Speaker 1: What happens when nine trillion dollars in boring four to
Speaker 1: oh one k money gets permission to chase yield.
Speaker 2: Because that's about to happen. Trump's signing the order. The
Speaker 2: game is.
Speaker 1: About to change forever. I'm talking about trillions of dollars
Speaker 1: that have been stuck in losing or low yielding retirement
Speaker 1: accounts now being able to go by bitcoin or private
Speaker 1: equity or real estate. And for the first time in history.
Speaker 1: Now this isn't speculation.
Speaker 2: It's happening. And here's what everybody's missing.
Speaker 1: This is about the entire financial system reorganizing. When the safest,
Speaker 1: most conservative money in America, retirement accounts, starts chasing alternative assets,
Speaker 1: you get what's called an asset supercycle, now, the kind
Speaker 1: that creates generational wealth. So in this video, I'm going
Speaker 1: to show you exactly which assets explode first, the timeline
Speaker 1: that Wall Street doesn't want you to see, and how
Speaker 1: to position yourself before.
Speaker 2: The herd arrives.
Speaker 1: So let's go all right, So we are talking about
Speaker 1: one of the biggest moves in the financial system that
Speaker 1: we've seen today. Of course, it all comes on the
Speaker 1: back of Trump's executive order. Another one, now, He's racked
Speaker 1: up quite a bit of executive orders. Not something I'm
Speaker 1: super fond of. But anyway, that's beside the point. That's
Speaker 1: a whole another topic front of the video. What we're
Speaker 1: talking about is his executive order that's unlocking about nine
Speaker 1: trillion dollars and a massive amount of money, about forty
Speaker 1: three trillion dollars total are in these retirement accounts in
Speaker 1: the financial system. But this is affecting about nine trillion dollars. Now,
Speaker 1: the big move is that it can now take money
Speaker 1: the nine trillion in four one ks and can it
Speaker 1: push them into what we call alternative assets. Now, alternative
Speaker 1: assets is where I've basically made my entire career. Forget
Speaker 1: the stock, the S and P five hundred, We're talking
Speaker 1: about alternative assets. I'm going to break that down for
Speaker 1: you now. Part of the reason why is because, of
Speaker 1: course the S and P. Five hundred hasn't really been
Speaker 1: getting people where they need to be. We know that
Speaker 1: about half of all baby boomers are broke. They have
Speaker 1: no money, number one, Number two. Of the half that
Speaker 1: do have money average about two hundred and forty thousand dollars.
Speaker 1: So we need to get the returns to improve We
Speaker 1: need to get them to make more money if they're
Speaker 1: going to have any success or any hope of retirement.
Speaker 2: Now.
Speaker 1: Part of the reason why they've not been able to
Speaker 1: do this so far is because apparently it's too risky.
Speaker 1: People aren't smart enough to know what they're doing. It's
Speaker 1: too volatile. So we must protect them. At least that's
Speaker 1: what the government thinks, and Trump says, no more, no
Speaker 1: more of that, So he signed this executive order to
Speaker 1: specifically allow people to take their own money in their
Speaker 1: four oh one K that they was holding the back
Speaker 1: from what they want to invest into, and now they
Speaker 1: could direct it.
Speaker 2: Now.
Speaker 1: A couple things that I think are worth noting in
Speaker 1: this specifically is we can see that this order unlocks
Speaker 1: a massive opportunity for PE firms.
Speaker 2: Private equity, and crypto investments.
Speaker 1: So bitcoin and cryptocurrencies, Like I said, about nine trillion dollars.
Speaker 1: The White House officials said, alternative assets again, not the
Speaker 1: SMP five hundred. They offer competitive returns. We need them
Speaker 1: to get their returns. It offers diversification benefits and will
Speaker 1: improve americans retirements prospects.
Speaker 2: That's the key piece. We need to get them a
Speaker 2: little bit more money.
Speaker 1: If they're going to have success, because surprise, surprise, social
Speaker 1: Security is not going to be there.
Speaker 2: Okay.
Speaker 1: It says that typically they have a fiduciary responsibility to
Speaker 1: plan participants people in the four one K to select
Speaker 1: appropriate investments, and alternative investments often are more volatile than
Speaker 1: typical funds.
Speaker 2: Okay, so they're trying to protect them.
Speaker 1: They don't want them to diversify out too much because
Speaker 1: typically alternative investment investments are more volatile.
Speaker 2: Okay. I'm going to show you some of the data
Speaker 2: around that.
Speaker 1: So this is a chart right here of the treasury bonds.
Speaker 1: This is represented by the TLT, which is an ETF
Speaker 1: of the long US Treasury bond, which is supposed to
Speaker 1: be the risk free rate. It's the bedrock of the
Speaker 1: global financial system. And what this shows us is that
Speaker 1: over the last five years, you've lost about fifty percent
Speaker 1: of your money. Now, most financial plans in a four
Speaker 1: one K your financial advisor put you into is something
Speaker 1: what's called a sixty forty portfolio, meaning sixty percent of
Speaker 1: your money is in stocks, forty percent of it is
Speaker 1: in bonds.
Speaker 2: And look at what's happened.
Speaker 1: You've lost fifty percent of your money so rather than
Speaker 1: your money being stuck and your plan advisor putting you
Speaker 1: into plans like this that lose money, I think it's
Speaker 1: a good idea to let you choose where you want
Speaker 1: to put your money. But let's explore the alternative investments. Okay,
Speaker 1: the three horsemen of these alternative investments. We're talking about
Speaker 1: real estate. We're going to dig into that private equity.
Speaker 1: We'll take a look at that, and of course my
Speaker 1: favorite bitcoin will take a look at that. So let's
Speaker 1: go through these one at a time. Let's start with real estate.
Speaker 1: Of course, if you've been following me for any time,
Speaker 1: you know that I started my career in real estate.
Speaker 1: I still own real estate. I like real estate. But
Speaker 1: there's a couple things that we should know, specifically around
Speaker 1: in your four to one K in your retirement account.
Speaker 1: They talk about liquidity, they talk about volatility, and in
Speaker 1: real estate is certainly ill liquid You can't sell it quickly.
Speaker 1: At best case scenario, it's probably a couple months. Sometimes
Speaker 1: it could be even worse, depending on the market cycle
Speaker 1: where you're located.
Speaker 2: Things like that. The other thing with.
Speaker 1: Real estate is that there's high transaction costs. It's very
Speaker 1: expensive to sell a piece of real estate. It's also big,
Speaker 1: big sales, big purchases, big amount. So let's just say
Speaker 1: you needed five thousand dollars for a purchase or ten
Speaker 1: thousand dollars fortification. You can't just get five or ten
Speaker 1: thousand dollars out of your house, so it's i liquid.
Speaker 1: There's high transaction costs to move them. And so most
Speaker 1: likely if people were going to use this in a
Speaker 1: retirement account, they'd probably use something like a rate, a
Speaker 1: real estate investment trust, something like that. They wouldn't want
Speaker 1: to own it directly. They wouldn't want the maintenance headache.
Speaker 1: They wouldn't want the property managers getting calls late at
Speaker 1: night when your toilet's breaking down.
Speaker 2: Things like that.
Speaker 1: Some other things with real estate in a retirement account
Speaker 1: that can be problem matic is a geographic concentration risk.
Speaker 1: But if we take a look at the case Shiller
Speaker 1: index for real estate, we can see a couple things.
Speaker 1: Number one, this goes back to nineteen eighty eight. Real
Speaker 1: estate had been pretty much flat here until the dot
Speaker 1: com bubble blew up. When the dot com bubble blew up,
Speaker 1: rates went down, real estate went up into a bubble.
Speaker 1: Two thousand and eight we had the real estate crash,
Speaker 1: and we've been basically on an upward trend ever since.
Speaker 1: So the last couple decades real estate has been a
Speaker 1: pretty good investment. Now, let's stack this up and take
Speaker 1: a look at it in a chart here. So what
Speaker 1: we have here is reates versus direct So how should
Speaker 1: we own real estate, especially if we can get money
Speaker 1: from our retirement account into real estate specifically, So the
Speaker 1: investment type here is an equity rate. Here is a
Speaker 1: private sire commercial real estate, and here we.
Speaker 2: Have us home prices.
Speaker 1: And what this shows over one year, the rates have
Speaker 1: performed better in a one year period eight point seven
Speaker 1: versus two six and two seven. Over three years they
Speaker 1: didn't do too well. However, they lost less. Let's just
Speaker 1: stay in commercial real estate and over five years and
Speaker 1: over ten years they outperformed. So if I was going
Speaker 1: to move some of my money in my four one
Speaker 1: k into one of these horsemen's into the real estate bucket,
Speaker 1: the equity rates are probably the best option for me
Speaker 1: in this scenario.
Speaker 2: Now, of course, there's more advanced options. We're not talking
Speaker 2: about that. We're just talking about in your retirement account specifically.
Speaker 1: It looks like it's when there. Okay, remember those numbers.
Speaker 1: We're going to stack all these up at the end.
Speaker 2: Okay.
Speaker 1: The second horseman would be in my alternative investments is
Speaker 1: private equity. Now Tony Robbins recently wrote I Believe, his
Speaker 1: third book on money, part of the trilogy, where we
Speaker 1: talked about private equity being one of the best investments
Speaker 1: that you can get into, and he talks about wre
Speaker 1: Typically you're going to make twenty to thirty percent on
Speaker 1: your money versus you know, sp five hundred and six
Speaker 1: or eight percent return. A couple things they know about
Speaker 1: private equity. Typically they have pretty high minimum investments, so
Speaker 1: typically you probably need to be an a credit investor.
Speaker 1: Means you're making over two hundred fifty thousand or a
Speaker 1: million dollars of assets, and.
Speaker 2: Typically you need to put two hundred and fifty thousand.
Speaker 1: Up to one million dollars into private equity. Also, the
Speaker 1: thing with them is they're not very liquid. Typically you
Speaker 1: have to lock up about five to ten years. When
Speaker 1: you put your money into the fund, it's stuck there.
Speaker 1: You can't get it back for like a five to
Speaker 1: ten year period. Not ideal if you're towards the end
Speaker 1: a nearing your retirement. Obviously, if you're just starting out,
Speaker 1: maybe that works.
Speaker 2: Okay.
Speaker 1: As I said, typically you have to have an accredit
Speaker 1: investor requirement.
Speaker 2: Of course, liquidity issues.
Speaker 1: If you're within that lock up period, you can't get
Speaker 1: any of your money out. And then typically they have
Speaker 1: very high fees, so you're typically going to pay two
Speaker 1: or twenty What that means is of the money that
Speaker 1: you have in the fund, they're going to take two
Speaker 1: percent as management fees, So every year, two percent of
Speaker 1: the money of in goes to management. And then on
Speaker 1: the upside, they're going to take twenty percent of the
Speaker 1: gains that they get you.
Speaker 2: Okay, let's take a look at how this is working out.
Speaker 1: What we can see here is that we are currently
Speaker 1: getting more and more allocations going to private equity from
Speaker 1: large institutions. And the reason why is again because of
Speaker 1: their performance, right, because they're beating regular funds. And what
Speaker 1: we can see here is the allocations we see for
Speaker 1: endowments and foundations. They're the leader in allocating to private equity.
Speaker 1: Endowments being like Yale, Harvard, things like that. We can
Speaker 1: see they're allocating about twenty five to thirty two percent
Speaker 1: of their entire fund towards private equity, just so you
Speaker 1: can see how they're allocating this. Again, most people, most
Speaker 1: individuals don't have any, but the endow onents they do
Speaker 1: twenty five to thirty two percent. Okay, what we can
Speaker 1: see is since they've been doing this and sort of
Speaker 1: going back to Tony Robbins book, we can see the growth.
Speaker 1: Here's the year two thousand and look at the amount
Speaker 1: of growth.
Speaker 2: Here we are. This is only to twenty twenty two.
Speaker 1: You can see the enormous move for money going into
Speaker 1: private equity, chasing yield. The S and P five hundred
Speaker 1: hasn't been performing well, the mag seven have four hundred
Speaker 1: and ninety three, other companies not doing so well, and
Speaker 1: so they're chasing yield. Where do we get it, Well,
Speaker 1: they move to private equity. Well, let's stack these up
Speaker 1: and take a look at what we've got so far
Speaker 1: and what we can see. Here's the assets we have
Speaker 1: private equity right here, here's the S and P five hundred, NASDAK,
Speaker 1: the Russell two thousand and then the Treasury bond. What
Speaker 1: we can see over one year, three year, five years,
Speaker 1: and ten years. And what we can see is that
Speaker 1: while private equity looks really good.
Speaker 2: Actually, the winner has been the NASDAK.
Speaker 1: What we can see over one year, three years, five years,
Speaker 1: and ten is we have seven point one percent. One
Speaker 1: P five hundred did better over one year. The Nasdaq
Speaker 1: did even better in the one year period. Over five years,
Speaker 1: we got seven percent here in private equity, almost eleven
Speaker 1: percent in the.
Speaker 2: S and P five hundred, eight and a half in Nasdaq.
Speaker 1: Five years, sixteen percent in private equity, about sixteen percent
Speaker 1: SP five hundred, but almost nineteen.
Speaker 2: Percent in the Nasdaq.
Speaker 1: And over ten years we have fifteen percent in private equity,
Speaker 1: thirteen percent in five hundred and sixteen percent in Nasdaq.
Speaker 2: So all of them are actually pretty close. Now.
Speaker 1: Of course, this is a private equity index. Some have
Speaker 1: done way better, some have done way worse. What we
Speaker 1: can see somewhat pretty close now. The Russell index has
Speaker 1: done pretty poorly overall, hasn't kept up about half of that.
Speaker 2: I did put.
Speaker 1: The US Treasury bonds on here just so you could
Speaker 1: see over one year, lost five percent, over three years,
Speaker 1: lost ten percent over five years. They've done pretty terrible.
Speaker 1: We also have real estate down here at the bottom
Speaker 1: ten percent, four percent, six and a half percent, and
Speaker 1: six percent So what we can see here is that
Speaker 1: the Nasdaq has been better performing than real estate and
Speaker 1: private equity.
Speaker 2: And of course most of you.
Speaker 1: Can buy the Nasdaq and this and P five hundred
Speaker 1: in your four to one ks right now. You don't
Speaker 1: need alternative investments to do that. Okay, let's go to
Speaker 1: the third horsemen of alternative investments, my favorite, of course, Bitcoin.
Speaker 2: Now, part of the reason why I love bitcoin.
Speaker 1: Is it's brand new, it's technology, it's changing the world
Speaker 1: as we know it.
Speaker 2: But it's also had the best performance.
Speaker 1: It has been the best performing asset over pretty much
Speaker 1: any period in time fifteen years, ten years, five years,
Speaker 1: three years, and one year. Let's take a look at
Speaker 1: it when we stack it all up. So if we
Speaker 1: have private equity, sm P five hundred, NASDAK Russell Treasury,
Speaker 1: and now we have Bitcoin here. So instead of seven percent,
Speaker 1: twenty four percent or twenty nine percent, the Nasdaq looked
Speaker 1: really good. Bitcoin did seventy, not twenty nine, seventy.
Speaker 2: Over three years.
Speaker 1: We had the winner here the s and P five
Speaker 1: hundred at ten point nine, but Bitcoin did sixty three percent.
Speaker 2: Over five years.
Speaker 1: We had the winner right here at nas eighteen percent,
Speaker 1: but Bitcoin did eighty two percent over ten years, we
Speaker 1: had the winner right here again back to the NASDAK
Speaker 1: at sixteen percent, but Bitcoin did one hundred and thirty
Speaker 1: nine percent. So pretty much, over any time period you
Speaker 1: want to look at, bitcoin has outperformed. Hard to argue
Speaker 1: with that, but how people would argue with it? But
Speaker 1: they'd say, but the risk, it's too volatile.
Speaker 2: Well, what we want.
Speaker 1: To do as investors is we think about the risk
Speaker 1: adjusted returns. One of the ways we do that is
Speaker 1: we use something called a sharp ratio. The sharp ratio
Speaker 1: looks at.
Speaker 2: Both the risk and the reward that we have.
Speaker 1: So if we take a look at the sharp ratio
Speaker 1: of a couple assets, let's look specifically at the sharp
Speaker 1: ratio of Bitcoin and the US Treasury. Specifically, what we
Speaker 1: can see is that the max draw down of the
Speaker 1: US Treasury for the last five years ending June thirtieth,
Speaker 1: twenty twenty five was forty eight percent.
Speaker 2: About half your money was lost hold in US treasuries.
Speaker 2: In bitcoin, it went down.
Speaker 1: The max draw down was actually seventy six percent, so
Speaker 1: the draw down was much worse. However, if we look
Speaker 1: at the sharp ratio, which looks at both the draw
Speaker 1: down and the return profile. We see that TLT was
Speaker 1: point thirty nine, which was very risky. We see that
Speaker 1: Bitcoin was over one, which was much much safer. And
Speaker 1: the reason why is because you have to look at
Speaker 1: both the return and the game, or the risk and
Speaker 1: the reward. I should say, so when we look at
Speaker 1: TLT over one month, three months, six month, one year,
Speaker 1: three or five years, and we see that again it
Speaker 1: is down heavily five years thirty eight percent, But if
Speaker 1: we look at Bitcoin, it was all gains.
Speaker 2: Over one thousand percent game.
Speaker 1: And so you have to understand risk and reward in
Speaker 1: both of these, and so we can see across the
Speaker 1: board bitcoin wins. But a couple things to keep in mind.
Speaker 1: It's not just about total performance, total volatility, total risk.
Speaker 1: We also want to think about liquidity. How fast can
Speaker 1: I get my money out? Like with real estate specifically
Speaker 1: if I have single family residents, how long does it
Speaker 1: take me to get money out if I just need
Speaker 1: a little bit five thousand, three twenty thousand? How liquid
Speaker 1: is that market? All right, now, let's get to the
Speaker 1: super cycle part of this, because, as I said, we
Speaker 1: have about nine trillion dollars that's going to be unlocked
Speaker 1: and it's going to rush into these types of assets.
Speaker 2: So what does history say about this?
Speaker 1: What can we learn? Well, a couple things that we
Speaker 1: can learn. First of all, we know that the four
Speaker 1: to one K was created by the Revenue Act in
Speaker 1: nineteen seventy eight. Okay, so it's when they change things,
Speaker 1: when money started flowing into it. We know that stocks
Speaker 1: became standard in a four to one K around the
Speaker 1: early nineteen eighties. We saw that the S and P
Speaker 1: five hundred in nineteen eighty one was about one hundred
Speaker 1: and thirty and today it's about fifty eight hundred. That's
Speaker 1: a forty four times increase since the four to one
Speaker 1: k's came into existence and started buying stocks what we
Speaker 1: call passive flows, passively buying them. Now, this is this
Speaker 1: is different than retail investing. Retail investors are trying to
Speaker 1: time things. Should I buy now? Should I wait? Four
Speaker 1: to one k's are every other week. My paycheck has
Speaker 1: money that goes into my four oh one K and
Speaker 1: it automatically buys back to the passive income. But for
Speaker 1: an illustrative chart, we can see here from nineteen thirty
Speaker 1: until this point when the four ones were created nineteen
Speaker 1: eighty we can see that the S and P five
Speaker 1: hundred was relatively flat. Yes, it went up and down,
Speaker 1: but it was relatively flat.
Speaker 2: But look at what happened since four to one k's
Speaker 2: started buying the S and P five hundred, it started
Speaker 2: going straight up.
Speaker 1: So, if history is our guide and we now know
Speaker 1: that the four one ks can unlock and that capital
Speaker 1: can now move into three types of alternative assets, what
Speaker 1: do you think happens to those three.
Speaker 2: Types of alternative assets?
Speaker 1: Well, that may not be definitive, but let's put a
Speaker 1: let's put a number on it here. What we can
Speaker 1: see is that if we do the math on how
Speaker 1: the capital should flow, we can see again, if there's
Speaker 1: nine trillion dollars sit in four O one k's, if
Speaker 1: one percent of that allocation moved into alternative assets, that's
Speaker 1: almost ninety billion dollars. Ten percent of that moved out
Speaker 1: of four own k's and into one of these three
Speaker 1: assets are all three, that's almost nine hundred billion dollars. Now,
Speaker 1: just to put things into some math, If that's almost
Speaker 1: nine hundred billion dollars, the entire crypto market is only
Speaker 1: four trillion. Bitcoin's only about two trillion dollars. So what
Speaker 1: happens when almost one trillion moves into a two trillion
Speaker 1: dollar market.
Speaker 2: Yeah, it explodes. You can do the math. But let''s
Speaker 2: look at some other parts of history.
Speaker 1: What we can see here is we can understand that
Speaker 1: pension funds entered also into stocks in the seventies. We
Speaker 1: know that insurance companies started buying real estate in the
Speaker 1: nineteen eighties. We know that endowments they started moving into
Speaker 1: stocks in the nineteen nineties.
Speaker 2: This is into private equity and to venture capital.
Speaker 1: And we have the tech boom, but now we have
Speaker 1: retirement accounts moving.
Speaker 2: Into this new alternative investment class.
Speaker 1: Let's take a little bit more charts, So let's look
Speaker 1: at gold, for example. We can see what happened right
Speaker 1: around the same time nineteen eighty gold had been kind
Speaker 1: of moving higher, and then look.
Speaker 2: At the growth that we have right there. As a
Speaker 2: matter of.
Speaker 1: Fact, you can see before it happened and after, before
Speaker 1: gold became legalized.
Speaker 2: A lot of people don't understand this, but back here, well,
Speaker 2: we don't go that far.
Speaker 1: Back in nineteen thirty three, the US government took everybody's
Speaker 1: gold and made it illegal to even own gold. And
Speaker 1: it wasn't until here that you were able to own
Speaker 1: gold legally.
Speaker 2: Again.
Speaker 1: So again, when a rule change happened legally and people
Speaker 1: could move their money into the asset, what happened, Well,
Speaker 1: gold went.
Speaker 2: Up, as you can see over four times.
Speaker 1: This is the history and this is what happens when
Speaker 1: money gets unlocked and can move into new assets.
Speaker 2: It creates a super cycle.
Speaker 1: So I've been talking a lot about something I call
Speaker 1: the quantum wealth window. About every fifty years we have
Speaker 1: a technological revolution that opens up.
Speaker 2: Now there's two things that happened.
Speaker 1: One of the technology changes the course of humanity, right,
Speaker 1: like instead of walking and riding horses, we had to
Speaker 1: have cars. Right, instead of having to send a letter
Speaker 1: in the mail, we now have the internet and email,
Speaker 1: and we have that going on right now. We also
Speaker 1: know that the richest people in the world, the legacy wealth,
Speaker 1: was always created.
Speaker 2: In one of these wealth windows.
Speaker 1: Now we are in the sixth wealth window we've seen
Speaker 1: in the last three hundred years. And at the same
Speaker 1: time we're seeing this, we're seeing now nine trillion dollars
Speaker 1: being unlocked and ready to rush into these new asset
Speaker 1: classes cryptocurrencies, bitcoin, etc. Now this isn't just another trade,
Speaker 1: it's not a short term move. This is a structural
Speaker 1: reformation of the entire capital market, right, not another trade.
Speaker 1: We're talking about nine trillion dollars that just got permission
Speaker 1: to now come out of their locked gates in a
Speaker 1: four one K and can now come into these assets again.
Speaker 1: Not a correction, a reformation, and this is the greatest
Speaker 1: wealth transfer in history. Now, if you want to know
Speaker 1: more about how we're positioning for these and how that
Speaker 1: money might move into bitcoin and where that goes over
Speaker 1: the next ten, twenty, thirty forty years, you might want
Speaker 1: to watch this video right here, and I'll see you
Speaker 1: over there.