TILP #10: Financial Planner answers questions that the average person might have about money

00:01.36

ilm

All right? Cody Morgan thanks for thanks for joining me today on the show. Great! Thanks for being here hey I guess before we get started. Um, who's Cody Morgan why are you why are you here

00:04.20

Cody Morgan

Hey how's it going today. Jim.

00:15.93

Cody Morgan

Ah, so I am Cody Morgan and I grew up in a small farm town in Minnesota and then I joined the army then I transferred to the air force to cause I didn't know what else I wanted to do with my life and now I'm moving back to Minnesota and yeah and I just went through life. Not really understanding money a whole lot or how it worked and I always thought like there'd always be more and then it realized with the family that I got to start pre-planning and so I hired somebody smarter than myself and I met Jim and through my wife and you've been awesome. You've helped us out a ton. And we really appreciate it.

00:52.53

ilm

So why? Ah why I guess why? Why are you here on the show and what do you hope to talk about.

00:58.45

Cody Morgan

Ah, so I'm here this all started through a conversation with us and probably all of our little meetings about I ask a lot of dumb financial questions because I don't understand finance at all. Um, and so as we stated before and talked about was. The last time I know about finance was Alan Greenspan and that money wasn't backed by gold or anything is backed by faith and that was in tenth grade in high school and ever since then I just kind of dug my head in the sand and was like okay I'll always just make more money and now that I get older I realize that I would like to retire someday. And um, but I didn't understand money and when I started talking to you through meetings and things and through our text messages back and forth. We're like I'm like there's a lot more I don't know but there's a lot of dumb questions that i. I don't know and I need to find someone to ask and so that's where you get a ton of text message from me about this or that or whatever I find on Google that data ask you about.

01:50.11

ilm

You know that's that's actually 1 thing I like is ah the the dumb questions you ask I think a lot of people have dumb questions but they're just too afraid to ask them and I like the people who are willing to ask ah 1 because that shows that you're willing to set aside ego for the sake of actually learning. Versus having this facade of pretending you know something but then going along the rest of your life actually not knowing that you're prioritizing the appearance of knowing over actual knowledge versus like actually knowing and who cares about the appearance. So I appreciate that and I'm sure ah like I used to always ask dumb questions in class. And there were questions that like I felt stupid asking but I was pretty confident. A lot of other people in the classroom had those same questions and sure enough most of time after class people had pulled me aside and like man I'm glad you asked about that because I was wondering the same thing so that's ah these questions you asked today. Um, yeah I'm sure some of them might seem goofy and they're probably things like. I don't know maybe you feel like you should know. But ah, most people probably don't know them either. So I'm excited I would I I anticipate a hodge podge of questions I have no clue where this is really going to go today. So this will be fun. Well.

02:58.33

Cody Morgan

Oh I'll get ready because I came up with a couple more the other day too for you. So this is gonna be like a hot round of just I'm expecting a lot of ums and us just starting to throw office quotes back and forth at each other for a while.

03:12.11

ilm

Let's do it so you had to give ah what we're gonna do today is basically Cody's just going to ask questions that he has they could be things that like for their personal money or from like I saw this on a movie or I heard this once can you actually explain this to me so this can be related to. Anything ask away. So ah here we go.

03:31.10

Cody Morgan

All right? Well then I have a choice for you First do you want to start out with bitcoin questions or you want to start with just general finance questions all right? Yeah, your favorite right? Let's do this all right? cool.

03:39.13

ilm

I'll start off with bitcoin get some momentum going.

03:44.19

Cody Morgan

So all right? So we talked a lot about bitcoin and stuff in your previous episodes and I just got done with episode 7 so if this is an episode 8 I apologize if it's a repeat of the question or not. But um, bitcoin is a non central currency and from my understanding of bitcoin until I started talking to you was. It's just this made up coin that someone made up. And I first heard about this in 2015 and I was working with some tech guru guy at a base and I said well I'm going to create my own coin then it's going to be called codycoin and people better start using it right? and I didn't understand blockchain all this other stuff which your episodes help clear up a little bit as much as my simple to mind can understand. But um, if it's a non-central currency and this something I don't understand we can get into it a little bit more is how come when I have my on-river I own like point zero zero zero zero seven of a bitcoin but it goes up and down all the time kind of like a stock market trend.

04:36.94

ilm

Ah, ah yeah, the the valuation of something is not dictated. Hopefully not dictated based off of a centralized Authority's ability to monitor or Maneuver a price.

04:38.83

Cody Morgan

But if it's not central. Why does it keep going up and down all the time.

04:54.39

ilm

That's actually where free and open markets. Ah how they should work now a yeah having a centralized control over something is something. We're sort of used to but really that is not free and open markets. So the yeah, we've we've grown accustomed to. Crony capitalism which is hilarious when people you know you have people who come in and say like oh man, we need to move to more of a marxist or whatever type of economy and government. Um because ah capitalism clearly doesn't work and what they're referring to is not actual capitalism. What they're referring to is this distortion through hijacking um that actually draws us away from capitalism and actually towards the towards marxism and through ah and towards centralization. So you have a central bank you have ah people who benefit. From ah ah, financial or monetary or fiscal manipulations. Um more so than others. So centralization itself should not in a pure economy should not nationally impact prices. So if bitcoin is decentralized. Why is there movement of purchasing power there that there's there's there's a few ways to look at this and one I'll give you a better answer in a second I promise. Ah but 1 way I look at this is bitcoin itself. We think to like what bitcoin is the technology behind it.

06:28.48

ilm

The issuance of blocks the mining the code all those things they're Stable. It's not a volatile technology. Um, what's volatile is people and people's understanding and adoption of bitcoin and that's why you see volatility in the price. It's not because bitcoin itself is changing. It's because you have more people who are learning about it. You have people who are speculating around it and you have people who are buying and selling So like yeah if we had I mean we could have ah a room of 50 people. Um, all bargering for a few items. And we're we're closed off in this little room. No one knows about it. So There's not a central authority to Govern Howard're trading that can still go up and down in price. Especially for if we're On. Let's say we're an Island um on our own for a decade and as we catch fish and collect rainwater and stuff like. Yeah, the values of those are going to change like if we ah maybe it's really dry for a long time and there's finally a little bit of rain. Um, when we're able to collect some dew then you better that water's gonna be a lot more Valuable. You're going to demand more fish for that water. But if you go through a monsoon. You're able to collect a lot of water. Well then Ah, yeah, it's ah. Less valuable compared to other assets and that's that's despite not having a centralized authority where I could get dangerous though is actually if you brought in a centralized authority and said no ah water always has to be pegged to this amount of fish. But why like at that point you are messing up.

08:06.22

ilm

The communication method of supply and demand so Centralized. Ah authorities can actually mess up those those communication methods. That's what again, what what money is and like you know how we value things is is to communicate ah value across space and time. So ah. Yeah, the the price of things communicates the value that we're placing on certain items or at least someone's placed on a certain item. This is a super roundabout answer. So Why if bitcoin is not owned by or controlled by a centralized authority is because again, ah the adoption rate the Purchasing. Of something ah at different levels. So if you have somebody who wants to come in and buy a whole bunch of bitcoin. Um, that could you know then you, you're you're throwing a new ah sound or voice into the supply Demand Communication vector.

09:00.56

Cody Morgan

Yeah, oh yeah, no, but it makes sense right? because like that's where we were talking about work the other day and I'm like well it's tied to the us dollar and it's going up and down but it's not tied to the us dollar. It's just that's how we perceive the value of it at least in this country. Um, but it's actually helped a lot in episode 7 with the guy that you had.

09:01.45

ilm

That was a terribly long answer I'm sorry.

09:19.68

Cody Morgan

Talking about like the little glass beads and you know then you're talking about Roman money and how like the value of it went down because of precious metals in it were less overall and you know, um, so no, that actually helped a lot. But now here's my other question with that right? So El Salvador just adopted it to ah two years ago now bitcoin is one of their currencies. Let's say heaven forbid but that country just goes bankrupt everything like that right? Well that caused the bitcoin value to go down.

09:47.11

ilm

Um, it it could because they own a decent amount of bitcoin. So if they had to immediately sell a whole bunch. Then yeah again, you have supply and demand and if a whole bunch of new supply hits the market. Um, you're going to that could drain the.

09:54.55

Cody Morgan

Nope.

10:04.35

ilm

Ah, exchange rate of that as you find more people who are willing to buy at the demand now eventually it will reach an equilibrium as you have a number of buyers who want to come in and stabilize the the purchasing price. Yeah, technically that that could impact the price same thing if you had I mean Satoshi Nakamoto has a ton of bitcoin on a wall that hasn't moved and. But 15 years So if he came in and sold all his bitcoin moved off there. Yeah I would drop bitcoin's pursing power probably relatively significantly over a short period of time again because you're messing with the supply demand communication method.

10:38.29

Cody Morgan

So be the same thing if that dude in England who's like missing like a thousand coins in the trash or something like that and he went. He's going out to go and find him as a story a couple years ago I think so yeah.

10:47.13

ilm

Yeah I mean there's ah yeah, it was ah I think what you're referring to as a guy in the Netherlands who's ah, he's spending a fortune to unearth a um ah yeah I was on a flash drive and he's unearthing a old.

10:53.20

Cody Morgan

Now Yeah, that's it. Yeah yeah, it was like a flash drive or something.

11:05.51

ilm

Like a dump a landfill. Um as he's searching for this thing. It's crazy. Yeah I mean there's based off of that like obviously there's there's ah, there's ah amounts of units that will impact like it's same thing with like stocks.

11:08.94

Cody Morgan

Okay.

11:23.20

ilm

So if you are a ah majority shareholder or an executive at a company you have to disclose when you're going to sell things and there's things called dark pools like if you own. Maybe you're blackrock and you're trying to acquire a whole bunch of a smaller company. Um, if you go out and just start buying that and everyone knows that you're buying it. You're buying a whole bunch. Well, it's just going to cause the price to grow up to go up and you're going to have to buy it at a higher dollar amount because of that so you can go in you can purchase these things ah relatively will be secretly to help not scoop up the price. Um, if you're buying a whole lot. You'll buy it over a prolonged period of time now me if I go out and buy like 2 shares of Apple.

11:52.79

Cody Morgan

Yeah.

12:01.25

ilm

That won't impact the price like at all just because the amount I'm purchasing compared to the total market cap. So yeah, there's a percentage of total market cap that is bought or sold can certainly ah, bring in price swings more heavily.

12:14.92

Cody Morgan

Yeah, um, all right? Well then here's my other question for you. This is your Utopian Bitcoin society coming out. Would you ever see that it would take away like the Euro the Us dollar or anything like that and we'd all just deal in bitcoin all the time.

12:30.94

ilm

Possibly um I don't know how this is going to play out so we could have we could have ah fiat currencies or what is what are currently fiat currencies that become backed by bitcoin. So maybe it is like just like ah the us dollar the Us dollar was originally backed by gold we we used to trade in gold and then it was too difficult to trade in gold so you were issued a depository note of hey at this bank this paper signifies that you had this gold. You go to the bank you could turn in for your gold. And then it got to the point where people are trading those notes those notes from another like I give you this note and then you can have once you have that note you can go to the bank and exchange it for the gold and then eventually people were just trading those notes back and forth and then we had governments come in create those notes that was backed by the gold that was owned by them. And eventually they remove the gold itself and now we're just trading notes that say it's backed by nothing except for the ability to say that's backed by their power their authority. So yeah, we could eventually get where like this us dollar is ah related to this much bitcoin or. We could just get away from that completely and yeah, everything is priced in bitcoin directly. Um.

13:40.66

Cody Morgan

So then do you foresee like gas instead of being I think it was like two or two dollars and fifty cents today or something like that in Texas now. Can you see it where it's like point zero zero zero zero one bitcoin per gallon.

13:53.70

ilm

Yeah, so bitcoin itself like you don't have to buy a full bitcoin. Ah's they're denominated in units called Satoshi's so a Satoshi is one one hundred millionth of a bitcoin. So currently, you can purchase multiple satoshis with one penny so eventually yeah we would expect like a galln of gas will be x satoshis now there is unit of account issues in my opinion that ah will be resolved over time naturally to like it's going to be tough to say like hey for that. Whatever.

14:13.68

Cody Morgan

No okay.

14:29.23

ilm

For that car that's going to be because you know this many satoshis where's just astronomical or we're like yeah that cup of coffee is whatever 5000 satoshis um yeah I think we we will probably come up with different denominations to signify amounts of bitcoin over time. Um.

14:38.74

Cody Morgan

Um, yeah.

14:48.21

ilm

Yeah, that's ah, that's how it would work is like even if it's the you know a dollar is not 1 bitcoin a dollar is whatever a hundred satoshis if we reach dollar if we so if we read Satoshi sent parody then obviously one ah or hundreds satoshis would be $1 so we could have Satoshi Dollar

15:05.28

Cody Morgan

Yeah, so we kind of like the us to the y kind of like a pennies like one yn roughly kind of.

15:05.57

ilm

Percent parody at that point.

15:13.12

ilm

Correct yeah, and that's where is it is it backed by this is it backed directly by it. Um, if so and like how many dollars equals that can it change like that's where ah if more dollars are created technically that dollar would be worth less bitcoin. Um, now that's where you all have a trust you have a lot of trust by by centralized authority to say that they are backing this thing by something else and that's where that that trust was massively eroded in 1971 when it came out that basically from the 1940 s till 1970 s we were creating more dollars than we had in the goal that was supposed to back those dollars. That's how we were able to fund all these wars and all this massive expansion in the us. It really benefited us um and then other countries started sort of getting a little bit privy on that and saying hey let's go ahead and I'll take delivery of my gold. Finally 71. We had to come come clean and say hey you know what the amount of dollars we have in conjunction to the amount of gold that's supposed to back those dollars. It's not it done fit it done. Line up now. Bitcoin is easier to ah ah verify and authenticate. Or audit then then then gold is um, but still yeah if a government started creating more dollar somehow then yeah would it would change the dollar to ah bitcoin ah like parody amounts.

16:35.92

Cody Morgan

So let's just say right that perfect world like 1 shioshi blah blah blah zero zero zero zero equals one penny right? just for easy math right? And let's say mean you are. You're doing I'm doing landscaping for you right? and you're like I'm like hey that's gonna be 1 bitcoin astronomical but. Just for easy math right? Yeah and I do all that and then I'm like all right cool. You owe me a bitcoin we each have wallets we transferred. However, but isn't it where from my understanding from your ah the swedish dude you had on who's heating his house with bitcoin miners which I need to figure out how to do here. Um. It like refreshes every 10 minutes right so we have to wait around for those 10 minutes right cause like venmo right now I can send you money and be like all right cool see you later man high 5 we're out right? But now what I have to wait for those 10 minutes for that hash rate to refresh to get that or could I this could creates another problem that I could see is. Could I be at your house spin that get you could give me that one bitcoin and then you run inside before that 10 minutes up and spin the bitcoin somewhere else real quick and now it causes us an error in the system and it freaks out and can't figure out what to do.

17:42.43

ilm

Yeah there's a few points to that is the easiest answer that eventually the and already at this point but it will be built out more so that the actual day-to-day payments layer of bitcoin will not be on the main bitcoin chain. It will be on ah other layers. So like right now there's. The the primary layer 2 ah ah technology for bitcoin is called ah the lightning network. So lightning network is really if you're going to send relatively small transactions or makes relatively small transactions in bitcoin. Rather than paying ah the main chain fees and waiting for that to settle in 10 minutes or 24 hours depending on the ah ah fee you're willing to pay you can make that transaction over the lightning network and it's going to settle instantaneously in that network and then we'll also cost. Way less than it would to get into the actual block space that's going to become really important because when when bitcoin was created and this was really ah ah a point of contention a few years back with block space and block sizes. But. Bitcoin was decided that they would emphasize security and decentralization um over efficiency and block sizes and some people have v for that and think that the the block sizes should be larger. We can put more data in there that we could ah ah we should. We should make it.

19:11.89

ilm

Better as a payments level. Um, but that would that could um, bring about issues from the security and for the amount of people to easily run a node and verify the network. So I would rather have the base of bitcoin be a secure ah network. And then find these workarounds on additional layers that's built upon security if you're building if you're not building on security if you you can have the most efficient thing that's not secure and it's dangerous. That'd be like building a you know whatever, amazing house on sand yeah, maybe it's an amazing this this amazing place. That's beautiful and you know has. Ah, really good insulation. So it's efficient there but like it's going to crumble versus you have something that's built on a rock solid foundation like you can build on top of that and know that's it's not going to just crumble a lot from underneath you so bitcoin made that that tradeoff so again because it's built on security we have it is relatively inefficient compared to some of these other. Cryptocurrencies out there in that sense. That's where layers will be built upon it. So like the the lightning network how that works in a very simplified manner is like you and I could open up a tab together and ah, it's like all right, we're going to put in some bitcoin towards this thing and you and I like youmo my lawn. And I ah ah I'll know I cut your hair and ah we just keep running tab between us and one day we want to settle that tab and based off like all right? You mow my lawn you give me 1 bitcoin. Oh I cut your hair I give you half a bitcoin you mow my lawn again. You give me or I give you another 1.

20:49.94

ilm

It gives it keeps a tab of that and then we can finalize that transaction So that's really how it's going to work now. Not everyone's going to have ah their own lightning node like I'm not going to have one with just you and me probably like there's already big lightning nodes that are sort of centralized so there are risks there in a sense.

21:03.78

Cody Morgan

Um I.

21:09.46

ilm

But ah yeah, like I use a light new network pretty much daily to send or receive bitcoin like I just bought some wine a couple days ago ah paid with bitcoin over the lightning network and I saw that it settled immediately I sent it my buddy he lives in Colorado and ah yeah I said how much for. A few bottles of wine. He told me I sent it to him and like he he received that settle payment right? Then. So.

21:35.28

Cody Morgan

Yeah, no, just something I was thinking about when we were talking to that swedish dude about hash rates and stuff like that like that might slow down transaction time right? when we're getting faster all the time with Apple pay and even credit cards are slow now compared to like writing a check. So.

21:48.76

ilm

Yeah, well all those things again like you're technically like a check I mean heck you think about that like a check can bounce. They're not going to that. Check's going to bounce for a few days same thing with credit cards like that's going to take a bit of time to go through that unsettle instantaneously there is a level of trust that that level of trust is obfuscated to ah.

21:56.58

Cody Morgan

No, right.

22:08.16

ilm

Ah, visa or Mastercard or the bank in the case of a check. That's why the bank gets mad at you for the check was bounce because that yeah sort of comes back bad on the bank for letting you write a hot check. So yeah, bitcoin in that sense is actually more efficient even on just its main block space right now eventually it will be. You know.

22:16.95

Cody Morgan

Yep.

22:25.41

ilm

Tougher to get in as more that that block space becomes more vulnerable valuable as more and more people adopt bitcoin 1 last thing about the payments level and ah money like backed by currencies and so on you know this is sort of maybe people had argue. It's 10 full hot conversation I feel like people think it's less so than it was you know four years ago when I was saying this. But like I do believe there's a pretty good chance that we will have central bank digital currencies or cbdcs like in short order maybe a couple of years or I would say in the next decade for sure we will have central bank digital digital currencies. Um, that are related. That's it's. Ah, yeah, it's it's money that the ah or digital currencies that your governing institution can issue and ah it will be sort of like bitcoin. They'll probably try to spin it like that. Oh it's it's a cryptocurrency and buth blah and they'll try to make it sound like bitcoin and so it's a marketing scheme. Um, and then I would venture to say that this will also come in with 2 other things like I think that some sort of universal basic income will become a norm. Um and it will be easier to issue that universal basic income with a cbdc. So like every month the Morgan family will get $500 um, dropped into your cbdc wallet now I think we take this further I think that there will be ah measures tied to your wallet of cbdcs. So like.

23:57.24

ilm

Right? These that $500 you get on a monthly basis that expires quarterly so on a rolling quarter basis that $500 ah ah expires. So you're forced to try to spend because the government's forced to keep people spending money like we're on this treadmill of Consumerism. So they're going to prioritize that versus savings. Ah again to take the 10 full hat. Maybe a little bit further I would speculate that that will also go in line with some sort of like social credit score. So I mean yeah with a cbdc you think through like with cash the government doesn't like cash really. Too much which side note it's pretty funny when people think that Bitcoin's evil because it can be used for nefarious cases like okay, well so can cash like around 90% of USDollars have traces of cocaine on it. Um I can't remember the statistic. It was pretty astounding though like if we got rid of.

24:47.70

Cody Morgan

Yeah.

24:53.96

ilm

Ah, ah, hundred dollar bills and $50 bills and our our largest denomination that was used in regular circulation was a twenty then ah like in-person drug transactions would drop significantly because it' would be like it'd be really hard to hand over a wad of twenty s um, way harder to do that than it is a wad of hundreds. So yeah, people don't talk about that anyways, I think the government is aware of that and that's why they're you know they're pushing for you know, ah other payment mechanisms. Also you can maybe have under the table you know transactions that they're not be able to collect taxes on because you know you give me twenty bucks for cutting your hair. You know you don't can you do have to report that legally like you should legally. But yeah, you gave me twenty bucks they'll know about that. Anyways, there's so many reasons that I think the government would push for cbdcs and um, yeah, 1 is those one of those I think we monitor monitoring transactions. So i. Again, this is all speculation but I would be I'd be sort of surprised if this doesn't happen in the next ten fifteen years is ah

25:57.60

Cody Morgan

Well, if you if you let me ask you this real quick right? So right? What would stop? The government. Let's just use right? The dollar right now because that's everything that me and you understand what would stop the government from going hey you know what we're done printing money. We're done the coins everything we're just done. It's all going digital. It's over. You know, like whatever you have in your pockets whenever it goes through circulation you could pay cash for the next ten years but eventually your money like the dollar isn't going to be worth a dollar anymore. It's just like a collector's item now wouldn't that become a cryptocurrency in and of itself.

26:30.79

ilm

Um, what? what? what would become cryptocurrency like the Us dollar that's digital. Yeah I mean it'd be a digital money. That's why it's central Bank Digital Currency now is it backed by Cryptography and like.

26:32.20

Cody Morgan

Just the the Us dollar would become acrypted because it's digital now.

26:40.76

Cody Morgan

Yeah, yeah, yeah.

26:47.19

ilm

What do we mean by cryptocurrency and oh the blockchain lot stuff like yeah, there's some level of digitization of the dollar. Ah, but that does not mean it's remotely the same thing as bitcoin and that's why I think I think that's where things will go. Is ah basically we'll remove we will suck out ah actual tangible physical dollars and coins from circulation and you'll be forced to use digital currencies. Um again I think they're going to push that um for a few reasons one of those is for primarily is going to be for monitoring. Where your money goes and then also they're going to say oh like this will make it easier for us to give you your monthly subsidy which I think they're going to do is everyone's going to get so many dollars per month or whatever. Um, but they're going to monitor your spending and it's like hey Cody y'all's family. y'all get five hundred bucks a month. Um, for existing congratulations. But again you, there's going to be parameters you have to spend that $500 quarterly to keep money in circulation because that's what keeps our economy going to I think it will be where like hey Cody if you allll if you are using your money for things that we don't approve of ah. Next quarter. You're not getting your 500, you're getting two fifty you do it again. The following quarter or following month. You're not getting anything like hey you spent too money ah too much money on fossil fuels or too much on red meat or I'll know maybe you gave to this organization that we don't agree with um, you better, watch it.

28:15.37

ilm

And I think they're going to try to force people to use their money in a way that they want you to Um, you know this is big again. This is tenvo hat stuff like most people would say at least but if we follow like what the world economic forum is pushing. Um it would indicate this is probably the direction we're heading which I think bitcoin is the antithesis of this. Um, and yeah I think this is is' coming to a head of battle of these these forms of money from ah ah self-soverety and relative surveillance proof. Um yeah, bitcoin is not anonymous, but it's ah it's certainly more surveillance proof than. A central bank digital currency would be so I think this is I think that's another reason besides like number go up and I'm trying to I'm trying to increase my purchasing power from a ah from a like protecting my family and not allowing Uncle Sam to come in and say like Jim you can't give to that organization. Um. I think that's another reason to own bitcoin actually saw someone last night I was reading I was on Twitter and I saw some dude posted that bitcoin is only own bitcoin to increase their like to make more money and that anyone who says otherwise is basically lying which I disagree with I think there's a lot of good reasons to own bitcoin outside of. I think it will increase my purchasing power There's a lot of use cases outside of that. So.

29:35.43

Cody Morgan

Yeah, oh man, your super tinfoil hat right now. Well then I'm going to add to that is bitcoin just another way for skynet to take over and become sitting sentient a eyes come chat gbt and now we got bitcoin terminator right around the corner judgment day coming down.

29:51.60

ilm

I think that ai will discover and begin using bitcoin because like it will recognize that as the superior form of money and that can transact itself. Um, so you will have Ai systems that you give information like hey you do your job and like here's your budget to do these tasks. And you put bitcoin in these things and then yeah, it's all go out and perform a task like a I have this ai system I need to build spreadsheets. Um, but it can't do everything for me. So it's going to use other ai systems that maybe you've built to attach you know, bring in attachments to it. But your attachments cost 10 sats. Well. My ai system spreadsheet system is going to go find your system and like I know this is a good purchase I have the ah ability and authority to give you x amount of sats for a transaction and it will do that and they'll communicate to each other like I think that's going to be done over ah over the bitcoin network. Yes.

30:43.16

Cody Morgan

All right? So skynet is coming around and terminators coming around. So I use I need to buy more so I give be more for the robot overlords to like me. Okay, perfect. Yeah, okay, good. Yes, the best the? yes.

30:48.16

ilm

What I am trying to say correct. We're talking about I would put this more towards a terminator to where he comes back. He's a good guy not towards you.

31:02.41

Cody Morgan

That's the best 1 by the way of just throwing that out there. So yeah.

31:03.48

ilm

Yeah terminator one was good terminator. Two was definitely the best. Yes, we're talking about would be I would say um Cbdcs would be ah the ah the the dude that dresses up as a cop and ah yeah, yeah.

31:16.59

Cody Morgan

Oh yeah, the T one thousand the liquid guy sweet. Yeah yeah.

31:22.89

ilm

He Ah, he looks like the good guy but and he's Clean. Cut looks good, but there's a level of ah um, Authority there. Again I'm not trying to obsusgate Authority like I'm not trying to hide taxes like these are narratives that are put out like people who like bitcoin like it because you want to pay taxes like that's not that's not true. Um, it's a matter of like ah what is a better form of money. That's where a lot of people come in like you like bitcoin because you're trying to make money. It's like no um I like bitcoin because it's better money. Um, yeah, So I think I think bitcoin is honor schwarszenegger and terminator two not terminator one where he's trying to kill you. It's your friend.

32:00.24

Cody Morgan

Oh okay, good. Good. Yeah, right? Um, all right? So um, all right, we're gonna move away from the bitcoin talk for a little bit and I came up with this question this morning when me and Jes were driving back after we got a cup of coffee. So inflation's going up right at 2% per year. Is what we're talking about right and right now it just popped into my head like let's say right? There's no number basis for this or evidence. But let's say right back in the 1940 s people were making a dollar a day right? and there's penny candy and gas was like five cents and now we're making $15 in minimum wage right. But gas and everything's gone up with how much we make right? So eventually let's say 20 years from now I'm making $100 a minimum wage but a house costs me $5000000000 because staying sticking with and we're shifting why like eventually aren't we going to reach that level of like that Zimbabwe billion dollar that you. You have like we're eventually just going to be handing around money like it's going out of style like and this isn't just like the us like global economies growing like inflating and it's just like well can't we just reset and be like okay, everything's back down we're moving the decimal spot 3 spaces again. We're starting over.

33:13.41

ilm

Yeah that's I think that that is I think the writing is on the wall. That's where we're headed. Um, there's I'm not aware of a case in history where inflation where a fiat currency is worked out and they're able to taper inflation over a prolonged period of time. And actually go back to a total ah deflationary disinflationary reset act like none of this happened scenario like all right? We're going back to 1940 s prices I don't know how you would do that and ah like that would be.

33:44.35

Cody Morgan

Um, yeah.

33:48.20

ilm

Pretty much impossible from the government's perspective like we have so much debt how in the world like our debt is priced in us dollars. How would we ever pay off $ $34000000000000 of debt if we made it where $1 is worth way more than it currently is suddenly like. That'd be like if if the dollar was worth what had the purchasing power of $10 well suddenly instead of $34000000000000 we have whatever three hundred and forty trillion dollars of debt and purchasing power in a sense the government say I want to do that if anything they're going to make it worth 30 $4000000000000 is like paying off $10000000000000 of debt and to do that where you have to make money. Cheaper and when you do that that's done through inflation and ah it's just inless cycle. So yeah I don't I don't see how to be possible now. The crazy thing here. There's a few parts to that one like what you described is I mean is it's manipulation. It's so it's a it's a sneaky tax on people. Um, there's so many issues with this. Um me think here so 1 issue is when you have inflation. Um you are forced to invest your dollars in order to just keep up with purchase. Keep your purchasing power there. Now thing is like let's say inflation is 10% okay well now I have to go buy assets that will appreciate by 10 percent in order just to keep up with my current purchasing power thing is if I make 10% on investment I have to pay capital let's say I hold it for a long period of time. So it's long-term capital gains.

35:20.70

ilm

Now I have to pay what 15 to 20? Maybe you have state taxes 30% capital gains tax on that so in order to keep up inflation I have to invest. But then the government's Goingnna tax me because I made money off of that but did I I I yes I technically made money but I did not increase my purchasing power. So. It's a double tax your tax by reducing your purchasing power. Then you're taxed because you're trying to just keep up with that purchasing power. It's super manipulative and really dangerous. Um, yeah, sorry, where are you going with your initial question.

35:49.35

Cody Morgan

Oh no, that was good see this is why it's so much fun because I like to setting you off on rants and see where where it leads. Um, no, it was just um, yeah you know it's just I was just wondering like why especially like okay we're in debt. How many other trillion right right now

35:55.65

ilm

It's dangerous.

36:07.30

Cody Morgan

Just in the us who do we owe that to that's my next question like I know it's probably the like I know we have you know government contractors and stuff and we always hear like those there was a commercial. What was that two years ago where it was like in the future and it's like. Ah, chinese guy saying like we own the us and stuff it was like this like propaganda thing about you know like we need to get our. It was probably during the political season like we're coming into now right? So like but that's a lot of money couple trillion more than a couple who do we owe all that money to. Is there some secret organization we owe it all to.

36:42.43

ilm

So There's a few types of debt. Um, there's a spot you should go check Out. It's a us Debt clock. Let me see yeah Us Debt Clock dot Org and ah, it's a real-time debt clock and it's broken down to like what people think of as general our national general National debt. It shows it over different periods of time. Ah it shows like it breaks down our types of debt. Um, but then also it in it. It Ah, one of the final numbers is our unfunded liabilities. So going back up like us national debt where is like when we say debt What is that like do we owe? Visa do we owe like.

37:18.48

Cody Morgan

Um, yeah.

37:20.00

ilm

You know some do we owe some guy in China. No I mean that debt is pretty much all through um, like us bonds. So ah, treasury notes treasury bills treasury bonds. So I mean that's that is what bonds are you are.

37:39.47

ilm

Allowing people to ah lend you money um and we will one day pay you that amount back with interest we might pay you all the interests at the end or we might pay you. What's called a coupon where you get interest over a period of time and the end we give you that. So if I if you buy a treasury note for 10 grand. Um, you could over the next. Let's say it's a ah 10 year treasury note for ten thousand bucks just for simplicity's sake well over the next 10 years. You can get 5 % per year on that note and then to the end of that time. You'll get your $10000 back. So the us government owes you. That debt so you are an owner of us debt now. So all of those us treasury notes and bills and bonds. That's where that debt comes from now. This debt is auctioned off regularly and people purchase that like all different people have purchased that there's a lot of governments who own us debt. Um. We also as a us government we own a lot of own debt. There's individuals who own this debt so that's where you hear people like you know the us owns owes china trillion dollars of debt but China owes US a trillion dollars of debt. why't we just cancel it and start all over which yeah that that's.

38:49.80

Cody Morgan

No yeah.

38:52.89

ilm

That's fun to think through but that's not really hot works if you if you actually start pulling that thread. It would all unravel when you got back down to like but who all's involved with this debt like you have like right in the us right now you have like tons of pinches like penschions. Basically have to own so much of bonds because they're considered a safe investment so I can't imagine the amount of I could look it up but ah yeah, the amount of debt that just ah us companies own inside of their pension plans. So yeah, there's those people there's other governments. There's individuals. There's there's our own government institution. There are lots of people. Um, so there's that debt. But then there's also unfunded liabilities. So that's like our really our total debt so that could be like all right? you want a bond. Maybe ah kind of think the easiest way. So like a simple illustration be like all right? Ah Cody I'm going to give you or I I borrow ten thousand bucks from you and we have a ah note saying like look you have this or I have this $10000 and I owe you in a year I owe you that $10000 back but I'll also give you an extra thousand So ten percent 1 year note okay so in a year I'm going to give you 11 grand. Okay, that would be ah our general like gym or in this case like us national debt. Okay, so that's where debt. But then.

40:21.37

Cody Morgan

Yep.

40:23.57

ilm

Also it's like oh I forgot to tell you in in 5 years I have to give you $500 per month. Um, because I promised you I would at some point a long time ago. Those are unfunded liabilities so that would be things in our governments would be like sole security medicare. Those types of programs. So you lump all these in on top of our bonds that we owe we have all these other liabilities and it's astronomical. So like our us national debt right now is thirty four trillion and change that just turned over from thirty three trillion like a few weeks back and like a couple months before that it was thirty two trillion like this is escalating. At a crazy like rate. Um, but then we add in like the us unfunded liabilities is actually ah two hundred and eleven trillion dollars so per citizen that's $630000 um, yeah, so we're we're talking about numbers. They're like. Are unfathomable of how much we owe to everybody yet. Yeah you.

41:26.27

Cody Morgan

So then why if our debt keeps going up who keeps buying it cause like let's just say right? Ah I'm gonna loan you 10 grand and that's why we have credit right? And then I realized that you owed me 10 grand for the past five years and never paid me back I'm not gonna give you any more money right? It makes sense right? I'm not a dude. No. And it ain't going to happen. So what who would buy up debt or other countries debt because eventually someone's going to be stuck with the bill. This is like a game of ah where we're gonna like that 70 show when they dine and dash right? Eventually someone gets stuck at the table and you get stuck.

41:46.27

ilm

Well.

41:57.79

ilm

Yeah, yeah, well, there's a few things here. We we pay our debts by issuing new debt. That's what we do. So it's like hey we've got a trillion dollars of ah of bonds that are being ah that are maturing this month let's say

42:12.49

Cody Morgan

If.

42:15.32

ilm

Okay, well gosh we need to go. We need to go sell a trillion dollars worth of bonds. We can pay off those other people's trillion dollars that's what we essentially do with the government for decades now is just snowballing now. Fortunately, it worked out in a fortunate way for since like 1980 basically that we were issuing debt at lower and lower interest rates. So if at first let's say a bond was 15% and then we were able to issue new bonds and roll that debt over to a 10% and then a 5% the 2% interest rate. So our debt was getting cheaper in a sense. Well over the last couple of years our interest on our debt has gone up so we're refinancing debt at a higher interest right now. So the other thing like other governments so one we have paid our debt sort of we've paid it by. We've paid it by getting more debt that'd be like you owe visa um, you know your payments coming up and it's like I can't actually make I don't have a thousand dollars my bank account. I need to go and get my get a new mastercard then I'm going to roll that I'll I'll get a cash advance on that Mastercard to pay my visa card like look I've always paid all my debts. It's like yeah, but you actually have more debt and what's happened is previously that visa interest rate was 10% but your Mastercard interest rate is 8 % actually you're rolling it over at cheaper rate you're getting more and more debt because now you rolled over that 10000 or that thousand dollars and you're adding more on you're digging in your whole self at hole. But at least in a lower rate. What's happening now is we're doing that but we're rolling over from a 10 % interest rate to a 15 % interest rate while adding more debt.

43:48.39

ilm

And what's happened is our our receipts as a government ah like our our income um has gone down like whenever the market doesn't very do very well when ah corporations aren't producing and capital gains aren't being realized all that fun stuff then our our gross receipts aren't as high so like the. That we're bringing in actually is not good. So I'd be like you know Cody your you're continuing to spend at the same rate, you're actually consuming way more. You're spending more money you're rolling over your existing debt. Um, so you're not paying that off, you're rolling it over and you're rolling it at a higher interest rate right now. Oh and the amount of money are making as a house just dropped as well. Um. So that's that's more like what's going on. Um, yeah, don't know where I am.

44:33.53

Cody Morgan

Oh that was That's perfect. Yeah, absolutely because I mean I think that's where a lot of us get caught up where we hear a lot in the news like hey you know the debt ceiling's going up, especially we're coming up in a political season right? So That's all we're going to talk about is fiscal responsibility and all that other stuff and um. But I mean it'd be political suicide for anybody to be like hey we're super in debt and we're just going to try and dig out of it and I don't know if you can.

44:54.30

ilm

It's terrible because that would the best thing to do on a if we're talking about generational my grandkids great grandkids. The best thing to do was to rip the bandit off and say you know what guys we can't afford this stuff. I mean that's you know you try that as a family. It's like look guys. We're eating beans and rice. We're not going on vacation. We're unplugging the Tv it stinks right? Then that's what's good for your family. The problem is we have people who are more concerned about saving face like I just want to look like I'm a good dad so keep watching Tv we're going to keep going to vacations. Behind the scenes though I'm stressed as could be and we're broke and that's where we're at like politically we are shortterm focused on saving face rather than actually thinking through the the longevity and the betterment of our country overall so we'll we'll keep doing that otherwise like hey we're gonna have to cut these entitlements those unfunded. Liabilities. We're going have to cut some of those no one wants to do that? No one wants to be the guy who says you know what social security sorry we're going to get rid of it or Medicare that's going down or ah, the amount of money we're spending to continue to fight wars has to drop like no one wants to do that. But what else you going to do like you got to cut the cable at some point that or keep spending. Now. We're a fortunate place where we can keep making your own money fortunate sort of um oh that's what I'll see earlier. 1 other thing is historically you ask like why would someone keep buying our debt. Well we've we've been at a ah privileged spot where other countries have basically been forced to buying our debt. So like we've ah.

46:25.80

ilm

Ah, we've benefited from. Ah, what's called the petro dollar system where basically other countries were forced to when they when they transacted for oil and gas they had to do so using the us dollar. So if you're if you're forced to do that you better keep some dollars on your balance sheet. Because maybe your currency. Maybe you had Yen or francs or whatever and that goes down in value and compared to the dollar. Well, you're sort of hosed. So you're going to be forced to keep some dollars on your boun sheet. You're not going to actually keep dollars for the most part you're going to buy us debt that will continue to pay you in dollars so other countries because of. Petra Dollar system and a few other mechanisms have been forced to buy our debt but that's starting to go away like it's sort of other countries sort of getting ticked off, you're starting to see the rise of the bricks nations Brazil Russia India China's South Africa so you're starting to see these rise of these other countries who are saying you know what we're not going to transact for oil and gas in. Ah. Using the Petr Dollar system we'll use our own currency. We'll use this one and ah so you're again, you're obfuscating the need of other countries to buy our debt. So I think what's gonna happen is us the us ah will have to buy more and more of our own debt and it becomes this weird. Um, we issue debt. The other guy in the same team buys it and ah it's it's it's this strange game of sort of musical chairs. Um, yeah, that's where it all looks so choppy like that's that's why I love ah referencing you mentioned earlier my world war post world war one picture of.

48:01.13

ilm

The german Mark um, there's there's a chart at that same period of gold to German Marx and there's it's it's showing over a few year period the value or purchasing power of Marx versus gold and it's super volatile. So there were days and years or whatever that you look like I could total more on if you sold your marks for gold because oh yeah, maybe maybe we do have a zillion of these things but oh well, it'll be fine. We'll we'll figure it out. There were other times that you look like an idiot for holding it. You should have bought gold over the long period. We all know that like german marks became. Truly worthless and you should have owned gold but it wasn't clear that point when you looked at it as a chart um and and did not think through actually underlying problems here and that's what that's what you have people who are trying to shout from the rooftops. We're not talking about like bitcoin as a hype. Um, but rather I knew bitcoin come back in the conversation. Um, we're not but we're not talking talking about hard assets for hype. We're talking about a lot a lot of bitcoiners are really interested in Macroeconomics because ah, they're they're so intertwined like bitcoin's important because there's a hard supply cap and ah.

49:01.86

Cody Morgan

Ah.

49:16.71

ilm

Versus the us dollar doesn't and it can be easily manipulated when you have someone a centralized authority to control these things who can create print by their own like it's it's it's too much power in 2 person's hands and you have what's you alluded this earlier as well. Um, early on the conversation. But there's something ah always butcher outs pronounced but it's very like it's called the like cancel on effect effect. So what that is basically is ah people who are closer to the money printer benefit more by printing money so us government would benefit more by issuing new. Ah, by. Printing more dollars than ah ah basically anyone else but then like big banks would benefit as well like right now there's these crazy temporary measures in play for banks to be able to essentially like take loans. Ah, so they're they're going to benefit more than whatever like bill gates but bill gates will benefit more than you know, a small business owner that small business owner is going to benefit more than ah like a 10 maybe like a w 2 employee but that guy is going to benefit more than like. The old lady who's living off her deceased husband's pension that has no cost of living adjustment like that old lady is a person who hurts the most can you imagine living like what if your only income was ah a pension that like like there's trs Texas retirement system pretty much.

50:50.30

ilm

Almost all school districts in Texas if you participate in trs. You don't participate in social security and a lot of Trrs Trs does not technically have a cost of living adjustment. They can give you an increase whenever they decide it's time or fitting to they don't have to so imagine if you were a 85 year old woman. And you spent your entire career working in ah the Texas retirement system or in Texas schools and and you had no other assets. Maybe you're renting or maybe you own but you just have property taxes up. Let's say you rent just take to an extreme you rent. You have no assets your income stream is your trs textile trauma system that technically doesn't have a cola associated with it and groceries go up by 25% between 2020 and 2022 and your rent goes up by 50% but you maybe t rs was generous enough to give you a 5 % increase but they didn't have to like that's who's hurt the most and that's a cancel on effect and that's why like that's why this stuff really gets me like fired up um, is to think through those people because that's real I remember I remember a couple years ago is at the store. Um, when grocery started really, it was almost exciting how much more expensives groceries were getting. It was like infuriating but yet curious ah to go to the store and observe like wow it's I can see how much more expensive it was than was last week and for a few months there I would always ask the the you know the high school kids bag in my groceries like.

52:23.66

ilm

1 like how much more expensive would you say like an average person basket is compared to a year ago and then I I would also ask like roughly what percentage of people that y'all check out comment on the price of groceries that was really interesting but man I remember when there was 1 ah, one time I was at the grocery store and this old lady behind me she had like. 5 items you like it was really it was almost like cliche it was like hot dogs some cat food like coat hangers few little things like that and ah she went check out and they were backing my groceries and they rung up a few of the items and then she looked and saw the like. Already reached how much she could spend so she had to like she was gonna have to put some stuff back and ah, that's infuriating. Um, yeah, that's that is that that's where you have people who are like inflation is theft. Um, if you own assets it benefits you so think through like ah.

53:14.59

Cody Morgan

Now.

53:20.86

ilm

Let's go to another country because that has experienced hyper inflation. Let's go down to like Venezuela let's say you own a ten Thousand Acre ranch in Venezuela like you were you had a great job. You made a lot of money and you own this ranch but you took a mortgage on the ranch and it's 2% mortgage for a million bucks okay um use venezuelan currency so was it the peo. Whatever so you buy this thing for venezuelan dollars for a million bucks over a thirty year timeframe mortgage for 2% but you have you also have other assets. You have a 4 1 k and stock plan and all that fun stuff. And we reach hyperinflation the value of your pesos or dollars whatever we're going to call him gets annihilated so suddenly you a million dollars on this thing and maybe prior you're making a lot of money. So maybe you're making half a million a year so that was 2 years of work that it would cost you to pay this thing off but you decide to take a note because the the.

54:11.72

Cody Morgan

Um, for.

54:17.86

ilm

The debt was cheap. Let's go ahead and do that well hyperinflation comes and suddenly you're making $5000000 a year your your salary went up by tenfold. Well now you can pay off that land with a few months of your salary you benefited you just got.

54:24.25

Cody Morgan

Are.

54:37.19

ilm

Ten Thousand Pristine acres of you know you got a beautiful stream not stuff like desirable land. You just got for next to nothing and your assets if they are good. Assets went up as well because people are fleeing to those things as stores of value people who are renting and don't own hard assets. They just got annihilated maybe that a few bucks in the bank or maybe they're not able to get a bank this happens a lot in like smaller countries like they're unbakeable so they had a few bucks stored away under their mattress and that money that they just worked if you're able to squirl away $1 a week and finally you have you know enough for down payment. A little cottage like a little condo. You know it took you 5 years ah to scroll that amount away. But then also you reach hyperinflation and that 5 years of savings was just turned into a month of savings and the their cost of that condo went up.

55:35.58

ilm

In Tandem with how much inflation took Place. You just got wiped out. Um, not only days that was was your money stolen but ultimately was stolen was your time your dreams like your family's hopes of having your own place that's infuriating um and that's that's what happens when we reach places of like hyperinflation. It's obvious. But inflation itself like we're okay with saying like 2% inflation is good and normal and healthy. Why like that is unnecessary but is a ah that is a narrative that we must continue propagating in order to keep this thing going.

56:09.76

Cody Morgan

Nice, Well, that's why I like talking to you because you get so passionate about this stuff and it gets me fired up too I'm like yeah, let's ah, let's start mining some bitcoins and stuff. Let's do this. So let's talk about something fun right.

56:18.81

ilm

Ah.

56:21.38

Cody Morgan

Retirement everybody wants retirement right? We got this whole fire movement right and experts and there's commercials Jpmorgan you know invest with us and we'll let you reach your dreams and all this other stuff and you know shoot oh yeah, yeah, just like.

56:31.49

ilm

Yeah, there's people sitting in those like I adirondack chairs you know and like they're looking out on the beach holding hands.

56:38.77

Cody Morgan

Oh just like sipping their coffee and they're like you know and you're and I'm getting dressed to go to work like oh I can't wait to be there right? So let's talk about? No oh the? oh oh well I mean if that's your if the if that's your retirement.

56:43.91

ilm

Yeah I think I was just I I was thinking of a see Alice commercial instead I was thinking ah I was picture I was pictured people in a bathub holding hands in a field like wait a second. That's not what? Ah um.

56:56.20

Cody Morgan

You live how you want to live gym all right man. Well um, but you know, um, anyways, so let's say I want to retire right? This whole fire movement's like you know retire as soon as you can right? and you had a guy on the other day who I actually agreed with um where these fire people work their butts off for like 10 years and miss out on their family and then all of a sudden. Can retire but their family's not there anymore, right? and that can be set for anybody who works right? You get people who investment bankers military people. You know, anybody like that right? But let's just say right? Perfect world I want to retire when I'm 50 I got a good hopefully 50 years left of my life right? And so everyone says hey you gotta invest.

57:16.20

ilm

Pure.

57:34.14

Cody Morgan

Let's invest let's invest right okay cool so let's say I retire when I'm 50, but then I have an accountant or a financial planner such as you and now I want to you know I want to live on my farm and I have a fixed income everything like that. How do I plan that out right and I know. Your your most hated thing is I want to make enough money to retire. How do I make that happen right? because everything's so volatile. But I'm talking like the very basic stuff like do I sell a stock a year but then if I sell a stock year eventually I'm going to run out so am I trying to plan that perfect peak of I die when all my stock runs out.

57:56.46

ilm

A.

58:09.58

Cody Morgan

Or like how like I don't know like it is the dumbest question but nobody ever talks about it. They're just like yeah invest and you'll retire. It'll be great right? exactly and it's like you got like 4 ah one k's and you got iras and everyone's like you know.

58:14.55

ilm

Yeah, you'd mess and you retire on it like but what does that mean? So I.

58:25.25

Cody Morgan

You got to do this. You gotta to do that and you're like okay but I want to retire when I'm 55 and they're like cool. okay like what what ah okay I retired now what do I do like I know I'm sitting around sipping coffee in my see alice commercial I get that but like where's my where's my money at.

58:42.45

ilm

Perfect here. Yeah, that's ah, um, at least you got the need got so many funny think.

58:43.70

Cody Morgan

You know like and where's it coming from.

58:50.35

Cody Morgan

Sorry I got you I got you think about bathtubs now. Sorry.

58:56.70

ilm

Well, you got you got the names right? I've heard so many like oh, where's my my k one zero four you know it's like you know isn't it. There's like a radio station or yeah, my you know, ah my four zero one k there's a guy who thought his 401 k meant that you get four hundred and one thousand dollars when you retire um and that was a given like yeah, there's so many crazy things out there.

58:57.23

Cody Morgan

Yeah, yeah, yeah, yeah.

59:11.65

Cody Morgan

Now.

59:16.74

ilm

I've I have I have a notebook somewhere of like the craziest statements I've heard people make about their money and retirement and one day I'll write a book just summarizing like this is the average This is the state of the average American when it comes to financial literacy and it's astonishing. Um.

59:29.86

Cody Morgan

Well I mean Phil speaking speaking personally right is like ours was I mean there's a song out there like buy dirt. It's a country song but like growing up on a farm it was hey if you got land you got money like that's it and like cool but now somebody go into stocks and they're like hey if you got a. Piece of paper that says you own some Apple you got money like okay, but where but where is this money I want it like it's my money and I want it now right? And so like yeah, right, give me my money man but like so then do I like would I have to like plan it out where like you say.

59:55.83

ilm

Yeah, come on Jaden you wentworth.

01:00:05.73

Cody Morgan

Hey Cody you're retiring at 55 congratulations mean you high 5 each other woo great. So then for the next let's say thirty years I'm selling 10 stocks a year to survive is that what's going on or how do I do that.

01:00:17.89

ilm

So I try to make things as simple as possible. There's enough complex things in the world. The things that can be simplified. Let's simplify them and ah yeah, so how we look at this in a general sense is a few fold so one. We're going to look at fixed income sources that you'll have during retirement. So that could be sole security or a pension or ah military disability. Um, it could be income from a rental property things like that. So let's say let's say that's 50 grand a year they will get from ah military disability and and the pension. And so security. So 50 grand a year from fixed income sources all right? and then let's say you have $2000000 of investment assets all right? You got $2000000 there and let's say all needed $100000 a year to live the lifestyle you want. So we have 50 grand a year that we know is coming in we need we need. 100000 so we need another $50000 we have to get that from your investment assets. Okay, so what we're trying to figure out is fixed income plus a distribution rate of investment assets equals how much you can draw from or you'll receive annually during retirement. And the goal is to get that equal to or greater than ah in your that case $100000 then we're at 100%. Okay, so where we look at that would be ah um so a distribution of investment assets. So in that case, you have two million bucks so if you have $2000000 and this is again. This is speak in general terms. But ah.

01:01:45.85

Cody Morgan

MS.

01:01:48.91

ilm

Let's say you're in a diversified portfolio. So like a sixty forty portfolio is what's utilized in its ah in the the case studies here so sixty forty being 60% stocks 40% bonds diversified portfolio all right? So here before I go too deep. There's a study done to figure. Sort of this question out so back in the 90 s the market went up for a long time and you'll always goofy talking heads on the news saying like hey the market's up by 12% this year you can pull out 12% of your portfolio and you won't run out of money like you can pull out 12% every year and you'll actually keep your initial basis in there because you're just pulling out the growth. Which sounds great and it gives a lot of people a sense of false hope the problem is what if the market doesn't go up by 12%. What if it goes up by 4 well if it goes down by 12 or goes down by 30% and you pull out 12% of your portfolio. That's what's called sequence of return risk. So we're not talking about just the general returns. Maybe your portfolio on average returns 12 % but what in. What order does that average of 12 % take place like if you have a negative 25% followed by a positive sixty. Well, that's a good return. But if you have that negative 25% for the first couple of years like if you're pulling out 12% of your portfolio. You're in big trouble. Okay, so the order of which. Ah, returns happen is really important here. So anyways, in the 90 s you had these group of people saying hey you can pull out so much of your portfolio. You had a guy named Bill Benan who went and said ah well that doesn't seem quite right? Let's look at more data to to figure out what number is reality if it's not 12% then what is it.

01:03:24.30

ilm

So he went did a study I believe it went back to 1926 and then ah he actually redo the study going back to the mid eighteen hundreds a few years back um to grab a distribution rate called what's called ah like the safe withdrawal rate. So basically that you want to see all right if you retire and you're going to live for 30 years in retirement what dollar amount of your portfolio can you pull out in year one and then adjust that amount according to inflation annually for every year thereafter and in any situation. Um would you have not run out of money at that third years so I could be like retiring in. Right? before the great depression happens or in the early 1970 s during these terrible times retire. How much could you pull out your portfolio then so the number came out to about 4.2% they rounded it down and said it's four percent so there's a rule. It's called this 4% safer draw rate. Okay. So in reality if you only pull out 4% of your portfolio on like 98% of the time you would die after 30 years with more money than you started off with because that's accounting for a safe withdrawal rate ah during these worst case scenarios historically so to answer your question that's ah, that's a big explanation for how we arrive at this. But basically if you have. That situation if you have $2000000 of a diversified portfolio if we utilize the trended you study for this then you could pull out 4% of your portfolio which would be 80 grand per year and statistically you would not run out of money over that period actually 98% of the time.

01:04:56.27

ilm

Historical numbers. You would die with two million or more dollars in that situation. There's a lot of times you would die with way more than $2000000 because you're pulling out only 4% each year and again if you're if 4 Percent first year that would be 4% of two million is eighty grand well then let's say inflation the next year is 5% well you would adjust that number by 5 % now what we actually utilize is ah what's called guardrails. So for our retired clients. We use a higher distribution rate we use a five and a half percent distribution rate but we utilize what's called what we call guardrails so a guardrail is like all right? You have $2000000 five and a half percent distribution rate would be one hundred and ten hundred and ten dollars ah hundred and ten thousand dollars in year one now if your portfolio goes up during that year and ah one hundred and ten thousand dollars actually is now only 3% of your portfolio. We're going to give you a good raise the following year if the market drops during that first year and one hundred and ten thousand dollars is now like 8 % of your portfolio well that year we're not Goingnna give you a raise and we actually if it's bad enough might say like hey instead of going on 4 vacations this year you're going to go on 2 but that allows for a by having those parameters. It allows for a higher total to distribution rate because you're moderning. Ah, the spin down of your portfolio.

01:06:10.57

Cody Morgan

So with that what what I want is for you to be able to call me and say hey I need you to go buy that pontoon boat. You've been eyeing up really badly actually by 2 you have too much money. That's what I hope for.

01:06:20.26

ilm

Yeah, yeah, there's there's way too much money here.

01:06:25.70

Cody Morgan

Yeah, like you just don't there must be a rounding error somewhere because you gotta go buy a lot of stuff and yeah, um, okay, no that answers that um, okay now I'm gonna change it again 1 more time on you right? because this is from an outsider's perspective right? The stock market all I know about it is from what I seen on the wolf of wall street. And the dark night rises when Bain walks in and the guy's like there's no money here and he's like why are you all here and then he like beats the dude up but like all does a bunch of people walking around youll and sell sell sell or buy and it seems like chaos. But yet we base everything on these nasdaqs and all these other portfolios being like oh.

01:06:48.91

ilm

No, ah.

01:07:01.38

Cody Morgan

They're gonna make more money so buy more stocks or it's worth more so it seems like it's all built on faith and people just like it seems like a giant fantasy football game to me. Yeah, so so like we're basing all this on that and people put so much faith into this like but why.

01:07:09.24

ilm

Yeah, sort of.

01:07:20.25

Cody Morgan

Like what's what's the whole point.

01:07:20.50

ilm

Well, you have to keep in mind personally I don't think that our market currently is built on true fair note and free and open markets. So that's where it's like I want to invest in good companies. So yeah, that's what you're doing you buy a stock you're buying partial ownership of a company if you think that the company the value of that company is going to go up if you think they're going to have free cash flows. They'll distribute dividend then maybe you want to own some a bond is debt like hey that like that person is investing in something good. But they want they need some money in order to build up the infrastructure and in a year they'll give me that initial money back plus a little bit more you don't own that if they're building a bridge. You don't own the portion portion of the bridge. You just loan to money as they can build the bridge and they give you payment on top of that. So in reality, you're just looking for good places deploy your money. What's. From a risk-justed perspective. What can give me return on my money greater than what my cash should be doing and that's where you deploy your dollars. The thing is where we're out right now that's not the case like owning companies that actually are solid and make. Money is not necessarily what's in vogue. It's what companies have access to cheap debt and can continue to scale and grow and like maybe there's zombie companies that aren't making any money or maybe it's debt that we know is terrible like there's a few years ago

01:08:54.99

ilm

Ah, countries were issuing negative interest rate debt like you give me a thousand bugs and in 10 years I'll give you $900 back. That's ridiculous who would buy that you're not gonna buy that because of any rational thinking you're buying it out of spec speculation of manipulation like you're buying that because you think that. That de centralized authorities are going to take interest rates where instead of you know you buy right? now you buy it. You'll get if you buy a thousand dollars. You'll get $900 back. Well if you buy it next year you'll only get $800 back. So it was like man that that $900 back is way better than $800 back and someone's going to want that one later on like. That has nothing to do with rational investments that has to do with like playing this goofy game. So there's ah I think there's a good reason. It's not easily understood. Um, yeah, now in general like what we should be observing is the market figuring out values of certain things. Like yes like I think that this company is going to do well that they're deploying their capital. Well they have good marketing. They have good executives. They have ah what's ah, what's called a moat around the company. So like they have something that's protecting them from outside intruders that's going to protect their longevity. Um, so they have a good. Moat as a company they produce free cash flows and they're growing. Whatever it's like that's a good place to put my money. Um, so that's normally how works and other people like I think it's I think it's valued fairly right now I don't think it's gonna go up so I'll sell it so I could buy something else and I think we'll do better and the other these people are saying like hey I want to buy that well I want to sell it.

01:10:31.30

ilm

Perfect. Let's make a market Market Makers They go there when they connect buyers and sellers. Um, that's that's why there's so much yelling is just people trying to communicate what they think it's the best place to put their money at um, but again, that's we've lost touch with reality like we lost the plot so long ago. Um.

01:10:47.62

Cody Morgan

Yeah.

01:10:50.30

ilm

And that's even like right now like with the with the rise of index funds like no very few people even know what the heck they invest in like you go buy go buy an index fund like you own everything. It's like in that thing there's so many like Crudy companies buried deep in there that don't have any business being in like own being owned.

01:10:53.21

Cody Morgan

S.

01:11:10.29

ilm

But they're carried along because they're part of an Index um sort of like like a real estate investment trust as well like a reit you know a reit is like a mutual fund with real estate and like maybe you own some place like in the bottom of that reit is like some cockroach invested ah apartment complex in the middle of a. Junk You know the little spot that no one wants to rent but it's being invested in just because it's slipped into that thing and would anyone in reality like if you actually went and visited that place and looked and said like I think it's a good investment. No One's going to buy that thing but it's slipping through the cracks because we got to keep.

01:11:37.60

Cody Morgan

Ah, yeah.

01:11:48.69

Cody Morgan

Yeah, so so it is a big gamble. It's a big ga big fantasy football game then? yeah yeah, so for well and that's where it's hard right? Especially when we're talking about you know, being 35 year old who didn't grow up learning about this stuff is that you're like.

01:11:48.89

ilm

Keep the money going.

01:11:52.97

ilm

Yeah, sort of but.

01:12:05.89

Cody Morgan

Um, there's too much to know here like you hedge funds index funds all sudden. We're talking about mutual funds and everything I'm like I don't know what we're talking about anymore. It's just getting chopped up into bits and don't know um, but the last big question I have for you right? shorting stocks since we're talking about the stock market right? So the movie the big short right. Christian Bale's character is jamming away on some drums or something like that and he's like I'm going to stop I'm going to short all like mortgage companies stock for some reason, right? I don't know why I didn't understand half the things that were going on in it. So but here's my question for you right? So let's say you. Buy stock in. Let's just say Aig right? was that was one of the banks that went under right? I think in 2008 when this happened right? You won't stock it and I shore them I said hey now something's gonna happen. These guys are gonna fail right? So I'm basically betting on them failing and you're betting on them winning. So we're basically in a horse race against each other right? Yeah, so let's say then they do.

01:12:49.50

ilm

Yeah.

01:12:58.60

ilm

Yeah, sort of yeah.

01:13:03.96

Cody Morgan

They do fail you know, okay like they did historically where does that So I shorted the stock I said yeah, you're going to fail. Well their company goes under Do I get your money then is that where that money's coming from but then they yeah yeah.

01:13:15.50

ilm

Yeah, what you're describing is options trading so you when you Ah, there's a this options can't get super complex but it doesn't have to be that hard like there's ah, there's what's called call options and put options a call option.

01:13:33.48

ilm

Is ah if you think the value of something's going to go up here so we'll we'll make it. You're you're the purchaser of a call option. So you think that Aig is going to go up but you don't want to go buy Aig right now but you want the ability to buy it later on for thirty bucks

01:13:40.77

Cody Morgan

Yep.

01:13:51.75

ilm

So today. It's trading at $28 and you want the ability to buy it for $30 in six months like all right cool and I think that aig is going to stay flat or go down well and by I maybe I own a I g so it's a covered call. Well I'll say all right? Well I want to keep holding this thing. But I don't think it's gonna go up to it's 28 I don't think it's gonna go up to 30 maybe'll go up to 29? Well yeah, I'll buy. Well we'll come up with agreement where you have the ability within the next six months to purchase it for $30 a share and I have to if you exercise your option if you say jim. Want to buy this thing from you for thirty bucks I have to give it to you for that amount. Okay, now you have to pay me for that option. So you are giving me ah ah, pre agreed up on amount. Do you deliver upfront for that agreement. Maybe it's. fifty cents well I get fifty cents to take that risk of it going up too much so that day I profit fifty cents so what happened is let's say in this scenario again. Ah the it's called a strike price is $30 so that's ah I actually let's stay away from terminology. It's twenty eight bucks a day

01:14:53.33

Cody Morgan

Like f.

01:15:05.22

Cody Morgan

No yep.

01:15:07.20

ilm

You have the ability to exercise at 30 you give me 50 stins for that ability to do exercise. Okay, let's it for the next six months if if Aig goes from 28 to 35, you would exercise because you could buy it from me for 30 and immediately sell it if you'd like for 35 you just got $5 per share. Built in you paid fifty cents for the ability to do that I lost well I owned the stock so I made the difference from 28 to 30 but then I lost the other runup. So I made $2 and fifty cents you made the difference if if Aig goes up from 28 to 30 well you're not going to exercise on me. Because or let's say it goes up to twenty Nine Ninety nine okay well you're not going to exercise because why was you buy it for twenty Nine Ninety Nine ah you don't have the ability you have to you have to buy it at at 30 so I win I made fifty cents it went up so I made I made the amount that went up by anim made my fifty cents

01:15:45.52

Cody Morgan

M.

01:15:54.63

Cody Morgan

Now. Yep.

01:16:04.58

ilm

Um, same thing if it goes down. Um, now if it goes up. Let me think here. Um, if it goes up to ah me think. Here. Let let's let's skip through this stuff. You're you're talking about shorting so shorting is another option. It's the ability to ah ah you be able. You're you're hoping a stock goes down so you have the ability to sell it to me at a predetermined price. Okay, so let's stick with Aig. For thirty bucks and you think that ai is going to go to 0 and I don't think that's the case. So I'll say all right? Well here you think it's going to go to 0 you have the ability to sell it to me for thirty bucks later on and we enter that agreement you're going to pay me for taking that risk so you give me fifty cents for

01:16:47.47

Cody Morgan

Yep.

01:17:00.10

ilm

For that right to exercise so aig goes from 30 to a dollar then you can go buy it for $1 but then sell it to me for $30 you just built in a twenty and a dollar gain.

01:17:12.98

Cody Morgan

So we're kind of playing the prices right? a little bit. Yeah.

01:17:19.40

ilm

Yeah, you're you're you are speculating on movement. The thing is there's different option. Period. So like you can say like all right for the the that that ah that price that you're paying for the ability to force me to do something. That price is going to be dictated based off the market. So like if we're talking about a stock that moves a whole bunch. It's going to cost you more money in order to get that option if we're talking about something super super stable it doesn't really move well, that's Goingnna be a super cheap option because it's more likely it won't move than that band. Also we're talking about time frames. We're talking about an option that expires tomorrow the chance from it going from 30 to 0 in the next day is super low. So it's going to be inexpensive. Um, if we're talking about a year -long ah open option period. Let's go be more expensive because more things could just happen. Um, there's how close it is so like. If we're talking about something that's like it's called being out the money. So if it's ah ah, currently trading at forty bucks and you forty bucks ility to exercise at 30 like that's a long ways. So it's gonna cost less versus like it's at 30 and you can exercise at first thirty like that's gonna be a lot of money you're in to pay me in order for me to take that.

01:18:20.45

Cody Morgan

I.

01:18:27.25

Cody Morgan

Yeah, yeah.

01:18:29.98

ilm

That bet because if it drops any you're you're in the money. So um, yeah there there I know I just did a terrible job of explaining this you.

01:18:38.58

Cody Morgan

No, it sounds like a lot to me to simplify it I like sports betting and stuff like that. So. It's just like being at Vegas and being like hey the browns are gonna win the super bowl. Yeah dude, that's 1001 odds all right. Let's do this I'm gonna put down $10 right compared to you know, betting on you know one of the better teams. Ah chiefs. Winning the super bowl right? So and the more volatile it is the more money you could make off of it.

01:18:55.96

ilm

Yeah, you're correct and like maybe the less it costs you yeah like betting on some crummy team is probably gonna cost you very much you know because the chance of it are slim so you're you're considering your.

01:19:07.39

Cody Morgan

Yeah, yeah.

01:19:14.99

ilm

There's someone else on the opposite side that trade who has a different opinion than you and ah, you're just meeting in agreement to say like I think it's going to go this I think it'll do that. That's like in the big short he was. He went to the banks himself in the movie at least he went to the banks and was like hey I want.

01:19:18.20

Cody Morgan

Yep.

01:19:30.31

ilm

I Want to short these mortgage-backed securities and they all laughed at him because like there's no way this is going to go down. He had to he had to create this new product that would allow him to do this. So ah yeah, he was he was forcing them or he was He bought the ability to be able to buy that company back from them.

01:19:36.16

Cody Morgan

Yeah.

01:19:47.18

ilm

At a predetermined price. So if it goes to 0 He has these big built and gains now at the end of the movie. Ah Steve Carerell is like we gotta do it. It's now or never you know you know's talking about. He's on top of the skyscraper. It's actually not him who says that it's thedu's yelling at him. He's like he has this moral conflict should he actually do it will he be like the rest of the bad guys and find like fine. We'll do it. They make a.

01:19:57.87

Cody Morgan

Um, yeah, yeah.

01:20:06.74

ilm

<unk>llion dollars. Um in that scenario I think with that came I mean technically you could exercise at zero because someone you got to to get the thing delivered for thirty bucks a share so you just made thirty bucks per share I think that situation where it's like if you don't do it now. It's never going to happen. Um.

01:20:15.56

Cody Morgan

Ah.

01:20:22.64

ilm

And that could have been again. I'm not the person I talked to about options by any means if you can't tell I haven't thought about options in 8 years since I took all these tests like I don't I don't trade options I'm a pretty boring dude. The only time options are considered is with clients who own like ah not to confuse things like stock options or like. Equity positions in their companies. We might look at options to hedge their risks of companies like if you in private if you own a company's stock that you can't sell. It's going to vest in 3 years maybe we could buy some options in order to hedge that risk of something you can't sell. That's really the only time I even think about these things so that's why I sound like an idiot right now. Um.

01:20:55.78

Cody Morgan

No, you Don's not you're doing waste smart than me I'm the one asking about you know Christian Bale drumming on drums to figure out how to short a stock. So.

01:21:05.69

ilm

No, you're good. Um, anyways. Ah I know where I was head. Oh yeah, at the end of the movie. He's like we got to do this. It's now or never, there's a few reasons that could happen again like options expire. So like I mean they basically automatically exercise if it makes sense like it'll just. Exercise it for you but maybe those wouldn't automatically and maybe they actually expired that day and it was like we got do this before they expire and you'd lost all your money or maybe it was like a liquidity place like this place is literally not going to have money to pay you so you have to exercise now let me if we're talking about like Apple stock and you short Apple stock from like $100 to $95 like.

01:21:37.47

Cody Morgan

You know what.

01:21:42.29

ilm

You You would make that and it went down. You would get that difference. You know so that that's why that movie it seems so crazy at the end is probably because we're talking about not just like shorting a company. We're talking about this cataclysmic collapse.

01:21:43.59

Cody Morgan

Okay, yes.

01:21:52.60

Cody Morgan

Yeah, and I mean well if it was just a normal like oo you made five bucks you wouldn't make a movie but it would be like well that was the most boring movie I've ever seen in my life like wow that was sweet dude you bought yourself a 24 pack of bushlight on that good job I'm happy for you.

01:22:01.73

ilm

Ah, the okay snort. But.

01:22:10.32

Cody Morgan

Um, all right? So now we're gonna come up to the end of this but I have some fun questions for you. Okay to change it up all right? So here's the first one are you ready for this all right? if you can meet 1 person from history or right now dead or alive who would it be and why.

01:22:20.32

ilm

Stew it.

01:22:29.79

ilm

I guess is probably super cliche but it'd be it'd be Jesus ah yeah um na now war jesus is wayr the Warren Buffett ah

01:22:31.43

Cody Morgan

All right? That's a good one I was not I was trying to say Warren Buffett I'm not gonna lie idea. Well yeah, we can all agree upon now one come on now. All.

01:22:45.95

ilm

I Feel like yeah feel like that's one the cough out answer almost. But yeah I mean.

01:22:48.43

Cody Morgan

Yeah, that was okay, all right, Let's do. Okay besides him Obviously yes, okay, who else then.

01:22:55.92

ilm

Ah, yeah I guess my other answers would be super cliched be other apostles. So probably Peter maybe Paul ah Stephen okay outside of no okay, no no biblical, no biblical person. Um man I don't know. Ah.

01:22:59.28

Cody Morgan

No okay, you can't no now man you're cheating. Okay, we're moving on to another one. You're a cheater. Yeah yeah.

01:23:11.67

ilm

Maybe King Griffy Junior I'm kidding that was my favorite baseball favorite kid. Ah no, there's.

01:23:12.72

Cody Morgan

Do it? Well he is my first glove man back in the day I had the blue glove It was sweet. It was signed by him in gold. It was the coolest glove ever had. Yeah.

01:23:19.21

ilm

I Do everything I hit left handed on all sports because when I was little like I'm naturally right handed but I wanted to be a lefty like griffy. So I first screwed me up but I I I'm Amex because that.

01:23:26.65

Cody Morgan

Oh isn't it amazing isn't amazing like a guy like that right? like I mean yeah, he was good and the team was okay but they weren't phenomenal, right? There's not like a Derek Jeter out out there like. Best ever but like everybody from our age group knows exactly who King Griffy Junior is yeah like I mean it's awesome. It's like being from Minnesota and if you don't know who Kirby Puckett is it's like you might as well just get out of the state man.

01:23:46.47

ilm

Dude, Best best swing in history. Best swing in baseball.

01:23:55.81

ilm

Ah, now my my realize maybe ah my my great great, great. Something grandpa many generations down was a guy ah named John Rogers who was burned at the stake by Bloody Mary for translating the bible to english um, like people's english in England and he was burned at the stake while his his wife and kids watched what one of those kids was my great. Great great something grandpa. That's pretty crazy. So ah, the bold move.

01:24:24.13

Cody Morgan

Dude, that's that's nuts man all right? Yeah wow all right? That's a bold 1 all right cool all right? Ah, we'll make this one fun. All right take a trip to the beach or to the Forest which would you rather do.

01:24:35.13

ilm

Is the forest flat or mountainous.

01:24:39.99

Cody Morgan

Ah, let's say okay now it's 3 all right the beach or you can go to like Yosemite where it's mountainous hiking or it's a flat forest like ah the plains of like Montana.

01:24:49.60

ilm

Yeah, do I Do the mountains I grew up as a beach guy but man I Just love the the crisp mountain air a good mountain like a good stream in the mountains and maybe a aspen grove who can't beat it. Yeah.

01:25:04.33

Cody Morgan

Oho nice a little town called as spin all right cool now. Let's say right? You go back to being you know, 20 something you're just getting out of college. Let's say you're not going to start your own company. You're going to go work for a company right? and they offer you this they say hey we can either give you invest in 4 1 k for you or we're gonna start.

01:25:07.56

ilm

And.

01:25:22.60

Cody Morgan

Giving you bitcoin in your retirement fund which one would you pick? Well I already know which 1 you would pick obviously the let's do both okay 2011 Jim and then let's say there's another person of you who just is about to graduate this may.

01:25:25.12

ilm

What is this me present getting out of school or is this be present is this me graduating in 2011

01:25:39.78

Cody Morgan

And you already have your job and they call you let's say I'm about to graduate this may I'm gonna go work for a company and I so call you up and I say hey Jim I need some advice they're offering me these options which one would you do so let's start out with Jim in the twenty eleven yeah and you can buy 5 3 pizzas with it.

01:25:52.43

ilm

2011 heck yeah I take bitcoin. No no doubt my mind present Jim yeah ah present Jim if I mean let's say let's all think equal. They'll give me $100 a month in company match.

01:25:58.47

Cody Morgan

And be awesome.

01:26:07.82

ilm

If I have to do the 4 1 k to get that company match I'll do the four 1 k up to the company match if they say Jim I'll just give you a hundred bucks you can put towards the I'll put it towards a 4 1 k or towards bitcoin I take the bitcoin but I do I I do I do like particating in 4 1 k's up to a company match at least being on your.

01:26:07.98

Cody Morgan

Yep.

01:26:18.12

Cody Morgan

Okay, awesome. All right? and.

01:26:26.79

ilm

Situation and tax situation. All that like my wife and I we were both fortunate enough in our late 20 s to work with companies with fantastic matches. So my wife worked at the company that had a dollar for dollar 10 percent match and the company I worked had a dollar for dollar seven percent match and we took advantage of those and invested it really well and made a whole bunch of money. Now my wife most of her friends she works at the airline most of her friends did not participate in the four 1 k because they' were like 26 and I was like I just want to go to brunch and like you know, try spend travel which is great like go to brunch and travel but like but they were 30 and had. Never put a dollar into their 4 on k plan versus my wife has a whole bunch of money in hers like yeah, there's it's good. It's free money. So anyways.

01:27:07.87

Cody Morgan

Now all right? and then all right if you could go back right? back in the early nineteen ninety s right during the.com boom right? Would you rather buy $10000 in a tech stock Apple Microsoft your pick. Whatever. Or would you rather buy $10000 in bitcoin when that dude bought the 3 pizzas with it which one would you rather do.

01:27:30.93

ilm

I I would do the bitcoin without doing the math I would assume that bitcoin has gone up even more than like ah let's say Amazon and like 2000 ah versus bitcoin from like zero nine um

01:27:39.26

Cody Morgan

Yeah.

01:27:45.94

ilm

I would assume bitcoins gone up more in that time frame I Honestly I probably sound dumb did not know that um, but even from a even if if I especially if I had to if I continue had to continue owning the asset moving forward I would rather have bitcoin and also from a ah.

01:28:03.83

ilm

Maybe an altruistic perspective like I I like owning bitcoin I think it is a better form of money that would advocate for versus like owning a company. That's just me and that's not investment advice. But.

01:28:14.19

Cody Morgan

Nice all right? Oh yeah, no, this is all just for fun. Um, okay, and then this ah this is a question that my son asked me the other night and so I got to ask you this if you could only eat one food. The rest of your life. What would it be.

01:28:26.52

ilm

Would it be healthy for me by default.

01:28:29.44

Cody Morgan

Yeah, like yeah sure Christmas chronicles too. You eat cake and it's like broccoli or something like that right? I don't know if you've seen that yet. but yeah. but yeah

01:28:38.63

ilm

Haven't ah man man.

01:28:40.21

Cody Morgan

You'll you'll live like you'll be who you are whatever but you can only eat one food. It's like literally every other food disappears off the planet except for this one food and you have to eat it. What would it be.

01:28:48.71

ilm

Oh that's tough I'm conflicted maybe either ah like a medium rare ah rib eyee or fill a or or chocolate ice cream. Um, ah.

01:29:00.56

Cody Morgan

But that was like the most Texas I answer I've ever heard in my life. Yeah yeah, nice, nice, awesome. Okay, and then the last thing I got for you is what would you give.

01:29:07.27

ilm

And maybe be 1 of those. Ah if I was going to make more things we have more more Texas and be like or maybe enchilatas.

01:29:20.60

Cody Morgan

And was talked about a person who's just graduating from college or trade school or whatever. Let's say mid 20 s right? and they're about to start you know hey we just got out I don't have any debt right now. What advice would you give them right away.

01:29:37.12

ilm

Um I would I really encourage people to think through investing your time and and yourself really well like I think that your 20 s or a large part of your twenty s is to learn about yourself and to learn about the world and things around you. And investing by trying stuff is really important. So um, one um, try things and I say this I try to hedge what how say this? so try things and be willing to stop when you recognize. That you don't enjoy or aren't good at something but also don't just sit around waiting like oh what am I Pat like I don't wait you to sit around like thinking about what you're passionate about while not doing anything. You're not going to find your passions or your talents by doing nothing so try stuff at the same time. Don't allow that try things side of things to be an excuse. To be flaky. Do things really? well. You also won't learn about yourself and learn about things unless you're doing them well like if you're just haphazardly trying things and just you know flippantly going about it. You won't get enough out of it and also you'll be cheating the other people. So yeah, invest in yourself and and learning about things like I um. Got Kendra and I got married ah when I was I just turned 22 I always romanticize being a poor newlywed and we were super poor really woods like 2013 I think our gross household income was like thirteen thousand bucks like ah super broke and ah I tried different weird jobs.

01:31:09.62

ilm

And I started a business that was a flop but it was so much fun and like we just tried different stuff and then ah I I actually went to I had a career job for like four days and I remember those four days the first day I was like wow this is sort of fancy out a big office and it was like the sixtieth floor this fancy highrise in Dallas was a big corner office all glass. And ah, the first day I was like this is sort of neat I feel like an adult day two I getting in the elevator and it was like man when you're a kid and you think I don't want to grow up because I don't want to be an adult. This is the adulthood that you picture that you don't want to be by day three like I began praying and fasting about whether I should be there. And day four I quit and ah you know I and then I went from a few different jobs and I tried stuff I remember feeling a lazy bum in that period like I feel like my in-laws were probably disappointed for letting my wife marry me because like I wasn't in a secure job. And it wasn't because I wasn't trying things or trying to do well is because like I wanted to explore and figure out where I should be and what I am good at meanwhile I have a few friends who have since told me this um, almost apologetically I have a few friends who worked really decent jobs doing things that were safe and secure and comfortable. They knew weren't long-term jobs but they were the responsible thing to do and those friends since are now like we're all in our early mid 30 s and a lot of them are now they've recently left those jobs because it was sort of like it worked out really well in your twenty s and now they're sitting there like I don't know what I want to do when I grew up.

01:32:38.93

ilm

But now I'm married with three kids and it's really hard to like try new things at this point I have a lot friends who have since told me like Jim never told you this but I definitely thought you were a bum for a few years there and now I realize that you were you learned enough about yourself that you're able to like go deep so like for me when I started in finance I didn't know what if.

01:32:49.83

Cody Morgan

Um.

01:32:58.40

ilm

I didn't know what a cfp was or really financial planning was at all I just knew I wanted to help people with their money. That's it and that's why I started and I I took a friend of a friend helped me get a job at a big firm with that premise and from day one like I found in like ah vice president was like hey how do i. How have better conversations with people. How do I get in front of people instead of on the phone. Oh you need? Ah you need read these books and you get this certificate you you go this position I started running so hard I was working 70 hours a week and reading any chance I could and I went from job to job to job and certificate to certificate all that fun stuff and grew. And over time like I didn't know that I eventually want to have my own financial planning company serving people in this way but I did get more direct like okay I don't want to do roofing sales I know that for sure. Ohh I like working with people with money like oh I actually like working with people with like their holistic money picture. Who I like working with people about these things. Oh I need that in my own company. Oh I like working with this type like well I want my company to look like this eventually and ended up here. So yeah I I came to that conclusion by learning about myself and also what was out there.

01:34:03.99

Cody Morgan

Nice, well look at that awesome. Well, that's all I got for you unless you got any parting shots.

01:34:09.90

ilm

Oh man, think that's it I talked way too much. But thanks for flattering me with all of your questions I'd fun.

01:34:16.41

Cody Morgan

Oh yeah, me too and I bet it's different being on the other side where you normally just ask the question. Let the guy talk now you got to be the one talking the whole time. So.

01:34:26.70

ilm

Yeah, the the ah I feel like ah the wizard of Oz suddenly the the curtain's gone up and it's just me behind there pulling some ropes I'm not a big deal. No.

01:34:31.10

Cody Morgan

Yeah, ah that just tell it just tell me. Yeah, oh you're a big deal in our household by the way. So yeah, you're the you're the financial guru. Yeah, nice.

01:34:42.57

ilm

Thanks Cody but dang I'm it awesome! Thanks for coming on Cody.

01:34:49.88

Cody Morgan

No thank you very much.