WEBVTT - “The Greatest Wealth Transfer in History” - Trump 401k Changes Explained 0:00:00.160 --> 0:00:03.280 What happens when nine trillion dollars in boring four to 0:00:03.279 --> 0:00:05.760 oh one k money gets permission to chase yield. 0:00:05.800 --> 0:00:09.119 Because that's about to happen. Trump's signing the order. The 0:00:09.160 --> 0:00:09.840 game is. 0:00:09.800 --> 0:00:12.880 About to change forever. I'm talking about trillions of dollars 0:00:13.080 --> 0:00:16.200 that have been stuck in losing or low yielding retirement 0:00:16.239 --> 0:00:19.480 accounts now being able to go by bitcoin or private 0:00:19.480 --> 0:00:22.720 equity or real estate. And for the first time in history. 0:00:22.920 --> 0:00:24.200 Now this isn't speculation. 0:00:24.600 --> 0:00:27.360 It's happening. And here's what everybody's missing. 0:00:27.600 --> 0:00:32.080 This is about the entire financial system reorganizing. When the safest, 0:00:32.440 --> 0:00:37.360 most conservative money in America, retirement accounts, starts chasing alternative assets, 0:00:37.600 --> 0:00:41.000 you get what's called an asset supercycle, now, the kind 0:00:41.040 --> 0:00:43.839 that creates generational wealth. So in this video, I'm going 0:00:43.920 --> 0:00:47.360 to show you exactly which assets explode first, the timeline 0:00:47.360 --> 0:00:49.879 that Wall Street doesn't want you to see, and how 0:00:49.920 --> 0:00:51.839 to position yourself before. 0:00:51.520 --> 0:00:52.440 The herd arrives. 0:00:52.520 --> 0:00:56.440 So let's go all right, So we are talking about 0:00:56.640 --> 0:00:59.120 one of the biggest moves in the financial system that 0:00:59.120 --> 0:01:01.520 we've seen today. Of course, it all comes on the 0:01:01.560 --> 0:01:06.040 back of Trump's executive order. Another one, now, He's racked 0:01:06.120 --> 0:01:08.520 up quite a bit of executive orders. Not something I'm 0:01:08.600 --> 0:01:11.039 super fond of. But anyway, that's beside the point. That's 0:01:11.040 --> 0:01:13.000 a whole another topic front of the video. What we're 0:01:13.040 --> 0:01:17.040 talking about is his executive order that's unlocking about nine 0:01:17.480 --> 0:01:21.120 trillion dollars and a massive amount of money, about forty 0:01:21.200 --> 0:01:24.600 three trillion dollars total are in these retirement accounts in 0:01:24.600 --> 0:01:28.560 the financial system. But this is affecting about nine trillion dollars. Now, 0:01:28.640 --> 0:01:31.120 the big move is that it can now take money 0:01:31.200 --> 0:01:33.840 the nine trillion in four one ks and can it 0:01:33.880 --> 0:01:37.240 push them into what we call alternative assets. Now, alternative 0:01:37.280 --> 0:01:40.199 assets is where I've basically made my entire career. Forget 0:01:40.240 --> 0:01:42.080 the stock, the S and P five hundred, We're talking 0:01:42.120 --> 0:01:44.640 about alternative assets. I'm going to break that down for 0:01:44.720 --> 0:01:47.520 you now. Part of the reason why is because, of 0:01:47.520 --> 0:01:50.600 course the S and P. Five hundred hasn't really been 0:01:50.640 --> 0:01:52.960 getting people where they need to be. We know that 0:01:53.000 --> 0:01:56.520 about half of all baby boomers are broke. They have 0:01:56.560 --> 0:01:59.200 no money, number one, Number two. Of the half that 0:01:59.240 --> 0:02:02.200 do have money average about two hundred and forty thousand dollars. 0:02:02.240 --> 0:02:05.840 So we need to get the returns to improve We 0:02:05.840 --> 0:02:07.760 need to get them to make more money if they're 0:02:07.760 --> 0:02:10.920 going to have any success or any hope of retirement. 0:02:11.160 --> 0:02:11.359 Now. 0:02:11.440 --> 0:02:13.160 Part of the reason why they've not been able to 0:02:13.200 --> 0:02:16.160 do this so far is because apparently it's too risky. 0:02:16.600 --> 0:02:18.799 People aren't smart enough to know what they're doing. It's 0:02:18.840 --> 0:02:21.200 too volatile. So we must protect them. At least that's 0:02:21.240 --> 0:02:23.600 what the government thinks, and Trump says, no more, no 0:02:23.720 --> 0:02:27.040 more of that, So he signed this executive order to 0:02:27.160 --> 0:02:30.280 specifically allow people to take their own money in their 0:02:30.280 --> 0:02:32.440 four oh one K that they was holding the back 0:02:32.480 --> 0:02:34.040 from what they want to invest into, and now they 0:02:34.120 --> 0:02:34.840 could direct it. 0:02:34.960 --> 0:02:35.080 Now. 0:02:35.080 --> 0:02:37.040 A couple things that I think are worth noting in 0:02:37.080 --> 0:02:41.400 this specifically is we can see that this order unlocks 0:02:41.400 --> 0:02:43.720 a massive opportunity for PE firms. 0:02:43.560 --> 0:02:46.200 Private equity, and crypto investments. 0:02:46.200 --> 0:02:49.200 So bitcoin and cryptocurrencies, Like I said, about nine trillion dollars. 0:02:49.440 --> 0:02:53.000 The White House officials said, alternative assets again, not the 0:02:53.080 --> 0:02:56.080 SMP five hundred. They offer competitive returns. We need them 0:02:56.120 --> 0:02:59.280 to get their returns. It offers diversification benefits and will 0:02:59.360 --> 0:03:02.679 improve americans retirements prospects. 0:03:03.040 --> 0:03:05.079 That's the key piece. We need to get them a 0:03:05.120 --> 0:03:05.799 little bit more money. 0:03:05.800 --> 0:03:08.239 If they're going to have success, because surprise, surprise, social 0:03:08.240 --> 0:03:09.200 Security is not going to be there. 0:03:09.320 --> 0:03:09.560 Okay. 0:03:09.600 --> 0:03:12.760 It says that typically they have a fiduciary responsibility to 0:03:12.880 --> 0:03:16.120 plan participants people in the four one K to select 0:03:16.280 --> 0:03:22.359 appropriate investments, and alternative investments often are more volatile than 0:03:22.400 --> 0:03:23.440 typical funds. 0:03:23.639 --> 0:03:25.200 Okay, so they're trying to protect them. 0:03:25.520 --> 0:03:27.960 They don't want them to diversify out too much because 0:03:28.320 --> 0:03:31.840 typically alternative investment investments are more volatile. 0:03:32.040 --> 0:03:33.440 Okay. I'm going to show you some of the data 0:03:33.480 --> 0:03:33.919 around that. 0:03:34.280 --> 0:03:37.480 So this is a chart right here of the treasury bonds. 0:03:37.520 --> 0:03:40.080 This is represented by the TLT, which is an ETF 0:03:40.080 --> 0:03:42.600 of the long US Treasury bond, which is supposed to 0:03:42.600 --> 0:03:45.360 be the risk free rate. It's the bedrock of the 0:03:45.400 --> 0:03:48.400 global financial system. And what this shows us is that 0:03:48.600 --> 0:03:52.640 over the last five years, you've lost about fifty percent 0:03:52.800 --> 0:03:55.760 of your money. Now, most financial plans in a four 0:03:55.800 --> 0:03:58.320 one K your financial advisor put you into is something 0:03:58.360 --> 0:04:02.240 what's called a sixty forty portfolio, meaning sixty percent of 0:04:02.240 --> 0:04:04.520 your money is in stocks, forty percent of it is 0:04:04.560 --> 0:04:05.120 in bonds. 0:04:05.440 --> 0:04:06.640 And look at what's happened. 0:04:06.680 --> 0:04:09.120 You've lost fifty percent of your money so rather than 0:04:09.320 --> 0:04:12.080 your money being stuck and your plan advisor putting you 0:04:12.080 --> 0:04:14.040 into plans like this that lose money, I think it's 0:04:14.040 --> 0:04:16.320 a good idea to let you choose where you want 0:04:16.360 --> 0:04:19.880 to put your money. But let's explore the alternative investments. Okay, 0:04:20.080 --> 0:04:23.400 the three horsemen of these alternative investments. We're talking about 0:04:23.440 --> 0:04:26.200 real estate. We're going to dig into that private equity. 0:04:26.240 --> 0:04:27.839 We'll take a look at that, and of course my 0:04:27.920 --> 0:04:30.599 favorite bitcoin will take a look at that. So let's 0:04:30.800 --> 0:04:33.039 go through these one at a time. Let's start with real estate. 0:04:33.080 --> 0:04:34.720 Of course, if you've been following me for any time, 0:04:34.760 --> 0:04:36.480 you know that I started my career in real estate. 0:04:36.640 --> 0:04:38.760 I still own real estate. I like real estate. But 0:04:38.800 --> 0:04:41.280 there's a couple things that we should know, specifically around 0:04:41.279 --> 0:04:43.320 in your four to one K in your retirement account. 0:04:43.560 --> 0:04:46.720 They talk about liquidity, they talk about volatility, and in 0:04:46.720 --> 0:04:50.120 real estate is certainly ill liquid You can't sell it quickly. 0:04:50.800 --> 0:04:53.320 At best case scenario, it's probably a couple months. Sometimes 0:04:53.360 --> 0:04:55.240 it could be even worse, depending on the market cycle 0:04:55.279 --> 0:04:56.080 where you're located. 0:04:56.120 --> 0:04:57.560 Things like that. The other thing with. 0:04:57.560 --> 0:05:00.400 Real estate is that there's high transaction costs. It's very 0:05:00.440 --> 0:05:04.000 expensive to sell a piece of real estate. It's also big, 0:05:04.360 --> 0:05:06.440 big sales, big purchases, big amount. So let's just say 0:05:06.480 --> 0:05:09.280 you needed five thousand dollars for a purchase or ten 0:05:09.360 --> 0:05:12.120 thousand dollars fortification. You can't just get five or ten 0:05:12.160 --> 0:05:14.479 thousand dollars out of your house, so it's i liquid. 0:05:14.839 --> 0:05:17.920 There's high transaction costs to move them. And so most 0:05:17.960 --> 0:05:19.560 likely if people were going to use this in a 0:05:19.680 --> 0:05:22.479 retirement account, they'd probably use something like a rate, a 0:05:22.520 --> 0:05:24.960 real estate investment trust, something like that. They wouldn't want 0:05:24.960 --> 0:05:27.000 to own it directly. They wouldn't want the maintenance headache. 0:05:27.000 --> 0:05:29.360 They wouldn't want the property managers getting calls late at 0:05:29.400 --> 0:05:30.719 night when your toilet's breaking down. 0:05:30.640 --> 0:05:31.160 Things like that. 0:05:31.920 --> 0:05:34.120 Some other things with real estate in a retirement account 0:05:34.120 --> 0:05:38.200 that can be problem matic is a geographic concentration risk. 0:05:38.520 --> 0:05:40.760 But if we take a look at the case Shiller 0:05:40.839 --> 0:05:42.919 index for real estate, we can see a couple things. 0:05:43.320 --> 0:05:46.000 Number one, this goes back to nineteen eighty eight. Real 0:05:46.120 --> 0:05:49.880 estate had been pretty much flat here until the dot 0:05:49.960 --> 0:05:52.000 com bubble blew up. When the dot com bubble blew up, 0:05:52.080 --> 0:05:54.800 rates went down, real estate went up into a bubble. 0:05:55.120 --> 0:05:56.960 Two thousand and eight we had the real estate crash, 0:05:57.000 --> 0:05:59.479 and we've been basically on an upward trend ever since. 0:05:59.720 --> 0:06:02.279 So the last couple decades real estate has been a 0:06:02.320 --> 0:06:04.920 pretty good investment. Now, let's stack this up and take 0:06:04.960 --> 0:06:07.919 a look at it in a chart here. So what 0:06:08.000 --> 0:06:11.839 we have here is reates versus direct So how should 0:06:11.839 --> 0:06:13.920 we own real estate, especially if we can get money 0:06:13.920 --> 0:06:16.919 from our retirement account into real estate specifically, So the 0:06:16.960 --> 0:06:20.480 investment type here is an equity rate. Here is a 0:06:20.960 --> 0:06:23.520 private sire commercial real estate, and here we. 0:06:23.520 --> 0:06:24.880 Have us home prices. 0:06:25.040 --> 0:06:29.440 And what this shows over one year, the rates have 0:06:29.560 --> 0:06:32.240 performed better in a one year period eight point seven 0:06:32.360 --> 0:06:35.920 versus two six and two seven. Over three years they 0:06:36.000 --> 0:06:39.040 didn't do too well. However, they lost less. Let's just 0:06:39.040 --> 0:06:42.240 stay in commercial real estate and over five years and 0:06:42.279 --> 0:06:44.560 over ten years they outperformed. So if I was going 0:06:44.600 --> 0:06:46.880 to move some of my money in my four one 0:06:46.960 --> 0:06:49.640 k into one of these horsemen's into the real estate bucket, 0:06:49.960 --> 0:06:53.000 the equity rates are probably the best option for me 0:06:53.160 --> 0:06:54.000 in this scenario. 0:06:54.279 --> 0:06:56.280 Now, of course, there's more advanced options. We're not talking 0:06:56.279 --> 0:06:58.920 about that. We're just talking about in your retirement account specifically. 0:06:59.279 --> 0:07:02.000 It looks like it's when there. Okay, remember those numbers. 0:07:02.279 --> 0:07:04.000 We're going to stack all these up at the end. 0:07:04.040 --> 0:07:04.400 Okay. 0:07:04.760 --> 0:07:08.479 The second horseman would be in my alternative investments is 0:07:08.560 --> 0:07:12.600 private equity. Now Tony Robbins recently wrote I Believe, his 0:07:12.720 --> 0:07:14.880 third book on money, part of the trilogy, where we 0:07:14.920 --> 0:07:17.560 talked about private equity being one of the best investments 0:07:17.600 --> 0:07:20.280 that you can get into, and he talks about wre 0:07:20.320 --> 0:07:22.080 Typically you're going to make twenty to thirty percent on 0:07:22.120 --> 0:07:24.720 your money versus you know, sp five hundred and six 0:07:24.800 --> 0:07:26.800 or eight percent return. A couple things they know about 0:07:26.800 --> 0:07:30.560 private equity. Typically they have pretty high minimum investments, so 0:07:30.600 --> 0:07:32.640 typically you probably need to be an a credit investor. 0:07:32.760 --> 0:07:34.600 Means you're making over two hundred fifty thousand or a 0:07:34.600 --> 0:07:36.160 million dollars of assets, and. 0:07:36.160 --> 0:07:38.600 Typically you need to put two hundred and fifty thousand. 0:07:38.280 --> 0:07:41.440 Up to one million dollars into private equity. Also, the 0:07:41.480 --> 0:07:43.760 thing with them is they're not very liquid. Typically you 0:07:43.800 --> 0:07:46.600 have to lock up about five to ten years. When 0:07:46.600 --> 0:07:48.840 you put your money into the fund, it's stuck there. 0:07:48.920 --> 0:07:50.840 You can't get it back for like a five to 0:07:50.880 --> 0:07:53.880 ten year period. Not ideal if you're towards the end 0:07:54.320 --> 0:07:56.520 a nearing your retirement. Obviously, if you're just starting out, 0:07:56.640 --> 0:07:57.240 maybe that works. 0:07:57.280 --> 0:07:57.600 Okay. 0:07:58.080 --> 0:07:59.960 As I said, typically you have to have an accredit 0:08:00.080 --> 0:08:00.960 investor requirement. 0:08:01.240 --> 0:08:02.640 Of course, liquidity issues. 0:08:02.800 --> 0:08:05.240 If you're within that lock up period, you can't get 0:08:05.280 --> 0:08:07.520 any of your money out. And then typically they have 0:08:07.680 --> 0:08:10.440 very high fees, so you're typically going to pay two 0:08:10.600 --> 0:08:12.960 or twenty What that means is of the money that 0:08:13.000 --> 0:08:15.160 you have in the fund, they're going to take two 0:08:15.160 --> 0:08:17.840 percent as management fees, So every year, two percent of 0:08:17.880 --> 0:08:19.920 the money of in goes to management. And then on 0:08:20.000 --> 0:08:23.120 the upside, they're going to take twenty percent of the 0:08:23.160 --> 0:08:24.160 gains that they get you. 0:08:24.400 --> 0:08:26.760 Okay, let's take a look at how this is working out. 0:08:26.840 --> 0:08:30.600 What we can see here is that we are currently 0:08:30.640 --> 0:08:34.319 getting more and more allocations going to private equity from 0:08:34.480 --> 0:08:37.160 large institutions. And the reason why is again because of 0:08:37.200 --> 0:08:41.000 their performance, right, because they're beating regular funds. And what 0:08:41.040 --> 0:08:43.600 we can see here is the allocations we see for 0:08:43.760 --> 0:08:47.600 endowments and foundations. They're the leader in allocating to private equity. 0:08:47.720 --> 0:08:50.840 Endowments being like Yale, Harvard, things like that. We can 0:08:50.880 --> 0:08:54.360 see they're allocating about twenty five to thirty two percent 0:08:54.960 --> 0:08:57.680 of their entire fund towards private equity, just so you 0:08:57.679 --> 0:09:01.199 can see how they're allocating this. Again, most people, most 0:09:01.240 --> 0:09:03.720 individuals don't have any, but the endow onents they do 0:09:03.800 --> 0:09:06.440 twenty five to thirty two percent. Okay, what we can 0:09:06.440 --> 0:09:08.240 see is since they've been doing this and sort of 0:09:08.320 --> 0:09:11.040 going back to Tony Robbins book, we can see the growth. 0:09:11.240 --> 0:09:13.560 Here's the year two thousand and look at the amount 0:09:13.559 --> 0:09:14.239 of growth. 0:09:13.960 --> 0:09:15.440 Here we are. This is only to twenty twenty two. 0:09:15.760 --> 0:09:19.319 You can see the enormous move for money going into 0:09:19.360 --> 0:09:22.200 private equity, chasing yield. The S and P five hundred 0:09:22.200 --> 0:09:25.160 hasn't been performing well, the mag seven have four hundred 0:09:25.160 --> 0:09:27.600 and ninety three, other companies not doing so well, and 0:09:27.640 --> 0:09:29.839 so they're chasing yield. Where do we get it, Well, 0:09:29.880 --> 0:09:32.600 they move to private equity. Well, let's stack these up 0:09:32.600 --> 0:09:34.440 and take a look at what we've got so far 0:09:35.480 --> 0:09:38.480 and what we can see. Here's the assets we have 0:09:38.520 --> 0:09:42.119 private equity right here, here's the S and P five hundred, NASDAK, 0:09:42.160 --> 0:09:45.480 the Russell two thousand and then the Treasury bond. What 0:09:45.520 --> 0:09:47.640 we can see over one year, three year, five years, 0:09:47.679 --> 0:09:50.160 and ten years. And what we can see is that 0:09:50.240 --> 0:09:52.480 while private equity looks really good. 0:09:53.120 --> 0:09:55.080 Actually, the winner has been the NASDAK. 0:09:55.440 --> 0:09:57.440 What we can see over one year, three years, five years, 0:09:57.440 --> 0:10:00.080 and ten is we have seven point one percent. One 0:10:00.120 --> 0:10:02.600 P five hundred did better over one year. The Nasdaq 0:10:02.679 --> 0:10:05.840 did even better in the one year period. Over five years, 0:10:05.840 --> 0:10:09.559 we got seven percent here in private equity, almost eleven 0:10:09.640 --> 0:10:10.360 percent in the. 0:10:10.320 --> 0:10:12.200 S and P five hundred, eight and a half in Nasdaq. 0:10:12.679 --> 0:10:16.720 Five years, sixteen percent in private equity, about sixteen percent 0:10:16.840 --> 0:10:19.240 SP five hundred, but almost nineteen. 0:10:18.840 --> 0:10:19.760 Percent in the Nasdaq. 0:10:19.800 --> 0:10:22.880 And over ten years we have fifteen percent in private equity, 0:10:23.000 --> 0:10:26.800 thirteen percent in five hundred and sixteen percent in Nasdaq. 0:10:26.840 --> 0:10:28.760 So all of them are actually pretty close. Now. 0:10:28.840 --> 0:10:31.880 Of course, this is a private equity index. Some have 0:10:32.000 --> 0:10:34.480 done way better, some have done way worse. What we 0:10:34.480 --> 0:10:37.480 can see somewhat pretty close now. The Russell index has 0:10:37.520 --> 0:10:40.520 done pretty poorly overall, hasn't kept up about half of that. 0:10:40.840 --> 0:10:41.520 I did put. 0:10:41.400 --> 0:10:43.880 The US Treasury bonds on here just so you could 0:10:43.880 --> 0:10:47.400 see over one year, lost five percent, over three years, 0:10:47.440 --> 0:10:51.880 lost ten percent over five years. They've done pretty terrible. 0:10:52.000 --> 0:10:54.000 We also have real estate down here at the bottom 0:10:54.320 --> 0:10:57.200 ten percent, four percent, six and a half percent, and 0:10:57.240 --> 0:10:59.200 six percent So what we can see here is that 0:10:59.240 --> 0:11:03.079 the Nasdaq has been better performing than real estate and 0:11:03.200 --> 0:11:03.920 private equity. 0:11:04.160 --> 0:11:05.120 And of course most of you. 0:11:05.080 --> 0:11:07.160 Can buy the Nasdaq and this and P five hundred 0:11:07.160 --> 0:11:09.079 in your four to one ks right now. You don't 0:11:09.120 --> 0:11:11.680 need alternative investments to do that. Okay, let's go to 0:11:11.720 --> 0:11:16.920 the third horsemen of alternative investments, my favorite, of course, Bitcoin. 0:11:17.160 --> 0:11:19.040 Now, part of the reason why I love bitcoin. 0:11:18.800 --> 0:11:22.120 Is it's brand new, it's technology, it's changing the world 0:11:22.120 --> 0:11:22.720 as we know it. 0:11:23.440 --> 0:11:25.600 But it's also had the best performance. 0:11:25.640 --> 0:11:29.520 It has been the best performing asset over pretty much 0:11:29.559 --> 0:11:31.840 any period in time fifteen years, ten years, five years, 0:11:31.880 --> 0:11:33.880 three years, and one year. Let's take a look at 0:11:33.920 --> 0:11:36.120 it when we stack it all up. So if we 0:11:36.160 --> 0:11:39.320 have private equity, sm P five hundred, NASDAK Russell Treasury, 0:11:39.360 --> 0:11:42.840 and now we have Bitcoin here. So instead of seven percent, 0:11:43.000 --> 0:11:45.560 twenty four percent or twenty nine percent, the Nasdaq looked 0:11:45.559 --> 0:11:50.120 really good. Bitcoin did seventy, not twenty nine, seventy. 0:11:49.920 --> 0:11:50.800 Over three years. 0:11:51.200 --> 0:11:52.719 We had the winner here the s and P five 0:11:52.800 --> 0:11:56.240 hundred at ten point nine, but Bitcoin did sixty three percent. 0:11:56.600 --> 0:11:57.640 Over five years. 0:11:57.920 --> 0:12:01.040 We had the winner right here at nas eighteen percent, 0:12:01.240 --> 0:12:04.640 but Bitcoin did eighty two percent over ten years, we 0:12:04.679 --> 0:12:07.319 had the winner right here again back to the NASDAK 0:12:07.360 --> 0:12:10.320 at sixteen percent, but Bitcoin did one hundred and thirty 0:12:10.480 --> 0:12:13.559 nine percent. So pretty much, over any time period you 0:12:13.600 --> 0:12:17.360 want to look at, bitcoin has outperformed. Hard to argue 0:12:17.400 --> 0:12:19.600 with that, but how people would argue with it? But 0:12:19.600 --> 0:12:22.880 they'd say, but the risk, it's too volatile. 0:12:23.000 --> 0:12:24.200 Well, what we want. 0:12:24.080 --> 0:12:26.319 To do as investors is we think about the risk 0:12:26.400 --> 0:12:28.400 adjusted returns. One of the ways we do that is 0:12:28.400 --> 0:12:31.319 we use something called a sharp ratio. The sharp ratio 0:12:31.400 --> 0:12:31.960 looks at. 0:12:31.840 --> 0:12:34.600 Both the risk and the reward that we have. 0:12:34.920 --> 0:12:37.240 So if we take a look at the sharp ratio 0:12:37.400 --> 0:12:40.120 of a couple assets, let's look specifically at the sharp 0:12:40.240 --> 0:12:44.600 ratio of Bitcoin and the US Treasury. Specifically, what we 0:12:44.640 --> 0:12:46.960 can see is that the max draw down of the 0:12:47.040 --> 0:12:50.400 US Treasury for the last five years ending June thirtieth, 0:12:50.440 --> 0:12:52.840 twenty twenty five was forty eight percent. 0:12:52.920 --> 0:12:55.720 About half your money was lost hold in US treasuries. 0:12:56.080 --> 0:12:57.520 In bitcoin, it went down. 0:12:57.559 --> 0:13:00.280 The max draw down was actually seventy six percent, so 0:13:00.320 --> 0:13:03.319 the draw down was much worse. However, if we look 0:13:03.320 --> 0:13:05.720 at the sharp ratio, which looks at both the draw 0:13:05.760 --> 0:13:09.000 down and the return profile. We see that TLT was 0:13:09.160 --> 0:13:12.200 point thirty nine, which was very risky. We see that 0:13:12.240 --> 0:13:16.600 Bitcoin was over one, which was much much safer. And 0:13:16.640 --> 0:13:18.839 the reason why is because you have to look at 0:13:19.080 --> 0:13:22.280 both the return and the game, or the risk and 0:13:22.320 --> 0:13:24.120 the reward. I should say, so when we look at 0:13:24.200 --> 0:13:26.959 TLT over one month, three months, six month, one year, 0:13:27.000 --> 0:13:30.720 three or five years, and we see that again it 0:13:30.800 --> 0:13:33.679 is down heavily five years thirty eight percent, But if 0:13:33.720 --> 0:13:36.199 we look at Bitcoin, it was all gains. 0:13:36.280 --> 0:13:37.800 Over one thousand percent game. 0:13:38.240 --> 0:13:40.680 And so you have to understand risk and reward in 0:13:40.720 --> 0:13:42.280 both of these, and so we can see across the 0:13:42.320 --> 0:13:45.000 board bitcoin wins. But a couple things to keep in mind. 0:13:45.000 --> 0:13:49.360 It's not just about total performance, total volatility, total risk. 0:13:49.400 --> 0:13:52.600 We also want to think about liquidity. How fast can 0:13:52.640 --> 0:13:54.600 I get my money out? Like with real estate specifically 0:13:54.600 --> 0:13:56.439 if I have single family residents, how long does it 0:13:56.480 --> 0:13:58.480 take me to get money out if I just need 0:13:58.480 --> 0:14:01.840 a little bit five thousand, three twenty thousand? How liquid 0:14:01.960 --> 0:14:04.240 is that market? All right, now, let's get to the 0:14:04.320 --> 0:14:06.600 super cycle part of this, because, as I said, we 0:14:06.640 --> 0:14:09.800 have about nine trillion dollars that's going to be unlocked 0:14:09.920 --> 0:14:12.400 and it's going to rush into these types of assets. 0:14:12.440 --> 0:14:14.720 So what does history say about this? 0:14:15.080 --> 0:14:16.679 What can we learn? Well, a couple things that we 0:14:16.720 --> 0:14:19.160 can learn. First of all, we know that the four 0:14:19.200 --> 0:14:22.800 to one K was created by the Revenue Act in 0:14:22.920 --> 0:14:25.800 nineteen seventy eight. Okay, so it's when they change things, 0:14:25.840 --> 0:14:28.800 when money started flowing into it. We know that stocks 0:14:28.840 --> 0:14:31.640 became standard in a four to one K around the 0:14:31.680 --> 0:14:34.520 early nineteen eighties. We saw that the S and P 0:14:34.640 --> 0:14:37.600 five hundred in nineteen eighty one was about one hundred 0:14:37.600 --> 0:14:40.880 and thirty and today it's about fifty eight hundred. That's 0:14:40.960 --> 0:14:45.720 a forty four times increase since the four to one 0:14:45.800 --> 0:14:49.040 k's came into existence and started buying stocks what we 0:14:49.120 --> 0:14:53.160 call passive flows, passively buying them. Now, this is this 0:14:53.240 --> 0:14:56.280 is different than retail investing. Retail investors are trying to 0:14:56.320 --> 0:14:59.200 time things. Should I buy now? Should I wait? Four 0:14:59.200 --> 0:15:02.280 to one k's are every other week. My paycheck has 0:15:02.320 --> 0:15:04.200 money that goes into my four oh one K and 0:15:04.240 --> 0:15:06.960 it automatically buys back to the passive income. But for 0:15:07.040 --> 0:15:10.120 an illustrative chart, we can see here from nineteen thirty 0:15:10.720 --> 0:15:13.360 until this point when the four ones were created nineteen 0:15:13.440 --> 0:15:15.160 eighty we can see that the S and P five 0:15:15.240 --> 0:15:18.160 hundred was relatively flat. Yes, it went up and down, 0:15:18.280 --> 0:15:19.480 but it was relatively flat. 0:15:19.680 --> 0:15:23.320 But look at what happened since four to one k's 0:15:23.600 --> 0:15:26.760 started buying the S and P five hundred, it started 0:15:26.800 --> 0:15:27.600 going straight up. 0:15:27.840 --> 0:15:30.320 So, if history is our guide and we now know 0:15:30.400 --> 0:15:33.200 that the four one ks can unlock and that capital 0:15:33.240 --> 0:15:36.320 can now move into three types of alternative assets, what 0:15:36.360 --> 0:15:38.160 do you think happens to those three. 0:15:38.000 --> 0:15:39.400 Types of alternative assets? 0:15:39.600 --> 0:15:42.000 Well, that may not be definitive, but let's put a 0:15:42.080 --> 0:15:44.200 let's put a number on it here. What we can 0:15:44.240 --> 0:15:47.080 see is that if we do the math on how 0:15:47.120 --> 0:15:49.360 the capital should flow, we can see again, if there's 0:15:49.480 --> 0:15:52.400 nine trillion dollars sit in four O one k's, if 0:15:52.720 --> 0:15:57.480 one percent of that allocation moved into alternative assets, that's 0:15:58.000 --> 0:16:02.280 almost ninety billion dollars. Ten percent of that moved out 0:16:02.280 --> 0:16:03.880 of four own k's and into one of these three 0:16:03.880 --> 0:16:09.840 assets are all three, that's almost nine hundred billion dollars. Now, 0:16:09.920 --> 0:16:13.560 just to put things into some math, If that's almost 0:16:13.640 --> 0:16:17.040 nine hundred billion dollars, the entire crypto market is only 0:16:17.320 --> 0:16:20.720 four trillion. Bitcoin's only about two trillion dollars. So what 0:16:20.760 --> 0:16:23.320 happens when almost one trillion moves into a two trillion 0:16:23.360 --> 0:16:24.000 dollar market. 0:16:24.840 --> 0:16:27.640 Yeah, it explodes. You can do the math. But let''s 0:16:27.640 --> 0:16:28.880 look at some other parts of history. 0:16:29.040 --> 0:16:31.320 What we can see here is we can understand that 0:16:31.400 --> 0:16:35.560 pension funds entered also into stocks in the seventies. We 0:16:35.640 --> 0:16:38.160 know that insurance companies started buying real estate in the 0:16:38.240 --> 0:16:42.080 nineteen eighties. We know that endowments they started moving into 0:16:42.080 --> 0:16:43.360 stocks in the nineteen nineties. 0:16:43.560 --> 0:16:45.480 This is into private equity and to venture capital. 0:16:45.720 --> 0:16:47.920 And we have the tech boom, but now we have 0:16:48.000 --> 0:16:49.800 retirement accounts moving. 0:16:49.600 --> 0:16:52.360 Into this new alternative investment class. 0:16:52.560 --> 0:16:54.840 Let's take a little bit more charts, So let's look 0:16:54.880 --> 0:16:58.840 at gold, for example. We can see what happened right 0:16:58.920 --> 0:17:01.720 around the same time nineteen eighty gold had been kind 0:17:01.720 --> 0:17:03.360 of moving higher, and then look. 0:17:03.200 --> 0:17:05.399 At the growth that we have right there. As a 0:17:05.400 --> 0:17:05.720 matter of. 0:17:05.720 --> 0:17:09.760 Fact, you can see before it happened and after, before 0:17:09.840 --> 0:17:10.880 gold became legalized. 0:17:10.920 --> 0:17:13.520 A lot of people don't understand this, but back here, well, 0:17:13.520 --> 0:17:14.320 we don't go that far. 0:17:14.359 --> 0:17:18.200 Back in nineteen thirty three, the US government took everybody's 0:17:18.240 --> 0:17:21.560 gold and made it illegal to even own gold. And 0:17:21.640 --> 0:17:24.640 it wasn't until here that you were able to own 0:17:24.760 --> 0:17:25.479 gold legally. 0:17:25.520 --> 0:17:25.879 Again. 0:17:26.280 --> 0:17:30.119 So again, when a rule change happened legally and people 0:17:30.160 --> 0:17:32.720 could move their money into the asset, what happened, Well, 0:17:32.800 --> 0:17:33.399 gold went. 0:17:33.320 --> 0:17:35.720 Up, as you can see over four times. 0:17:35.960 --> 0:17:38.360 This is the history and this is what happens when 0:17:38.440 --> 0:17:41.320 money gets unlocked and can move into new assets. 0:17:41.440 --> 0:17:42.760 It creates a super cycle. 0:17:42.960 --> 0:17:45.199