BitSwap is the hottest new way to trade tokens. Crawling all the top decentralized exchanges, BitSwap gets you the very best price and value for your trades. BitSwap is changing the game. Try it now at bitswapdex.io. Hey, guys! I'm joined, a very special treat today, with Graham Stephan, one of the best
financial YouTubers out there. You know, he dabbled a little bit in cryptocurrency, made some Bitcoin videos,
but he does a phenomenal job. You guys should make sure
to subscribe to his channel. We'll have it down in the comments. – Graham, how are you doing today?
– Good. Thank you so much for coming by. – Yeah.
– I appreciate it. All the way to Las Vegas. – All the way to Las Vegas for this video.
– Yeah. Absolutely, so, you know, we're here at
your house, absolutely beautiful house. – Thank you.
– Love everything going on out here. But, you know, for our audience, we've had a lot of people
that have gotten rich this year. I mean, that's just a fact of the matter. You've seen what's happening with
Bitcoin and cryptocurrency. And you really specialize in more
traditional investments, real estate, that's kind of your forte. I want to know from you, like, what– to someone
who, let's just say, has gotten rich over six months, what do you think the best way for them to kind of
hedge that money on the traditional market is? In terms of what I would do, I would probably– I would feel very uncomfortable myself keeping more
than like 20% of my net worth in cryptocurrency unless– I know you're the exception, – and you would advocate, you know, go all in.
I believe, at this point, to diversify. It depends on how much money you've made. I think if you're like at $100K, and that's equivalent to maybe
a year's worth of salary, then it's not as bad as if it's, you know, $1 million, and you're making $50K a year, and maybe then it's smarter
to play it a little more safe. My personal recommendation or what
I would do is probably sell off at least half and invest somewhere between
index funds or real estate, whatever you have time to do
and feel comfortable with. Just I would take a safer approach,
spread your money around. That way, just in case something
were to happen to it, you're at least going to have money aside
and something that shouldn't be as volatile. Yeah. But Bitcoin has piqued
your interest a little bit. You've been talking about it on your channel.
What are kind of your general thoughts? What was the moment where you said, "You know what,
I think maybe this is a good thing to either talk about or invest in"? I think when I started seeing
a lot of bigger corporations put some of their reserves in Bitcoin, that was the point where I thought to myself,
it's worth it to learn more about what it is. And, for me, I've always been– – I don't want to say I've been dismissive of it,
– Yeah. but I'm open to the idea of looking into
something that I've been skeptical about and changing an opinion on it
based on new research.
And so the more I looked into it, this was earlier this year, really starting
since like November, December, the more I looked into it,
the more I began to like it. And the more I began to think, "Well,
I'd rather take the 1% risk and and be in it than not take 1% of my net worth and be out of it." So I got to 1%. That 1% has now grown to about almost 2% now. And it's at a point now where I've tr–
I'm starting to treat it like any other investment. So for every $100,000 I'll put in the stock market, I'll take maybe $,1000 to $2,000 of that
and put it into Bitcoin or Ethereum. And so my strategy right now is basically just
to dollar-cost average over the long term. And I'm going to keep it probably
under 5% of my net worth. Right now, it's at 2%. I mean,
if it goes 2%, 3%, 4%, that doesn't matter. It's really for me in amounts that
if that were to go to zero tomorrow, it would be disappointing,
but I wouldn't be devastated.
So, that is how I'm treating it, at least right now. And I think that's a very important point because
it's something that we always tell people, and we understand people get overextended. I'm very overextended in terms of percentage
of my overall wealth into cryptocurrency, but don't invest what you can't afford to lose. You don't want some of that to be
such a gut punch when you lose it that it makes you question your life, or, you know, we saw what happened with the guy
that was doing, you know, derivatives trading – on Robinhood that took his life.
– Yeah. Very, very sad story. You don't want to get to that point,
so I do think that's really good. I would say, you know, I hope that your percentage
grows to like 10% of your portfolio – as the rise of Bitcoin goes way up.
– Yeah. How would you handle that if Bitcoin does go–? A lot of us think Bitcoin is going
to $300,000 this year.
There's a lot of signs that do point to that. Are you going to– If it gets above let's say 5%, are you just going to
start pulling it out or you're going to let it grow? No, I would let it grow. At this point, – it's all or nothing in terms of that,
– Yeah. so I'm not planning to do anything with it.
Unless I needed the money. – If there's something that came up
– Right. – where I'm like, "Crap. I need money."
– Yeah. Bitcoin. I would consider that, but otherwise, I'm just planning
to hold this for like 50 years. – Okay.
– If it hits zero, fine. If it goes up a lot, great. – But, yeah, if it grows to more,
– Yeah. – I would 99% not take any money off the table.
– Yeah. So, like, if you would need to buy a Logan Paul NFT,
that's what you would do, pull your money out.
– I would sell my Ethereum for it. Yeah.
– Oooh! Okay, okay, okay. So I want to go back to our original question, what the suggestion would be
to people that you want to– that would want to hedge some of their, you
know, newfound wealth into other areas. What is the area of investing, in traditional investing,
you think has the lowest barrier to entry for understanding to just jump in and start, – you know, kind of making money with?
– Yeah. The lowest barrier to entry – wouldn't necessarily be the best.
– Gotcha. Lowest barrier to entry I would say is an index fund. I think the obvious go-to answer is just
take $6,000 and open up a Roth IRA, go and invest in a broad index fund, VTSAX. Just the total stock market index fund,
that's the lowest barrier to entry. In 20 minutes, you can set up a Roth IRA, throw your money in an index fund, and be completely done
and never look at it again.
That would be the lowest barrier to entry. I think the best option though,
depending on your situation, use some of that money,
put a down payment on a house, like a duplex or triplex, move in one of the units,
rent out the others, pay for your cost of the mortgage
and property taxes, try to live for free,
you're almost very close to it, and then just live there as long as you can. Let the property appreciate. You're diversifying your net worth a little bit
and you get a place to live. Yeah. What are you looking for
in an investment like that? Like, like, what separates a good investment
and like a duplex from a bad investment? – Good investment, it makes money.
– Bad investment loses money.
– I like that. That's really what it comes down to. I would say,
from a lot of the properties that are out there, – like 98% of it is just trash. Like,
– Yeah. you can't just go on Zillow and be,
"I'll buy this investment property right there!" Chances are it's a bad investment.
It takes a long time to try
to find like the right deal. That's been one of the reasons why I have not
been buying real estate as an investment. It just– it takes so much time, and that time gets taken away
from everything else that I'm doing. So, if you have the time, by all means, do it. That's what I did for the first
like eight years of my career, is spent nonstop, every day,
looking for good deals, and after like six months, one deal would come up. It's like, "Yeah, that's
the one that I can actually make money on. There's enough upside. It's under market value.
I can fix it up. I can add value to it." – Most is just crap.
– Yeah. Yeah, I think that's the difficult thing,
is finding that right spot.
And a lot of novice people that might just go,
you know, grab the first thing they see, and that's not always going to be where
you're going to want to put your money. – Now, I did an episode on the Iced Coffee Hour.
– Yeah. Your podcast or your show
and I really enjoyed it. – We had a lot of–
– Had fun. – Yeah, it was great. Yeah.
– Yeah. I loved that. Yeah. And a statement you made to me after was
"Wow, this was easy." I did all the talking.
And so– – But in–
– It's true. Yeah. – But in– I get that a lot.
– Yeah. My wife says the same thing. But in all seriousness though, you pressed me
on a couple issues, you know, revolving like, did I think NFTs were in a bubble? Or did I think that, you know,
crypto in general is a bubble? I want to put that question back on you. Do you think that real estate is in a bubble? And do you also think that the stock
market right now is in a bubble? – What do you kind of see happening with
those things in the next few years?
– I don't see any of those in a bubble. I think they're both fueled right now
by really low interest rates. Real estate is unique because real estate
is not just dependent on one factor. It's a whole bunch of different
factors that make it up.
So let's say one aspect of that
would be supply and demand, one would be the local job market,
the other might be inflation, and the other might be interest rate. So you have four different aspects
that play into that building. And then also how much money does it make? And is that return comparable to other assets
for the amount of risk that you take? And so there's so much for real estate. The one thing I could see happening to
real estate is that if interest rates go up, real estate becomes a little bit more expensive. Because of that, maybe if people could
afford less or prices come down, but it almost ends up being the same price for you because either you pay a low
interest rate and a higher price, or you pay a lower price
and a higher interest rate. So it's a bit of a catch-22. Usually it's going to add up to about the same, but I say the local job market and economy is
so much more important than interest rates. In real estate, I think there's still some great
opportunities out there in certain cities.
I think probably a lot of places
in Texas, Nashville and Arizona, I think are fantastic for investments. It's competitive, but if you get a good deal, I'm all for it. Stocks? I think some stocks are a little bit lofty. I think– I'm going to get hate on this one,
but Tesla, I think, is quite lofty. – I think– Yeah.
– It was until they bought Bitcoin. Go ahead. Some tech stocks, I think, are very lofty. Green energy? Lofty. I don't think they won't end up
at that valuation in the future.
– I think they're trading ahead of themselves.
– Yeah. But I do think there are aspects of the
stock market that are undervalued. I think oil could be one of those things
that I still think has a way to go and hasn't fully recovered, so I think it really depends on the individual stock. And I wouldn't say the entire market
as a whole is in a bubble. What are your feelings when I say stonks meme? I like it. – You like the stonks meme?
– Yeah. – I love the stonks meme?
– You're a big fan of the stonks? – It's hard for me to hear the word stocks
– Yeah. – and not hear stonks.
– Stonks. Stonks! Sometimes, I catch myself
accidentally saying stonks, but I just keep it in there because it's like
someone's going to comment that. – Exactly.
– It helps algorithm. – So I'm like, yeah, going for it.
– It's like misspelling a word.
– I like it. Or take HODL instead of hold.
– Yeah. TJ is good at that. – You better "HODL" that investment.
– Or HODL. – HODL. HODL it.
– That's, you know. – It's a big discussion in crypto which one is it.
– Yeah. – Is it "HODL" or HODL?
– Yeah. I'm a HODLer. – That's what I am.
– I think it's "HODL" – because you would hold,
– Yeah. but then it's "HODL". – Yeah.
– So. Why would things moving the letters
changes the phonetics of the word? – So, I don't know. So, I mean, it's–
– But that's not the intention of the word. – It's tomato "tomato".
– The intention of the word was hold. – Yeah. Wow. He's really going at me on this.
– So I think you have to keep the inte– – You have to keep the integrity of the word intact.
– Wow! Graham's strong opinions, the strongest opinions yet today on
HODL verus hold. I really love that. I want to ask you about– we also talked on your show about the M1 money
supply and the, you know, parabolic movement, the helicopter money, like how safe do you feel putting investments
that are ultimately equated to US dollars in this economy that we might be
facing with hyperinflation? Do you think that's even a concern? Or, in your mind, like, is that just not
something that's going to happen? Yeah, I don't think we're going to see hyperinflation.
Where we are seeing– if you want to argue inflation,
I'd say you see inflation in asset prices. I don't think the inflation has translated
to goods and services. Like, you're not going to the grocery store
right now and paying $10 for milk. You're not going and buying a car right now
and that car went from $20,000 to $50,000. You are seeing that in the stock market. So that is the biggest concern for me. But a lot of the population right now is not
spending their money on goods and services, so you could argue that we might see inflation
when the economy fully reopens and we start getting back to normal,
but then you also have the argument that maybe people are going to be
so traumatized by the situation that they're not going to spend the same
as they were two years ago.
And there could be a brand new mindset like
we came out of the Great Depression in the 20's, and like our grandparents were very much like,
"No. We're not going to spend money. We're going to be very frugal," – because they remember that.
– Yeah. And so I think a lot of other people
are going to feel the same way, so we might not see inflation like that. We might see inflation– well, we are seeing,
I would call it, inflation in asset prices. – Is it justified? Maybe.
– Yeah. 'Cause there's more money going into circulation
and that is going to end up somewhere. That's my argument. Yeah. And that's an interesting thought
I haven't really thought about, about the mindset coming out, but I mean, I would think a lot of people are going
to come out of this mindset with "Government got me.
They're just going to print more money." Maybe, but I also think that– Now, I've started to notice
that saving money is cool. I've never seen it before. Like 10 years ago,
saving money was not necessarily cool. – Yeah.
– I feel like now it's become trendy almost to be like, "I'm good with personal finance." "I'm good with credit cards." so like– – "I'm growing my net worth." I mean–
– Yeah. It's because your channel. That's why. – Everybody loves Graham's channel.
– I think my channel coincided with a movement that was already going in that direction
regardless of what I would talk about. And I think the fact that my channel even did well says something that people want to move
in that direction of being financially literate. So I think I happen to be into something
that was already going in that direction, but I just feel like so many people
after this are going to be like, "Look at me.
I save 20% of my
income now. That's cool." So I don't think we're going to have the same
level of spending like we did before. – I would hope not.
– Yeah. So that would subdue inflation,
but, honestly, this is all just speculation. – Yeah.
– And it could very well go that the economy reopens and people like,
"I've been locked up for a year and a half now. I'm ready to go to restaurants
and like spend the money," but then you could also say,
"Well, where are they getting that money?" If we still have high unemployment,
where is that coming from? So we are getting very much the richer richer, the poor are poorer.
And where are the rich spending their money?
Stock market, real estate, assets. Yeah, and I would think that, you know, when it– what I've said before, like kind of my prediction
for the future, the next couple of years, is that next year is when we get the big hit. This whole entire year is still going to continue to–
I think we are in a giant bubble with the stock market. I think we are in a giant bubble
and basically our entire economy due to the rampant money printing. – You know, we got a lot of memes in crypto about it.
– So where do you think the stock market should drop to? Where do you think it's worth right now? Well, God forbid I give an answer
because I don't know. – Okay.
– You know, I'll just be honest about that. You know, when it comes to the stonks, I look at it like a meme.
I would rather invest in cryptocurrency where, you know, we can get, you know, 200%
or 300% in a couple months sometimes than something where a 10% gain
a year is like a big deal. And I know the tech stocks field have
had much better returns than that, but for me, investing in more cryptocurrency,
I get a better return. We are moving– we do want to talk– and this is something we're going to be talking
more on the channel in the future is I'm going to go on that journey. I'm going to go on that journey and start, you know,
investing in the stock market a little bit more – and then maybe I could have an understanding,
– Yeah. but I can't just throw out arbitrary
numbers on stuff that I don't know.
All I know is everything screams
the economy is not doing great and it should be going down
and yet they're going up. Depends on the industry. Earnings have been crazy
for some online companies. Absolutely booming. I think, just like we– It's now becoming impossible to say
the economy is not doing well right now because certain industries are doing
the best they've ever been now. – Such as? Amazon?
– Almost any online company right now – including YouTube as I'm sure you've seen.
– Yeah. – BitBoy Crypto is doing great.
– Youtube– yeah.
YouTube is really doing the best it's ever done. And I can say that from every creator
I've ever spoken to over the last year is doing better during this time
than they were a year ago. – Yeah.
– And that's because more people are home, they're watching YouTube and that's become
their source of entertainment for free. And a lot of the online companies, Etsy is another
fantastic example that just blasted earnings and they're making a lot of money.
Google is another one just doing fantastically
well right now with everything going online. And some could also say these changes
are going to be permanent. A lot of those changes, – people don't break those habits very easily.
– Yeah. Do you think– – We've got to kind of wrap it up here in a few minutes,
– Yeah. but do you think that that's a good thing
when you have the largest companies out there that are doing well and a lot of the
smaller ones are not doing well? Like, what does that say about the state
of the economy for small businesses? – Supply and demand.
I really believe that
– Yeah. – this just caused everything to flip at once.
– Yeah. – It's better than 10 years, I guess.
– Just like– Just like I feel like saving money was
going in that direction of being cool, this just like put it on forward,
like fast forward, – like really quickly just overnight.
– Yeah. And I think, normally, in a normal situation, a lot of these small, like, brick-and-mortar
businesses would have had time to adjust and had seen that maybe sales are declining,
they're losing business to online, and they would have had a time to adjust. Instead, there's like just cry through shut down. Whoever was already positioned online
gets that first mover advantage. – They get all the business.
– Yeah. I just think, like, I don't go to malls anymore. – Who does that? Yeah.
– That does– Exactly.
But that's just the nature of it. – Just we found a better way to do something
– Yeah. that's now cheaper and people are going to move in that direction. – So it makes sense.
– Right. And unfortunately, I think a lot of
people are not ready for that. – No one could have predicted this.
– No. – And they were caught in a downturn on this.
– Yeah. – I think the Simpsons.
– The Simpsons did it first. – Certainly, they predicted it.
– They of course did. Okay, last question. We've talked about Bitcoin a little bit.
We've talked about traditional investments. Are there any altcoins, anything outside of Bitcoin,
that you're interested in and why? Ethereum. That's been the only– so I did a 60/40 split
between Bitcoin and Ethereum. And I try– if I invest a little bit in Bitcoin,
I try to do the same.
I try to buy like, "Let me get one extra Ethereum." – That's it. That's it right now.
– Yeah. – So not Cardano?
– No. – Wow.
– Even though I've been– – Listen. I don't want–
– You've been preppered, right? – They've been preppering you.
– Yeah. It was at 80¢, they were saying,
"Just buy. Just buy Cardano. Buy Cardano." And I didn't, but I remember a lot of people told me
to buy all these coins back in like 2017. Glad I didn't listen to that. There was one though.
What do you think of Nano? – Nano! That's funny.
– Yeah. A company I know actually
just started accepting Nano.
But Nano is one of these projects– and on your show, we talked about the difference
between investment and use case and how like for instance Brave Browser
such incredible use cases, doing so well, and it's not one of the top cryptocurrencies.
It's in the top 80, but it's not in the top 10. And it's the most used product, in my opinion. Nano is another one of those. It's the fastest out there. It's got such a good app. It does so well, and yet the investment, the speculation side of it,
has just never really lined up with how well it does. So that's kind of how I see.
I've always liked Nano. – I've been a big fan of Nano.
– Yeah. I was actually heavily invested – and got totally wrecked in 2018.
– So did I. – So, yeah.
– So did I. So Nano was the only one. So when I say I bought Bitcoin at $17K, – I sold it like $17.5K.
– Yeah. I put most of that into Nano at $1.50.
– And I rode it to $37.
– Yeah. And I think it was supposed to be listed
on what was the exchange? – It was some exchange where one that
– Yeah. that the coin of the month or something
like that. It's supposed to be listed. And then I was an idiot. I did all the analysis. I'm like,
"When it gets listed, it's supposed to go to $45, but I'm going to be smart and sell it at $40." – It hit $37.
– Ooh. And I was up a lot of money on that. – And it just went down.
– Yeah. And I'm like, "It's going to go back up." Kept going down, kept going down,
kept going down. So. – Well, that's– we've got that in common.
– But I still– – Both totally wrecked by Nano.
– But I still kept a good chunk of it. And I just left it and remember
when it was down at like $2? I'm like, "Should I sell it?" I'm like,
"What am I going to use the money for? – I may as well leave it in there.
– Right. That's it. So I'm happy to see it now at like $5. – I'm just going to hold that at this point.
– You have to at this point. Nostalgia! – I'm not listening. I'm not going to sell it,
– Yeah. but if it goes to $40, I'm selling it like $37. – Geez.
– You guys know. – Bake that in. Sell at $39.
– Yeah. – You guys heard it here first.
– Yeah. But you know what? – That was a great lesson.
– Yeah. And there have been very few things
that I have lost money at, and that was one of those
experiences that really like, – "You know what? There are winners and losers."
– Yeah. And that was the lesson that I needed to learn, so, – so be it. Yeah.
– Yeah, those lessons can be very valuable. They pay off down the road with some
of your investment decisions. – Back when it was RaiBlocks. Remember that?
– RaiBlocks! – RaiBlocks.
That's what it's called back then.
– That's right. The rebrand was going to be the big–
when it went with a rebrand to Nano and then of course they had the
RaiBlocks hack that was on BitGrail. – That's what led to a lot of the sell-offs and stuff like that, so.
– I remember. I remember that. – Yeah. Uh-huh?
– I didn't get anything stolen, but, geez. – It was wild. Yeah.
– It was tough. – I mean, the lawsuit went on for years, but–
– Yeah. – Graham, thank you so much for
coming on the show today.
– Thank you. – Thanks for having me at your house.
It's been absolutely phenomenal.
– You're welcome. Everybody, make sure you guys go down
and subscribe to Graham's channel. He says that he wants to see so many
subscribers come from this video, right? Yeah. You know what? So far, I've never
gotten a good like crossover audience, but if your audience is up for the task, my information is down below in the description
where you can also smash the like button. – Smash that like button while you're at it.
– Yeah. Smash the like button if you like seeing more of
these collaborations with people like Graham.
– And the notification bell.
– And the notification bell. And make sure you got your notifications turned on
on YouTube. That's another big thing. But, guys, you guys heard it here first, the BitSquad has got to be the community
to give him that pump. You guys make sure to go pump his channel. – You guys hit that subscribe button to him.
– I hope we get to 3 million after this. All we need is, I think it's like 60,000– no, 50,000. – Oh, yeah. Let's get there.
– 50,000 of your viewers go to my channel, – we could hit 3 mil.
– That's easy. That's less than 10%. You guys go make it happen. – That would be very incredible. Thank you.
– So, Graham, thanks for coming on. Been awesome. Guys, drop comments down below. Let me know
who you want to see on the channel next. That's all I got. Be blessed. BitBoy out..