year cycle that it has and, you know, might go to a million now. Things are never that clean, but if you can sort of anticipate like a broad brush of cycles, I, I think this round, right now, Bitcoin is cheap as shit.

• 42:44Shaan Puri?

  And what's, what percentage of your own personal net worth are you putting in Bitcoin?

• 42:49Speaker 01

  I lost all my Bitcoin in a boating accident.

• 42:50Shaan Puri?

  Okay.

• 42:55Speaker 01

  But it was traditionally, traditionally speaking, it was about.

• 43:00Shaan Puri?

  Taxman doesn't listen to this podcast.

• 43:01Speaker 01

  Yeah, yeah, yeah. I was probably closer to 70%.

• 43:07Shaan Puri?

  Oh, wow.

• 43:08Speaker 01

  Yeah, so I'm very bullish, yeah, yeah.

• 43:09Shaan Puri?

  Yeah, okay. Yeah, somebody's gotta be bullish about this, right?

• 43:13Speaker 01

  Dude.

• 43:13Shaan Puri?

  There's a lot of people out there who will say all the right things and then they put, you know, 2% of their net worth and they're already rich and so it's sort of, that's a nice to have sort of proposition.

• 43:22Speaker 01

  Correct.

• 43:22Shaan Puri?

  And that might be the correct conservative way to do it, but.

• 43:25Speaker 01

  For most people, that is correct, exactly, yeah. So I believe, so I think that the level of, so I don't look at Bitcoin as a risk asset, I actually look at it as a risk off asset. So, but that just comes from my level of understanding of what's actually going on here. And that's the same as someone who might say, oh yeah, investing in Uber in, you know, the first couple of years was a risky thing to do. Whereas the people who understood it or were close to it had a very different view and a very different picture of that. So those founders, obviously, had a much larger stake. So to them, it was a, it was a risk not being a part of it. So I think that the more you peel the onion and the closer to the core of what you're involved in, you get, the more that profile changes. So if people don't understand it, 1 or 2, 3%, that's enough.

• 44:10Speaker 01

  You know, but for them, the more you understand it, the more you'll find that you want to put more into it.

• 44:13Shaan Puri?

  And what have you noticed, Australia versus Silicon Valley, the opinions on Bitcoin? Because you spend time at both places.

• 44:19Speaker 01

  Yeah.

• 44:20Shaan Puri?

  Do you feel like it's the same viewpoints or do you see anything drastically different?

• 44:24Speaker 01

  Look, I haven't been back here for a while and this week was obviously skewed because of the Bitcoin 2019 conference.

• 44:29Shaan Puri?

  And who goes to that? Is that guys like wearing a Bitcoin outfit? Like, is it the nuts or?

• 44:34Speaker 01

  Dude, there was actually a really good turnout. So there was, I mean, you know, you had like blockchain capital there, that was sort of like one of the first funders of Coinbase and things like that. So you had everyone from VCs, they had Snowden telecast in.

• 44:47Shaan Puri?

  Oh, wow.

• 44:47Speaker 01

  So that was really cool.

• 44:49Shaan Puri?

  Where's he living nowadays?

• 44:50Speaker 01

  I don't know, I mean, he's not gonna kind of tell us.

• 44:53Shaan Puri?

  What region of the world do you think he's living in?

• 44:55Speaker 01

  I don't know, isn't he still in Russia or something? I don't know, I don't know, but I mean, that was really cool. So they had that, they had speakers from like, you know, all different startups in the Bitcoin space, people that are working on Lightning and all this. There is so much happening there and it's really interesting to be like, being in the Bitcoin space right now is like being part of this cool club that very few people know about. And sort of tying it back to that little newspaper thing that I gave you is, you know, I. I got up and I opened that talk. So that that little newspaper started off as a talk that I was supposed to give. And that was the second talk at this wholesale investor thing, like it was a year after the first talk that I gave where I bashed the shit out of ICOs. At the second talk, they were like, oh, look, can you not do what you did last year because you, you know, scared a bunch of people away, telling people that ICOs were scams.

• 45:39Speaker 01

  And I was like, well, was I right? And they're like, well, you were, but can you not? And I said, all right, this time I'll be nice. So this time I got up and I said blockchain was a load of shit that, you know, Bitcoin is where it's at, not this term blockchain, which is just this ephemeral term that someone's picked out of the fucking hat that has nothing to do with anything. And they've sort of made it seem like blockchain can give you security and mutability when those two functions come from something like Bitcoin, which is an amalgamation of the blockchain architecture, along with economics, game theory, incentive, disincentives, networks, all this other stuff that you don't get. So um, I got up and I I said, um, you know, I I had Peter Thiel's quote on the on the screen. And I said, you know,

• 46:19Speaker 01

  what truth do very few people agree with you on? Um, and kind of, I I told the organizers that um, the talk was going to be entitled, you know, how lightning is going to deliver on what blockchain promised. But then um, I got up and I said, the real name of my talk is blockchain is dead, the future is on lightning. And now, mind you, this is a blockchain conference where people are raising money for blockchain companies. Right. So, yeah, that that's angry Alex and contrarian Alex at work. But I think, and the contrarian bet which I'm I'm personally like sold that is going to win is that Bitcoin and the layers built on Bitcoin, much like the internet and the layers that were built on the internet are where the game is at. Not in trying to build, and the analogy that I give to people is trying to compete with Bitcoin is like AOL trying to compete with the internet.

• 47:03Speaker 01

  The the companies that succeeded were the ones like Google, Netscape, et cetera, who built on the internet, which was this really dumb, basic packet routing network. And it didn't do anything except for route packets of data and didn't give a shit what was on that data. It was the value added services and the businesses and the layers that were built on top of that, where everyone converged to use the internet. Same thing's going to happen with Bitcoin. Bitcoin is this really basic. Basic is maybe not the right word, but this really robust fundamental uh network that routes value and it's unstoppable at routing value. You cannot stop it. You can't turn it off. You can't turn it on. It's that. That's what it does. It's this autonomous.

• 47:42Shaan Puri?

  No one owns it.

• 47:43Speaker 01

  Network. No one owns it. No one controls it. Exactly. So it routes value the same way as the internet routed data. And what's going to happen is people are going to realize that, hey, I can provide the service of what traditionally a bank with hundreds of millions of dollars of resources is required to like what a bank needs to do to provide a simple service of a fricking checking account and the ability to send money to your friend requires hundreds of millions of billions of dollars of infrastructure. I could provide the same guarantee of funds and the same guarantee of send, store, receive that a bank can with a little app that we can build with a couple hundred grand.

• 48:19Shaan Puri?

  Love it.

• 48:19Speaker 01

  Like, tell me that's not revolutionary. Like, and and people are still here running around trying to look for the killer app on blockchain. The killer app is here. It's Bitcoin.

• 48:27Shaan Puri?

  It came in the bundle.

• 48:29Speaker 01

  That was the zero to one moment.

• 48:30Shaan Puri?

  Yes.

• 48:31Speaker 01

  And and now, so and that was sort of my argument. And that's sort of in that paper there. I make this whole argument. I sort of display what blockchain was what's promised for blockchain. And then I talk about how that's a broken promise and that, you know, out of all the stuff that came out of the ICO craze, like ninety nine percent of it was all just bullshit, like, you know, autonomous drone powered, you know, token that's going to wash your clothes and make you rich overnight, right? All this shit. But there might have been one percent of the stuff which made sense. That stuff is going to be built on Bitcoin. It ain't going to be built on its own blockchain.

• 49:01Shaan Puri?

  Makes sense. There's really, I'd say, three schools of thought. There's the, let's give it four schools of thought. School of thought. Number one, what the hell is Bitcoin? People who just don't understand yet, too fuzzy of a concept. Cool. That's where a lot of people live. Number two, Bitcoin is snake oil.

• 49:17Speaker 01

  Mm hmm.

• 49:17Shaan Puri?

  This is, and everyone, you know, even Warren Buffett, Charlie Munger are out there saying this thing, it makes no sense. It's a Ponzi scheme. Stay away from it. It's poison. Number three is where I think you and I live, which is Bitcoin is the thing. Bitcoin is the killer application of this technology breakthrough. We had this computer science breakthrough, which enabled a really amazing thing, which is, like you said, we can route value as easily as we routed data in packets for the internet. Now we can route money the same way. And money can be something that's as open, secure, and controlled by a single entity in the way that the internet is. And then there's a group of people that say blockchain, not Bitcoin. And I think that's where you stepped in and said, no.

• 50:00Speaker 01

  Yeah.

• 50:01Shaan Puri?

  I also feel like that's sort of the, it's the hedge stance. It's the stance that says, I don't want to be anti this whole crypto thing, but I don't want to be in on Bitcoin and the price and the money-making side of it. So I'm gonna, I'm gonna just sit on this technology side, because that's safe. Who can argue with a breakthrough technology? That sounds smart and that sounds safe. Those are the people who say it's all about blockchain, not Bitcoin. And I think that the two are paired together, they're bundled in, as you said, where blockchain made something like Bitcoin possible, and something like Bitcoin is a huge breakthrough and should be sort of celebrated on its own.

• 50:37Speaker 01

  I'm actually gonna, I'm gonna actually push back on one of those things. It's actually not blockchain that made Bitcoin possible, it's Bitcoin that made blockchain possible. Because see, the word blockchain never even existed. It's not even in the white paper. It's not even in there. So Bitcoin is actually, and this is technically correct, it's actually a time chain. It's got nothing to do with being a blockchain. It's just that a group of bankers who missed out on Bitcoin and were bitter about it came up with the name. It was kind of, I think the R3 consortium, which sort of, you know, had a bunch of banks and all this sort of stuff, came up with the term blockchain in 2012, about four years after Bitcoin came out.

• 51:09Shaan Puri?

  Is that right? Okay, I didn't know that.

• 51:11Speaker 01

  It didn't even exist.

• 51:12Shaan Puri?

  You're saying, forget all the noise, Bitcoin is the thing.

• 51:13Speaker 01

  It's the thing. There's nothing else here.

• 51:15Shaan Puri?

  And if you were, I'll give you the last minute of the podcast to basically speak to, you know, there's a lot of people that are gonna listen to this, some of which already are in the Bitcoin game, some have heard of it, and some have never heard of it. I would say their ears are yours. If you had a minute to just say anything to that group of people, you know, what would you tell them? Because you have the chance to reach a lot of people and share a little bit of what you believe to be true.

• 51:37Speaker 01

  Okay. Whether you're as a fervent believer as me, that, you know, the system needs to get better, and we need to bring some more symmetries, and whether you've gone down that rabbit hole and you really believe in Bitcoin, whether you're on that side of the spectrum. Or whether, you know, you think it's okay and you don't really give a shit. Or even if you're even further on the spectrum, you like the current system the way it is. You should still buy some Bitcoin because of the asymmetry that it represents, that contrarian bet. I don't give a crap where you are. Holding some, buying and holding some is actually game theoretically sound. Because if you don't, you're just gonna end up in the bucket of having been left behind. And if you do, and you only do a little bit, so if you just manage that percentage, depending on which part of the spectrum you're on.

• 52:21Speaker 01

  You do it intelligently, the worst case is not so bad. You will have lost a little bit and life will go on depending on where you are on the spectrum. But if it does happen, um, dude, this changes everything. So it's, it's kind of like buying a domain name 20 years ago. Just buy one. Maybe the internet wasn't gonna be anything.

• 52:38Shaan Puri?

  Right. All right, uh, this is not investment advice.

• 52:42Speaker 01

  This is not investment advice, exactly.

• 52:43Shaan Puri?

  Yeah, yeah, yeah, all the normal disclaimers. Listen, man, I appreciate you coming in. Uh, it's a pretty fascinating conversation. Like you said, we, we had never met before. And so, uh, for me, I liked hearing, I really liked hearing the story of the ups and downs. Trying to, trying, trying to make a quick buck, got, you know, got burned. Learning sales and building a real business the hard way. And then getting burned on the, at the mercy of, uh, the government who changed their mind and how that led you to Bitcoin. I think that's a pretty cool, pretty cool story. And I think that, um, for a lot of people, you know, some of the stuff that we talked about may, may go over their head. May, may not understand a lot of the terms.

• 53:17Speaker 01

  Yep.

• 53:18Shaan Puri?

  And for them, I would kind of just ask you, what's a good, like, what's a good starting point or resource? Or when you do want to go down the rabbit hole, where's the door?

• 53:24Speaker 01

  Okay.

• 53:24Shaan Puri?

  Uh, where, you know, where's the surface of that hole? Where, what's a good, what's a good place for somebody to start?

• 53:28Speaker 01

  There's a couple of good places. If you like listening to podcasts, there's, um, one of my favorite ones is dude called Marty Bent and Matt Odell. It's called TFTC, so Tales From The Crypt. It's really, really cool, like conversational, uh, sort of, um, podcast. They, they do a show every week. It's, it's really, really cool. So they're, they're based up in New York. Um, so that's one. If you want to, if you want to learn more about the, um, The the economics element of it, particularly Austrian economics, there's a friend of mine called Stefan Laverre, he runs a podcast there. Um, that's if you prefer podcasts. If you prefer reading, um, I mean, you know, I'm going to toot my own horn here. I do a lot of writing on Medium. I've got quite a decent following. Um, I write for Hacker Noon, so I'm one of the top Bitcoin writers on Hacker Noon.

• 54:07Shaan Puri?

  Where can people find you? If they just want to hear more from you, where do they find you?

• 54:11Speaker 01

  Just find me on Twitter, so at Aleks Svetski, and my name's spelled different, so it's A L E K S S V E T S K I, so Aleks Svetski. So on Twitter, you'll find me on Medium as well, or if you just Google my name, you'll find me, it pops up all over the place. So a lot of my resources, I've done a couple of long form articles, and the probably two you want to look for is Homo sapiens, evolution, money and Bitcoin. That sort of is a journey of, you know, how we started and sort of, you know, why it's important. So that sort of sets a good foundation. And then I do why Bitcoin matters. And in there, I sort of talk about how, uh, they have some similarities because I talk about society, evolution, all that sort of stuff. But then I talk about the fundamental tenets of money and why this is a better, a superior form of money.

• 54:49Speaker 01

  So that's those two. If you want to read that publication online, so we've got it online, Sean has the last printed version that I ever did for that event, right? So it's still a draft, that's a three day job there. But, um, we fixed it up, it's online, it's Bitcoin Times dot news, N E W S.

• 55:04Shaan Puri?

  Got it.

• 55:05Speaker 01

  Don't put the W W W. So, um, so yeah, so that's all the resources, I think. I hope that all helps.

• 55:10Shaan Puri?

  Great. I appreciate you coming on the show, bro.

• 55:12Speaker 01

  Thanks, bro. Really appreciate it.

• 55:13Shaan Puri?

  All right.