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

Are we falling for the biggest money traps of our generation? And what are the money habits that actually build millions? Raoul Pal, Jaspreet Singh, and Humphrey Yang reveal the truth about renting vs buying, escaping credit card debt, mastering passive income, and investing with $0! This personal finance roundtable brings 3 leading finance experts to discuss building wealth and planning for your financial future. Jaspreet Singh is an entrepreneur and founder of Minority Mindset, Raoul Pal is a former hedge fund manager and CEO of Real Vision, and Humphrey Yang is a personal finance creator and former financial advisor at Merrill Lynch. They discuss: ◼️Why saving money won’t make you rich, and what to do instead ◼️The single best skill to escape being broke in 2025 ◼️ Why renting is smarter than buying (even if you can afford to buy) ◼️ The tiny money habit that quietly builds millions over time ◼️ Why most people under 45 won’t get a pension (and what to do instead) ◼️The truth about crypto, AI and why the financial system doesn’t want you prepared (00:00) Intro(02:24) How Do I Make More Money?(05:13) Pointless Jobs That Actually Made You the Most Money(06:53) How to Visualize Your Finances(07:44) Social Pressure With Money(09:37) The Simple Money Tracking Hack(13:32) Best Form of Investing: Active or Passive?(18:34) More People Joining Crypto(21:07) Bitcoin Is Too Speculative(28:31) Stocks vs Crypto(34:01) How Would You Invest $1,000?(42:13) The S&P 500 vs the Nasdaq-100(44:14) Dollar-Cost Averaging(47:12) Remove Emotion From Financial Decisions(48:08) Should We Be Putting Everything Into Crypto?(49:36) If Crypto Isn't the Future, What Takes Its Place?(54:26) Sponsored Segment(56:24) What to Do When You're in Debt(59:43) Bankruptcy: When Should Someone Consider It?(01:02:13) What If You Don’t Want to File for Bankruptcy?(01:03:55) The Myth of Passive Income(01:05:51) How Well Can You Actually Do From Property Investments?(01:10:35) Should You Buy Rental Properties for Passive Income?(01:11:21) More People Are Renting in the US Over Buying(01:13:33) Is Property a Good Way to Build Wealth?(01:19:30) Is There Any Such Thing as Good Debt?(01:20:30) Leveraging Your Current Assets(01:26:01) Pensions and 401(k) Retirement Plans(01:41:37) Framework for Making More Money Easily(01:47:53) Keeping Your Money in a Bank Is Making You Poorer(01:51:58) What Do Rich People Know That Most Others Don’t?(01:54:41) Relationships Make Money(01:59:44) How Much Do Geographies Matter When Making Money?(02:02:30) Is the UK a Good Place to Build Wealth?(02:05:49) Closing Statements Follow Jaspreet: X: http://bit.ly/3HSFdO3 ‘Market Briefs’ newsletter:: http://bit.ly/4mWeqzr YouTube: http://bit.ly/46hbTbU Follow Raoul: X: http://bit.ly/466Fe8Q Website here: http://bit.ly/4m6Rexb You can download Raoul Pal’s 5-Year Roadmap for free here: http://bit.ly/3JQok7g You can purchase ‘The Everything Code’, here: https://amzn.to/48cJ2bk Follow Humphrey: Youtube: http://bit.ly/3KgmkoJ Instagram: http://bit.ly/4gs6kMI Website- Humphreysguide.com The Diary Of A CEO: ⬛ Join DOAC circle here - https://doaccircle.com/ ⬛ Buy The Diary Of A CEO book here - https://smarturl.it/DOACbook ⬛ The 1% Diary is back - limited time only: https://bit.ly/3YFbJbt ⬛ The Diary Of A CEO Conversation Cards (Second Edition): https://g2ul0.app.link/f31dsUttKKb ⬛ Get email updates - https://bit.ly/diary-of-a-ceo-yt ⬛ Follow Steven - https://g2ul0.app.link/gnGqL4IsKKb Sponsors:Linkedin Jobs - https://www.linkedin.com/doac Vivobarefoot - https://www.vivobarefoot.com/ Bon Charge - http://boncharge.com/diary?rfsn=8189247.228c0cb with code DIARY for 25% off Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Steven Bartlett?

  When I grew up, everyone said to me that to generate wealth, get a job, get money, then get a mortgage.

• 0:04Jaspreet Singh?

  That's one of the worst pieces of advice you can give somebody.

• 0:07Raoul Pal?

  And your future self is going to be poorer because of it.

• 0:09Steven Bartlett?

  But that's what everyone's doing.

• 0:11Raoul Pal?

  Because we're not taught this stuff.

• 0:12Steven Bartlett?

  So what do you think the biggest money mistake the average person makes is?

• 0:15Raoul Pal?

  Being a saver.

• 0:16Steven Bartlett?

  So just having your money sat in a bank account?

• 0:17Raoul Pal?

  Yeah.

• 0:18Jaspreet Singh?

  It's a guaranteed loss. You're becoming poorer every single day. But there are plenty of ways to retire early and be financially independent.

• 0:25Raoul Pal?

  And that's including secret hack that makes people fortunes.

• 0:28Jaspreet Singh?

  So let's talk about making more money.

• 0:30Speaker 03

  This is the ultimate money-making masterclass.

• 0:33Speaker 04

  As we are joined by three financial gurus.

• 0:35Steven Bartlett?

  With very different opinions and methods to build future wealth. So I want to talk about pensions, credit cards, renting, bad money habits, debt, passive income, spending money to look rich. But first, what is it that rich people know that the average person doesn't know?

• 0:50Jaspreet Singh?

  Rich people are more disciplined and they're doing little things that compound into huge results, like investing. But for example, the average American spent more money on Netflix than they do on their investments. And if I invested $1,000 a month for 30 years in something like the S and P 500, I will have about $1.9 million.

• 1:05Raoul Pal?

  Or there's no asset in all human history that's ever generated as much wealth in a short period of time than Bitcoin.

• 1:10Jaspreet Singh?

  There's one problem. Bitcoin is high risk. And if any of those risks happen, let me, let me finish. Do you want to have hope that you have the Bitcoin? Or would you rather have more security?

• 1:19Raoul Pal?

  You can reduce risk. It's our job to educate them.

• 1:22Steven Bartlett?

  So if someone loses $1,000, what would you suggest they did?

• 1:25Jaspreet Singh?

  I have a different take on this. If you're trying to make more money, I would.

• 1:28Steven Bartlett?

  And what about bad money habits? Because when you look at the stats, money is the number one source of stress for Americans, top in work, family and health.

• 1:35Jaspreet Singh?

  There's a three-step framework, so I want to get into that. Number one.

• 1:40Steven Bartlett?

  Just give me 30 seconds of your time. Two things I wanted to say. The first thing is a huge thank you for listening and tuning into the show week after week. It means the world to all of us. And this really is a dream that we absolutely never had and couldn't have imagined getting to this place. But secondly, it's a dream where we feel like we're only just getting started. And if you enjoy what we do here, please join the 24% of people that listen to this podcast regularly and follow us on this app. Here's a promise I'm going to make to you. I'm going to do everything in my power to make this show as good as I can now and into the future. We're going to deliver the guests that you want me to speak to and we're going to continue to keep doing all of the things you love about the show. Thank you.

• 2:24Steven Bartlett?

  I think the first place to start is people want to know how they can make more money. Because if you don't feel like you have money, saving and investing in these kinds of things appear to be pointless. I also understand that that's not necessarily true. I think you can you can start investing and saving with a very small amounts of money. But for those people that are asking that question, if they're listening to this now and going, how does one make money? Like, you know, I've got this job, I'm working a nine to five, it's paying me thirty thousand pounds a year or forty thousand dollars a year, whatever it might be, is the right question to be asking, how do I make more money? And if so, how do I do that?

• 3:01Speaker 03

  I always think it's it's a combination of making more money and also saving more money, but let's talk about the making more money piece. I think that everyone is unique in their own way, right? You've probably spent more hours doing some sort of hobby that I have no idea about. You play paddle, for example. I've never played paddle in my life. So let's say you were Steve, Stephen from age twenty and you're a really good paddle player. You can start to monetize this type of skill, which you have, that I don't, but perhaps you know more than me, I could take lessons from you. Even if you're not, let's say, the pro paddle player that you are, I might still be willing to pay you twenty, twenty-five pounds an hour for a lesson, right? Just because you're naturally better than I am. And so I would encourage people to kind of lean into what makes them unique and where

• 3:45Speaker 03

  they've spent a lot of their time. I think everyone has something that they're good at inherently. Figuring out what skills you have internally and how you can kind of monetize those.

• 3:54Steven Bartlett?

  What do you think, Row?

• 3:56Raoul Pal?

  I think one of the hidden things to do is you really are a function of who you're surrounded by. Invest in your network. And I don't mean that in a kind of cold-hearted, you know, I want to network with these people, but just surround yourself by people who are who are also trying to push themselves to push their income, push their opportunity set, and it makes it so much easier. If you're the only one doing it and you're around a group of friends, you're the odd one out and you're castigated for it. Find other people who want to do the same thing and you kind of help each other in that journey. So at an early stage, that's just one of the key things is to find people who also want the same journey as you. That really helps. Then it's still about.

• 4:38Raoul Pal?

  The best leverage of your skill set and being honest with what your skill set is, just because you're a doctor doesn't mean you should be a doctor just because you've graduated, because you can do other things. And it's figuring that out, that's not an easy bit, but you figure it out over time by trying stuff. You know, we've all done multiple jobs and we know what we're terrible at and what we've been good at. And you kind of over index on the things you're better at and that works. So if you're early, it's the time to make bets in yourself and your network. And that gives you the foundational tools to then earn more income and then invest more.

• 5:13Steven Bartlett?

  Was there a pointless, seemingly pointless job you did that ended up in hindsight making you the most money? And what I mean by that is I think about my experience doing telesales between the age of sixteen and nineteen. That's probably the most important thing I ever did. Like not only do I spend a lot of time talking now, but sales is a transferable skill across raising investment, persuading employees to come and join you. And I think there's nothing I did that was more important than telesales.

• 5:33Raoul Pal?

  The single best skill you can acquire in life is to learn how to sell. To be comfortable around people and to be able to get a message across is the single most powerful tool you can have in life. Everything you do, finding a partner in life, doing anything you do is basically sales.

• 5:49Steven Bartlett?

  And it's all people.

• 5:50Raoul Pal?

  It's all people.

• 5:51Jaspreet Singh?

  So if I'm this twenty four year old and I'm a twenty five year old and I'm ambitious, I want something big.

• 5:56Steven Bartlett?

  Yeah.

• 5:57Jaspreet Singh?

  You gotta find more income. You gotta have more income to do it. If I'm a twenty five year old and I just want to be okay, I don't mind my job, I just want to invest, you know, whatever. You gotta find the right investments, you gotta have a system for your money. And then you gotta create a plan. Anytime you get paid, you know how much money you're going to save. You know how much money you're going to invest and then you spend what's left. Because the difference between the person that becomes wealthy and everybody else is wealthy people save and invest their money first. Everybody else, especially in America, I spend all my money. I wonder where all my money went. And then if there's anything left, I'll try to save and maybe invest and hopefully I'll get rich.

• 6:37Raoul Pal?

  For me, it's all around, based around what is your. Vision of your future self. You know, how do you see yourself living? Because that is what we do. One of the sources of unhappiness is if your current state is not moving on the path of where your future self wants to be. How you imagine yourself?

• 6:53Steven Bartlett?

  So practically and tactically, how do they do that? How do they create this this financial vision board? Is there, do they need to know certain numbers? Do they, should they get clear on if they want to be on a private jet or easy jet?

• 7:03Jaspreet Singh?

  Oh, man, I think I think you know, if if if you have to ask yourself, hmm, do I want to fly on Spirit Airlines? Or do you want to fly on a private jet? I think you already know that question.

• 7:13Steven Bartlett?

  But is it important to be explicitly clear with yourself? Because actually, if I think of most of my life, I I wasn't entirely clear. And so you either end up chasing.

• 7:23Raoul Pal?

  Because it's generally not a materialistic outcome. It's generally an emotional outcome.

• 7:27Steven Bartlett?

  Yeah.

• 7:28Raoul Pal?

  And that's why it's hard to to pinpoint exactly what it is. But you need to position yourself in that future self and say, what does it feel like? Do I feel secure? Do I feel this? Do I feel that? So it's it's an emotional thing and not a material thing.

• 7:43Steven Bartlett?

  Is that is that central to a lot of this? You talked about emotional elements is being OK with what other people think of you.

• 7:52Raoul Pal?

  Yeah, that's the other thing is social pressure, right? So you may have the vision of yourself and you just say, I want the the three bed house, you know, with a little strip of lawn and the barbecue. And that's great. And around you, people are like, you should try harder.

• 8:06Steven Bartlett?

  Yeah.

• 8:07Raoul Pal?

  So they're questioning your own sense of happiness. And society does that at scale. And then even the whole media complex is about kind of how unhappy and how miserable you are and should be. It doesn't make it an easy place.

• 8:20Steven Bartlett?

  We're talking about emotional and psychological barriers here. How do we get over people not just being scared of what other people think? But so many people are scared of their own money. When you look at the stats around avoidance, eighty two percent of Americans admit they avoid thinking about their own finances. And one in four Americans have avoided medical care because they're afraid of the the bill and thinking about how much it might cost. For Gen Z's, sixty seven percent of Gen Z and fifty eight percent of millennials say they avoid checking their own bank account because it's too stressful. Which is compared to only thirty percent of boomers. And on in terms of mental health, money is the number one source of stress for Americans, topping work, family and health. Thirty six percent of people with debt experience clinical anxiety and twenty three percent depression.

• 9:05Steven Bartlett?

  So people avoid their own money.

• 9:07Raoul Pal?

  A lot of people avoid it because the financial world's full of jargon.

• 9:11Speaker 03

  Yep.

• 9:12Raoul Pal?

  You need to go to a professional for advice. That's what people think.

• 9:16Speaker 03

  Mm hmm.

• 9:17Raoul Pal?

  It's intimidating. You don't feel like you've got enough money. You're gonna let them down, yourself down, your family down. So there's this whole kind of thing around it. It's the confidence that you can learn. Because a lot of people say, no, no, unless you're from an investment bank or you're in a RIA or something, you can't do this.

• 9:33Speaker 03

  Right.

• 9:34Raoul Pal?

  But just a little bit of confidence to say, you know, you can do this.

• 9:37Speaker 03

  A simple tip that I think people can do is just kind of figure out how much they spend on a monthly basis. Track your expenses for thirty days, sixty days, or ninety days. And you're gonna learn so much more about just your personal habits of what you do. Because sometimes I'll forget that I DoorDash something for thirty dollars, or I'll forget that fifteen dollar or twenty dollar Uber charge. I'll just kind of file it away because I'm swiping my credit card. I don't really, I'm not aware of it. It's like if you're going to the gym and you're not aware of your weight, how are you gonna, where's your starting point? So you, I like to give people a starting point because then they can kind of have that small step to kind of start working towards their finances in that sort of way.

• 10:14Steven Bartlett?

  Sixty five percent of Americans have no idea what they spent in the last month, according to the US Bank, and sixty percent underestimate their monthly spending by a significant margin.

• 10:23Speaker 03

  Right, and that's exactly what I found. I tracked my expenses for a month in twenty fourteen. I thought I was spending fifteen hundred bucks a month. Guess what? I was spending twenty eight hundred dollars. And I wasn't making that much. And I was like, how am I off by an order of magnitude of, I don't know, sixty, seventy percent? And I find that even like all my friends I issue this challenge to, most of them don't make it to the three months. But I think as long as you have an approximation of what you're spending, that can help. Because that, that means then you're gonna have a little bit of a difference of what you make and what you spend, and then you can save that money. And I think that's one of the bad money habits of Americans is they don't save. Right, so.

• 10:57Steven Bartlett?

  It's a really good point, which is a practical step to just heighten one's awareness.

• 11:01Speaker 03

  Yeah.

• 11:01Steven Bartlett?

  Because you need to have sort of informational awareness of where you're at to even understand what you need to do to get to where you want to go, so.

• 11:07Jaspreet Singh?

  Yeah, I think you need to start with the mindset. You have to build the basics. You gotta get rid of the credit card debt. You gotta save a little bit of money, but you gotta have some breathing room. Because investing is all about taking the extra money that you have, throwing it somewhere to grow that money. And this is where, uh, there's a three-step framework that I'll talk about. Because there's a lot of ways to invest. At the very simplest is I can be completely hands-off. I can work with a financial advisor. I can give them my money and they can do everything for me. If you don't have a lot of money, you're not gonna get a very good advisor. But there's a con and a cost to a financial advisor, which is the amount of money you have to pay because they're gonna charge you a fee. So if I invest my money, a thousand dollars a month with a financial advisor, I get a good financial advisor who beats the market.

• 11:52Jaspreet Singh?

  They get 11% a year, but I have to pay one and a half percent a year. After 30 years, I'm gonna have 1.8 million dollars after paying 600,000 dollars to my advisor. Stage number two is I can be a completely passive investor. It's a little bit more involved than an advisor, but I can just put my money into the stock market. Something like the S and P 500, which is a group of the 500 largest companies in the stock market. It's kind of like investing your money into the United States economy. This has historically averaged 10% a year, which means if I invest a thousand dollars a month for 30 years, I will have about 1.9 million dollars. A little bit more work than completely hands-off, but still pretty passive.

• 12:35Jaspreet Singh?

  Then we have the people that want to be more involved. What we call is a active investor. And an active investor is somebody who now wants to invest their money themselves. And I don't mean trading. I mean actually investing their money. And now I'm gonna be doing the research to find which investments I want to own. Maybe it's real estate that I want to own. Maybe I want to invest in individual companies. So it's more risk for more potential return. A small edge can give you outsized return.

• 13:08Jaspreet Singh?

  Because if now I don't get a 10% return, I can get a 13% return, which we're not talking about 200 or 50% returns. A 13% annual return means that about $1,000 a month over 30 years is now going to grow to $3.5 million. So about $1.6 million more than before, just with a slight edge. And you've got to figure out how involved you want to be.

• 13:32Steven Bartlett?

  On this point of being an active investor and picking stocks yourself versus being a passive one, the data shows that passive investors who invest in the S and P 500, like you said, consistently outperform most stock pickers. Over a 20-year period, more than 90% of actively managed investors, so talking about funds there, underperformed the S and P 500 after fees. So should people be actively investing? Or should they just put the money in an S and P 500 and be patient?

• 13:58Jaspreet Singh?

  I say most people should not be active investors. In fact, I say 98% of America should not be active investors. Just be a passive investor because if you don't want to put in the work, if you're not willing to put in the time and the effort to research, you're probably going to lose. And many people do.

• 14:15Steven Bartlett?

  So why do people want to be active investors? If the probability is stacked against them?

• 14:19Jaspreet Singh?

  Well, if you get a little bit better returns, if you're willing to put in the work, you can get better returns and it is possible. We do see people that are doing it consistently.

• 14:28Steven Bartlett?

  Is there an element of fun and entertainment to this?

• 14:30Jaspreet Singh?

  Absolutely.

• 14:31Steven Bartlett?

  People like sports betting and...

• 14:33Jaspreet Singh?

  That's the problem. Because the fun is I like researching versus, oh, I want to see my money go up tomorrow. If I buy a house tomorrow morning, am I going to go into Zillow in the afternoon and check what is my house price? Am I checking in the evening what's my house price? No, because you know that this is something I want to own for the long term. Well, when I go into the stock market, because it's so liquid, I buy a stock in the morning, I'm checking it 15 minutes later, I'm checking at lunch, I'm checking in the bathroom, checking in the evening, and I'm getting anxiety because if it's going up or down, I'm very emotional. And that's that emotional control as an investor, which is just as important as the research that you're putting in.

• 15:10Raoul Pal?

  See, how fundamentally different all of this stuff is people are so screwed. They are coming out of university with massive debts. We looked at the stat earlier off camera when we were talking about the fact that...

• 15:25Raoul Pal?

  Percentage of thirty year olds who have a mortgage and are married has gone from fifty two percent in nineteen fifty to twelve percent. Nobody can afford anything. So if you look at the average millennial in the US and a Gen Z, they generally have a 401k if they've got a job, right? They have some sort of savings. But they're taking massive amounts of risk. A lot of us would look at them and say, this is ridiculous.

• 15:51Steven Bartlett?

  Why are they taking risk for anyone that's?

• 15:53Raoul Pal?

  Because there is no way of closing the gap between buying, getting the deposit on the house, getting into a house, realising that future vision of themselves, however reasonable that is.

• 16:01Steven Bartlett?

  Why?

• 16:02Raoul Pal?

  It's so far away because the cost of assets has gone up so much versus their incomes don't go up.

• 16:08Steven Bartlett?

  You mean the cost of buying like a house, for example?

• 16:10Raoul Pal?

  Yes, or even however much percentage share of the stock market, the average salary does, you know, stuff like that, that you're getting less for your money. So your future self is automatically going to be poorer because of it, because you could buy less of a house, et cetera.

• 16:25Steven Bartlett?

  Explain that to me like I'm an idiot, like I'm a ten years old, and maybe in the context of this mug here. In terms of the how, why is that worth less now, based on what you said?

• 16:39Raoul Pal?

  The way of explaining it is money is the medium of exchange, the thing that you buy something with. If we all have a lot of money, we've all got a stack of cash on this table, and you want to sell that mug, we can pay anything for that mug because we've got a stack of cash. So that mug suddenly is worth not the ten dollars it's supposed to be worth, it's suddenly we're paying a hundred and fifty dollars for the mug. Why? Because that money has no value to us because we've got excess money. So when you create excess money in the system, it's this debasement of currency, it's an optical illusion that the value of assets are actually going up. They're not. The value of your money is going down.

• 17:20Raoul Pal?

  And this is this pain point because your earnings only grow with economic growth generally, plus your progression of your career or whatever it may be. But those things, the scarce assets, are going up optically by the amounts they're lowering the thing. So what you find is salaries go up at about two or three percent a year.

• 17:43Raoul Pal?

  And the house of, the cost of the S and P is about twelve percent, thirteen percent up every year and a house price is about the same. Gold is about the same.

• 17:52Steven Bartlett?

  And that's because they're printing more and more money.

• 17:55Raoul Pal?

  Correct.

• 17:56Steven Bartlett?

  Okay, that makes perfect sense to me. So I'm imagining you will have a big stack of paper in front of you, which you're using to take some notes on. And if, if I was saying, I'm going to sell you guys this mug for some of the paper you have there. But then my team said, you guys can have unlimited paper. This mug loses value because you can all just offer a gazillion sheets of paper for this mug.

• 18:16Raoul Pal?

  Well, it doesn't lose value. It optically will give you a gazillion for it as opposed to, you know, three sheets of paper because we've got so much paper. It matters not.

• 18:25Steven Bartlett?

  So I'll be, I'll be thinking, wow, like this mug, it's worth a gazillion sheets of paper. But actually, each sheet of paper is now worth nothing.

• 18:32Raoul Pal?

  Correct.

• 18:33Steven Bartlett?

  Okay, got you.

• 18:34Raoul Pal?

  And this is the problem that people are finding is they put money in a 401k, you compound it at 10%. For my generation, yeah, that was, that was how the world worked and it was great. And it worked. And now it doesn't work. So they need assets that go up 50% a year, 100% a year, which is ridiculous. But luckily, we've been gifted a few. And so that's helped.

• 18:53Steven Bartlett?

  Go and see it.

• 18:54Raoul Pal?

  Well, it's crypto. Simplistically, it just outperforms all other assets, even with the excess volatility. So Bitcoin, for example, produces about, since 2012, it's produced about 145% a year returns. So that's 10x the stock market. And that's including three 70% drawdowns in the middle of it.

• 19:16Steven Bartlett?

  A drawdown being a drop.

• 19:17Raoul Pal?

  Yeah. Well, you feel like you're an idiot, you're losing money, it's all going to go, you know, you, you, you've made the biggest mistake in your life and it recovers and it keeps going because it's a, it's a technological network adoption model that's happening. So it's just sucking in more and more people. So there's now 650 million crypto brokerage accounts in the world, which is more than all the stock market brokerage accounts added together in the world. And we're seeing it all around the world because everybody can buy a share of something. So as opposed to be able to buy, nobody can buy a Fifth Avenue apartment here, everybody can buy a fractionalized share of Bitcoin, which is in theory, a hundred thousand dollar asset. But we can all put in 10 bucks, five bucks, a thousand bucks, 10 billion dollars.

• 20:02Steven Bartlett?

  Let me challenge it then. So. Bitcoin isn't based on anything, though. Okay, I'm being a fuddy here. That's my job. Bitcoin isn't based on anything. It is a database in the sky that isn't backed by gold, or it doesn't produce any sort of valuable asset as its byproduct. So why, how can we have faith in Bitcoin? It's essentially, in its essence, before someone clips me, this is, I'm playing devil's advocate, because I know they're just gonna clip this part out. It is essentially, many would say, a Ponzi scheme. Which is, it only goes up if other people take part in it. And if everybody decides that it's not worth anything, then it's gonna go to zero.

• 20:40Raoul Pal?

  So, all money is social consensus. Everything. Gold has no real value.

• 20:48Steven Bartlett?

  I can build a table with gold, though. I can rest some things on it, and it's good, it doesn't rust.

• 20:54Raoul Pal?

  If you're building a table of gold, then the value's gonna be much less. If everybody's building gold tables.

• 20:58Steven Bartlett?

  Trump has.

• 20:59Raoul Pal?

  We do.

• 21:02Raoul Pal?

  And so, really, it's just social consensus. What do we, as humans, ascribe value to?

• 21:07Jaspreet Singh?

  But the problem with the 145%, like you mentioned, Bitcoin has fallen by 70-plus percent on multiple occasions. If we, let's go back to the S and P 500. A lot of people invest in the SPY, the S and P 500, and still lose money. Why? Because when the, we go through any downturn, people panic, and they sell. And if we look at, I mean, Bitcoins, I think Bitcoins 2009, when it started, if I'm not mistaken. If we look at the crashes from, you know, recent history, 2020, stocks fell by 30%, Bitcoin fell by 50%.

• 21:47Jaspreet Singh?

  2022, stocks fell by 20, the S and P fell by about 20%, Bitcoin fell by 60%. So in those times, people who are in the S and P are freaking out, selling.

• 22:01Raoul Pal?

  Yep, but here's the thing. This is the risk reward that people don't understand. If you've got a time horizon, let's say the average drawdown in the S and P during a bear market is 25%.

• 22:12Steven Bartlett?

  Drawdown being a drop.

• 22:14Raoul Pal?

  A lot, yeah, a drop, a drop in prices. You're getting compensated 15% a year returns for that, at best. In Bitcoin, the average drawdown over the same period will be about 70%, but you're getting 150% return.

• 22:30Jaspreet Singh?

  If you're on the winning side, though. If I buy it and I can sell it for a higher price.

• 22:35Raoul Pal?

  Just hold it.

• 22:36Jaspreet Singh?

  That's the key.

• 22:37Raoul Pal?

  All of these are in a nice trend channel. They go up. So anybody can buy something and hold it long enough, it'll go up.

• 22:44Jaspreet Singh?

  Well, what about, let's look at housing. You can say the same thing about housing. 2008, housing crashed. Just hold it. I have too much debt. I'm underwater. My bank's taking it from me. People are buying Bitcoin with debt.

• 22:54Raoul Pal?

  Yeah, I mean, that would not recommend that. But housing's different because you can endlessly create more housing. And we have a demographic problem in housing that makes it more complicated. Demographic problem is, A, everyone's leaving the cities now. B, the generational gap. Maybe you can afford the boomer houses. We don't have enough cheap housing for young people. People are relocating, moving around. So we've got a very interesting mismatch in real estate now that makes it more complicated than it used to be.

• 23:23Jaspreet Singh?

  Absolutely. And I do want to say, I think the part that we fundamentally differ is not that there's value in crypto. I own crypto, but the difference between you and I is you are all in crypto. For me, it's a speculative piece in my portfolio. So I invest in my own business. I have real estate, stocks, my speculative assets, and then a little bit of gold.

• 23:44Raoul Pal?

  Imagine how difficult to replicate what you've achieved in your amazing career is for the average person listening to this versus buying one thing in your Coinbase account, your Robinhood account, and doing nothing. It's so, there's no cost. It's not like buying a house. It's like servicing all the stuff. There's no debt involved. There's nothing.

• 24:03Jaspreet Singh?

  In theory, but theory isn't reality. How many people end up losing money when things go down? How many people panic, especially with Bitcoin? Because if we look at especially the early adopters of Bitcoin, who are those people? These are the people that, well, a lot of the average person is, I want to get rich. I want to get rich quick. It's, I want to make money fast versus the average person who's buying the S and P 500. This is somebody who is, I want to invest and build wealth for the long term. It's a very different mindset.

• 24:33Raoul Pal?

  If the average investor of this is 32 years old, and we say, no, you need to invest for the long run, they're never going to have a house. So their whole vision of their future selves is utterly destroyed.

• 24:44Jaspreet Singh?

  But look, you said Bitcoin.

• 24:45Raoul Pal?

  It becomes a logical thing to actually take more risk. It's logical for them because they've got nothing to lose.

• 24:50Jaspreet Singh?

  So Bitcoin, you're saying, is 145% a year?

• 24:54Raoul Pal?

  Yeah, and in recent years, as the trend rate of adoption grows, it's probably down to about 100% a year. Let's call it that for easy maths.

• 25:01Jaspreet Singh?

  But now, let's think about this just from a practical, long-term perspective. Warren Buffett is arguably the best investor in the history of time. He has averaged about 19% a year over the course of his decades, making him a multi-multi-multi-billionaire. And so when we compare a 20% return from one of the top investors in the world versus, hey, Bitcoin is going to give you 100% a year, there's some sense of something could be wrong.

• 25:30Raoul Pal?

  By doing nothing. So even if I'm wrong by 50%, you still outperform Buffett. To put it in perspective, Bitcoin since 2010 has done, I think it's about 90 million percent returns. There's no asset in all human history that's ever generated as much wealth in the shortest period of time. And because it's not a random thing, it's actually a technology, and it's a network model of technology. As more people use the network, and we see with Bitcoin, governments buying it and asset management firms buying it and everybody else, you have this network adoption model. And so what it creates is the same chart as Google or Amazon, all of these. It just goes up in a log trend over time with some volatility. So you've got a secular bull market,

• 26:14Raoul Pal?

  which means that over time, prices go up for measurable, understandable reasons. And it happens to be the highest performing asset of all time.

• 26:23Jaspreet Singh?

  There's one problem.

• 26:24Raoul Pal?

  And it's volatile. The psychological thing, you're dead right about. It's very hard when it falls 70%. I've gone through three of those. They're hard.

• 26:31Jaspreet Singh?

  The problem is, just like with real estate.

• 26:36Jaspreet Singh?

  Everyone has said, "Real estate only goes up." Well, how do you make money on that real estate? You make money when you sell, or you lose money if you sell. It ultimately comes down to that. You make or lose money only if you sell. Well, what about everything along the way? And what if I need to sell during that 70% crash? Because what happens during those crashes? A lot of times, people lose jobs. A lot of times, people lose their income. A lot of times, people need that money during that time. And so now, I'm desperate or I'm panicking. There's two things happening. And now, maybe it's the end, and I go in, and now I lose money, thinking that I'm gonna make all this money.

• 27:12Speaker 03

  I think I can appreciate your love for cryptocurrency and your 100% concentration in cryptocurrency.

• 27:18Raoul Pal?

  And I'm not saying that's suitable for everybody, right?

• 27:20Speaker 03

  Right.

• 27:20Raoul Pal?

  I've got my, the bottom of Maslow's hierarchy of needs taken care of. I've got a house, I don't have debt. You know, it's easy for me. I've got multiple sources of income that I can take that back. I'm not saying that for everybody, but I can also understand why a 25-year-old can do that too, because they've got nothing to lose.

• 27:38Speaker 03

  But do you think that if a 25-year-old puts their entire salary and savings into Bitcoin, and they lose it, let's say they run through a 70% drawdown, aren't they just putting themselves in a bigger hole for their future as well? Like, maybe before, there was a glimmer of a chance that they could buy a house, but now they can't?

• 27:56Raoul Pal?

  The most important part of financial markets is the least understood is time. It's not just price, it's time. So if you're 25 years old and you get wiped out, we've all done it. We've all kind of screwed up and, you know, had to move home to our parents or whatever. We've all done it. You can do that several times when you're young, and it's okay. You just don't wanna do it when you're...

• 28:17Speaker 03

  At age 50?

• 28:18Raoul Pal?

  At age 50?

• 28:19Speaker 03

  Sure.

• 28:19Raoul Pal?

  You really, really don't. You become more risk averse, generally speaking. So it just depends where you are and how much time you've got to take that risk.

• 28:29Jaspreet Singh?

  But now, if I'm investing my money in Bitcoin, or really anything, a lot of the value is what some people refer to as like equity. It's, I bought it for, like, I started buying Bitcoin when it was $3,000. That other stuff is equity, it's invisible money, which in my view is is theory. It's not actual money in my bank account. It's sitting there waiting for me to sell, hoping that when I go to sell, it's going to be a profit versus cash flow. If I buy a dividend paying stock.

• 28:59Steven Bartlett?

  What's a dividend paying stock?

• 29:02Jaspreet Singh?

  Some companies have big profits. For example, McDonald's has billions of dollars of profits. There's three things that they can do with their cash. They can save that money for an emergency. They can take some of that money and reinvest it and open more stores and create better burgers. Or the third thing that they can do, which some companies do, not all, is they can just give this money away to their investors, the shareholders. It's called the dividend. So it's a cash payment for doing nothing except owning that investment. So if I buy something, whether it's ETF stock or whatever, that's paying a dividend or a rental property, that's putting money in my bank account every single month or year, that's money I can use to buy food, go on vacation, do something. Here's what, let me tell you.

• 29:41Raoul Pal?

  You're getting paid 4%.

• 29:43Jaspreet Singh?

  Listen, so I.

• 29:44Raoul Pal?

  Nobody cares.

• 29:45Jaspreet Singh?

  I started buying Bitcoin at $3,000 a coin. When I was at, I went through multiple crashes. I remember when $20,000 of Bitcoin was the, oh my God, we did it. And once they hit around 70,000, I looked at this and I said, wow, I have my real estate, my stocks, my speculative, which is crypto and startups, and the 2% gold, which is now looking extremely inflated. I need to lower this, that way I can have some more income. So what did I do? I sold some Bitcoin about rental properties. That now rental property is putting money in my bank account every single month. The Bitcoin, it's a big number on paper, but it doesn't actually mean anything unless I do something with it.

• 30:30Steven Bartlett?

  Could you have staked it? Which means you can stake the cryptocurrency and make a monthly yield from it?

• 30:36Raoul Pal?

  Get a loan against it.

• 30:37Jaspreet Singh?

  Now, that's adding risk. Well, what happened if I take an 80% loan, 70% loan, let's, 50% loan, whatever.

• 30:45Raoul Pal?

  It's very volatile.

• 30:46Jaspreet Singh?

  So let's take, let's take a 50% loan and Bitcoin falls by 70%, which it has. Now I'm underwater. Now what? Now the bank comes knocking on the door, margin call, you're forced to sell and it's a foreclosure on my Bitcoin.

• 31:01Raoul Pal?

  My point being, I mean, I don't disagree. And really speaking, people should have. The ability to have cash flow or cash for if things go wrong, right? That's really a super important thing, to be able to have a long-term view, to be comfortable with drawdown, to be able to invest in startups, or to invest in crypto or technology and all of this stuff. That makes sense, but I just don't think a dividend at 4% makes any difference to anybody.

• 31:26Jaspreet Singh?

  Well, it does if you do it consistently, month after month, year after year.

• 31:29Raoul Pal?

  You need huge capital to start with to be worthwhile.

• 31:32Jaspreet Singh?

  No, no. If you, if you start investing for a dividend income, I call it a decade of sacrifice, and this is why it's so hard.

• 31:40Raoul Pal?

  Yeah, but if you're 33 years old now, you're sacrificing until you're 43.

• 31:45Jaspreet Singh?

  You're going to become 43 at some point. And imagine if you're 43 and now you have the income to pay for that car, to pay for the house, you don't have to worry about it. Well, do you want to have hope that you have the Bitcoin, or would you rather have more security? Again, Bitcoin, in my perspective, high risk, high potential return. And I'm not saying don't buy it, I'm saying allocate it in your portfolio in a way where you understand you are arguably one of the top crypto experts in the world. I'm not. I also am not the stock expert in the world. I'm also not the real estate expert in the world. What I'm doing is I'm probably going to be wrong. If my stocks crash, I have

• 32:27Jaspreet Singh?

  my real estate. If real estate crashes, I got my stocks. Crypto crashes, well, that's part of my speculative portfolio, I really don't care. And if everything crashes, I got some gold. So for me, I have to diversify against myself, because I know stocks crash, I know crypto crashes, I know real estate crashes.

• 32:47Raoul Pal?

  But if you're not starting with a lot of money, your, your strategy is the strategy of a rich person. Oh, I've got houses, and I've got dividends, and I've got some gold, and I've got a bit of this. That's the strategy of being rich.

• 33:00Jaspreet Singh?

  But I didn't start with all of those. I didn't start with all those at all. I started with one.

• 33:04Raoul Pal?

  And where did you make most of your money? Being an entrepreneur. What were you doing?

• 33:06Jaspreet Singh?

  Being an entrepreneur.

• 33:07Raoul Pal?

  Taking obscene risk.

• 33:07Jaspreet Singh?

  I did. That was me.

• 33:09Raoul Pal?

  An entrepreneur is taking obscene risk.

• 33:11Jaspreet Singh?

  But if I'm making $50,000 a year, the first step, let's assume now I'm putting $5,000 aside, $7,000 aside a year, I can take high risk, high potential return.

• 33:23Jaspreet Singh?

  Or I can be conservative or a hybrid. And not everybody should be taking all the risk. Because Bitcoin has risks. And again, I'm telling you, as somebody who owns it, the government could come in and change policies on Bitcoin. Quantum could change Bitcoin. People could stop caring about Bitcoin. And if any of those things happen, and all my money is in this very speculative asset, I'm the one that's carrying all the risk.

• 33:56Steven Bartlett?

  So if someone has a thousand dollars in disposable income to invest, what would you suggest they did, Humphrey?

• 34:04Speaker 03

  My take on a thousand dollars has changed over the years. I used to say you could invest a thousand dollars, but as Ruel probably mentioned, 10% on a thousand dollars is not that much, right? So like, you know, if you invest a thousand bucks in the S and P 500, you get 10%. Next year, you'll have $1,100. That hundred dollars is not going to change your life dramatically. So if I had a thousand dollars, I'm investing in myself. So trying to improve my skills to make more money at some point.

• 34:28Steven Bartlett?

  How exactly would you do that?

• 34:30Speaker 03

  When I was still coming up, I was trying to take a lot of courses online. So I tried to figure out different types of skills that I could use in the marketplace. So I took an AdWords course back in the day for like 150 bucks that taught me how to do Google AdWords. And I would try to consult for businesses out there to try to make more of an hourly income on the side.

• 34:49Steven Bartlett?

  And Google AdWords, for anyone that doesn't know, is Google's advertising platform.

• 34:53Speaker 03

  Yeah, and now there's TikTok ads and Facebook ads. But, you know, anywhere where I could be more value to another business, I knew that economically speaking, that I could command more in the marketplace. So something with that like that would be great.

• 35:05Steven Bartlett?

  So right now, clearly, that is AI. Because what you saw there is like a knowledge arbitrage with a new technology, where most people didn't understand AdWords. And you could be the young guy bridging the gap for people's ignorance. So most businesses now would be dramatically more efficient and effective if they understood even the basics of AI.

• 35:24Speaker 03

  Yeah.

• 35:24Steven Bartlett?

  So a kid could take a course in AI. And do you know what's crazy? If you read the top 10 books on AI, you'd be in the top 1% in the world in terms of knowledge.

• 35:33Speaker 03

  Yeah, I mean, if you just read the instruction manual of how ChatGPT or Claude works, you could probably be in the top, you know, 1% of prompt engineers, right? And that could be a value to a business or service, right?

• 35:44Steven Bartlett?

  That's probably where my career came from, was we were the Kids eighteen, nineteen, twenty years old that knew social media because we'd messed around with it. So we sold it to companies.

• 35:54Speaker 03

  Right.

• 35:54Steven Bartlett?

  And that started my first business and then there was

• 35:56Speaker 03

  Yeah.

• 35:57Steven Bartlett?

  Soon hundreds of us.

• 35:57Speaker 03

  And there's, there's a lot of these apps right now coming out from eighteen, nineteen, twenty year olds. Have you seen that, that one profile of that guy who created Cal AI? Cal AI is this, this app where you take a photo of your food and then, you know, it sends it to AI and it tells you how many calories are in it. Well, the guy's making fifty million bucks a year or whatever it is and.

• 36:15Steven Bartlett?

  Yeah, I saw that this morning finally and a four million dollars a month he's making from.

• 36:19Speaker 03

  Like chat, basically it's an AI rapper, obviously. I think he has some, you know, secret sauce that he puts into it. But a lot of, a lot of kids these days are using AI to try to leverage that and try to turn, turn them into businesses. I do want to say though, I think with a thousand dollars and with, with what Jess Breed said, I think you can still make a decent. If you can make a decent income, you can start to slowly save and invest your way to some sort of semblance of retirement. I think you can still be able to retire and be financially independent without having to, let's say, bet your life savings on, on crypto. I know that I personally bought Bitcoin at a hundred dollars, but I've sold it many times. You know, I bought and resold it so many times because, you know, when it's up ten X, you're like, oh, like,

• 37:03Speaker 03

  you know, if, if you would give me a ten X return when I first bought it, I was like, yeah, I'm taking that any day of the week. Right? And so I think that's why it's so hard. It's like Bitcoin does produce one hundred forty five percent return since twenty twelve, but in twenty twelve, no one knew how to buy it. I bought it on some random sketchy website. I got this like, you know, this, this string of characters for my wallet and I, I tried to buy, you know, I tried to buy a coffee at a cafe in Palo Alto. And I didn't know that Bitcoin transactions took thirty minutes to go through. So I sent Bitcoin twice for a five dollar coffee. Now, keep in mind, this is point one Bitcoins, right? This is ten K.

• 37:36Steven Bartlett?

  It's an expensive Bitcoin.

• 37:37Speaker 03

  Yeah.

• 37:37Steven Bartlett?

  It's an expensive coffee.

• 37:38Speaker 03

  I sent it twice and then didn't get it. And guess what? I still had to pay for the coffee with my debit card. So where did my Bitcoin go?

• 37:43Steven Bartlett?

  You spent what twenty K on?

• 37:45Speaker 03

  I spent twenty K on coffee. Yeah, that could be the title of this video.

• 37:49Speaker 03

  Spend twenty K on coffee. Yeah, I literally, I, I sent it to Cooper Cafe in Palo Alto, if anyone wants to go there. I think the average person psychologically speaking.

• 37:57Steven Bartlett?

  It's hard.

• 37:58Speaker 03

  It's really hard when it goes down eighty percent. And if Jaspreet says you need money, like at that moment, you're going to sell it.

• 38:04Steven Bartlett?

  But your, your point about, I mean.

• 38:07Raoul Pal?

  The primarily important thing is income.

• 38:10Jaspreet Singh?

  Yes.

• 38:10Raoul Pal?

  I mean, and that, and we talked about last time I was on the podcast, it's like, how do you just leverage the same skills in different ways that you can earn more money from it? Like, the story I was told when I left university was speaking to a friend of my dad's. He was like, well, what are you gonna do? And my father was in marketing and I liked marketing. And, but it was like late eighties Wall Street thing was going on. And I'm like, well, I'm thinking about either going to work for somebody like Mars, do marketing, you know, great company, or, or go and work in the city in London. And the guy looked at me and said, it's really simple, Ralph. It's the same job. You're a salesman in both. One, you get free Mars bars and the other, you get free money.

• 38:51Raoul Pal?

  And you realize, oh, there's actually arbitrage in what you can do with the same skill set.

• 38:57Jaspreet Singh?

  Well, I, I would say there is a point. So I agree. If it was me with a thousand dollars, I'm gonna go out and invest in my income, read some books, get whatever I gotta do, go start something, cause that's enough. But if we look at time, a thousand dollars compounded is decent. If I, if you go back nineteen seventy one.

• 39:15Raoul Pal?

  But how do I pay for my college loan and my house deposit? And I wanna get married and have kids. You're telling me I can't do that for another twenty years?

• 39:25Jaspreet Singh?

  If I took a thousand dollars in nineteen seventy one, I invested that into the S and P five hundred and I did nothing else. I keep doing whatever I'm doing, my job, and I only invested a thousand dollars. I never invested another penny again. Today, that would be worth, if I, if we invest in my dividends, about three hundred and thirty thousand dollars. And I never invested another penny after the first one thousand dollar investment. Why? Because the S and P five hundred has grown by a little bit over ten percent a year from nineteen seventy one to now. It's something. Now, imagine if I invested a thousand dollars a year, a thousand dollars a month. Now, I can't say that about Bitcoin because Bitcoin didn't exist fifty years ago. I can't say that about Bitcoin because Bitcoin didn't exist twenty five years ago. And so.

• 40:10Raoul Pal?

  How about Amazon?

• 40:12Jaspreet Singh?

  What about Amazon?

• 40:13Raoul Pal?

  That started trading in two thousand, or even better, Facebook, two thousand twelve.

• 40:18Jaspreet Singh?

  How do I know?

• 40:19Raoul Pal?

  Do we not invest in it because it wasn't around? It hasn't been around as long as gold. I mean, Facebook has been around less than Bitcoin has.

• 40:26Jaspreet Singh?

  Amazon

• 40:26Raoul Pal?

  Shorter time.

• 40:27Jaspreet Singh?

  Creates a profit. It has a tangible value that you can see and feel because I can go onto Amazon and order myself

• 40:34Raoul Pal?

  Amazon

• 40:34Jaspreet Singh?

  A brand new guacamole set. It'll be there in two hours.

• 40:37Raoul Pal?

  They didn't make a single profit until, what, 2018?

• 40:41Jaspreet Singh?

  But that wasn't because they weren't producing a value. It's because they were growing so aggressively.

• 40:45Steven Bartlett?

  So you think if you had a thousand dollars, you should invest it in the S and P 500?

• 40:49Jaspreet Singh?

  Well, I'm not saying you should. I think personal finance is personal. I think if it was me, if I have a thousand dollars extra and I'm just trying to figure things out, I'm going to go buy some books, I'm going to buy a class, I'm going to do something about how do I increase my income, going back to what you said. But if I'm saying I just want to work my job, I don't want to go out and do all that, I would do half into the S and P 500.

• 41:08Steven Bartlett?

  Yeah.

• 41:08Jaspreet Singh?

  And I would go half into individual companies. So more risk than the S and P 500, not as much risk as the Bitcoin. And the reason why I would do this is because this is something I enjoy. I like that research side of things and I understand this is something that I could see returns with, like you talked about Amazon, like you talked about Microsoft and whoever. There's potential.

• 41:28Steven Bartlett?

  And what about you, Humphrey? Ten thousand dollars, does your strategy change?

• 41:31Speaker 03

  My strategy is a little probably more conservative or traditional. It's probably 90% index funds, so tracking the S and P 500 and then 10% speculative. And my whole goal for that 25 year old would probably be to get to a hundred thousand dollars as quickly as possible because at that point I think they get more options and flexibility and they're able to kind of use that capital to maybe take more risk after.

• 41:52Raoul Pal?

  That's still 10 years with the S and P, well, eight years of the S and P.

• 41:55Speaker 03

  About 7.84 years, yeah. But that also assumes that they're only doing the 10,000 bucks a year. Maybe they can save and invest a little bit more, that'd be nice. But I think for a lot of people in America, if they can get a guaranteed a hundred thousand dollars in 7.84 years, I think a lot of people might opt for that.

• 42:12Raoul Pal?

  So I agree, but I'd remove the S and P.

• 42:14Speaker 03

  You do all crypto?

• 42:15Raoul Pal?

  No, I'd just do Nasdaq.

• 42:16Speaker 03

  Oh, yeah, you do Nasdaq.

• 42:17Raoul Pal?

  So Nasdaq compounds at 18% a year.

• 42:20Steven Bartlett?

  What is Nasdaq?

• 42:21Raoul Pal?

  The Nasdaq is, the Nasdaq 100, which is the top technology stocks in the United States. We live in a world that tomorrow will be more digital than today, guaranteed. And so therefore, these stocks tend to generate the most performance. And we've talked about many of these names. That is all in the NASDAQ. So a little arbitrage is if you want to shorten your 7.8 years

• 42:44Jaspreet Singh?

  Sure.

• 42:45Raoul Pal?

  to five and a half years, six years, buy the NASDAQ 100. It's an ETF.

• 42:50Jaspreet Singh?

  Yeah.

• 42:50Raoul Pal?

  Zero cost, easy. And then I would say, and then do 70% that, 30% crypto. And you don't have to care about anything.

• 42:57Jaspreet Singh?

  Sure.

• 42:57Raoul Pal?

  You're fine. Now, if you have a different risk tolerance, you can tweak those dials. Or if you are more risk averse, then you up your cash dial or some other more stable flow, whether it's gold. Although gold is still driven by the base of currency. They're all the same thing. They're all driven by the same macro factors. But so, yeah, similar kind of idea.

• 43:17Jaspreet Singh?

  And the NASDAQ is great. I've had to just say one thing, but just like with Bitcoin, the difficult part with the 18% is you got to be willing to go through the downturns. And I want to make sure that that's clear because, I mean, the big drop, 2000, the NASDAQ fell by 78% from its peak. During that time, the S and P 500 fell by 40%. So it's a bigger drop. Not to mention, the NASDAQ didn't get to its level until 2015. 15 years later of no money.

• 43:48Raoul Pal?

  It is still compounded more returns than the S and P.

• 43:50Jaspreet Singh?

  Absolutely. If you held on for 15 years of loss.

• 43:53Raoul Pal?

  You can't live your life in fear of the drop.

• 43:54Jaspreet Singh?

  100%.

• 43:55Raoul Pal?

  It's got to be in the risk adjusted returns versus the gains.

• 43:59Jaspreet Singh?

  But how many people can hold on for 15 years and say, year one, ah, no big deal. Year two, okay, year three, year five, it's gonna go up. Year 10, it's gonna go up. And by the way, year 10 was also another crash because.

• 44:11Raoul Pal?

  All you have to do is dollar cost average.

• 44:14Jaspreet Singh?

  What's that?

• 44:15Raoul Pal?

  So dollar cost averaging is if you're young and you've got a bit of excess cash now, you know, you've sold your income a little bit, as opposed to just chucking everything in. Or you do, you put your large sum in, you've saved up your 10 grand. But now you've got maybe $500 a month of free capital you want to put into your savings. So when you have these drawdowns, you're actually keep buying. And what happens is it lowers your average cost over time. And you get to new all time highs in your portfolio much before the market does. So for example, in the last crypto down cycle in 22.

• 44:51Raoul Pal?

  In twenty two, all I did was add as much as I could to my crypto. So I was at new all time highs in my portfolio well before the market was because I'd lowered my average entry. That compounds your profits over time incredibly.

• 45:06Steven Bartlett?

  And is there something psychological there where if you commit to the habit of just putting five hundred dollars in regardless of what happens?

• 45:13Raoul Pal?

  You remove emotion.

• 45:14Steven Bartlett?

  You remove a bit of emotion from it.

• 45:16Raoul Pal?

  And the emotion is the thing that people struggle with. If you're investing in things that are more volatile, you firstly understand that you will see larger drawdowns when markets go down. Usually they're all correlated, they'll all go down at the same time, all up at the same time. So you're gonna do that, but if you tell yourself that's an advantage for me because I can buy more, that's a secret hack that makes people fortunes, compounding. This is Warren Buffett's thing.

• 45:43Jaspreet Singh?

  I a hundred percent agree with that.

• 45:45Raoul Pal?

  He buys more companies in a bear market than in a bull market because.

• 45:49Jaspreet Singh?

  Agreed. It, it, yeah, I will a hundred percent agree with that part. I call it poop. Panic leads to overselling, leads to opportunity, leads to profit. So I am on board with that, but that requires a specific level of financial sophistication.

• 46:07Raoul Pal?

  No, even your Coinbase app can just.

• 46:10Jaspreet Singh?

  Can dollar cost average. But how many people can dollar cost average down seventy percent for fifteen years waiting to see that return?

• 46:18Raoul Pal?

  It wasn't seventy percent in fifteen years. It was, it was seventy percent in one year and then rallied ever since. Every single year after year after year it went up.

• 46:26Jaspreet Singh?

  And to see that down. Well, no, after the two thousand eight crash, the Nasdaq also again crashed more than the S and P five hundred.

• 46:35Raoul Pal?

  And then step back and look at the returns of the Nasdaq first.

• 46:37Jaspreet Singh?

  I agree. Over the long term, it's a great investment, but volatility is hard for the average person who doesn't have the emotional IQ and the financial sophistication to understand.

• 46:47Raoul Pal?

  That's our job to educate them.

• 46:49Jaspreet Singh?

  Yes.

• 46:49Raoul Pal?

  Our job is to help people in this journey. And not get them to make decisions that compromise their future. We have to help them.

• 46:59Steven Bartlett?

  I agree.

• 47:00Raoul Pal?

  And risk adjusted returns and time horizon are two of the single most important things.

• 47:04Steven Bartlett?

  And so what I hear, I mean, through history, contrarians have made the most money.

• 47:11Steven Bartlett?

  And also, I think the other thing that I've really pulled out from what you both were just saying there is you need to set up a system that removes emotion and requires you to not make decisions because it's in making decisions that your amygdala, the emotional center of your brain, is going to make a bad one. And it's that, I think that self-awareness emerges from what you're both saying, which is, okay, my brain is going to panic, it's going to poop or whatever you were talking about there, and I need a system which is panic-proof.

• 47:37Raoul Pal?

  So you know that the best performing brokerage accounts in the United States are dead people. That's true. It's a known fact because they don't do anything. So they have these accounts that haven't been closed and they're inactive. They outperform all the active people.

• 47:53Steven Bartlett?

  You are a hundred percent in crypto in terms of your investment portfolio.

• 47:57Raoul Pal?

  Yeah.

• 47:58Steven Bartlett?

  So you must be sat here thinking that

• 48:02Steven Bartlett?

  actually, when I ask that $10,000 question, what should someone do with $10,000? You must be thinking that the right answer is to put it into crypto.

• 48:11Raoul Pal?

  The right answer for me is that, to his point.

• 48:13Steven Bartlett?

  But you think.

• 48:14Raoul Pal?

  Look, I actually would say, but you know, this is, it's an audience of people and people misinterpret things. Yes. The answer is, we've been given the gift of the greatest performing asset the world has ever been given. That's not just Bitcoin, it's the crypto complex. If you're very careful in investing in like top projects, you can even have a more, a broader diversified portfolio of that. Like you've had Ethereum, Bitcoin, Solana, Sui, all of these things, great. They will definitely outperform for a period of time. And that's based on macroeconomic factors, which is the debasement of currency, which we've talked about. That means all of these assets go up by a certain amount and some outperform it. The only two assets that outperform the debasement of currency is the NASDAQ and crypto.

• 48:59Raoul Pal?

  This has been a persistent trend that is observable and measurable. So this is not a speculative asset. What it is, is a Metcalfe's Law adoption model. Bitcoin is the adoption of, let's say, a money or collateral layer, like gold, digital gold, we'll call it. While the rest of crypto is the new rails for the internet. So it's a technological investment. It is growing at twice the speed of the internet in terms of adoption and has been since the first five million IP addresses for the internet and the first five million wallets. Twice the speed of the internet makes it the fastest adoption of any technology the world has ever seen. Aside from AI now, which is now outpacing it.

• 49:36Steven Bartlett?

  If we sit here in 20 years' time.

• 49:38Raoul Pal?

  Yeah.

• 49:39Steven Bartlett?

  And you were wrong.

• 49:40Raoul Pal?

  Yeah.

• 49:41Steven Bartlett?

  What happened, do you think?

• 49:44Raoul Pal?

  Well firstly, in terms of investments, you have to always, once you have a high conviction bet, your entire job is to question yourself. Not to keep reaffirming yourself. Sure, you end up reaffirming by questioning and then you you figure it out. For it not to have been true, what would have happened?

• 50:03Raoul Pal?

  The AI would have had a new system of money that it created. There has to be a competitor to this because we're now in the game of nation. Nations are acquiring this, the Middle East nations, nations in Asia, the US wants to acquire it. So we've got, and we've got South American nations. So it's now the game of nations geopolitics. This is a real thing.

• 50:27Raoul Pal?

  But what changes in 20 years' time? Well, in 20 years' time, we're in a very different world. The economic engine is driven by robots and infinite intelligence. We don't know how the economic machine works. We don't even know what the value of money is when we go into that world. So I've talked about this before, the economic singularity past 2030, the economic model breaks down. So the economy generally grows by a measure of population growth, how many people are in the economy or coming into the economy or being born, productivity, how much output they create, and then debt growth is the other lever.

• 51:08Raoul Pal?

  What's happened here is the population of the entire Western world plus Japan plus China has been aging, so the rate of change of population growth is shrinking. They tried immigration, but that became politically unacceptable, so that stopped. So you've got this slowing economy, GDP growth has been slowing over time. Productivity, old people make less things, so it makes less economic output. So we've got this mess and then we've got this debt and we've stopped that whole engine in 2008 and we need to service this debt. So, okay, so that's the system we're in and this is why we're printing money to service this debt because we're not generating enough output in the economy.

• 51:49Raoul Pal?

  But after 2030, this population part changes. We've got infinite artificial humans.

• 51:57Steven Bartlett?

  You're talking about AI agents and robotics?

• 51:59Raoul Pal?

  Yeah, infinite. So what does that do for that, the multiplier of that formula, you know, population growth plus productivity growth plus debt growth? It breaks because you can have 20% GDP growth because you've had a huge rise in the number of AI agents creating economic activity and robots.

• 52:18Steven Bartlett?

  And so what does that mean for me as an average person?

• 52:21Raoul Pal?

  For me, it's like the economic system starts changing. We get to this world of abundance, we don't know what has value. What we as humans do, we change and retool to become more humans because AI and robots can't be humans. So we have to figure all of this stuff out. Investing, we were talking about this earlier, is like, well, does the AGI, is that going to be a better investor than any of us? Yes.

• 52:44Steven Bartlett?

  Artificial general intelligence.

• 52:46Raoul Pal?

  Yeah, so that's the next stage where it's smarter than any human that's ever existed. And we're very close to that. So in which case, well, how do markets work? And when businesses are agents selling stuff to other agents, where do we play a role? So all I'm saying is, my job, my whole life has been to look into the future, sort of 10 years out, and try and probabilistically understand paths.

• 53:13Raoul Pal?

  Here I get to like 2030 and it's like a dark curtain.

• 53:18Steven Bartlett?

  Just to flip that for a second, how could AI actually positively influence your hypothesis?

• 53:24Raoul Pal?

  I'm very positive about AI. I think humanity will come out of this just fine. I think economic growth that explodes is we can work a way of accretion it to humans or society or whatever we want to do with this. I'm not an AI doomer.

• 53:40Steven Bartlett?

  Specifically on Bitcoin's value and price, how could AI make it even more important?

• 53:46Raoul Pal?

  Well, in the end, an AI is a, it requires two inputs. It requires, it's Maslow's hierarchy of needs is basically two things, computing energy and it needs to be paid. These agents can't, you can't build all this agents of billions of agents running around doing things without paying for them. And agents will use agents. So they will, one agent will get another 10 agents to do all this task. They're all going to have to be paid. And the way of doing that is using crypto rails.

• 54:16Steven Bartlett?

  Stable coins.

• 54:18Raoul Pal?

  Whether it's stable coins, whatever it is, but that whole crypto rail, you know, all of this new infrastructure for the internet, the blockchain, that's how it works.

• 54:27Steven Bartlett?

  Often the difference between a company succeeding or failing isn't down to its product or strategy. It's down to the people on the inside. After all, the definition of the word company is group of people. And some of the best companies in the world have been largely built by A players, because I'll let you in on a little secret. When you hire an A player, they go on to hire more A players and it perpetuates. The challenge is finding those first few A players. I found the majority of mine on LinkedIn who are a sponsor of this show. LinkedIn provides talent I could not find anywhere else. Talent with the necessary skills and culture fit that I'm looking for. Whenever I've paid to promote a role on LinkedIn, I've been able to hire faster and of course, better. The data supports this too. You'll

• 55:08Steven Bartlett?

  actually get three times more qualified applicants than if you posted the same role for free. So if you're trying to build something truly great, you can get started by posting a job for free by visiting LinkedIn.com/DOAC. That's LinkedIn.com/DOAC and you can post your role for free there. Terms and conditions of course apply. Do any of you remember a conversation I had on this podcast with anthropologist Daniel Lieberman? It was one of our most viewed conversations of all time and the most replayed moment in that conversation was when I talked about this product. These are what I call barefoot shoes by Vivo Barefoot, which have significantly reduced support, which gives my feet the opportunity that they desperately want to need to strengthen. If you've learned anything from this podcast, it might be that we're living in a comfort crisis

• 55:53Steven Bartlett?

  and that at all times in our lives, we're making this trade of whether to have more comfort now and therefore more discomfort in the future, or a little bit less comfort now, but to be stronger and healthier in the future. And for me, that is the choice to wear barefoot shoes. So if you want to start strengthening your feet and your body, visit vivobarefoot.com/steven and you'll get 20% off when you use code STEVENB20 at checkout. That also comes with a 100 day money back guarantee. What have you got to lose? I wanted to ask you a question. The reason I went and got my phone is because I had someone contact me that I knew from my childhood. Used to be one of my old best friends, frankly not spoke to them in 10 years.

• 56:35Steven Bartlett?

  Sent me a text message and the text message they sent me is,

• 56:43Steven Bartlett?

  I wanted to get your opinion on this because I ended up saying to him, listen, I'm not the guy to ask about this. I think you've misunderstood who I am.

• 56:50Steven Bartlett?

  Hi mate, I hope you're well. I got myself in a bit of trouble with some debt, about £40,000, some more than a bit of trouble. I'm after some advice and direction in terms of maybe passive income slash an avenue to try and work my way out of it. Is there some material I should be reading, watching that you might know of? And I asked him, I said, what kind of debt is it? And he said, personal loans and credit cards, mate. And I said, like, how, I need to ascertain how urgent those debts are and if it's causing any immediate issues. And he said, well, they're not super urgent, but as a result of the high monthly outgoings, I'm a month behind my mortgage payment this month. So it like is, but it's not because I don't want to keep being in that position moving forward.

• 57:34Steven Bartlett?

  It's costing me circa $1,000, £800 a month in repayments at the moment. And I can't get a consolidation loan. It's a perfect storm starting because I've just started a new job and my partner is on maternity leave and I have this debt mountain. It's starting to affect my family if I can't pay the mortgage, you know. So I've got to change moving forward and figure out what to do. And you're the man to ask for advice. I was like, fuck me. And then he messaged me again within an hour and said, hey, sorry, man. If you're busy, just wanted to nudge this. Then messaged again an hour later because I was on a flight and said, hey, I really need some help and direction, man. I'm quickly running out of places to turn.

• 58:15Speaker 03

  He's kind of in a hard spot because forty thousand pounds in debt with the interest payments of, let's say your interest rate is fifteen to twenty percent. That starts to spiral out of control a little bit. Like if he was under ten thousand pounds in debt, it's a little bit more manageable. But at forty thousand, the interest starts to compound quite quickly. So, you know, you said he had a mortgage. He might even have to consider moving, selling, selling the home to at least get the interest payments under control or like reduce that amount of debt. It's kind of that, one of those situations where you just need to reduce every single expense possible and start really pouring all your money into the highest interest rate debt that he owns. So like, you know, you can rank your interest rates of all your debts from highest to lowest and start, start at the very top.

• 58:58Speaker 03

  Right. If it has twenty two percent interest rate, you want to get rid of that first because that's what's killing them. At those levels of debt, it's really tough because I think a lot of people consider bankruptcy at that point just to kind of clear that amount of debt, depending on what his income is. I know I've known, let's say, a waitress or server that had fifty thousand dollars in credit card debt and just unable to get over it because the interest payments were as much as their salary. So in those cases, unless you can get a personal loan from, let's say, a family member and, you know, kind of clear that debt, you're in a really tough spot. Reduce your expenses as much as possible. Put any extra money you have towards that debt at the highest interest rate possible, the first, the highest interest rate thing. And then consider selling some assets if he has assets.

• 59:41Steven Bartlett?

  Bankruptcy.

• 59:42Speaker 03

  Bankruptcy.

• 59:44Steven Bartlett?

  When should someone consider bankruptcy and what's the trade off?

• 59:48Speaker 03

  The trade off is seven years. I believe your credit is shot in America. So, but I believe that, actually, I think if you pull up a chart, someone sent me a tweet the other day of like bankruptcy lawyer searches in America on Google. And it's like been kind of like going up until the right, which is not a great thing. Bankruptcy, just, you know, there's different types of bankruptcy that you can file for. But I do know that it usually clears some, if not all, your debt. And you basically have to start over. But as a result, you lose a lot of your privileges. Like, for example, no credit score.

• 1:00:22Steven Bartlett?

  I read some stat, and you might know if this is true, but I read a stat that

• 1:00:27Steven Bartlett?

  it said something to the effect that people avoid going into bankruptcy because of the stigma associated with it. When they looked at the financial performance over 10 years of people that did go into bankruptcy, those that did typically were better off than those that tried to avoid it for the next 10 years. So, yeah.

• 1:00:49Speaker 03

  I don't know, that could be anecdotal. I don't know. That's tough because if you have $50,000 in debt and you make $50,000 a year, it's, yeah.

• 1:00:56Raoul Pal?

  Bankruptcy in some ways is a good thing because it forces you to do crisis control. It's like your expenditure, what you're doing, what, everything becomes hyper focused. Like you led in the beginning with about, you know, how people should look at their expenditure, right? When you're $40,000 in debt, you've not been doing that.

• 1:01:17Speaker 03

  Correct.

• 1:01:17Raoul Pal?

  And bankruptcy actually forces you to actually discipline that for an extended period of time where it becomes a habit. So Stephen, that's why they outperform in the end because you've created the habit that you talked about right in the beginning of this discussion.

• 1:01:31Steven Bartlett?

  Yeah, so I just found the stat here. It said, yeah, this is one of the uncomfortable truths in finance, and the answer is often yes. Those who file for bankruptcy end up in a better place long term than those who try for prolonged periods of time to avoid it. And the research shows that people who file for bankruptcy typically get their debt wiped out and cleaned and they, removing unpayable debt. And bankruptcy can bring immediate mental relief, removing the crushing stress of unpayable debts. People who avoid it often live in chronic financial stress, which spills into their health, relationships and work. So in short, those who face bankruptcy head on often recover faster and end up in a stronger position than those who keep limping along trying to avoid it.

• 1:02:11Jaspreet Singh?

  And I think somebody who's listening who may be in a similar or the same situation ultimately wants to know how do I get relief? Bankruptcy is one option, but at the end of the day, there has to be change and that change is difficult. And that's the part that I think a lot of people have hard time talking about or comprehending. There is relief, but it comes with severe, extreme and quick sacrifice. What do I mean? Number one, you've got to cut back your expenses as fast as possible in that situation. You have to sell as much stuff as possible. I mean, bankruptcy obviously works, but you also lose your house. You also lose other things along with it. There's a lot of emotional toll with it. You have a family, you have a kid.

• 1:02:55Jaspreet Singh?

  I mean, it's also a big reason people end up getting a divorce. So it can also impact your life in many different ways. So you have to make extreme sacrifices. And I mean, get rid of the Netflix subscription, not because it's just costing you $15 a month, but because the average American is spending more than two hours a day watching Netflix. And if you're in that type of situation and you're spending two hours sitting there watching whatever the heck is on Netflix, how do you sleep at night? You shouldn't be sleeping eight hours a night. You better be getting up, go and try to get some more money. I don't care if it's Uber. I don't care if you're working at McDonald's. Find some extra money and learn how you can earn some more money. And I mean, it sounds harsh, but the reality is if you want extreme change, it's not going to happen without extreme change.

• 1:03:38Steven Bartlett?

  So could he sell his house, do you think, assuming he's making the 50K, which I think is probably accurate, having a vague understanding of his job and where he lives, et cetera? Sell his house and then move and rent an apartment with that free capital?

• 1:03:51Speaker 03

  I mean, that would alleviate his current problem immediately, sure.

• 1:03:55Steven Bartlett?

  He says here, after some advice direction in terms of maybe passive income. This word passive income, I know.

• 1:04:01Raoul Pal?

  It's driving nuts.

• 1:04:02Steven Bartlett?

  Why does it drive you nuts?

• 1:04:04Raoul Pal?

  It is a, there's like a passive income industrialization complex that is, I mean, it is literally every millennial's dream is, I'm going to get passive income and it doesn't exist. We talked about property. Property is the least passive income you can imagine. It is awful. Every time I've tried to rent out property, there are so many costs. Everything goes wrong. It's just endless. You're paying fees. And people think there's a magic passive income. Everything comes with effort. There is no such thing as returns without effort. That's where even robbery comes with effort, you know? There's no way of making money without effort or risking something. And so when you're forty grand in debt, how on earth do you think passive income is going to rescue you?

• 1:04:49Raoul Pal?

  But he's seen that on TikTok and on Instagram. Oh, we're millennials in our thirties and we're now living in Lisbon. And we've got passive income from our house. It's like it's bullshit. It's social media dream that doesn't really exist. And that's never going to save him from forty thousand pound debt.

• 1:05:11Jaspreet Singh?

  Passive income can exist. The perception of what it is is the problem. I am struggling with money. I have no money. I got bills to pay. I need passive income. That's not how it works.

• 1:05:24Raoul Pal?

  That's not how it works.

• 1:05:25Jaspreet Singh?

  The way it works is you take extra money, right? I have, I'm going to work and I'm saving and investing some money. I take the extra money that I want to put into my investments. And I can put it into an asset, an investment, that can pay me for owning it without actually working, without going to work to own it. Now, let me ask you about your real estate, because I gotta keep coming back to you, man. Did you manage your real estate yourself?

• 1:05:50Raoul Pal?

  I've done both. I've had a management agent and a manager myself.

• 1:05:54Jaspreet Singh?

  Managing yourself is probably an absolute nightmare.

• 1:05:57Raoul Pal?

  That's horrific.

• 1:05:58Jaspreet Singh?

  And managing it with a manager is also probably a nightmare, just in a different scene.

• 1:06:03Raoul Pal?

  Yeah, because your yield is massively reduced as well.

• 1:06:05Jaspreet Singh?

  It is reduced.

• 1:06:06Raoul Pal?

  And then you take the trade off between whether you're going to do short term lets or longer term rentals. And there's the volatility in the short term lets that you don't know what your yield's going to be. Long term, different as well. Then you've got the tenants and how bad the tenants have been and the damage that they've done.

• 1:06:22Jaspreet Singh?

  Yep.

• 1:06:22Raoul Pal?

  By the end of it, you walk away and think, really, it just wasn't worth the effort.

• 1:06:25Jaspreet Singh?

  Well, I would disagree with you on that part.

• 1:06:27Raoul Pal?

  Yeah, I mean, obviously, people can do really well out of property.

• 1:06:30Jaspreet Singh?

  The work in real estate investment.

• 1:06:34Jaspreet Singh?

  Is learning the process. When I first started investing in real estate, it was a complete nightmare. And it was not passive, anything close to passive. It was a nightmare. What you don't know when you start is that there's a good property manager. There's also a bad property manager. How do I find good property managers? By going through a lot of bad property managers and learning that process. And that is a painful process, a very time-consuming process. But when you do have the right team, it can be extremely passive. So I invest in real estate.

• 1:07:06Steven Bartlett?

  What kind of properties are we talking about?

• 1:07:08Jaspreet Singh?

  Single-family houses and multifamily apartments.

• 1:07:10Steven Bartlett?

  And you have lots of them?

• 1:07:12Jaspreet Singh?

  Not lots, but I have a decent amount.

• 1:07:13Steven Bartlett?

  And how much of your portfolio is in buying properties and then renting them out to families?

• 1:07:18Jaspreet Singh?

  Fifty percent.

• 1:07:19Steven Bartlett?

  And what are your returns been like over year over year for the last decade?

• 1:07:22Jaspreet Singh?

  So the way I look at returns, when I look to acquire a property, is I want seven percent cash on cash on the money that I put in. So when I look at return, I don't care about equity. We talked about this kind of a lot, that if I buy a house for, let's just call it a hundred thousand dollars, and it goes up to two hundred thousand dollars, I don't care. My goal when I acquire real estate is not to sell it and flip it for a profit. My goal is to grow the cash flow that I'm generating month after month after month.

• 1:07:49Steven Bartlett?

  From rental payments.

• 1:07:49Jaspreet Singh?

  From rental payments.

• 1:07:50Steven Bartlett?

  It's really difficult though, because if I, as someone that hasn't done a lot of property rentals and stuff like that, the chance that I'm gonna fuck up is so high.

• 1:08:01Jaspreet Singh?

  And I'm one of those people that probably screwed up more than, more than I could count. It does cost me a lot of sleep, cost me a lot of stress.

• 1:08:10Steven Bartlett?

  So you have to kind of be an expert?

• 1:08:12Jaspreet Singh?

  You don't have to be an expert, but you gotta be willing to give. In the beginning, right? For the first number of years, it was extremely painful. But today, when I go and acquire a property, I will look for the property, just like I do research on a stock or whatever I want to do. I do the work to research a property. In today's economy, it's much harder, not impossible, to find those returns.

• 1:08:33Jaspreet Singh?

  Acquire the property, hand over the keys to the property manager, give them the goals. And now I oversee the manager because I have a team now that is.

• 1:08:41Steven Bartlett?

  It's a business.

• 1:08:42Jaspreet Singh?

  It's a business.

• 1:08:43Steven Bartlett?

  It's like starting a startup.

• 1:08:44Jaspreet Singh?

  But it's not like starting a startup.

• 1:08:45Steven Bartlett?

  Why?

• 1:08:46Jaspreet Singh?

  Because starting a startup, when I work in my company, I am working in my company and I work a lot of hours. So I'm meeting with my employees, I'm leading the meetings, I'm coming up with ideas, I'm leading the vision. With this, I acquire, I hand over the keys, I've already set the framework and now you are doing the execution.

• 1:09:04Steven Bartlett?

  That's a mature business. With my company, there's hundreds of people in the UK.

• 1:09:08Jaspreet Singh?

  But you're not the one that's starting that startup.

• 1:09:09Steven Bartlett?

  I was the founder.

• 1:09:11Jaspreet Singh?

  And now what have you done? You've acquired more employees to get there.

• 1:09:14Steven Bartlett?

  Which is what you did with your property manager.

• 1:09:15Jaspreet Singh?

  It's much harder to do it with a startup, though. How big does a startup have to be? In order to be able to displace you as a CEO, to pay for the staff, to make the money and then to hire a new CEO and to lead it the way.

• 1:09:27Steven Bartlett?

  Depends. My friend, my friend Ash, who was just with me last week in LA, has four people in his startup. He's out in LA right now, in my house in LA with my girlfriend and my other best friend who's still there. And I watched, he's in the hot tub right now. I know that because every day at the same time he goes in the hot tub. And then they go for this hike and my girlfriend sends me photos. What he's done is he's set up a team of four people. They do personal branding on LinkedIn for people and they're running it back for him in the UK. He's up in bloody the mountain with my girlfriend right now.

• 1:09:52Jaspreet Singh?

  That's beautiful. But how many startups don't get there?

• 1:09:56Steven Bartlett?

  No, but I'm saying, when you described it to me, I was like, oh, that's just, it's just a business.

• 1:10:00Jaspreet Singh?

  It is a business.

• 1:10:00Steven Bartlett?

  A steep learning curve to develop expertise. And then you put systems in place to make it sustainable.

• 1:10:05Jaspreet Singh?

  But the systems are kind of pre-established where you need to rent it out, you need a good manager, it's gonna find a good tenant, they gotta pay the bills. And it's not like a startup where I have to innovate and create an idea. I don't have to go out and build the blueprint. I am going out, I'm acquiring an asset that people already need, it's already existing. And then I'm going to. Put used to it by having somebody live there or use it. And then there's a team just maintaining it.

• 1:10:35Steven Bartlett?

  So what do you think then in terms of passive income? And is it real? But specifically, let's do this point of housing. Do you advise people to buy rental properties and then generate rental fees from them as a source of income?

• 1:10:47Speaker 03

  Well, you just heard Jess read it, how much work it would take. So I generally don't advise people to to get into that business just because of the steep learning curve. And not everyone is built for that. And not everyone has capital for that. So if you were just trying to get started and actually make some money, I just think the stock market is the most liquid and easiest place to get started. I personally rent and I I plan on renting and just instead investing the difference of what my mortgage payment might be in my my rent. I think in on the coasts like San Francisco, New York, I think Miami, that might actually be the more reasonable thing to do.

• 1:11:21Steven Bartlett?

  I was reading a New York Times article that just came out yesterday. And it said more millionaires than ever are renting in the United States. And that it's tripled between two thousand and nineteen and two thousand and twenty three. So in just a couple of years, millionaires are choosing to rent more than ever before. What's going on?

• 1:11:41Speaker 03

  My guess would be a lot of the millionaires are probably living on the coast because they invest a lot or they have higher paying jobs. And maybe it's slightly unaffordable for them to buy a house in, say, San Francisco, Seattle, New York, Los Angeles.

• 1:11:53Steven Bartlett?

  In the New York Times article, it says they're choosing flexibility and liquidity over ownership.

• 1:11:59Steven Bartlett?

  And they don't want to be bothered with the inconveniences of homeownership, which includes paying a real estate tax and insurance, especially in markets like Florida and California, where we're seeing a lot of natural catastrophes.

• 1:12:09Raoul Pal?

  Yeah, so the US is a peculiar market because there's this high real estate tax in owning real estate. So all the time your returns are being reduced by that you pay. So whether it's like one and a half percent or two percent, whatever the number is, there's that. And then there's the other real estate taxes that come on top of it.

• 1:12:29Raoul Pal?

  Interest rates have been high. They've been high for a while now. So a lot of people have just been priced out of the market, just in interest payments. But now, because of mortgage payments are here, the difference is actually with the rental is a lot of rental people aren't trying to cover their mortgage costs because they own the property outright. So you get cheaper rates. So it's to do with price. The US economy's not been super strong yet. At Main Street level, Wall Street's had a great period of time, but Main Street hasn't. So people don't have excess earnings yet. So I think it's a function of that, but it's probably a larger trend as well.

• 1:13:05Jaspreet Singh?

  I think also it's understanding what the opportunities are. I mean, there's a lot of flexibility with renting. I mean, I finally bought a house in 2025. I've been renting before this.

• 1:13:14Steven Bartlett?

  So you bought your first property to live in with your family this year?

• 1:13:18Jaspreet Singh?

  From, yes, me to live in was 2025.

• 1:13:20Steven Bartlett?

  Why didn't you do it sooner?

• 1:13:23Jaspreet Singh?

  Well, because when I was renting, I could take the capital and buy other rented properties, buy other investments. So it was, it made more sense for me to put that money to work somewhere else.

• 1:13:33Steven Bartlett?

  So is buying a property as a means to generate wealth a terrible idea?

• 1:13:38Jaspreet Singh?

  As a means to generate, to buy it for yourself to live in or to?

• 1:13:42Steven Bartlett?

  Well, but you know, when you, when I grew up, everyone said to me that you get money, get a job, then you get a mortgage. And so like, that's what you did.

• 1:13:49Jaspreet Singh?

  That's one of the worst pieces of advice you can give somebody.

• 1:13:51Steven Bartlett?

  But that's what everyone's doing. That's still what the vast majority of people are doing. And I know that because I look at, I look at my friends that don't have the same financial advice that I have from like my brother and my financial advisors, my accountants. And the first thing they do when they get a bit of money is they go and get a mortgage. And that's because that's what their parents did. And that's what everyone's always done. Is that a good idea, Ron?

• 1:14:15Raoul Pal?

  Yes and no. No, I think these days with how the economy's been set up, don't forget, when I was 24, 25, I was working in an investment bank. I wasn't the highest paid guy there. I was a 25 year old. And to buy my first flat in London was three and a half times my income. That equivalent flat and the equivalent income is 12 times. So rent makes much more sense now and you might as well invest. Buy all the stuff that you think will drive returns. But a house, a primary house is not an investment, never will be. Because once you buy it, you don't sell it. You don't realize that equity, maybe your kids do, if you've got kids. So it's not an investment, but it can be an investment in your future.

• 1:14:59Steven Bartlett?

  But there's like some optical illusion going on here because when I think about renting, I go, well, that money, I never see it again. But with buying a house, I'm paying into it. So it's like me depositing the money in a piggy bank. So logically, of course, renting is wasting money. It goes to someone else and never see it again.

• 1:15:16Jaspreet Singh?

  But that's not exactly true. If you go out today, I buy a half a million dollar house. I put 20% down. So I put a hundred thousand dollars down. I financed four hundred thousand dollars. I get a six and a half percent mortgage. Thirty years, my mortgage payment is two thousand five hundred dollars a month. Now, what am I doing? I'm not renting, I'm not giving money to my landlord. I'm building equity in my property. But banks also understand the same game. They front load your mortgage. What does that mean? When I pay two thousand five hundred dollars, it's not twelve fifty going to principal to build equity in my house and twelve fifty for interest. It's

• 1:15:54Steven Bartlett?

  Principal being?

• 1:15:56Jaspreet Singh?

  Buying your house back for yourself. It's not half and half. It's almost all interest. In fact, if you go out and buy the half a million dollar house today at a six and a half percent mortgage, 20% down, for the first 20 years of that mortgage, more than half of that payment is going to go directly to your banker's pocket with interest. It's not until year 21 that half of your two thousand five hundred dollar payment is going to go towards equity in your house. So it's all interest, zero equity, and then slowly it moves like this. It takes 20 years to get there. And then what happens along the way for a lot of people, for, not everybody, for a

• 1:16:38Jaspreet Singh?

  lot of people, is along the way, interest rates go down, I need some extra money. So what do I do? I refinance. As soon as I refinance, that amortization starts all over again. And so now I'm paying all this interest again and my real equity that I'm building is not there. This is why I say it's not bad to buy a house. I think it's great if you buy a house. But don't treat your house, like you said, don't treat your house like an investment. Treat it like an expense. Buy it because you can afford it, because you want it, because you're ready, but not because you're gonna build wealth.

• 1:17:13Speaker 03

  I agree with what their takes. I think that, you know, a home is an asset that you can't sell very easily. So that's also a good thing. Like if you have a hundred thousand dollars to put into stocks or a hundred thousand dollars to put on a down payment and you know you were just such an emotional person that the moment that the stock market goes down two percent you're selling, probably better to buy a house, right? You can't really sell your house in the tap of two swipes. But in terms of an investment, it's like, usually it's much more than investment to people. They buy them for psychological reason or emotional reasons or the sense of security. So I would just say like, if you're interested in buying a house and you can afford it, then that's great, yeah.

• 1:17:52Jaspreet Singh?

  And let's actually go with the best case scenario. So like, I think you were mentioning this. I buy a house for, let's call it half a million dollars. It goes up in value to a million dollars. Oh my God, I'm rich, right? Well, it's invisible, but yeah, I could take the cash out, refinance, but now I had to pay all that. But here's the problem. You now own a million dollar house. What does that mean? You have to pay property taxes on a million dollar house. So you gotta pay a lot more property taxes. You have to pay insurance on a million dollar house. And so now, if you pass this house down to your kids, great, they got a million dollar house. But if they can't afford the property taxes or the insurance on a million dollar house, now they have to sell it.

• 1:18:29Raoul Pal?

  Insurance is one of these really hidden costs that you don't realize. Particularly if like, if you're in a hurricane area like Texas or Oklahoma or something, suddenly your house insurance costs are prohibitive. On top of the taxes you pay, people don't think about that.

• 1:18:45Steven Bartlett?

  So just what you're saying by Bitcoin, right?

• 1:18:48Jaspreet Singh?

  Go all in. You're one coin away from everything.

• 1:18:51Raoul Pal?

  Zero cost.

• 1:18:51Steven Bartlett?

  They've just clicked that, clicked that. That's gone viral.

• 1:18:56Steven Bartlett?

  But no one at this table would adopt buying a house as a wealth creation strategy. No, you would all do many things before then.

• 1:19:04Raoul Pal?

  Yeah.

• 1:19:04Speaker 03

  Correct.

• 1:19:05Steven Bartlett?

  Would that be almost at the bottom of the list of things?

• 1:19:08Raoul Pal?

  It's part of his age cohort. Who are you talking about? If you're kind of like thirty eight years old, you've got a kid, you kind of cleared up some of your student debt payments. Okay, that security thing is fine, but it's not an investment. Anybody younger, just no.

• 1:19:25Speaker 03

  Yeah, if you're just talking pure dollar investment returns, I probably would rank it lower on the list for sure.

• 1:19:30Raoul Pal?

  Yeah.

• 1:19:30Steven Bartlett?

  Is there any such thing as good debt? Because I remember at the start you said clear up your debts. Is there a good debt?

• 1:19:36Raoul Pal?

  People make a lot of money on debt.

• 1:19:39Raoul Pal?

  But people lose a lot of money on that.

• 1:19:41Speaker 03

  I just try to stay away from debt altogether. Yeah, I mean, I think that, yeah, there is such a thing as like good debt. If it's working for you and you're able to leverage that money to make more money. But a lot of people, you know, with leverage comes a lot of risk. And I know a lot of people got wiped out because they took on quote unquote good debt, right?

• 1:19:57Steven Bartlett?

  What's leverage?

• 1:19:59Speaker 03

  Leverage is, so for example, in Jaspreet's example, you put twenty percent down on a house and you take an eighty percent. The rest of it as a mortgage, that's technically leveraging your money because you're taking the hundred K that you have. And now you're affording an asset that's worth five hundred thousand dollars. If your home goes from five hundred thousand dollars to a million dollars, you have a five hundred thousand dollar gain. But you only put in a hundred thousand dollars. So technically your profit or your return percentage is much higher. It was leveraged by that debt that you carried.

• 1:20:30Steven Bartlett?

  Well, I don't think most people know that they can leverage their crypto.

• 1:20:33Raoul Pal?

  That's right. You can borrow against it.

• 1:20:36Steven Bartlett?

  So anyone can? You don't need to go to a bank?

• 1:20:38Raoul Pal?

  No, you could do it instantaneously in what's known as decentralized finance. Or there's a whole bunch of companies that do this, where you can borrow against your assets. You can even do it against digital arts. I mean, I'm a huge digital art collector. Much like the art market, you can actually go and borrow against the value of the art, maybe forty, fifty percent against the value.

• 1:20:56Steven Bartlett?

  Let me explain this to me super simply, if I, as if for someone that's like never even bought a Bitcoin before and is thinking about potentially buying one. But they would also like some way to have a little bit of cash.

• 1:21:08Raoul Pal?

  Look, I don't like it.

• 1:21:10Steven Bartlett?

  Okay.

• 1:21:11Raoul Pal?

  I understand why, but the issue is you've got an asset that does this.

• 1:21:15Steven Bartlett?

  It's volatile.

• 1:21:15Raoul Pal?

  It's very volatile and you're borrowing a certain amount against it. And you don't know whether it falls below that value and you get liquidated, then you've lost all of your Bitcoin. The whole game is if you're in a secular bull market, just don't lose control of your tokens. Own your Bitcoin all the way through and you have a risk of screwing that up for the extra 5% income or 10% income. In Ethereum, very different world because you're staking. So you're getting naturally rewarded in the network.

• 1:21:43Steven Bartlett?

  What does that mean, staking?

• 1:21:44Raoul Pal?

  What it means is in Bitcoin, you actually get miners basically get rewarded for solving the algorithm, the computation. In Ethereum and Solana and Sui and the other big blockchains, you basically get rewarded for securing the network. So you stake your tokens to secure the network because the more people then have this network connectivity between them and you get paid for that. So in Ethereum right now, it's probably 4% yield.

• 1:22:13Steven Bartlett?

  Okay, so just I'll try and summarize this like a 10 year old.

• 1:22:16Raoul Pal?

  But there's no risk in that. You're not getting leverage in that.

• 1:22:19Steven Bartlett?

  So if I choose to buy Ethereum, which is a form of cryptocurrency, I can take my $100,000 of Ethereum and on my phone in a couple of clicks, I can move it, I can press a button and move it so that it is staked. And when it's staked, I am basically using my Ethereum to secure the network, to make the whole thing more secure so it can run properly. And in return, they'll give me 4% of it as a payment every month.

• 1:22:49Raoul Pal?

  Well, not 4% a month, but monthly payments.

• 1:22:52Steven Bartlett?

  Monthly payments. Of 4% annualized.

• 1:22:54Raoul Pal?

  Yeah.

• 1:22:55Steven Bartlett?

  So you can you can get interest on your crypto.

• 1:22:58Raoul Pal?

  Yes. And then if you're a little more sophisticated, a little bit racier, there are then yield enhancements. So we talked about high yield bank accounts, there's high yield versions in crypto and you can get up to 20, 30%. But now you're taking risks.

• 1:23:12Steven Bartlett?

  And I can also loan against my Ethereum. So I actually did this at one point. I don't do it anymore. But I had a thousand Ethereum and I put it, I took a... A thousand dollars or a thousand Ethereum? A thousand Ethereum, yeah. Oh, gosh. Yeah, I know. I actually, I switched into Bitcoin a little while ago, so a couple of months back, but probably bad timing. This is why Melon...

• 1:23:31Raoul Pal?

  That was terrible timing. You should have called me first.

• 1:23:33Steven Bartlett?

  I know. But yeah, people are emotional. I had a loan against it, so I borrowed a couple of million dollars at one point to buy some other crypto assets against my Ethereum. And it was surprising to me that I didn't have to call anybody. I didn't have to ring a bank. I could just click a couple of simple buttons on my phone. And this 1,000 Ethereum I had, I managed to get a couple of million dollars paid straight away in cash, straight to me. But I chose not to do that because the markets are super volatile.

• 1:24:02Raoul Pal?

  But it is incredibly efficient, effective way of people. If you were to, let's say you had $100,000 of Bitcoin, one Bitcoin, to borrow $20,000 against it?

• 1:24:13Steven Bartlett?

  Yeah.

• 1:24:13Raoul Pal?

  That's not very risky.

• 1:24:14Steven Bartlett?

  Or $5,000 against it.

• 1:24:16Raoul Pal?

  Or 5,000, whatever it is, it's not very risky. Or if you're in a different currency where you can stake it, very little risk, very, very little risk. It's like lending to the US government, I lending to the government of Ethereum, the Ethereum network. That's a pretty decent way of enhancing.

• 1:24:32Steven Bartlett?

  It's hard to do that with stocks. It's hard to get a loan against your stocks if you have $5,000 of stocks, isn't it?

• 1:24:42Raoul Pal?

  Yeah.

• 1:24:42Steven Bartlett?

  It's typical, I mean, when I was younger and I had, I bought $10,000 of Facebook stock when I finally got some money. I couldn't think, I couldn't see a simple way of taking a loan against my Facebook stock. It wasn't until later when I had a private investment bank in Europe that my private investment bank were like, do you want 50% of your blue chip stocks as a loan?

• 1:25:01Speaker 03

  Yeah, it's probably usually reserved for people with more assets. But I do want to push back a little bit on the staking yield. I do understand it's 4% virtually risk-free, but there are always going to be risks with, you know, the price of Ethereum, right? So like you're getting paid in Ethereum.

• 1:25:15Raoul Pal?

  This is a key thing, right? Is your, your risk is the, is the currency you're staking.

• 1:25:21Speaker 03

  So if Ethereum goes down 50%, then your fiat value of Ethereum, uh, sorry, of your stake could go down versus, you know, if you're getting a 4% high-yield savings account, it's backed by the FDIC, it's virtually this.

• 1:25:33Raoul Pal?

  And there is another risk as well, is Ethereum is actually annual staking.

• 1:25:37Speaker 03

  Oh, I see.

• 1:25:38Raoul Pal?

  And most of it is being done via a few businesses like Lido, which are turning into short-term staking. And so there's a duration mismatch that has some elements of risk in.

• 1:25:50Steven Bartlett?

  What about?

• 1:25:51Speaker 03

  Sorry, go ahead. I was gonna say, when do you get paid? The, with the Ethereum stake, you get paid every month? Or do you get paid on the year?

• 1:25:58Steven Bartlett?

  I was getting paid monthly.

• 1:25:58Speaker 03

  Monthly, okay.

• 1:26:00Steven Bartlett?

  What about pensions?

• 1:26:02Jaspreet Singh?

  Retirement.

• 1:26:03Steven Bartlett?

  Retirement. So in the UK, we call it a pension. I think you guys call it a 401k. But across the world, it's pretty much the same, the Western world, anyway. If I'm 25 or 30, whatever, should I be paying into my pension as a way to generate, to make myself wealthy someday? Is that a smart idea?

• 1:26:22Jaspreet Singh?

  I don't have a 401k. I don't have an IRA. But the reason why people like these accounts and why they can work for some people is because they are tax-deferred accounts, meaning I could put my money in, whether I pay taxes now or later, the money will then sit there, grow, and I don't pay taxes until I pull my money out. But there's a couple of problems. Problem number one is I have very little control over where my money can be invested. Maybe this will change. The Trump administration has passed a new executive order on 401ks to change which you could potentially invest in 401ks, but that hasn't happened yet. You have very limited options. They're primarily just mutual funds, and many of them have

• 1:27:06Jaspreet Singh?

  a fee. I think NerdWallet said 92% of Americans don't know what the 401k fees are. So if you don't know what your 401k fee is, this is your notice to go check what the expense ratio is, and you should know that. So you have very limited options. You're going to have to pay a fee, which means somebody on Wall Street is going to be paid forever until you retire. Number two, I can't touch this money until I'm 60 years old, 59 and a half. If I do have to pay a 10% penalty. And number three, the whole discussion is you're doing this for tax benefits. But kind of like we talked about earlier, there's a lot of tax benefits that you can get outside of a 401k, which is why, for me, I don't like it. But I'm not everybody. For some people, it can be a great place because your employer might say, we're going

• 1:27:50Jaspreet Singh?

  to give you a 3% match. So if you invest, let's just say, $3,000 into your 401k and they match it 100%, they might also just throw $3,000 into your 401k, but you have the same risks and concerns along the way.

• 1:28:05Steven Bartlett?

  I don't think most people even know what a pension is, to be honest. I think we pay into it, but we don't really know what's working. And I saw this really interesting debate take place on X the other day, where someone was, a guy was saying, in the UK, I've paid into my pension my whole life. So I deserve it and it will be there when I'm ready. And then everyone underneath it was telling him that, by the way, it's not like some piggy bank that you get to break open. The money you paid into a pension was used to pay for the people that needed a pension when you were working.

• 1:28:36Jaspreet Singh?

  So you're talking about social security in the United States. Because as an employee in the United States, you have to pay into social security. So 6.2% of your income. So you have a lot of taxes. You're gonna have to pay income taxes on what you make. And then you have social security tax. So on your income, you're gonna pay 6.2% of that separately from your income tax, but 6.2% into this social security fund. And then your employer is also gonna pay 6.2% into this fund.

• 1:29:06Steven Bartlett?

  Yeah.

• 1:29:07Jaspreet Singh?

  This money, in theory, is supposed to grow and compound. That way, when you retire, you have this retirement fund that's going to pay you every single year. You don't get to choose. I mean, you can choose when you pull it out, but you don't get to do anything with it. The government's gonna be in charge.

• 1:29:20Steven Bartlett?

  Yeah.

• 1:29:21Jaspreet Singh?

  This is what is running out of money in the United States today. Why? Because people that are in their twenties, thirties and forties that are paying into it today, it's not paying for their retirement, it's paying for the people who are retiring today to pay for their social security benefits.

• 1:29:37Steven Bartlett?

  And that's what people don't understand. They think they're paying into a piggy bank that they get to crack open and that will pay for them as long as they live for the rest of their life. I was looking at the biggest misconceptions around pensions. And the first one was that my pension is guaranteed money for the entirety of my life once I retire.

• 1:29:53Jaspreet Singh?

  Well, there is some truth to that. The part, in the United States at least, that you are guaranteed, what the wording is, that you're gonna get the social security until you pass away. But the part that they never tell you and they're not asked this about this either is how much that value of the check will be. So here's what's going on. People are paying into the social security fund, thinking that they're gonna be able to fund their retirement. Every financial advisor historically has said that retirement is a three-legged stool. You have your 401K, your personal retirement, you have your own personal savings, and then you have social security. Well, you pay into social security by force because you don't get to opt out of it unless you are an investor. You don't

• 1:30:37Jaspreet Singh?

  have to pay your social security income or social security taxes on your investment income. But you pay into this until you hit retirement age, and then you get to pull this money out. Well, the government is running out of social security money. But people misconstrue that because they say, oh, that means the government's no longer gonna pay social security. That's not true. They'll still pay it, but they'll just print their way to pay it, which is what you've been talking about. So, great, they're giving you a bigger check. The problem with that bigger check is that bigger check can't buy you as much stuff. So, yeah, you're, based off what the United States government says, assuming that they don't default, you're going to get the social security check, it's just not gonna be able to buy you as much as you thought before.

• 1:31:22Steven Bartlett?

  The other big misconceptions are that people think their employer is putting enough in to cover their full retirement. They think it's the same as a savings account. They think they can access it whenever they like. The government will cover them when it runs out, and I don't need to think about it until I'm older. And lastly, my pension part is tax-free.

• 1:31:38Raoul Pal?

  So, the big shift that happened around 20 years ago was a shift from what's known as defined benefit to defined contribution. So, defined benefit, you used to work for Ford, or American Airlines, or whatever company. You retired, you got 60% of your final year's salary forever.

• 1:32:00Jaspreet Singh?

  Ah.

• 1:32:01Raoul Pal?

  That was bankrupting all of these pension plans, because people were living longer, all the other stuff. And so, they kind of changed it to defined contribution. Basically, you get out what you put in, plus the investment returns. But this fees... Maybe you didn't give it to a good manager. Maybe you didn't know when they said, well, do you want to put it in bonds or equities? You like bonds and it didn't grow as much or whatever it was. And in the end, you're just not sure that you're the average 401k in the United States for a baby boomer, I believe, is about a hundred thousand dollars.

• 1:32:35Speaker 03

  What age? A baby boomer, like sixty five?

• 1:32:38Raoul Pal?

  Yeah.

• 1:32:38Speaker 03

  I think it's right now around two hundred thousand.

• 1:32:40Raoul Pal?

  Oh, two hundred. Okay, fine.

• 1:32:41Speaker 03

  But it's not enough to retire.

• 1:32:42Raoul Pal?

  Two hundred is not enough to retire. There's ten years of twenty grand a year.

• 1:32:44Speaker 03

  Right.

• 1:32:45Raoul Pal?

  So there's so little money in the US pension system particularly um that there is no hope for these people. And this whole video on this called the retirement crisis became a huge kind of viral success years ago, just explaining there is no way out of this for the pensioners, the boomers, all the millennials, and everyone's gonna have to change within this to figure this stuff out.

• 1:33:07Jaspreet Singh?

  I think you said it earlier today. You were talking about a Ponzi scheme. Here you have one. But nobody wants to say that, but everyone is paying in to keep funding this thing. But the only way it's running is because people are paying it in. The problem is there's not enough money coming in.

• 1:33:23Raoul Pal?

  Because? Because the, remember the, remember we talked about at the beginning, the demographics? There's less and less young people. There's less and less young people because we're having less babies. But there's tons of these retired people. So and this keeps going in perpetuity because we're having babies. So that's workers in twenty years' time. The babies now are workers in twenty years' time. We can forward project this. It doesn't stop. So how the hell are we gonna pay for this massive amount of baby boomers, which is in the United States, there's seventy eight million of them, largest cohort in history at the time? We can't pay for them.

• 1:33:56Jaspreet Singh?

  And this is where the proposals are to tax your Bitcoin. The value of your Bitcoin or tax the value of your assets or tax your investment income.

• 1:34:04Raoul Pal?

  But the UK's got the same, this whole wealth, everybody's got the same problem, everybody. What do you think Humphrey in terms of retirement crisis?

• 1:34:11Speaker 03

  I think that, so I have a different take on, well, I think, first of all, I think Jess Breet and Row, you guys were talking, and you, were talking about social security, right?

• 1:34:19Steven Bartlett?

  Yeah.

• 1:34:19Speaker 03

  But I have a different take on retirement altogether, I think. I think 401Ks are good for the average person because it's a forced savings mechanism. A lot of people wouldn't contribute to a retirement account unless they, the employer offered it, right? And so, the whole match thing is a great thing for behavioral, behavioral finance. It's like, okay, if I, if I do this, I get some free money from my employer, and at least I'm saving some money instead of nothing.

• 1:34:45Steven Bartlett?

  You are working for that money, it's not really free. A 401K for anyone that doesn't understand is, you agree to invest in a investment pot alongside your employer.

• 1:34:53Speaker 03

  It is more like an individual retirement account that is awarded to you because you work for an employer.

• 1:35:02Steven Bartlett?

  Yeah.

• 1:35:02Speaker 03

  You have the option to invest within a 401K, and that 401K is typically tax-deferred, which means that you pay taxes on it later in life.

• 1:35:12Steven Bartlett?

  And what's the difference between that and a social security?

• 1:35:14Speaker 03

  A social security is a government program where you are required to pay into it every paycheck that goes into this big pot, and then, when you do retire, the government will send you a social security check every month.

• 1:35:27Steven Bartlett?

  Okay.

• 1:35:28Speaker 03

  But I, I still think that there are plenty of ways to retire and retire with some sort of freedom, retire early. Have you heard of Coast Fire before?

• 1:35:37Steven Bartlett?

  No.

• 1:35:38Speaker 03

  Coast Fire is another newer thing that's, that's kind of on Reddit, but it's a variation of financial independence, retire early. And it's essentially, you get your nest egg to a point where you don't have to invest any dollar into it after that, but because you get it to, let's say, a certain number, and that number is usually pretty reasonable, the investment returns, if you're invested in the S and P 500, will get you to a full retirement by the time you're able to retire at 65. So it doesn't mean you retire early completely, but it means that if you get to your Coast Fire number, which is what it's called, maybe you have more freedom of choice in what you're working on. So like, maybe you don't have to work for the employer that you absolutely hate, you can maybe go do something that's a little bit more suited to your lifestyle.

• 1:36:21Speaker 03

  You're still working, but you're not working to save for retirement anymore because you hit that Coast Fire number. So, for example, at the age of 35, I think the coast fire number is like $150,000. If you can hit 150K by 35, if you have 30 years of investment returns at 8%, you'll have $1.5 million by the time you retire, which is a little bit more palatable for people that are having a hard time wrapping their heads around, am I ever going to retire? They're not going to retire in that they're not going to be kicking up their feet on the sand beaches of Aruba, but you're still going to be doing something. And I personally think if I was retired, I'd be so bored out of my mind doing nothing, right? So I'd like to work on something. The idea is you just don't have to work for maybe the job you hate or something like that.

• 1:37:04Steven Bartlett?

  So if I hit the $150,000 in savings and I put it into the S and P 500 and get the

• 1:37:09Speaker 03

  8% return.

• 1:37:10Steven Bartlett?

  8% return. By the age of 65, I'll have 1. something million.

• 1:37:13Speaker 03

  1.509, yeah.

• 1:37:14Raoul Pal?

  What's that worth then?

• 1:37:16Speaker 03

  That's true. There that is another part of the equation is with inflation, what is it going to be worth?

• 1:37:22Steven Bartlett?

  And is this what you're trying to do? Cause I remember an hour ago, you said, I'm just trying to retire earlier, words to that effect.

• 1:37:28Speaker 03

  Yeah, I mean, I'd like to be coast fire and coast fire is, you know, however you would like to define it. But, you know, I already think I'm pretty close or if not, I've already reached it, which is like, I get to work on the things that I love. And I think that my retirement nest egg will eventually grow to a point where by the time I hit 60, 65, I'll be able to coast, retire, chill.

• 1:37:49Steven Bartlett?

  Did you create a number, do the math on what you'd need to get to?

• 1:37:52Speaker 03

  Yes. Yeah. So you can project out your expenses of what you think your expenses are going to be on an annual basis and then kind of work backwards to that number.

• 1:38:02Steven Bartlett?

  Okay.

• 1:38:02Speaker 03

  Yeah. A lot of math involved, but you kind of have to do.

• 1:38:07Steven Bartlett?

  Do on chat GPT or something. Retirement crisis. That's concerning. That's concerning. So your approach is to do the coast fire thing.

• 1:38:18Speaker 03

  My approach is let's stay disciplined, consistent with our savings and investing and actually get to a place where retirement might be possible.

• 1:38:27Raoul Pal?

  I love that idea. And that's the same as when I started with the manifesting your destiny.

• 1:38:32Speaker 03

  Sure.

• 1:38:32Raoul Pal?

  You say, well, I need this goal. How do I do it? We do this and grow it via investments, right? It's brilliant to do that. And then you can take more risk.

• 1:38:39Speaker 03

  Sure.

• 1:38:39Raoul Pal?

  If you isolate that and say, well, any capital I build now, I can do whatever I want.

• 1:38:44Steven Bartlett?

  That was the same idea that I had with the home. It's like I've de-risked my life. Now I can take risk and that's a really nice thing to do. And I love the way that you do it by saying, well, my future self wants this. For me to do that, I need to do this now and then it should take care of that. Now, it's always risky in the imagine, but yeah.

• 1:39:03Speaker 03

  And then you have extra dollars to do whatever you want with, right?

• 1:39:05Jaspreet Singh?

  I also love that you've been disciplined on like what you like and what you know.

• 1:39:10Speaker 03

  Yeah.

• 1:39:11Jaspreet Singh?

  And

• 1:39:12Speaker 03

  I appreciate that, thank you.

• 1:39:13Jaspreet Singh?

  Because you said, I think 90% are on index funds and ETFs.

• 1:39:16Speaker 03

  That's what I would recommend for people.

• 1:39:18Jaspreet Singh?

  Oh, sorry, okay.

• 1:39:19Speaker 03

  For me personally, I'm like 50, 60% index fund.

• 1:39:21Jaspreet Singh?

  But still, that's, that's pretty high and not having that, you know, shiny object syndrome or whatever you want to call it. I mean, that, that

• 1:39:28Steven Bartlett?

  You're accusing me of having shiny object syndrome?

• 1:39:30Jaspreet Singh?

  I was just trying to gauge everybody here. But, but whatever it might be, to, to, to be disciplined. I think that's such a valuable trait. And you know, you talked about the scarcity mindset. I think that's also a discipline mindset that you have that. So I would, I would reframe that. I think you've done an excellent job.

• 1:39:46Speaker 03

  I think personal finance is personal.

• 1:39:49Speaker 05

  Right, guys, I'm gonna go get Steve. The guest is here. Ready?

• 1:39:52Steven Bartlett?

  Come in.

• 1:39:53Speaker 05

  Oh, my God, Steve!

• 1:39:55Steven Bartlett?

  What?

• 1:39:56Speaker 05

  What are you doing?

• 1:39:57Steven Bartlett?

  This is a Bon Charge face mask. It's good for blemishes, wrinkles, clears up the skin. It's red light. Have you not used it before?

• 1:40:05Speaker 05

  No.

• 1:40:05Steven Bartlett?

  Have you tried this before? It's, um, it's really, really good. It shines red light on your face, which helps increase and boost collagen production. I actually found it out because of the missus. Seeing her wearing it, she terrified me a couple of nights in a row. I thought it was to scare people with, but actually it's really, really good for your skin. So they are a sponsor of the podcast and I've been using it every day for about a year and a half now.

• 1:40:27Speaker 03

  Wow, Steve, you smell it, aren't you?

• 1:40:28Steven Bartlett?

  I'm glowing, aren't I? Yes, and Bon Charge ships worldwide with easy returns and a year-long warranty on all of their products. So visit boncharge.com/diary for 25% off on any product site-wide. But you have to order through that link. That's boncharge.com/diary with code DIARY. Make sure you keep what I'm about to say to yourself. I'm inviting 10,000 of you to come even deeper into the diary of a CEO. Welcome to my inner circle. This is a brand new private community that I'm launching to the world. We have so many incredible things that happen that you are never shown. We have the briefs that are on my iPad when I'm recording the conversation. We have clips we've never released. We have behind the scenes conversations with the guests and also the episodes that we've never ever released.

• 1:41:12Steven Bartlett?

  And so much more. In the circle, you'll have direct access to me. You can tell us what you want this show to be, who you want us to interview and the types of conversations you would love us to have. But remember for now, we're only inviting the first 10,000 people that join before it closes. So if you want to join our private closed community, head to the link in the description below or go to D O A C circle dot com. I will speak to you there. On that point of discipline, Humphrey, I have seen a couple of videos from you where you talk about the things that you stopped spending money on. And there is a narrative that says, you know, in order to get rich or to save, uh, to get to where you want to go with your financial goals, you should not have the Starbucks coffee.

• 1:41:51Speaker 03

  Sure.

• 1:41:51Steven Bartlett?

  You should not do these things. What, what did you stop spending money on and what's your framework there?

• 1:41:56Speaker 03

  So I looked at, I took a look at my expenses from 2014 and onward and just kind of like saw the differences in how my spending habits have changed. The first thing I stopped spending money on are Airbnbs. So Airbnb's used to be a great value. They used to be a unique experience, but these days they're all kind of commercialized. And I feel like with the cleaning fees and all these fees, you end up paying more for less convenience as a hotel. So that's number one. I stopped buying food in bulk. I know that sounds kind of random, but uh, I'm a single guy. Sometimes I, I get two gallons of milk and I can't finish it. Right. So I'm pouring milk down the drain or I'm buying 48 eggs at a time from Costco. And I'm just like, dude, like, I, I mean, I like the gym, but I can't eat 48 eggs in like two weeks or whatever, whatever that, that time is.

• 1:42:40Speaker 03

  Right. So that's, that's another. And then, um, another thing I did was I started to switch my car insurance because I moved into San Francisco, the city. I'm driving less, so I used to drive 15,000 miles a year. I drive 3,000 miles a year now. And just by calling my car insurance, I was able to save like 40 bucks a month, just because my driving requirements are much lower. So those are like.

• 1:43:02Steven Bartlett?

  Explain that.

• 1:43:03Speaker 03

  Yeah. So, you know, a car, a car insurance rates are dependent on how much you drive. And if you drive less and you, you move to a city, then your rates should come down. But I think some people are a little bit too. Loyal to their providers, they're not willing to compare rates because it's painful. You don't really want to do it, it takes time. But I think doing that, spending an hour calling your insurance provider, looking at different insurance providers, not just for cars, but for homes too. You can save a lot of money because insurance is kind of commoditized. So it's like, you're going to get coverage from many different providers. You might as well put them kind of in a bidding war for your business.

• 1:43:38Steven Bartlett?

  I used to work selling car insurance, you know, it was one of my telesales jobs.

• 1:43:42Raoul Pal?

  I've done that as well.

• 1:43:43Steven Bartlett?

  Yeah, and there was, interestingly, I don't think people know this, but as I sat there in the car insurance call center, there's this bar on the screen that I can move in either direction to basically give you a discount based on how the sale is going. So if I really think I'm going to lose your sale, all I do is slide the bar to the left and it brings your upfront payment down and your monthly payment down. But if I thought the sale was easy, I could bring the bar up in terms of the price they quote you and give you breakdown insurance and all these other upsells. And so I don't think people realize how negotiable all of their insurances are, even their phone insurance and all these other things.

• 1:44:26Steven Bartlett?

  And sometimes you don't figure out until you say you're going to quit. And then suddenly they give you some great offer where they're going to give you 50% off.

• 1:44:31Speaker 03

  Yeah, yeah.

• 1:44:33Raoul Pal?

  And the other way of approaching it is, I never really sold for cost, I sold for income.

• 1:44:40Steven Bartlett?

  Okay.

• 1:44:41Raoul Pal?

  And that is saying, that is saying, okay, your life, so as long as you're not being ridiculous, right? It's like, do I really want to not go to a restaurant or get that Uber Eats or whatever?

• 1:44:53Speaker 03

  I understand, yeah.

• 1:44:54Raoul Pal?

  Because that's penalizing yourself. And that's not a nice thing to do always, right? It takes a lot of discipline and discipline is hard. But if you've got an equal, an opposite amount of discipline in solving for income. You actually move your lifestyle further ahead. So, you know, the rise of, I mean, I do three, four jobs, you do three, four, we all do lots of different things now. You do as well. We all got different income streams. You're almost better off to spend your energy thinking about how do I increase my income stream than your cost basis. At a certain point, we agree, like Stephen's friend who sent him the message, he needs to desperately rescue his cost base.

• 1:45:34Raoul Pal?

  But generally, if you're looking at a life plan, you'll get to your coast fire, or whatever it's called, quicker by solving for income than you will for cost.

• 1:45:42Speaker 03

  I just think lower hanging fruit is solving for expenses, which is like everyone can cut back a little bit, but everyone can't just like say, I'm going to make two X more tomorrow. That's kind of a harder problem. And I think if you want.

• 1:45:54Raoul Pal?

  Well, you just trade off your time because you, I mean, you can, if you're in a lower earning job, you can drive an Uber and earn extra money, or you can do a bar job.

• 1:46:02Speaker 03

  I see what you're saying, yeah.

• 1:46:03Raoul Pal?

  It's like multiple revenue streams is now the way the world works because the cost of living has become so expensive that everyone's having to do multiple jobs. But with technology, we can actually do it much easier.

• 1:46:12Steven Bartlett?

  Tom free's point as well, though, you can get a 30% pay rise today just by maybe bringing a packed lunch or walking somewhere or whatever else. And it's probably harder to get a 30% pay rise.

• 1:46:24Jaspreet Singh?

  I'm not sure about today. I think it depends on which stage of life you're in, because now if you just stick with a lunch, if you're on the lunch example, packing lunch costs time. And depending on how much your time is worth, that one hour of time could be $20, it could be $2,000. And I think that's that key difference. And I think there's definitely times and places you got to cut. I fully agree with you on that. But I think at a certain stage, look, I'm, I have still cheap with my money in multiple places, but I have, when it comes to time, so our office is in downtown Detroit and my commute there is 45 minutes. And, but I don't drive.

• 1:47:12Jaspreet Singh?

  What I do is I get driven there. And the reason why I do that is because I can sit in the backseat and work. And one of the things that we publish daily financial news. So sometimes something will be happening with our market briefs where, oh, this is important. And if I'm driving, I don't want to be texting and driving. So instead, I pay for an Uber or whatever, and I go that 45 minutes there, 45 minutes back. And it's money out of my account every single day, but I get back an hour and a half of my time, which is worth way more than whatever I'm paying in my driver fees. So I think it depends on where you are in the stage of life, because I wouldn't do that if this was way before.

• 1:47:51Steven Bartlett?

  What is the biggest, this is an open question to everybody. What do you think the biggest money mistake the average person makes is?

• 1:47:57Jaspreet Singh?

  They spend all their money, the two S's. You're spending all your money, and if you get past that, then you're saving all your money.

• 1:48:04Steven Bartlett?

  Both of them are mistakes?

• 1:48:05Jaspreet Singh?

  Both of them are mistakes.

• 1:48:06Steven Bartlett?

  So just having your money sat in a bank account doing nothing?

• 1:48:09Jaspreet Singh?

  You're becoming poorer every single day.

• 1:48:11Steven Bartlett?

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

• 1:48:38Jaspreet Singh?

  Well, it's a guaranteed loss. If your bank account, the average bank account in the United States today, not the high-yield accounts, but the average account is paying 0.1%, 0.5%, I don't know, something, something super low. If we just say inflation is 3%, meaning the cost you have to spend out of the bank account to buy something is going up by 3%, and that's the reported number, it's not the real inflation that many people feel, well, that means there's a net loss of 2.5% on that. So if I have a million dollars there, that's $25,000 of loss buying power.

• 1:49:12Steven Bartlett?

  Ro, do you think companies, because a lot of my audience are companies, whether they're, you know, one-person companies or big companies, do you think they should be putting their money that they have sat in their account into Bitcoin?

• 1:49:25Raoul Pal?

  In essence, if you're Microsoft, they have huge cash piles. What does Microsoft buy with their cash?

• 1:49:35Raoul Pal?

  Really, they buy some investment stuff, but it's generally cash based. And then they may buy another company, or they may buy real estate, data centers, let's say, or they may buy their own shares back. All of those three things that they buy are driven by the debasement of currency and they get more expensive every year and they're holding a cash return of three and a half percent. So it's stupid what they're doing because actually all your shareholder cash is not buying the equivalent of the actual things that drive the value of the company.

• 1:50:09Steven Bartlett?

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

• 1:50:17Raoul Pal?

  And so I do think that investing versus saving is misunderstood, to go back to your original question. I think investing is much more important. I made the mistake of being a saver when I was young because, you know, the fear that, you know, all of that stuff meant I was super risk averse and I was an investment banker. I was investing, but I didn't, so I made money from being in that industry. So I'm like, I'm just going to hoard cash. I did worse for doing that. And then once we saw the banking system fell, I'm like, I'm not doing this anymore. I'm going to take control of my own finances. So the same is true of a business that they're generating cash. They shouldn't be sitting on a massively large amount of cash, but some liquid investments,

• 1:50:58Raoul Pal?

  I think massively help because you're going to make your cash grow for you and your shareholders. And that's important, but, but don't let go of your liquidity because when you really need it and you don't have cash, that's the worst thing in the world, particularly when you've saved the money.

• 1:51:12Steven Bartlett?

  So in your business bank account for Real Vision, do you put some of the, the money into crypto?

• 1:51:19Raoul Pal?

  It depends. A lot of it gets reinvested for growth within the company. So you're making the decision is, how's your capital going to grow? Is it going to grow, grow your share price via reinvesting in the business? Or is it better to use the savings pool and buy other investments and diversify away? That really depends on your business, where it is in the growth cycle. But if you're like a, a cash generating, regular, non-growth style business, then you're going to be generating cash. You might have taken some dividends out and bought a house and done all that thing. Yeah, there's no reason not to do some relatively conservative investment strategy.

• 1:51:57Steven Bartlett?

  Humphrey, you worked with lots of rich people advising them. What is it that rich people know that the average person doesn't know as it relates to money? Because there are money games that you discover when you get to see behind the curtain. What is it that they're doing with their money that the average person isn't aware of or isn't able to do with their money?

• 1:52:19Speaker 03

  Rich people are typically more disciplined. They're typically checking their bank account every day, right? They're doing little things that compound into huge results at the end of 10 or 20 years. And they're thinking in decades, not just what am I going to do this week, right? They're choosing investment choices for themselves in 10 years, 20 years from now, instead of choosing sports betting on the football match for a thousand pounds that night. Because they know that their thousand pounds working for them today will be worth 10,000, 20,000 in 10 or 20 years. So it's more just like a long-term mindset versus a short-term mindset.

• 1:52:59Steven Bartlett?

  Delaying gratification.

• 1:53:00Speaker 03

  Delaying gratification, yes.

• 1:53:01Steven Bartlett?

  What were you writing down there?

• 1:53:02Raoul Pal?

  I was writing down how the system is rigged in the favor of rich people. It's extraordinary because it's the Charlie Munger quote of, "Show me the incentive and I'll show you the outcome." What people get, once you get, it's not the 100,000, but it's like the people who've got 10 million in their bank account, they get loans that are called non-recourse loans. It's an extraordinary thing because unlike your friend, they don't have to pay it back. So a non-recourse loan means you're not legally liable for the loan in the end. Now, there'll be some provisions on how to do it, but why are they doing this? Why are they getting these favorable terms? Why are they getting the private placements in stocks before they go public?

• 1:53:47Raoul Pal?

  Why are they getting all the best offers? Because they pay fees. Because they pay fees to the investment banks, and the investment banks desperately want these people because they have a lot of financial activity, and so they incentivize them. None of us get a look in at all of that. It's the same thing that I talked about with the hedge fund industry in the beginning. It's like they were incentivized by a fee to get information that was better than everybody else. And I think part of that is the ability that all we're trying to say to people is you don't have to play the same game.

• 1:54:20Raoul Pal?

  You don't have to pay anybody's fees. You buy a Bitcoin, stick it in your Coinbase thing or whatever. It costs you nothing to run and you're outperforming a venture capital investor. There's, you know, simple things like buying an index fund. You're not paying the Wall Street complex thousands of dollars for active management. There's ways of hacking this and it's not that expensive to do.

• 1:54:41Steven Bartlett?

  Just before we move to just brief, one of the things that I think you've kind of both alluded to a little bit and you said earlier on was about how relationships make money. And because what I was watching when I sat in that apartment with this billionaire is his friends and his contacts who had done business with him in the past were getting the allocation, the prime allocation of being able to invest just before this company went public, which means that the next day it would multiply. But those were relationships. So if there is a strategy to build wealth, it goes back to what Ralph said at the start, being around people and having good relationships is actually, I think, really, really unappreciated. I've got a friend, I can name my friend, called Harry Stubbings. He runs a podcast called

• 1:55:23Steven Bartlett?

  20 VC and on that podcast, he sits with extremely rich people. The podcast, Harry's podcast, isn't as big as Joe Rogan's. But because Harry has had two hour conversations with the richest people on planet earth and continues to do so, he's built one of the biggest investment funds in Europe, especially as like a guy in his twenties. I mean, I think he's raised, if I'm not mistaken, 750 million just from the relationships. And he said to me, he said, you know, the biggest value leverage I've got in the last five, 10 years isn't like the views. People have more views than him. It's he has, he knows everyone rich. And I think we underestimate that when we think about wealth creation because if you can do what Ralph said and get around rich people, help them in some way, build those relationships, it pays dividends, what, forever?

• 1:56:09Raoul Pal?

  There's a great guy called Divesh Mackin who runs a firm, an investment firm in San Francisco called Iconic. He was a young investment banker at Goldman, around the same time when I started there as well. But he was, he was hired into the internet banking team. In two thousand, he turned up the office, but a month later, the entire thing was gone. Everybody was fired and he was too young, he was kind of too juniors to bother to fire. They fired all the senior bankers and he thought, well, what do I do? I think he had no bosses left. So he just basically went to Silicon Valley and hung out in coffee shops and made friends.

• 1:56:52Raoul Pal?

  The people he happened to make friends with, with Mark Zuckerberg, Reed Hastings, Reid Hoffman, all these people, but he then became their wealth advisor at Goldman, moved it all to Morgan Stanley and then built his own firm, Iconic, and Iconic is massive, runs all the wealth for these Silicon Valley people from this network of meeting these random dudes, building businesses when nobody else wanted to speak to them because they'd gone through the big bust and he made his entire life on that network. Genius.

• 1:57:20Speaker 03

  Probably at that cafe where I spent all my Bitcoin.

• 1:57:24Raoul Pal?

  The one with the gold door.

• 1:57:26Steven Bartlett?

  You were there at the same time.

• 1:57:30Steven Bartlett?

  It's interesting because when we talk about systems and all these things for money, nobody ever talks about a system for managing your relationships. And the way that most of us manage our relationships is we get someone's number and we hope that we'll cross paths again. But I think, I even think, I'm thinking about it, you obviously do this podcast, so I meet so many great people, I should have a much better system for understanding those relationships, how I can be of service to those people, understanding their birthdays and all these other kinds of things. And not only would that be good for my mental health and more friends, less like all these kinds of sort of social, psychological things, but in business terms, there's going to be opportunities, whether it's six years from now, where I need your advice, just briefly.

• 1:58:12Raoul Pal?

  The key to networks is it's what you put into the network, not what you take out.

• 1:58:18Steven Bartlett?

  Yeah.

• 1:58:19Raoul Pal?

  So the people who have the best networks I've ever seen are always the people who say, how can I help you?

• 1:58:23Steven Bartlett?

  Yeah.

• 1:58:23Raoul Pal?

  Hey, I've got something for you, you should meet so and so.

• 1:58:26Steven Bartlett?

  Oh, yeah, yeah.

• 1:58:26Raoul Pal?

  It's never.

• 1:58:29Raoul Pal?

  Hey, listen, what can you do for me?

• 1:58:30Steven Bartlett?

  Yeah.

• 1:58:31Raoul Pal?

  That comes back. Karma flows back always. Give as much into the network as possible and the network gives back.

• 1:58:37Steven Bartlett?

  I think that's what, in the case of Harry, he's also done, because funnily enough, about a month ago, I said, oh, I've got this idea to do this thing. And Harry turned around to me, thirty seconds within WhatsApp and said, oh, I know insert name of this person who's the very top in investing in Europe. I'll put you in a WhatsApp group with him. Put me in a WhatsApp group with this guy. Sent a voice note, said Steve's the best ever. Then he said, he said, Steve's way better than I am, everything. This is literally what he said. And then he said about the guy he put me in the WhatsApp group, he goes, and this guy's also the best at what he does ever. Putting you two together, good luck. And immediately, I thought, fucking hell, Harry's what a great guy. And then the guy he'd introduced me to goes, isn't Harry such a great guy? And so I messaged Harry, I'm like, listen, if there's anything I can do for you. But that's the karma.

• 1:59:17Raoul Pal?

  Honestly, you know, I really believe in networks. Thanks. The most important thing, your community, your network is everything. And the absolute answer is you have to keep putting into the network. Because if you try and extract from the network, it collapses.

• 1:59:35Steven Bartlett?

  Yeah.

• 1:59:35Raoul Pal?

  Because then you're just that guy who's making the phone call after ten years saying, hey, Stephen, can I get some money from you because I've run out of cash?

• 1:59:44Steven Bartlett?

  The last thing I wanted to talk about is the UK and the US and geographies generally and how much that plays a role. Because right now, there's lots of political, social conversations about the UK. People are a little bit doomer about the UK. Some people are optimistic about the US, some aren't. How much do you think about geographies when you're thinking about your wealth creation, your finance strategy? Does it play a role?

• 2:00:07Jaspreet Singh?

  So I was fortunate enough to live in London for a little bit over a month or so. And I did a number of podcasts out there. And I guess I could just ask you, the interesting thing about these podcasts is when I was talking to them, what they told me is that the majority of their listener base is in the United States. The majority of their money comes from the United States. The majority of their sponsors come from the United States. It's not from the UK. And I thought that was very interesting because it's a it's a huge market. But what they were saying is people who are really looking to grow in the United Kingdom, a lot of them at least, just from what I heard, would prefer to earn from the United States because the dollar figures are much higher.

• 2:00:50Jaspreet Singh?

  Now, I don't have a lot of global experience outside of that, but I do think that the United States is more friendly for people that are interested in wealth growth, wealth accumulation. Maybe not the best, there's tax-free countries out there, but in terms of for somebody who is more entrepreneurial in that sense, I think you have a lot of opportunities here that you don't have other places.

• 2:01:14Raoul Pal?

  What do you think, Raul? I'm a huge believer in geographic location for a number of different reasons. So I've lived in the UK, India, Spain, and the Cayman Islands. I spent most of my working career on this side of the pond in the US. Spain is lifestyle arbitrage. The cost of living is even probably half that of the UK and a third of that what it is in the US or the Cayman Islands. 300 days of sunshine, incredible people, culture, climate, cost is very cheap, rent is cheap, to buy is cheap, everything. Perfect lifestyle arbitrage. Problem is network. You're not surrounded by people who are ambitious, doing different stuff. In a globalized world now where we can work online, it's actually doable. So we're seeing a lot of Americans moving down to Latin America.

• 2:01:57Raoul Pal?

  That's the arbitrage here, or Colombia as well. So into South America, Latin America, it's cheap, high quality of life, relatively safe. And if you're in a business where you can work online, I think you can get to your end goal, your coast far thing, super fast by doing that. If you want, to your point, if you want intellectual capital, there is only one place in the world that has it in such high densities, the US. Capital and intellectual capital. Asia has it, India has it, you know, it's all around, but they're all missing different forms of it. So it's using that for your end goals. What about the UK? I can't do it because...

• 2:02:37Raoul Pal?

  The UK's attitude now has become, we just can't have nice things. They don't want to. If I speak to my friends, they don't want to invest. They just want to have the bigger house and the next car on lease. People are institutionally unhappy in the UK right now, and there has been for a while. And so we don't have a culture of entrepreneurialism left. It's been stamped out. Europe too. So it's not just the UK. Everywhere in Europe, the same thing has happened. People just don't believe they can have nice things anymore.

• 2:03:09Steven Bartlett?

  When you think about the narrative that you understand of the UK, like what is the message? So if it was like a marketing slogan, the UK, you're an investor, you're an entrepreneur. What's in your head when you think of the UK? What comes out?

• 2:03:23Raoul Pal?

  What is it in reality or what would be, how would you sell the UK to others?

• 2:03:28Steven Bartlett?

  No, I'm saying like, what do you think, what do you think the narrative of the UK is right now as an investor and entrepreneur?

• 2:03:33Raoul Pal?

  I think it just feels like a backwater.

• 2:03:36Steven Bartlett?

  Backwater?

• 2:03:37Raoul Pal?

  Yeah, it's an economic backwater. So don't forget, in the late 90s and 2000s, it was the entire centre of the world's financial industry. It was the centre of the world's advertising industry. It was some of the, you know, all the creative industries, it was all based in London. We lost all of it.

• 2:03:54Steven Bartlett?

  Why?

• 2:03:55Raoul Pal?

  Regulation.

• 2:03:56Steven Bartlett?

  So you think it's the government's, government have misstepped?

• 2:03:59Raoul Pal?

  Yeah, the government misstepped and the US took the banking system back because how they treated capital requirements in the UK and Europe was different than the US. And they managed to get the Wall Street back to Wall Street. It all moved. I was working for Goldman Sachs, London was their biggest office. Same for JP Morgan, Morgan Stanley, everybody. And we just stopped it. And now we're seeing it again. We've got new industries rising. We've got AI, crypto, you know, AI came out of Cambridge. I think it's, you know, the Google Deep Mind, I think it was Cambridge University for most of that stuff. And we dropped the ball. We dropped the ball in the finance industry, dropped the ball in AI. We get this massive talent density coming out of Oxford and Cambridge, Imperial College and all these others, and we, we don't use it. They all moved to the US.

• 2:04:43Raoul Pal?

  We had the crypto industry of which we were part of that, we dropped that ball too. We dropped the whole ball on everything and Europe is actively shutting the door on every opportunity. By saying, we don't want to do this. Don't forget, they're a nation of old people now, most of Europe. So they'd rather just not have any change. But if we go back to that economic formula for GDP growth, population growth is the key driver. You need a growing population over time, but it just needs to be done in the right way. So they're blaming that, but the whole economic machine is because nobody's had kids. That's the problem. The demographic problem is the structure of everything. And the problem is, is nobody's had kids, so you don't have economic growth. So then you try and bring in new workers to create growth. You don't want that, so they get thrown out.

• 2:05:28Raoul Pal?

  Meanwhile, the economy slows down, people get pulled back, they don't want to take risk anymore. The whole system is now having to pay for the National Health Service to pay for these old people. There's not enough kids to support all of that. The governments are getting more in debt. Bond yields are going up. Everyone's like, what's going on? It's all been a function of demographics from day one.

• 2:05:49Steven Bartlett?

  Closing arguments, Humphrey. Closing position. What's the most important thing people should be thinking about? How would you round off? Is there anything that I didn't ask you that I should have asked you?

• 2:05:56Speaker 03

  Yeah, I think that my personal philosophy is just that personal finances comes down to your income minus your expenses. So know those two intimately. Know how to drive both of those two. And then just really watch what you spend your money on, right? Like, the average car payment in America is 7.45 a month. Stay away from that if you can. Try to be reasonable. Everything is about being consistent and reasonable. And I think those small decisions compound to a much brighter future.

• 2:06:24Raoul Pal?

  For me, first thing is educate yourself. You don't know, we talked about what do your finances look like? What's your bank account look like? What are you trying to achieve? So educate yourself, learn about investing. Invest above all things. Investing above saving is the only way you're going to get there. Because if not, your money goes down. And then just do it. Make a trade, make an investment, fail, learn, do it again, and do it again. And keep learning, educating, and then surround yourself.

• 2:06:54Raoul Pal?

  Buy a good network, just be, whether it's even on Twitter or social media, find a network of people that you can learn from, add to the network. And those things, you will, you'll get ahead. You can't fail. If you educate yourself, just get started and then learn, keep doing it then and just grow a great network. And buy Bitcoin? Obviously. What, what coins do you own in crypto? So I, so this is going to get more contentious now. So I actually own just one Bitcoin for posterity's sake. Oh, fuck, okay. So I own. I'll delete the episode then. My, I own mainly SUI, which is the, which is the, um, the crypto network that came out of Facebook. But I'm also on the foundation as well, but I actually put most of my liquid net worth into that.

• 2:07:39Raoul Pal?

  Uh, and then I own a lot of digital art on Ethereum. Cause that's a, a long-term store of value for me. NFTs. And I'm, yeah, NFTs. And so I've moved around a lot between, you know, Bitcoin, Ethereum, Solana and SUI. I don't trade, so these are long-term holds. I might change once every two years, change my allocation. So, but it's all generally all the big, big tokens. And just pre-closing statements.

• 2:08:05Jaspreet Singh?

  Well, first off, thank you, Raul Humphrey and Steve of putting this together. This is, uh, and to add on to everything that you guys said, for me, I think there's a lot of, for lack of a better word, crap. Um, on the internet of people romanticizing and fantasizing how easy it is for passive income or for insane levels of wealth, where it becomes, uh, sometimes hard to see how you could actually do that. And what I'd like to say is, look, nothing comes easy, but change can always be made regardless of where you are, what your background is, where you come from, but it's going to take work. And I think the best thing to help your outcome, to get to where you want to go is hard work, sacrifice.

• 2:08:46Jaspreet Singh?

  Put in what I call a decade of sacrifice. That way you can have, uh, what most people dream of. And the only reason why you're able to get there is because you're willing to do what the majority of people are not willing to do.

• 2:08:58Steven Bartlett?

  And in a word, AI, positive about it or pessimistic? Positive.

• 2:09:04Raoul Pal?

  Best tool we've ever been given.

• 2:09:06Speaker 03

  Optimistic, yeah.

• 2:09:07Steven Bartlett?

  Okay, good, refreshing, very refreshing to hear. Thank you all so much for giving me your time today. I'm gonna link the top three things that you tell me we should direct the audience to below. So I'll ask you after this conversation to give me three things where people can find you. The first is gonna be your channels, so your channels on YouTube. You're all very large YouTubers and have incredible channels, channels that I've followed for many, many years. Is there anything else that you guys would like me to link that you think is gonna be pertinent to the audience?

• 2:09:35Jaspreet Singh?

  Well, we have a free newsletter for investors that we publish every single day.

• 2:09:38Steven Bartlett?

  Yeah.

• 2:09:39Jaspreet Singh?

  Called Market Briefs. I think that would be a great one.

• 2:09:41Steven Bartlett?

  I'll link that one as well. Anything else?

• 2:09:42Raoul Pal?

  Real Vision is a simple place. It's a simple home for everybody to find what they need, so.

• 2:09:46Steven Bartlett?

  The website, realvision.com or?

• 2:09:48Raoul Pal?

  Realvision.com.

• 2:09:49Steven Bartlett?

  Okay, and Humphrey?

• 2:09:50Speaker 03

  And I'm building a website right now that's basically my guide, but it's my guide on different.