Jim Crider (00:04:29):

But in the sense of we could say like, “What is food?” Food is something that is necessary for life, and that we interact with on a daily basis. We don’t really question what is food until we start seeing food being changed. We see these corporations coming in, and getting their tentacles in food itself. Suddenly it’s like, “Hold on. I don’t think this is real food. This isn’t good for me. You’re bringing in a fiat or a fake or whatever form of food.” It makes us question, “Wait, what is food itself?”

Jim Crider (00:04:56):

I think that’s where we’re at with money. Hold on. What is money? This is something that seems like it’s almost necessary for the perpetuation of life, and just continuation of civilization. We’ve taken for granted what this is. But now that we see things being hijacked, just like food, we want to say, “Well, hold on, let’s get back to the purity of it. What is this in its essence?” So we can understand the foundations of these things. Just like air and water, what is this? We don’t want to take it for granted though.

Clay Finck (00:05:26):

How would you define what money is, Jim?

Jim Crider (00:05:28):

I would say money is a means of communicating, storing, and transferring value. I guess what I mean by that, money’s a means of communicating, storing, and transferring value. If I were to do an act for you, and you were to give me money in return, so I mowed your lawn, you see value in that, and we would agree that there are X forms of money that you would give me in return for me doing the act for you. So for you, that is valuable. Therefore, you assign me a certain amount of money for it. I could then take that value that you give to me. So I gave you something of value. You give it back to me, and I can store that value, instead of you give me eight gallons of milk.

Jim Crider (00:06:10):

I can’t drink eight gallons of milk before they go bad, so instead, I get money that allows me to store that value or that energy. As Michael Sailor says, we store that value over time and space. That is what money is in its essence. Now, the very interesting thing with money is that, again, if it’s a means of communicating, storing, and transferring value, value can be very… It’s personal, and things that you value may not be things that I value, and things that you value right now may be not things that you value later on.

Jim Crider (00:06:41):

So right now, a glass of water for you would be worth 20 cents, let’s say. But if you were in the desert, and you’re about to die of thirst, suddenly, the value of water is much more salient. It’s there. You would give anything for it.

Clay Finck (00:06:57):

So the level of abundance correlates with what’s valuable. If we have drinking water at our sink, we’re able to get it for free, so you don’t really value it very much, because it’s abundant. It’s everywhere. It’s not scarce.

Jim Crider (00:07:10):

It’s a matter of your personal situation. I don’t value these things, because it’s available and abundant. Exactly. But the moment you need it, it is valuable for you. Of course, that’s why there are constraints in the way of monopolizing commodities and things. That would be very dangerous that… Who was that? Is it Bill Burr? I think he’s a standup sketch that talks about Nestle wanting to capture all the rain. He was like, “Who are these psychopaths wanting to capture all the rain just so they can sell all the water to the earth? We own all the water.”

Jim Crider (00:07:40):

Of course, that could be dangerous because we need water. If suddenly if someone controls all the water in the world, they can charge whatever they want, because we have to have it. Of course, that’s where there’s dangers around that, because again, money is just a means of stating and communicating your value, so we have to be clear. That’s why money is important, because again, it communicates that. We’ll get into this later, I’m sure, but having mixed signals with the way that you use your money can bring in a lot of issues personally, maritally, societally, because money, again, expresses value.

Jim Crider (00:08:12):

If my money’s not being used in a means of something that I believe is valuable, then suddenly there’s a contradiction in my lifestyle, and I am… Suddenly, I’m using an expression of value, and it means it doesn’t actually suggest what I actually value truly.

Clay Finck (00:08:27):

In researching this topic, what is money, the simplest definition I could find is from Robert Breedlove. He uses the definition of money is a tool used to move value across space and time. You alluded to this definition. You and I, we work to perform a service, so someone will pay you for that service. In your case, it’s financial advising. They’ll pay a certain dollar amount or Bitcoin amount or whatever you’re charging for that service, and the money you receive represents the work that you performed.

Clay Finck (00:08:59):

I know that sounds super obvious, but I don’t think a lot of people have boiled it down to that simplest form. I think it’s also important to understand that different types of money are better at different things. I think it’s important to understand the different types of money. For example, fiat currencies like the U.S. dollar are not very effective at transferring value across time, because they gradually go down in value as the Central Bank prints more of it. To help illustrate this, let’s look at the price of gold in U.S. dollars over time.

Clay Finck (00:09:31):

In 1913, when the Federal Reserve was created, you could go out and buy an ounce of gold for $20. Today, the price of an ounce of gold is $1,970. That accounts for a 99% decrease in the value of the dollar relative to gold. That’s not to say that the demand for gold has just gone crazy. That ounce of gold is the same thing it was back in 1913. It’s that they’ve just created so many new dollars. A lot of that is just created through new debt in the system. Interest rates are so low today, so it incentivizes people to take on debt, and that increases the money supply.

Clay Finck (00:10:06):

There’s just so many more dollars today that now you have to pay so much more for that same amounts of gold. Fiat currencies are not very effective at storing value across long periods of time, but they are fairly stable just from a day to day, which makes them effective as a currency for now anyways. When looking at gold, you can flip it and look at, “Okay, gold does hold its value over time in general,” but the big issue is it’s very bad at transferring value across space.

Clay Finck (00:10:34):

So if I want to pay Jim for some consulting services or whatever, I have to ship a bar of gold in the mail. It takes a week to get there. I have to pay all these fees to get it there, so it’s not very good at transferring value across space. That’s just looking at just fiat currencies and gold. We’re going to be talking a bit about Bitcoin and how that can play into it as well.

Jim Crider (00:10:56):

Again, just talking through this, it’s stuff we take for granted. Just the fact that you said that the value of gold in proportion to the value of a dollar has… There’s this 99% difference over the last century, roughly. If we looked at face value, you’d say, “Wow, gold is worth a lot more,” but is gold worth more, or is the dollar worth less? We have to look at the ruler in which we’re using. Gold itself has not changed. There’s not that much more gold than there was previously, so actually, that would mean that gold itself has inflated a small amount.

Jim Crider (00:11:32):

It’s just that the amount of dollars has inflated significantly, so that ruler has changed, that means of measurement, that means of measuring value has changed the dollar itself. Is gold worth 99% more or not 99% more, whatever, thousands of percents more, or is it the fact that the dollar is worth 99% less? It’s these odd nuances that if you don’t ponder, life goes on, but I think it’s interesting, but also important to think about these things, especially, as you mentioned a moment ago, Clay, that fiat currencies generally do a good job of storing value over short periods of time, which is true.

Jim Crider (00:12:10):

I mean, that’s why, personally, I believe it’s an important to have an emergency fund, but at the same time, we’re privileged enough to live in the U.S., where we have a fiat currency that has been relatively stable over time or short periods of time. However, if you said that to people in Venezuela or in Germany post World War I, or all these places that are experiencing hyperinflation, their fiat currencies aren’t even stable over short periods of time. There’s dangers in having these things that cannot store your value over periods of time. Again, that’s a risk with having something that’s meant to store value, and communicate value is…

Jim Crider (00:12:43):

Again, if I mowed your lawn, and you give me X dollars in return, I did something of value to you. You received that full… You received 100% of the service. Initially, I received 100% of value as well. Let’s say we’re at a place of, I don’t know, 10% or, well, let’s say 8.5% annualized inflation. Just for fun, just to make it up a number. That was the CPI print the other day. So 8.5% annualized inflation. Well, a year from now, that mow that I did for you, you still received 100% of the value. But if I stored that in a means that’s supposed to store value, I actually lost 8.5%, so I only have 91.5% of the value that I initially received, so that whatever 8.5% was taken from me by inflation.

Jim Crider (00:13:28):

We could talk about what causes inflation, and is that fair and all that fun stuff? But again, when you have inflationary measures, that is a means of bringing in mixed signals as far as the value that I performed and the value that you received, because again, you still received your full value, but my value was diminished over time that I received in turn for performing an act for you.

Clay Finck (00:13:50):

You mentioned just the distortion of price signals. We’re seeing huge fluctuations in the price of things like commodities. I live in the Midwest, where there’s a lot of farmers. You see their input costs and the crop they’re producing. The prices of those are just fluctuating so dramatically. Say if the price of an input cost goes up 50%, it’s hard for them to realize, “Okay, is this price changed due to changes in demand? Is it due to changes in the money supply?” It’s really hard for them to figure out how they can conduct business. I think that can cause a lot of issues in an economy.

Jim Crider (00:14:28):

Oh, certainly. It’s hard to even fathom the changes we would see in a society if we had money that was secure and stable over prolonged periods of time. Of course… I live in central Texas. There’s a lot of people. It seems like most people are moving here right now, so of course there is a odd amount of demand versus supply, but my house appreciated by roughly probably about 50% last year. My town, the average house is appreciated by 33% last year. I don’t think all 33% of that is because of age supply versus demand issue.

Jim Crider (00:14:58):

I think a significant amount is because of the money issues themselves. So in saying that, it’s hard to even fathom the difference we would have as a society if money was stable. If I knew three years from now, I needed to buy a house, and I needed a down payment of $30,000, I wouldn’t have this issue of, “Well, I can save, whatever, $10,000 a year for the next three years. Therefore, I’ll have a down payment.” Instead, right now, we’re speculating on, “Well, how much will house prices change because the Federal Reserve makes this announcement?”

Jim Crider (00:15:30):

If I only can save $10,000 a year, that’s equals $30,000. But if the house values go up to double, therefore I need $60,000. I have to invest. How much risk should I take in investing? Do I put that in stocks or bonds? Do I buy Bitcoin? Do I hold it in cash? It makes things so much more complicated. That’s all because money itself is not secure. You have to… It opens up this can of worms as far as storing value, and growing your value in tandem with the things that you want. Because again, money is a means of communicating things that are valuable to you.

Jim Crider (00:16:01):

For you, maybe having a house in three years is valuable, so you need to have an equivalent amount of money to be able to exchange for that house that you find valuable. But again, if the means of which you are storing your value is subjugated over time, then it’ll bring in these mixed signals as far as the alignment of your money, your means of storing value, and the thing that you are placing value in, and the situation of the house in three years.

Clay Finck (00:16:25):

Brilliant points. Let’s transition to talk a little bit about the history of money to help us figure out how we got to where we’re at today. Humans originally started using bartering to conduct trade. So if I had chickens, and Jim had wheat, then we could just make that direct trade of chickens for wheat to get what we wanted out of that trade. Once humans had some money to facilitate trade, they figured out that people could specialize, and economies could become much more developed, and money just allowed for that development.

Clay Finck (00:16:58):

In studying money, probably the two most important properties of money originally were that money was durable, or it doesn’t corrode over time, and that it was scarce. If money isn’t scarce, then someone would be able to create new units of that money, and dilute the value you of the existing holders of that money. This is something you’ll find time and time again throughout history. It’s also happening today with the fiat currency units being created by the central bankers. Saifedean Ammous in his book also talks about how money has three primary attributes, that money is a medium of exchange, or it’s used to facilitate transactions.

Clay Finck (00:17:36):

It’s a store of value, which means that it generally holds its value over time. Lastly, it’s a unit of account, meaning that that is what goods are priced in, essentially. Over time, a number of things have been used as money. Humans have used seashells, salt, cattle, beads, large stones, gold, silver, and many other forms of money. I’ll be getting to a story about large stones being used, which I think is really interesting. Saifedean talks about this story in his book, where there’s these people on this island called the Yap who used these gigantic, large, limestones that weighed up to thousands of pounds as money.

Clay Finck (00:18:10):

These stones were called rai stones. The Yap island was this tiny little island, east of the Philippines, and south of Japan. These explorers found these limestones on another island that was hundreds of miles away. So since these limestones couldn’t be found on the Yap island, this made them very scarce and a reliable store value over time, because people knew that someone wouldn’t be able to just dig up a bunch of these new stones, and dilute the value of the existing holders. The people on the Yap island realized that it was a better way to facilitate trade using this form of money.

Clay Finck (00:18:45):

They selected these rai stones around 500 years ago. A lot of these stones were so large, and they really never even moved the stones. The community just realized who owned which stone, and they facilitated the value who owned what that way. Since these were relatively scarce and accepted by the Yap community, they would continue to be effective as money. This happened for centuries, and it worked very well for them. That was until 1871, an Irish American captain named David O’Keeffe stumbled upon the island. He discovered that the island had a very large supply of coconuts, and he wanted to buy these coconuts from them and sell them to coconut oil producers elsewhere.

Clay Finck (00:19:27):

But David’s problem was he brought in this foreign currency, and the people there didn’t value the currency at all. They wanted Yap stones. That was their money, and that’s what they valued in facilitating trade. David just didn’t stop there, and stopped with the answer of no. He went out to the other island, hundreds of miles away, and he had the technology available to create essentially new rai stones, so he could go and buy the coconuts that he wanted. David showed up to the Yap island, and many people on the island got upset because David showed up with all of these rai stones to try and buy coconuts.

Clay Finck (00:20:04):

They told him, “Hey, you produced these too easily, and we aren’t going to accept these,” but some people eventually did give in and sold them coconuts, because they had these rai stones. They had these issues of, “You had these old rai stones that had value,” and they had these new ones, where some people valued them, some people didn’t. The rai stones eventually failed as money, and they had to move on to some other new money. It’s just an interesting story how some actor outside of their economy comes in, and just floods the system with new forms of money, and that ends up diluting all the existing holders of that money.

Clay Finck (00:20:39):

One thing I found interesting about this is that the rai stones had zero utility. They were 100% used as money. They couldn’t be used as anything else. Whereas you look at something like gold, it has this utility value. It’s used in certain types of industrial uses, or maybe used as a jewelry. That’s one thing that someone like Peter Schiff argues with Bitcoin. It has no utility value. All it is just monetary premium, and that’s comparing Bitcoin to these rai stones, I think, is really interesting, because they’re both 100% monetary premium.

Clay Finck (00:21:12):

I think you’ll find throughout history, time and time again, that moneys that are able to easily be created, and that usually happens with the advancements in technology, that moneys that are easy to be created end up being very poor forms of money, and just end up not working.

Jim Crider (00:21:29):

Well, one, it’s interesting to think about how the people were frustrated that O’Keefe was able to easily produce rai stones, because they were still the same thing. They’re the rai stones they’ve been using for a long time. But you think when he showed up the first time on the island, he wanted to buy coconuts. They would not take another form of currency, so how would you expect him to receive coconuts? Well, he would have to, either, I don’t know, get coconuts by working on the coconut farm, or somehow procuring the rai stones if he wasn’t able to go and make them on his own.

Jim Crider (00:21:59):

He would have to procure rai stones. So how would he procure rai stones as a new person to the island? Well, he would need to do something of value to that tribe, to the Yap, so he would have to do something. It takes energy. Maybe he could have tilled their land, or, I don’t know, done something for them, fished and provided agricultural, whatever, something for them that caused them to expound energy, and bring actually something of worth to them. Then for doing those services, he would’ve received coconuts, or he would’ve received these rai stones that he would’ve traded for coconuts.

Jim Crider (00:22:30):

That would be the means “fair way” of doing this is he does something that in tandem gives them value for the coconuts or the rai stones that he could then trade for coconuts. But instead, he was a capitalist, and went and found these things, and made them in a cheaper way, which frustrated people. There was no… This is a common term in Bitcoiners. There’s no proof of work. He was able to go around the means of which, for centuries, these people had proven that this is a value because it took energy and time and labor to produce, and he was able to do it so easily.

Jim Crider (00:23:04):

It frustrated them like, “Hey, you did not actually put in the work. Therefore, the time… You did not show that this actually has value because you didn’t trade something of worth for this.” They didn’t like it. That’s just interesting to think through. Also, the utility of money, we could argue, “Does money have to have utility outside of the form of being money itself, or is it a waste?” Not at all. If you look at civilizations prior to them having money, just think about the inefficiencies in their means of trade prior to having money.

Jim Crider (00:23:34):

So if Clay has chickens, and I have wheat, and I want some chickens, and he wants wheat, we can decide up on a fair amount to trade. We bring in a third party here, and maybe they each want wheat, but they don’t want Clay’s chickens per se. Maybe I want some chickens. Well, then Clay has to find a way of getting the third guy wheat in trade for his chickens. Then he has to come through me to facilitate trade. Now, take that out to an entire group of people. How do you make sure that each person gets the thing that they want without having this web of transactions?

Jim Crider (00:24:09):

That’s what money does. The better the form of money, the more clear those signals of communication are, because again, money is a means of communicating value over space and time. The better the money, the more articulate you can be in communicating value, and sharing that. It doesn’t have to have a direct… It doesn’t have to be like, “Oh well, gold’s good because it can… Whatever, it’s a good conductor, or it’s pretty to look at.” No, the value of money itself or good money is it means that we don’t have to have that messy means of exchanging value. That is what money is for.

Clay Finck (00:24:45):

I think you’ll find time and time again throughout history that just stories similar to the Yap island, money has to be difficult to produce. History shows that the money that has lasted the longest were those that were the most difficult to produce. That is why gold and silver were money for thousands of years. Despite any new technological innovations over the last century, gold has generally had its supply increase by 1.5% to 2%. Another reason why gold has been a preferred form of money was because of how durable it was.

Clay Finck (00:25:20):

It’s said that practically any gold that has ever been produced over thousands and thousands of years, all that gold still exists today, and is held by somebody. The conundrum with any form of money is that there’s an incentive for market participants to produce more of it, because it has value above its utility. Since there are thousands of years of stockpiles of gold, it’s so durable. All of it’s still around. It’s a good form of money, because the gold miners aren’t able to produce huge amounts of gold, and crash the price, and cause those distortions in the economy.

Clay Finck (00:25:54):

Gold and silver are the only two forms of money that despite all the advances in technology, they haven’t been able to produce, call it, 2% more of the gold supply. All the easy deposits have already been tapped into around the world, so all the gold they’re mining is in these hard to reach places. It’s almost like a difficulty adjustment for gold. The only way there’d be some massive flood to the market is just some crazy innovation, like Elon Musk starts mining gold on the asteroids, or someone starts mining gold in the ocean floor or something of that nature, just something that would be this huge innovation in terms of mining gold.

Clay Finck (00:26:30):

Gold is really the only thing on the planet that historically humans haven’t been able to figure out how to create more of it relative to the current supply. Despite any large price increases like… During the ’70s, gold had this massive price run. Yet, we didn’t see just a huge influx of the gold miners mining a lot more gold. This phenomenon really existed for thousands of years until Bitcoin was invented. Bitcoin has a fixed supply cap of 21 million. So any massive run up in price, the miners aren’t able to front run it, and mine more Bitcoin. It has this fixed amount that is produced every year that is in the code, and that’s going down over time.

Jim Crider (00:27:09):

I’m curious, just thinking through gold, and you said hypothetically, if Elon Musk was able to mine gold on the asteroid, would we treat that gold in the same way that the Yap people treated the rai stones that O’Keefe was able to procure? It’s like, “Hold on, you cheated the system. This is supposed to be difficult to procure,” or maybe vice versa. It’s like, “Hey, babe, I got you a gold necklace. Some of that’s asteroid gold,” and maybe that would have a premium on it. I don’t know. But again, we like to see that, “Hey, this was difficult to obtain, because it is meant to communicate value.”

Jim Crider (00:27:43):

If we value something, usually, that’s how some importance. Again, the more valuable something is, the more rare that’s going to be. If Elon was able to do that one day, which I wouldn’t put it past on, I’m curious how we would even treat that, because again, that would be a workaround, just like O’Keefe found.

Clay Finck (00:27:59):

Lyn Alden wrote this fantastic article called What Is Money Anyway. That outlines the history of money in the U.S. I wanted to touch on that a bit in this episode. For many years, money in the U.S. was backed by gold. Since gold isn’t very divisible and isn’t very convenient to use in day-to-day transactions, people would deposit their gold at the bank, and people could have paper claims against that gold. After the first world war in 1934, the U.S. declared that gold was actually illegal to own, so Americans were forced to sell their gold to the government in exchange for $20 per ounce.

Clay Finck (00:28:34):

The dollar was then revalued relative to gold at $35 per ounce, which benefited the government tremendously at the expense of those that had to sell their gold. That’s a 41% price increase in the price of an ounce of gold practically overnight. That’s pretty crazy to think about that gold is this precious metal that is very difficult to produce, and was chosen by the free market to be used as money. The government forced everyone to sell that gold for dollars at a price that was obviously favorable to the U.S. government. It was illegal to own from nearly 1934 to 1973, so nearly four decades.

Clay Finck (00:29:10):

In 1944 at the end of World War II, the world came together, and put together what’s called the Bretton Woods Agreement in 1944. Most countries pegged their currency to the dollar, and the U.S. dollar was pegged to gold still, so citizens couldn’t redeem their dollars for gold, but foreign creditors were able to. The dollar was backed by gold during this time period. They weren’t able to just magically come up with more gold, but they were able to print more dollars, and adjust the ratio between the dollar and gold.

Clay Finck (00:29:41):

Preston is always mentioning how even though the dollar was backed by gold, they were increasing the money multiplier or the ratio between the dollar and gold after the Bretton Woods Agreement to help finance government spending. In 1944, the money multiplier was around five, and around 1970, the money multiplier increased to 10. That’s just the increase in the money multiplier over those years is a 2.7% inflation rate for those foreign creditors. Then we had World War II and then early 1940s, and the U.S. government no longer had enough gold to back all the dollars that had been created over time since they were financing the war paying for all these… had all these increased liabilities.

Clay Finck (00:30:22):

So inevitably in 1971, we had what’s called the Nixon shock, where U.S. president Richard Nixon announced that U.S. dollars were no longer convertible to gold for foreign creditors. So essentially, the whole world was backed by the dollar. Now, the dollar was no longer backed by gold. It was just backed by the faith in the U.S. dollar and the U.S. government as the issuer of that currency. Ever since the announcement in 1971, all fiat currencies have been free floating, and not backed by anything or not backed by gold.

Clay Finck (00:30:52):

That’s with the exception of Switzerland, which kept its currency backed by gold until 1999. For those of you who aren’t familiar, fiat currency is essentially just a government-issued currency that isn’t backed by any physical commodity like gold. Then in the 1970s, the U.S. made a deal with the OPEC countries to only sell their oil for dollars, which has essentially created additional demand for dollars. The OPEC countries then received military protection and trade deals with the U.S. That is what we now know as the petrodollar system, which you’ll probably hear from time to time when you hear about the history of the U.S. and the U.S. dollar.

Clay Finck (00:31:31):

A result of this system is that it created a lot of demand for dollars as all the countries around the world needed to trade with it. Because there was this extra demand, this made U.S. exports more expensive, and U.S. imports less expensive, which has led to this massive trade deficits in the U.S. We all know how all the products that we’re buying on Amazon, most of them are coming from China or coming from some other country, because it’s much cheaper to produce those goods in other countries. The U.S. has just had this massive trade deficit.

Clay Finck (00:32:02):

They’ve been exporting dollars essentially, and importing all these goods. So with the whole world now using Fiat currencies, all governments around the world benefit from being able to produce those currencies for a cost much lower than the actual value. It ties in to what we’re already talking about. It’s not hard to get on your computer at the Central Bank, and just click add X number of units. There’s not much work that needs to be done to create those new units. In the U.S., for example, if they want to start funding a new government program, it’s much easier for them to just print the money themselves rather than increase the taxes on everyone in the U.S.

Clay Finck (00:32:39):

It’s a sly roundabout way of them taxing the people, so being able to print new money is a form of taxation as a value of all the dollars that the citizens are holding go down in value as more units are printed by the government. The coronavirus pandemic is a perfect example of this. The U.S. M2 money supply grew by roughly 40% over the past couple of years. A lot of that money ended up flowing into financial assets. You mentioned your home a little bit earlier. To illustrate this, the S&P 500 has gone up roughly 40% in the last couple years as well.

Clay Finck (00:33:14):

So at a general level, your dollars can buy less of a basket of stocks or less real estate like the real estate in Texas than it could two years ago. That’s in large part just due to the money printing. That’s the history of the U.S. in just a few minutes in how we got to where we are today. We were on the gold standard for many, many, many years, because the free market really just selected gold as money, and governments have found a way to go to this government-issued currency. Originally, everyone would deposit their gold at the bank.

Clay Finck (00:33:47):

We would get paper claims against that gold. Then they just cut the link between the paper and the gold. Now, we find ourselves today, we’re 50 years into just using a currency or a money that isn’t really backed by anything.

Jim Crider (00:34:01):

It’s interesting. The U.S. dollars used to be backed by gold. You could take it in, and exchange it for gold itself. Now, it’s backed by the full faith and credit of the U.S. government. Frankly, as I ponder that, I don’t know what that means. If I went to the government and I said, “Hey, I want to give you this dollar. What can you give me in exchange?” They would say, “Well, here, you can have some faith in me.” What does that mean? Full faith and credit of the U.S. government, their ability to bomb another country in war, that’s why it’s valuable.

Jim Crider (00:34:25):

Is it valuable because they’re able to enforce that that is money in the U.S.? Therefore, “Hey, this is valuable in money because we say so?” Then the government goes and prints 40% in a couple of years. That sounds like they pulled an O’Keefe on us. They found a cheat code on making more money in a cheap manner that they didn’t have to do the work for it. I was just laughing a second ago thinking I can be on high alert if the next chairman of the Federal Reserve’s last name is O’Keefe. I know it’s time, but it’s very interesting to think about these things and, again, just the implications of having unsound money, and for someone to have the ability to unfairly come in and change what money is or change the value, because again, you are mixing signals of an expression of value for everyone else who’s holding that thing.

Jim Crider (00:35:10):

Yes, if you own financial assets, then you aren’t as adversely impacted as someone who doesn’t own financial assets. So if you’re someone who on one end extreme, you own lots of high-end real estate and art and stocks and stuff like that, and the value of the dollar goes down, because we could argue, “Is the value of your goods going up, or is the value of the dollar going down?” I would say it’s a mix of those two. Right now, I’d say it’s disproportionately. The value of the dollar is actually going down, but it’s a mix of those.

Jim Crider (00:35:42):

But again, if you hold those things, perfect, you just maintain your purchasing power, because you held your value in those goods that are more inflation resistant versus in the other extreme here, if you’re someone who lives off of a fixed income, and doesn’t have any assets, and your fixed income is $5,000 per month, and you need $5,000 per month to live your lifestyle. You don’t own any assets, and then the cost of the things that you need to survive goes up by 30%. My grocery budget’s up about 40% over the last year. That’s, well, partially because my kids are growing and getting bigger, and they eat more.

Jim Crider (00:36:19):

They feed a significant amount of their food to our dog, but still, the groceries are up significantly. If you own no assets that you can sell that help hedge that inflation, and you only have, again, this fixed income that maybe has a small cost of living adjustment annually, or doesn’t have one, you just got left behind. Things are getting worse for you. That’s where inflation is taxation disproportionately on those who do not own assets. You can take it even a step further. If you own assets via credit, especially cheap credit that is not marked to the market, then you are even further ahead.

Jim Crider (00:36:55):

In a place that experienced hyperinflation, let’s just for fun said that you owned a 100,000 acre ranch in Venezuela. I don’t know. I’m just going to make up numbers. Let’s say you owed a million dollars for that ranch, Venezuelan dollars. So you owned a, let’s say, 100 million Venezuelan dollars for this ranch. That would usually be 100 years of work. Well, the Venezuelan dollar becomes worth 100% or 99% less. Well, suddenly, you’re able to pay off that ranch with one year of work, a few months of work versus 100 years of work, so you just benefited disproportionately compared to others.

Jim Crider (00:37:35):

You actually just procured this amazing ranch for one year of work versus the 100 years of work you were supposed to do. So again, the value that you put in was disproportionate to the value you received because money itself, which is supposed to communicate those things, is supposed to be a clear signal of communication, was hijacked by bad money. That actually goes in with one of my favorite stories about money itself is the glass beads in Africa, because I think that is very salient to thinking about how this can have an adverse impact on people who don’t understand what sound money is, and how cultures and people can get left behind.

Jim Crider (00:38:09):

So Africa, a lot of people groups in Africa used to use these glass beads as a form of money, and they would usually wear them as necklaces. That was what they used for money. It was easy to get around, and take with you, and trade with, and everything. Glass, at that time, was difficult to make, so it wasn’t highly inflated amongst those cultures. Well, Europeans started coming in and recognizing that is what was the means of currency in those locations. Europeans had technology to make glass very cheaply and easily. So they went back to Europe, made a whole bunch of glass quick, brought it back down to Africa, but they were smart about it.

Jim Crider (00:38:48):

Smart. They were cruel, but smart. They went just village by village. They didn’t display it. Let everyone know, “Hey, guys, we’re loaded,” because people would’ve caught onto that. They went from village to village, and they were quiet. They started buying assets, these valuable assets for this money that was not as valuable as the people thought it was. They knew it wasn’t valuable. The people didn’t know that yet, so they would trade, “Hey, I will buy your farmland for X amount of glass beads.” “Oh perfect. This glass bead communicates this value of farmland. That is a fair trade.”

Jim Crider (00:39:20):

They would do that. They started buying assets, and they went from village to village before the people realized that the glass bead money had been inflated. Suddenly, there’s this trade off of things of true value with an inflated worthless form of money. Again, it stole from people, because they weren’t understanding what money was, and they weren’t understanding that money had been printed or created from a system outside of themselves. We could argue that is what’s happening with people with fiat currencies right now, especially with people who don’t own assets, and are trading their time for something they think is valuable, but actually isn’t.

Jim Crider (00:39:58):

It just was created out of thin air, and you’re giving away something of value. That something of value is a farmland or something like that, or is that something of value is you’re trading a lot of time working and being away from your family for something that maybe isn’t as valuable as we’ve been told it is.

Clay Finck (00:40:15):

You mentioned some fantastic points right there. I think one of the things I took note of is that we’re seeing the financialization or just the monetary premium put on all these assets, so like I mentioned, how Bitcoin is pure monetary premium. Now, people that understand the dollar is falling in value over time, they’re doing everything they can to get out of dollars, especially right when they get it. They get their income. They’re like, “I’m going to put 20%, 30%, 40% of my paycheck, every single one in the stock market.”

Clay Finck (00:40:43):

They don’t even look at the value of the stocks. They don’t look at if stocks are up or down. They just know that stocks over the long run will go up as the dollar goes down in value. Other people do that with maybe real estate or other asset classes like you mentioned. You hear that another interesting thing to think about is that it actually incentivizes people to take on debt, like you’re saying with the Venezuela example. You listen to some finance people like Dave Ramsey. He’s like, “Avoid debt. Don’t get into any debt. Debt is bad. The borrower is slaved to the lender.”

Clay Finck (00:41:13):

But when the dollar or just the money is falling in value fast enough, and you’re able to get a loan, say, you’re able to get a loan for real estate for 3%, and the dollar is falling in value at a rate faster than 3%. Then all of us are really incentivized to take on a loan for 3%. Go and buy a house. Rent it out. Cash flow it. Then your house’s value goes up over time, and the value of your payments is going down over time. It’s just… It creates these poor incentives in an economy.

Clay Finck (00:41:41):

You think back to, say, 2008. The banks were just given out loans to anybody and everybody. They knew they were “too big to fail,” so it creates these incentives all across the economy that can really hurt a lot of people in my opinion.

Jim Crider (00:41:56):

It punishes prudence, and it rewards speculation. That’s why you see so much speculation in frothy markets. I mean, there are so many things that are… If in a conservative and traditional valuation, most things are overvalued right now. But again, how do you assign value when the measuring tool in which we’re supposed to judge value is seemingly broken at the moment? That’s where speculation comes in, and why real estate costs multiples more than it did in 2007. The stock market is trading these outrageous prices, and fine art, and wine.

Jim Crider (00:42:31):

There are so many interesting things that people are just buying as a means of speculating and trying to store their value in, because they don’t trust the dollar to actually store that value.

Clay Finck (00:42:41):

Well, I got plenty of questions for you about Bitcoin. You’re thinking about this all the time. You’re talking with many people. Bitcoin, like I mentioned, is pure monetary premium at its current value today. It doesn’t produce any cash flows like, say, the stock market or real estate. It’s totally dependent on just what the market values it from day to day. How do you grapple with this idea that Bitcoin doesn’t have any intrinsic value, and how do you work through that with people wanting to invest in it?

Jim Crider (00:43:14):

I don’t see that as any issue. Again, going back to the value of money itself is not in its utility or what people would consider utility like gold, it being pretty to look at, or it being a good form for teeth filling or whatever. That is not where I find the value of money. Its purpose is strictly as a clear means of facilitating trade, and communicating value again over space and time. That’s its purpose. I don’t have any issue there. Really, the people who say that gold is valuable because it has these other properties, we could argue, yes.

Jim Crider (00:43:49):

Again, if Elon Musk was able to mine an asteroid, maybe would flood the market, and hurt the value of gold on its means of trade like as money. It would help because more people, we could use gold for its other use cases more so. There’s that. But, really, the people who are saying that gold is worth more than Bitcoin because gold actually has use cases beyond money itself, I doubt 99% of these people have ever actually taken their gold bullion and said, “You know what? I’m not going to use this as money. I need to conduct energy right now, so I’m going to hook up my battery to my bars of gold.”

Jim Crider (00:44:24):

These people who are making these arguments that it’s useful, you’re not using it. You’re not… No one’s hooking up their gold bullion, and using that to conduct energy, or melting it down and using it for these different things. Get out of here with that. You’re not using it for the things you say it is. You’re using it to store value. That’s why you’re using it. Let’s just be honest.

Clay Finck (00:44:40):

One idea I’ve been grappling with is my asset allocation in my portfolio. I’m a big fan of Bitcoin. You’re a big fan of Bitcoin. You’re heavily invested. An idea you’ll hear in traditional finance is that you need to be diversified. You need to be in different sectors of the stock market. You can’t have too much exposure to “risky assets” like Bitcoin. How do you think about diversification in a portfolio?

Jim Crider (00:45:08):

Diversification serves multiple purposes. One, we could argue whether or not diversification is a means of growing wealth. I would say that the fastest… This is not a guaranteed way of growing wealth, but it is more speculative, but the fastest way of growing wealth is through concentration. Most of the wealthiest people in the world did not achieve their wealth by investing 10% in their paycheck into a 401k, and buying a broadly diversified portfolio. No, they usually do this by starting a business, which is a highly-concentrated position.

Jim Crider (00:45:37):

They’re putting their time and their money into a single business. That’s like me going and buying 100% of one stock. That’s what a business is. That’s what owning a company stock is. You’re investing in that business. So if you’re a business owner, you’re investing strictly in that one business. That’s how the vast majority of highly wealthy people achieve their wealth is through concentration. Now, I’m not saying that’s the right thing to do, especially for most people. But again, we have to call a [inaudible 00:46:03] spade, and concentration generally leads to higher wealth if you make it through the scathing fires of concentration. You have to be aware of the risks there.

Jim Crider (00:46:11):

Now on that same token, diversification is a phenomenal way. Historically, it’s been a phenomenal way of achieving a relatively consistent means of growing wealth over a prolonged period of time at a relatively expected rate. That’s nice. Also, it’s a great way. Historically, again, on those past performance, who knows what would happen in the future, but it tend to be a great means of preserving wealth. So if you had all the money you need to do everything you want in life, it would be foolish to just keep all of your value or all of your worth in one thing. You want to preserve that, so you’re going to buy lots of things to reduce that risk of that wealth being stripped away because one thing fell.

Jim Crider (00:46:53):

That’s why you buy a broadly diversified portfolio of goods. So yes, diversification’s great. It also helps with people, so people themselves tend to be irrational investors. There’s what’s called the behavior gap. The behavior gap, there’s… Years ago, a study was done to see how people’s behavior impacts their performance in investing. I’m going to butcher the numbers a little bit, but stay with me. The study was done. It pulled the average performance of a bucket of mutual funds. This bucket of mutual funds returned on an annualized basis roughly 9%.

Jim Crider (00:47:26):

Those were the funds, okay? Well, then they pulled a group of investor returns. These investors invested in these same mutual funds that achieved 9%, but these investors over that same period of time achieved an average annualized 7% rate of return, roughly. So how do people have a underperformance by 2% per year when they invested in the exact same things that achieved a 9% rate of return? That can only be accredited to the people. It wasn’t the investments. It was people’s emotions. We are irrational and we’re emotional. We invest.

Jim Crider (00:48:00):

We talk to our neighbors at a barbecue or, whatever, our crazy uncle at Christmas. They say, “Hey, you should buy this thing, because it went up a bunch.” We hop in. It starts going down. We freak out. We sell. We do these things that lead to poor rates of return, and that’s where you see this behavior gap. That’s where, again, a diversified portfolio certainly can help, because being concentrated can lead to an even poor behavior gap there. Because if you’re in something that’s moving by 10%, 20%, 30% per year, you might freak out.

Jim Crider (00:48:31):

That’d be like being with a group of friends at a theme park, and everyone wants to get on the rollercoaster. You know you don’t really like roller coasters that much. Maybe you don’t like heights, but you feel like you should, because everyone else is having fun doing it. You get talked into it, and you’re like, “This’ll be a good time. You know what, everyone else loves the roller coasters. I’ll do it too.” You hop in. You put your seatbelt on. You got the little thing over your chest. You’re going up that big hill. It’s exciting at first. You got the butterflies in your stomach, and you’re getting pumped.

Jim Crider (00:48:58):

Then right when you get up top, you realize, “You know what, I don’t really like this,” and you hit that big drop, and you decide, “This isn’t for me.” You take off your seatbelt. You don’t want to do that. That’s a horrible idea. Yet, that’s how most people invest. We get pumped up, because we see our friends excited getting on top on the roller coaster. We hop in there with them. The rollercoaster starts going down. We decide to bail out, and just get destroyed. You have to consider your behavior when you’re investing. Again, diversification, that helps out with maybe not being on such a crazy roller coaster.

Clay Finck (00:49:27):

I 100% agree that a lot of investing is definitely behavior, and human psychology can work against us because you want to buy low, and sell high in investing obviously, but most people, like you mentioned, do the opposite, where they’ll buy high, and end up selling low, just buying into the hype. I really wanted to ask you, as someone plans for retirement, they need to decide how much money they need when they retire. And if they’re invested in Bitcoin, they see these past returns of call it 150% on average over the past 10 years or so.

Clay Finck (00:50:04):

That’s just the average per year. Some years, that’s way higher in that. Some years, it’s down drastically. In projecting how much you’ll have when you retire, you have to factor in your, call it, 10% Bitcoin allocation. How can someone project what their returns are if Bitcoin is part of their portfolio? Is that something you’re actively doing, or how do you determine how much someone saves, and if you can expand on that idea?

Jim Crider (00:50:30):

That’s a great question. Frankly, that’s a difficult thing to do because of the volatility. There’s a number of things that we’re doing to consider allocation and expectations, and track your portfolio in tandem with what the portfolio is there to do, which is to serve the purpose of you being able to do what’s important to do in life. So your money… I know earlier at the very beginning, you asked me what money is, and I gave you more of a theoretical and dry answer, but money… I say this all the time. Money is simply a tool and a resource to help you do what’s important to you in life.

Jim Crider (00:51:01):

That’s what your portfolio is. It’s a means of helping you do what’s important to you, so that’s what we’re tracking. Anyways, going back to it, there’s a few things we do. One, because of the age demographic I work with, we do not utilize, at this moment, a Monte Carlo simulation. Monte Carlo, for those who aren’t familiar with that term, Monte Carlo basically pulls your current financial data, and then you state what you want to have in the future if in 20 years you want to have X dollars for the rest of your life, and you expect to live for this long.

Jim Crider (00:51:32):

Then the Monte Carlo grabs a whole bunch, usually thousand or thousands of possible market performances and maybe different inflationary rates and says, “Hey, based off of all these possible market scenarios, your expected probability of success is X percent.” Just for instance, if you have a million dollars right now, and just to be real simple, in one year, you need a million dollars. You’re probably going to have a Monte Carlo that’s going to say, “Hey, you have a 99% chance of success.” Well, the longer out your time horizon, and the more volatile the investments themselves, and the more unknowns you have, the more wild the Monte Carlo will be.

Jim Crider (00:52:10):

Because of that, the average person I work with is going to be typically late 20s to late 30s. I would say average is about 33-year-old married couple, who’s just now getting in stride with their career. So a lot of families I work with right now, maybe they’re making between 80,000 to 200,000 of income, but expect to eventually be making 400,000 to 800,000 of income. Well, how on earth are you supposed to consider that with a Monte Carlo projection, or how do you consider the fact that right now you’re employed, but you’re also starting a business that there’s a very good chance that you’re going to be able to sell for $3 million when you’re 46?

Jim Crider (00:52:40):

How do you consider the fact that right now that Monte Carlos have been using a set 2.5% to 3% inflation, and now CPI is 8.5? I would argue that inflation’s far higher than 8.5%. How do we consider that? How do we consider an investment that has grown on a annualized basis of roughly 150%? So one, we don’t use Monte Carlos. What do we do? Well, one, we track on a very regular basis your net worth, but also, how is your net worth serving the purpose of your financial independence? What I mean by that is net worth is obviously just your balance sheet of assets versus liabilities equals net worth. That’s good to track.

Jim Crider (00:53:18):

However, that can be deceiving. If you have a net worth that is primarily concentrated in a corn farm, and you want to retire, but you don’t want to sell that asset. You want to leave it to your kids. It’s going to be difficult for you to actually understand how your net worth is serving your ability to retire. So we take it a step further, and we look at, I just call it, your financial independence number. What we do there, first off, is fixed income during financial independence. That’s going to be a few in rental properties or oil rights or a trust fund, or even if you said, if Clay, you said, “Hey, Jim, I want to “retire” at 45, but between 45 to 65, it would be amazing to be a barista at a local coffee shop.”

Jim Crider (00:53:59):

We would take a super conservative number there. We’d say, “Perfect. If that’s what retirement is for you, you’re still working a little bit, we’ll say you’ll earn X dollars. We’ll plug that in for fixed income in financial independence.” We take that number, and then we do a 4% distribution of investment assets plus cash. That’s going back to the Trinity study or the 4% safe withdrawal rate. We add those two together. Then we take your desired income during retirement or financial independence. Clay, for right now, let’s just say that you had $10,000 of fixed income through a rental property.

Jim Crider (00:54:30):

You had a million dollar portfolio, so a 4% distribution rate is $40,000. You have $50,000 of fixed income, plus a 4% distribution. You won $100,000 during retirement, so right now, you’re at a 50% financial independence number. That is something we track on a very regular basis is, “Are you trending to reaching financial independence?” Now, the good thing there is that your financial independence number is going to change over time. Your assets are going to change. Your fixed income amounts are going to change, and also, your amount that you need to live the life you want when you’re retired is going to change as well if we’re tracking this on a regular basis.

Jim Crider (00:55:09):

We’re going to be able to see in real time, “Are you trending in the direction of getting to 100% financial independence?” We don’t use Monte Carlos. Instead, we track on a very regular cadence of seeing, “Are you trending towards this financial independence number?” We put a heavy emphasis on behaviors we can control, so increasing your savings rate, increasing your earnings potential. We try to be… The best thing that you can do about your financial situation, especially during frothy times, is just be flexible.

Jim Crider (00:55:36):

We don’t count on Bitcoin performing 150% per year. That would be a horrible idea. I hope it happens. The way I’m invested says, “Boy, I’m betting big on this, I guess.” That is not something I’m riding on. Personally, I am highly, highly allocated to Bitcoin in that space, but that comes with my risk tolerance. Risk tolerance is how much risk can you stomach taking? Again, that goes back to the roller coaster. Are you okay with going down those big drops? If not, let’s put you on a different ride. That’s risk tolerance.

Jim Crider (00:56:03):

Also, I have the risk capacity to invest in aggressive assets. Risk capacity is actually your ability to take on a certain amount of risk, or even not take on a certain amount of risk. If you’re a newborn baby, you literally don’t have the capacity to be on a roller coaster. Maybe you’re the bravest newborn ever, and you want to ride the roller coaster, but you can’t. It’s too dangerous for you. In the same way, someone who needs a certain dollar amount during retirement, they don’t have the capacity to invest in something hyper aggressive or at least in a concentrated manner.

Jim Crider (00:56:34):

In the same way, vice versa, if… Clay, you’re young. If you wanted to save for retirement strictly through holding your value and your money via the U.S. dollar, you don’t have the capacity to do that. You would have to save more than 100% of your current income in order to be eventually financially independent, just because the deflationary characteristic of the dollar. You don’t have the capacity to do that either. We look at risk tolerance, risk capacity. How do I do that? I have that capacity because of my earnings rate, my very high savings rate, and then just my personal future position.

Jim Crider (00:57:07):

That’s how another way we monitor those conversations, or have those conversations with families that we work with.

Clay Finck (00:57:13):

I think something that’s also important is that you’re building a business, and that business has value. You’re earning income from that business, but the equity value of that as you’re income grows, the equity value of that business is going to grow as well. So come retirement time, if you decide to retire, go off to the beach or mountains like you like doing, whether Bitcoin performs or not is almost irrelevant, because that business will likely be able to provide whatever you need should you decide to sell it, or just delegate all the tasks to other people.

Jim Crider (00:57:48):

Exactly. That would go into risk capacity. I have that ability to take that risk, one, because I’m very… I have built my personal and my family’s, our personal financial plan based off me not having to work by the time I’m 45. I’m 32, 13 years to not having to work, and continue living the lifestyle that we want. Now, worst case scenario… For those listening, that was with air quotes. Worst case scenario, I can’t retire at 45, boohoo. I have a lot of flexibility in my plan. I’m okay with that risk or volatility.

Jim Crider (00:58:19):

Something else I want to mention as well is to consider sequence of return risk. That is really, really important, especially with people as you approach retirement or needing the assets from an investment. I take a lot of heat from different podcasts I’ve been on, or Twitter spaces from Bitcoin maximalists. I think it makes sense and is prudent to have a U.S. dollar emergency fund. I think that’s smart. I’ve taken a lot of heat for saying that from Bitcoin maximalists. They think that that’s foolish, and you should have everything in Bitcoin.

Jim Crider (00:58:47):

Even if Bitcoin goes up by 200% per year, which it did in the past, but who knows if that’s going to continue, what if you have poor sequence of returns? Bitcoin drops by 50%. That’s really normal. What if that coincides with you needing some liquidity to you need a new car, whatever. Well, you’re hosed. Same thing if you have too high concentration in a single position, and that coincides with you needing to access those dollars with that money, you have to have a means of being able to stay afloat until that position has recovered.

Jim Crider (00:59:18):

That’s why people who are retired have to look at portfolio sizing and positioning, so you can absorb these volatilities that goes with the 4% safe withdrawal rate, the Trinity study, the portfolio they used. Again, that’s where flexibility and concentration and diversification comes in to serve all of these things. Again, the sequence of return risk is a very real thing that you, again, I think a lot of Bitcoin maximalists maybe who are listening to this, sometimes downplay, because you’re looking…

Jim Crider (00:59:43):

I don’t want to say it is important. That’s one thing I like about Bitcoin. People is they tend to have a long-time horizon, which is fantastic. Most people don’t have a long enough time horizon, but I would argue that maybe you want to also keep a long-term time horizon for 99% of it, but you want to consider tomorrow just in case.

Clay Finck (01:00:01):

I also think a USD emergency fund definitely makes sense, because although the dollar does go down in value over long time periods, there are some periods where it can increase in value very rapidly. Call it the 2008 financial recession, when you looked at the price of the dollar relative to anything, the dollar was skyrocketing in value. You don’t want to be in a position where you have to be forced to sell at inopportune times. There’s one more question I wanted to ask you in relation to financial planners.

Clay Finck (01:00:32):

It seems like there’s still just so many people who haven’t really come around to the idea of Bitcoin at all. You’re in talks with many financial planners. Is it the difficulty of the subject around Bitcoin, or is it just something that’s just so foreign to them, or have they already made up their mind? What’s your thoughts on why they aren’t open or haven’t come around to this idea?

Jim Crider (01:00:56):

I think it’s a few things. One of them is… I’m what’s called a certified financial planner or a CFP. CFPs generally are trained in a very conservative manner, so maybe that has to do with part of it is CFPs, we are brought up in a way that we look at things in a conservative way. We see this asset that sounds like it’s too good to be true. Therefore, we throw it out. We throw out the baby with the bath water. That’s it. That’s possibly one of the reasons. Two, financial planners or at least the good ones, in my opinion, are busy trying to constantly learn about tons of new things.

Jim Crider (01:01:30):

A lot of people on the outside industry, they think what I do is investment management. Investments is probably the smallest and most commoditized part of my job, actually, even though that’s what I spend a lot of time talking about on podcasts. That’s actually relatively commoditized. So me and my CFP cohorts, we’re constantly staying up to date on tax legislation, and estate planning, and insurance, and all these parts of your financial life, so reading up on Bitcoin is not necessarily top of mind for most CFPs. They’re trying to stay on top of a ton of other things as well.

Jim Crider (01:02:01):

Maybe… This is why I found a lot of conversations I’ve had. The last thing that these financial planners read about Bitcoin was maybe an article in 2017 saying that by 2022 or whatever, Bitcoin’s going to consume 100% of the world’s energy. There was literally… That’s an article that I was quoted a few months ago from a colleague of mine. She was saying like, “Oh yeah, well I read an article that sometime in the distant future,” I was like, “Hey, actually, that article said that right now, we’re using all the energy.”

Jim Crider (01:02:25):

I think that’s part of it. I’ll give them the benefit of the doubt. It’s saying that they are busy, and they’re trying to learn so many things, so they are wildly out of date on that. Also, I’d also… I would lump in there as well diversification. Again, we’re trained to diversify. We’re trained to make sure that people more so preserve their wealth rather than grow their wealth. That’s what most financial planners work with. Most financial planners are working with people who are about to retire or just retired.

Jim Crider (01:02:49):

They’re trying to preserve wealth, not grow it, so they’re incentivized to look at more diversified assets. So even if you throw in Bitcoin, it’s usually in the same conversation as blockchain or crypto. That’s why you have people in Bitcoin or in a traditional finance who integrate Bitcoin a lot of times throw in Ethereum and these other alt coins as well, because they’re looking at it as a diversified stance, and also looking at through not diving into Bitcoin as much as you need to to understand what Bitcoin actually is versus what these other things are.

Clay Finck (01:03:24):

Jim, thank you so much for coming onto the podcast. This was one of my favorite conversations to date. I really appreciate you coming onto the show. We’ll have to have you back on yet again sometime. This is your second appearance on the podcast. Before I let you go, where can the audience go to connect with you.

Jim Crider (01:03:42):

Clay, thanks again for having me on. It was fun hanging out in Miami. I enjoyed it. If anyone wants to talk, you can go to my website. It’s Intentional Living FP, as in financial planning, intentionallivingfp.com. On there, there’s a link to my calendar. You can put 15 minutes on there if you want. If you have just a one-off question about Bitcoin or what is my 401k, or if you want to talk about working together, put 15 minutes on my calendar. I’d love to answer any questions you might have. You can follow me on Twitter. It’s JimCriderTX as in Texas. Happy to talk with you on there as well.

Clay Finck (01:04:14):

Awesome, Jim. Thank you. All right. I hope you enjoyed today’s episode. Please go ahead and follow us on your favorite podcast app, so you can get these episodes delivered automatically. If you’ve been enjoying the podcast, we would really appreciate it if you left us a rating or review on the podcast app you’re on. This will really help us in the search algorithm so others can discover the show as well. If you haven’t already done so, be sure to check out our website, theinvestorspodcast.com.

Clay Finck (01:04:41):

There, you’ll find all of our episodes, some educational resources as well as our TIP finance tool that Robert and I use to manage our own stock portfolios. With that, we’ll see you again next time.

Outro (01:04:53):

Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday, we teach you about Bitcoin, and every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by the Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.