The Pilot Money Guys

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“It’s everything you don’t understand about money combined with everything you don’t understand about computers.”  ~John Oliver, Host of the HBO series Last Week Tonight with John Oliver.    

On the other hand… [Cryptocurrencies] may hold long-term promise, particularly if the innovations promote a faster, more secure and more efficient payment system. ~Ben Bernanke 

Welcome aboard Flight #5 with the Pilot Money Guys as they provide a pilot-proof Bitcoin and Crypto Investing…shared mental model!

In this pilot money guys episode we take on the topic of Bitcoin and Crypto Investing. Our token millennial and office wonderboy Ben, faces off with Charlie and Rob. Will he convince them to get rid of US Dollars and join the Crypto Revolution?

The Pilot Money Guys attempt to shed some light on how to think about investing in Cryptocurrencies.  What the heck is Cryptocurrency? Should you consider Bitcoin and Crypto Investing or buying Dogecoin and what to expect if you take the plunge and invest.  Hint:  Don’t invest any monies you can’t afford to lose!

We hope you enjoy our discussion. Please subscribe, share this podcast with friends, and let us know what topics you would like us to cover next!

 

Flight 5: Pilot Proof Bitcoin and Crypto Investing

Hey folks. Welcome to the pilot money guys, podcast. We’re talking some flying stuff and we aim to bring you some lighthearted, financial fun. Our topic today on the financial side is Bitcoin and Crypto Investing. So we’re pretty excited about this. I’m your host. Finally, we get to talk a Bitcoin. It has been hounding me for years on this.

[00:00:51]Ben: [00:00:51] That’s my generation. I like this.

[00:00:54] Rob: [00:00:54] Ben Dickinson at the helm. All right. I’m your host, Rob, back then we got the core certified financial planner, Charlie Mattingly, and I already introduced our millennial advisor. Ben Dickinson. First before we get to the Bitcoin. Sorry to delay it a little bit, but a little cliffhanger for you.

[00:01:14] We’re going to talk a little bit. Radiation news, Charlie, what do you got on aviation news this week, man? You

[00:01:19] Charlie: [00:01:19] know, it seems like there’s good news. I seem there’s good things going on in the world of aviation airlines, especially. So therefore there’s not that much news, that’s not fun to report good news and maybe I’m being too positive, but the one thing that That stuck out to us after we bragged on the news seven 37 max, a couple of weeks ago, they grounded some Holy cow.

[00:01:42] So are they grounded? What 60 of them? I think I read for an electrical problem. I’m not sure, anything that, that happens to the max now is going to be reported and it’s going to be big news. So I don’t really know. It’s hard to tell from my end, Rob if

[00:01:56] Rob: [00:01:56] it’s serious, right? Yeah. They talked about fasteners and it was just part of the fleet.

[00:02:00] So not all of them. But it was a grounding problem with the fasteners that they chose. So rather than rivets, they use fasteners that didn’t ground properly. And I, wow. It sounds to me like they just got to go back in and put the rivets that are grounding and hopefully that’ll be it. It’s the rivets

[00:02:16] Ben: [00:02:16] that plane can not catch a break.

[00:02:18] I know.

[00:02:19] Charlie: [00:02:19] No kidding. Oh man. I saw two other note news Delta said they’re going to be profitable by the end of the year. Squeak. That’s amazing, even though they’re not going to get back, they know they’re not going to get back there. They’re global business traveler for a while that we’re still away a ways away from that.

[00:02:36] But but there’s been some significant domestic, good flying news. All the captains at Southwest airlines have been recalled all of them from the temporary leaves. Now there’s still about 500 FO’s out there. As of now that are. That are hanging on to the free money as long as they can.

[00:02:51] Rob: [00:02:51] Yeah. Yeah. Oh, that’s exciting. I heard that a United starting hiring again and SkyWest is hiring as well, edible.

[00:03:00]Charlie: [00:03:00] Good. I’m glad for our young pilots out there that spent their 200 grand on their college degrees with their flying certifications and now they can go get jobs against him. I thought it was going to be longer for those folks.

[00:03:11] Quite honestly.

[00:03:13] Ben: [00:03:13] Soon enough. There’ll be a little pilot shortage out there. Another one. Yeah.

[00:03:16] Rob: [00:03:16] Yeah. It’s probably right around the corner. Yeah.

[00:03:19] Charlie: [00:03:19] Right back to where we started a couple of years ago until COVID 21 hits.

[00:03:22] Rob: [00:03:22] Yeah. Oh, I was pretty excited this last week. I flew into a Houston Intercontinental, George Bush Intercontinental first time flying in there.

[00:03:29] It was pretty cool. They treated us right to, it was

[00:03:32] Charlie: [00:03:32] pretty big time now. Big time. Cool. Let her bound, I don’t know of any other airline stuff. I can’t think of anything. Interesting. Anyway, other than playing seem like they’re full Rob, you would know better than I, but it sounds like planes are.

[00:03:46] Rob: [00:03:46] Yeah. I It’s getting back to, going through walking through the airport, it seems pretty darn fool. Oh, they in Denver. I do have to mention this because it was pretty awesome. I D I don’t have the credit card, but I’m thinking about getting it. The Centurion club came to the Southwest side of things.

[00:03:59]Terminal C there and it is nice. It’s really, what does that mean? I don’t know what you’re talking about. The club for certain card holders, like the special clubs for special people, and they go out and have drinks and all that kind of stuff. Wow. It’s pretty nice. Check it out.

[00:04:14] Yeah, I think it’s on the high side, the, towards the forties, if you ever get out there.

[00:04:18]Charlie: [00:04:18] I got to admit,  I now have an Allegiant credit card. Oh, I have an allegiance. What? Southwest doesn’t fly into Knoxville. Southwest is not flying to Knoxville. I’ve got an Allegiant credit card. So I’m going in all illusion.

[00:04:31] That’s our free commercial for today. Allegiance.

[00:04:33]Rob: [00:04:33] Awesome. That’s good. I’m glad we don’t have that much. Airline news because really I want to get into Bitcoin. Anyways, Dan and I are chomping at the Bitcoin to get in this. I get it. My wife keeps calling it Bitcoin. So

[00:04:50] I’m like, Oh my gosh, I’m a prescient there. Before you get in, let me just give a disclaimer here. Yeah, I know you guys probably already guessed this, but we’re not Bitcoin experts. We’re going to apologize up front if we misuse any of the terms, because there’s so many, it’s so fascinating and complex that the terminology out there is, it is a lexicon of its own, for sure.

[00:05:12]If we make a mistake. Please shoot us an email and we’ll try to correct it in the show notes or rerecord or whatever we have to do. For all the Bitcoiners out there, we know this is a passionate subject. We’re going, gonna try to give it the due to due regard that it,

[00:05:28] Charlie: [00:05:28] the good news is we’re just as expert as anybody else.

[00:05:33] Rob: [00:05:33] That’s why we can talk about Ilan pretty much the same. That’s

[00:05:38] Charlie: [00:05:38] right. Nobody knows anything.

[00:05:41] Rob: [00:05:41] Oh my God. Obviously what we’re talking about is, does not constitute advice. And as meant for informational purposes only. That’s all I got. Ben kick us off. This is fascinating. I’m really excited to get into it.

[00:05:52] Mainly

[00:05:53] Charlie: [00:05:53] entertainment purposes. Not even informational it’s I gotta be careful. It’s hard. It is fascinating. Sorry. I’m going to be the old guy in the room today, though. Everything you guys say today, I’m going to distract you say today. No,

[00:06:04] Rob: [00:06:04] you’re wrong today. You’re going to be the old guy in the room.

[00:06:07] Oh, you’re not

[00:06:11] Ben: [00:06:11] deal. Y’all are both the old guys to hear him, according to me.

[00:06:15] Charlie: [00:06:15] Ben, what the heck is Bitcoin and Crypto Investing and why are

[00:06:18] Ben: [00:06:18] you investing? Yeah. Yeah, no, that’s a great question. And what is Bitcoin is probably the biggest and probably the hardest question to answer for almost anyone including myself, but I’ll give it, I’ll give a little bit of a history on the Bitcoin.

[00:06:31] So Bitcoin. It was founded in 2008. It was based on a paper written by what is believed to be a group of people going under the name of S Toshi Nakamoto.   It is a open decentralized ledger system that is able to record and verify transactions. And they use that by creating this currency called Bitcoin.

[00:06:54] And that’s what they use to transact on this open ledger. The big difference between regular money and Bitcoin and Crypto Investing is the fact that it is decentralized, meaning that no one person controls the Bitcoin ledger system. There’s no way to manipulate it in any way. As far as we know at the banks. No banks, no, no middleman.

[00:07:16] It’s there, there are people around the country that mine Bitcoin, and what that really is basically just using computing power and running different programs to basically verify these different transactions on the blockchain. And that’s another. Term, you probably hear thrown around a

[00:07:32] Charlie: [00:07:32] lot.

[00:07:32] Yeah. Yeah. Ben, let me stop you there for a second before you get going too far, because the definition you gave mainly was the blockchain. You talked about an open ledger that is blockchain. And so that, it’s interesting to me. And again, I’m going to be the biggest critic on the show today. I’m just get off my lawn.

[00:07:50] Cause I don’t get it. I don’t get it. But anyway, I’m working, I’m having an open mind, but just to clarify. You talked about the open ledger that’s blockchain. Yeah. And actually that to me is the most appealing thing of this whole deal. Yeah. There’s tons of opportunity for that and in all kinds of different industries.

[00:08:08]So it, it’s interesting and And I’ll read one as well. Just just to clarify this stuff at cryptocurrencies are a form of code made back computers and stored in a digital wallet in the case of Bitcoin. So now we’re differentiating, Bitcoin in the blockchain, there is a finite supply of 21 million of which more than 18.5 million are in circulation transactions are recorded on the, again, Ben, you referenced that public ledger called blockchain.

[00:08:34] Yeah. So

[00:08:35] Rob: [00:08:35] that’s Oh, black ledger. That’s crazy.

[00:08:39]Ben: [00:08:39] So one of the things about that is basically it’s just like any ledger, it’s a recording of the transactions. Hey, a Bitcoin transferred from bins. It doesn’t say your name, but Ben tan and to Charlie, it would say, or, and then from Charlie to Rob and then from X to Y and all these different, that’s basically what it is.

[00:08:56] And then the blocks it’s verified in these blocks of transactions. Like a list of maybe I don’t actually know the number, but let’s say five transactions in a block. Those get verified on the blockchain with the mining side of things, and that’s what kind of keeps the ledger accurate and verifies that everything is accurate.

[00:09:16] And that’s that’s done by people using millions of mining computers across the country in the world. And

[00:09:22] Rob: [00:09:22] anyway, that is really fascinating because those mining computers, my nerd hat comes on for sure. And I guess they’re solving. Difficult math problems is how they’re doing this blockchaining and mining of the Bitcoin.

[00:09:37] Yeah. Yeah.

[00:09:39] Ben: [00:09:39] Great. Essentially from my understanding too, it’s even almost more of a you just have to test these different numbers one at a time to find an output that verifies the transactions. And the only way to do that is to basically just plug and play different numbers, test out, one to it’s 260 billion or trillion possibilities of these numbers. And you’re just less like plug and play, trying to verify this. And when you do, and this is the incentive for those miners out there, when you do verify a block of transaction, that it is accurate and correct, then you are rewarded with Bitcoin as a reward.

[00:10:15] And. And that number of Bitcoin that you get rewarded with is cut each every couple of years it gets cut down. And basically that limits the number of Bitcoin outstanding too. I think it’s about 26 million out there.

[00:10:29] Charlie: [00:10:29] 21 million. What do you want in there at nights with the financing plan?

[00:10:33] Rob: [00:10:33] So there’s only a million ish.

[00:10:35] Left to mine

[00:10:37] Charlie: [00:10:37] of which 20% has been permanently lost.

[00:10:40] Rob: [00:10:40] Wow. That’s crazy. Yeah. Which obviously

[00:10:45] Charlie: [00:10:45] don’t lose

[00:10:45] Ben: [00:10:45] your password for those people who lost hundreds of millions of dollars for losing their password. I, I just,

[00:10:51] Charlie: [00:10:51] yeah, it’s gotta be a day. And again, I’m trying to understand that.

[00:10:53] So I,  don’t get the mining thing. Okay. But let’s put that aside for a second because that’s just as crazy talk. But as an investor, What do I do to get into Bitcoin and Crypto Investing? Do I buy and Rob, you just did this. Ben, you’ve done it. I’ve not dipped my toes in the water yet. And we’ll talk about why in a minute, but I can buy Bitcoin directly, I think maybe through a trust of some sort.

[00:11:14] And now

[00:11:15] Rob: [00:11:15] it’s an exchange. Charlie, you go through an exchange. Coinbase just came public Coinbase is an exchange that you can go buy Bitcoin, but you can’t spend it there.

[00:11:28] Charlie: [00:11:28] Yeah, but then you and what I was gonna say was you, if not at this very moment, but in the very near future, we’ll be able to buy Bitcoin through an ETF, which I think is more understandable to people.

[00:11:40] So you’ve got different avenues of purchasing right now, which has maybe some pros and cons, but what is it? And you all tell me, what is it that we think we’re investing in?

[00:11:50] Rob: [00:11:50] So I go, this is very philosophical. Question. I don’t know that we can answer. You’re going to have to get to some of the more passionate folks, it could potentially be a currency that you don’t have to pay a bank governments don’t control.

[00:12:06] So you can go out there and buy all kinds of things with it, which is what got Bitcoin in trouble in the first place, which is. I don’t know if you’ve heard the story of the silk road or not. Ben, have you heard of that? Yeah.

[00:12:17] Ben: [00:12:17] Yep. Here did the hair to the that’s

[00:12:18] Rob: [00:12:18] on the dark web scary stuff. It was like, the the criminal element, the drug element, they were using Bitcoin, obviously, because it couldn’t be tracked very easily by the government.

[00:12:28] So they were out there doing the illegal behavior with it and they got out. Yeah, the FBI got them, but when was, it was funny about it. W from what I heard. The FBI caught them since the guy or Robert old brick. I think I said that, maybe a 26 year old dude from Texas, right? Yup. Yup. Send him to jail.

[00:12:46] But then the Bitcoin that was out there that they seized, some of the police officers tried to then sell, but because it’s an open ledger. They were able to track. And one of the investigators found out these guys were trying to sell the Bitcoin and arrests to them.

[00:13:03] Ben: [00:13:03] Oh,

[00:13:04] Rob: [00:13:04] I didn’t know that it is fascinating.

[00:13:07] Yeah. Yeah. It, is it getting back the Nakamoto you’re asking back to your question, Charlie, about what it is. Yeah. It’s a type of currency that can go above banks, but some people think of it  like a high-tech startup stock that just holds value. Yeah similar to gold, which is weird if you’re talking about startup tech companies and gold, but also it’s a currency of exchange. It’s obviously a lot easier to use than gold. So that’s what you would be buying. For instance,

[00:13:36] Charlie: [00:13:36] that’s the interesting part. Oh, I’m sorry, Rob, go ahead. I was just going to say, the interesting part is, and the reason I ask that question, which is an unanswerable question is because.

[00:13:44] Nobody knows what they’re buying when they buy everybody has a different opinion. Somebody will say, I’m buying it as an inflation hedge. Why is it an inflation hedge? Because it’s a limited supply. Maybe not, it’s a very volatile asset. This is a old guy, had, is coming on right now.

[00:13:58] And I’m just being a little testy, it’s a very volatile asset, so  what’s going to happen and when we go through a recession are people going to flock to Bitcoin? Our is it going to keep up with inflation? Obviously it has the last few years if it’s a gold substitute, gold has barely kept up with inflation.

[00:14:12]So in other words, if I buy a Bitcoin, should I expect when times get tough to people to flock to Bitcoin or away from Bitcoin? If I have a, we have a recession from increased inflation and people run away from Bitcoin. It’s not going to be, keep up with him. It’s not going to be an inflation hedge.

[00:14:31]Rob: [00:14:31] I can answer that. That’s been tested a little bit already, Charlie. So back in 2013, if you remember the Cyprus crisis where they basically went in, the EU said, Hey the Cypress was over leveraged and got themselves into some troubles. And they use that. The only way we bail you out is if you give us this kind of, This money, which they seized from their people.

[00:14:52] And I think this might be not exactly correct, but anything over about a hundred thousand dollars, they seized 50% of it. And most of those folks were rushing. And, a ton of wealth was just gone that the government stole an EU government, it could be said stole or at least taxed, or however you want to say that.

[00:15:09] So right after that happened, Bitcoin jumped in value because people were like, Oh, if I can invest in Bitcoin and the government, can’t go take half of it. That’s where the value in, in some people’s mind, that’s a huge value. It’s something that the government can’t go in there and grab. Now that’s obviously.

[00:15:29] With today’s regulations. One of the biggest risks that I think we’re going to talk about is that’s a risk to Bitcoin is the government regulation. That’s a huge risk. Yeah.

[00:15:40] Charlie: [00:15:40] Yeah. And, it’s, to me, it’s it’s decentralized. Is that good? Or is that bad? Because in the end, the V the Fiat currency that we’re currently on is only valuable because of the.

[00:15:51]Reliability of the U S government, the U S capitalist system, which again, people are going to scoff at out it’s terrible, but it’s the best thing in the world right now until we found an altered tech that turned into that. So being decentralized, it could, I don’t know if that’s an advantage or not, and as much as we hate taxes, the government has to tax.

[00:16:11]There has to be tax revenue, whether we like it or not. Some of the things that people say is great for these reasons. It’s I don’t know if it’s great for that

[00:16:17] Rob: [00:16:17] reason, Charlotte, there’s some folks and I, if I had to be pressed, I’m with you, you’ve got to have roads.

[00:16:23] You’ve got to yeah. Airports, all that good stuff. How are you going to do that? Some people say you can do it in the public sector. Some people say you can’t the libertarians obviously say you can do it on, in the private sector. And that’s one of the, I believe his name, correct me if I’m wrong. But a guy out there named there, all the Bitcoiners will know who I’m talking about.

[00:16:43] I believe he’s called the Bitcoin Jesus. It’s a big libertarian and he would argue that staunchly, I think. Yeah, she’s right behind Ben Dickinson.

[00:16:58] Yeah. It’s interesting. It’s interesting. I’m gonna throw this in there real quick. You talked about decentralized versus centralized and obviously there’s a lot that goes in there and I’m not going to solve that. But one of the interesting things that Bitcoin does throw at us is. They talk about it being a trustless system, meaning you don’t need trust.

[00:17:17]Yeah, because it’s all public and it’s all out there and it’s transparent, which is mind blowing for me. But that’s the last thing is yeah.

[00:17:25] Charlie: [00:17:25] Yeah. And I think, I’m gonna, I’m gonna argue my own position, but as more. You know of the big banks and even the sec that they’re trying to get on board, they’re trying to figure out how to work with this asset.

[00:17:37] They’re not turning away from it. They are trying to figure out how to integrate this in how it’s going to be useful. So I think, I don’t think it’s going away, I don’t think it’s going away. And I asked what we were buying and I was listening to Animal spirits podcast today.

[00:17:51] They’re awesome. Ben Carlson and Michael Batnick, but Ben Carlson said, Hey, it’s a put option on human behavior. Meaning, I get to profit from that. You know which again, we can say that for the whole stock market, but. So again it’s very interesting because it’s all these different things that our minds are not used to processing and it’s not going away.

[00:18:11] No, it’s going to be interesting. And again, the blockchain is fascinating. That is some very

[00:18:16]Rob: [00:18:16] Heading for sure.

[00:18:17] Charlie: [00:18:17] Cutting edge technology. That’s going to be used in many times. Oh

[00:18:19] Rob: [00:18:19] yeah. Industry’s Dawn’s is looking at currents for supply chains. All these different manufacturers are using it.

[00:18:27] I guess they can even track, like what you might be able to even track, like we’re an avocado came from which farmer picked it. Got it. Crazy stuff.

[00:18:36] Ben: [00:18:36] Yeah, you can trace where it was went, but you can’t trace who that individual was. There’s something called a private key and a public key basically.

[00:18:44] And that’s how they verify the transaction. And people are losing their private key, which is what gives you access to the Bitcoin. And then the public key is what’s out there where you can actually chase, trace those transactions back to where the Bitcoin originally came from. And so that, that’s where it is.

[00:18:59] There is that anonymity side to it. But there also is that public side where it’s all verified by. By the people out there mining this Bitcoin. Yeah, it is interesting. So

[00:19:08] Rob: [00:19:08] can you talk to that a little bit, Ben, like, how does that work? We talked about a little bit, like you go to an exchange, you buy it, then what happens?

[00:19:15] What’s the, if somebody wants to get in on Bitcoin and Crypto Investing, not that we’re suggesting that, but if you want it to, how do you actually do it?

[00:19:21] Ben: [00:19:21] Yeah, that’s a great question. And there, there are multiple different ways to get into Bitcoin and Crypto Investing. I’m just going to say probably the easiest way and that’s the way I do it because I’m not smart enough to do it.

[00:19:28]The, probably the true Bitcoin or way I use I’ve used what is it, Coinbase?  Coinbase. And then there’s also cash app. I think you can buy it through Robin hood now and a few of the, and a few of the others, but if you go in there, it really was almost as easy as.

[00:19:43] It buying something from Amazon. Really, when you go in here and try and do this, you got to hook up your bank to it. Some banks, maybe you need to get approval from, but there, there are designated wallet for Bitcoin and Crypto Investing. And you’ll see when you go into a Coinbase, but you’ll see that there’s a ton of different crypto coins.

[00:20:01] And I don’t think we have time to get into all the differences between them. I’ll just say some of them. And one of the most popular ones going around right now is called doge coin. You may have seen. And that one is just really interesting. Yeah, exactly. It is just fun to say. And I think that’s why Elon Musk pumps it up a little bit, but really it’s just a completely joke coin.

[00:20:20] But anyway I’ll say this just back to the previous discussion. I think one of the big things about Bitcoin is that it is a true global core currency and that’s something that people aren’t talking about as much is the fact that if somebody in Russia, and again, I’m not advocating for this.

[00:20:35] So I’m going in Moscow right now wants to send me money or needs to, they can do that pretty much anonymously. I’m not going to say who knows what the government can do these days? I don’t know, but I would say pretty much anonymously and I can send money to them without anyone being able to really trace who sent it.

[00:20:51] And from where. And so there’s no more relaxed. It’s, it can be instant and I’ve transferred Bitcoin to people before, not the Russians, but just to test it out. And and it was as simple as they have an ID to their wallet that they, I just pressed a button and it sent right to it almost exactly like you would through, a bank is there’s Zelle out there.

[00:21:11] Venmo. If you’ve heard of that, it really was almost that easy. And you don’t have to, if you’re doing this across borders, you don’t have to convert that to any currency. And if you do convert to currency other currencies, there’s fees involved in that and there’s still some different currency fluctuations, but

[00:21:29] Rob: [00:21:29] right.

[00:21:29] Don’t try doing it after five o’clock on a Friday or during the weekend. The banks are they’re out having fun on the golf course,

[00:21:35] Charlie: [00:21:35] right? Yeah. I think what you are talking about now is the most. Transformative and useful thing about this whole idea is that it’s going to make things a completely different than we could have ever imagined as far as the way we’ve transacted money.

[00:21:50]Earlier I asked, what are we buying? And now I’m going to ask, why should anyone buy Bitcoin or crypto, or even Coinbase? You can buy a stock and Coinbase, it just went. Public. And it is a brokerage platform, like you said, Rob earlier to the cryptos. So let’s talk now about why would I buy this?

[00:22:09]How do I make this decision as an investor and

[00:22:11] Rob: [00:22:11] should I be doing Bitcoin and Crypto Investing? I that’s, that is the crux of it right here. I’m going to circle back to that when I talk about rocks. But my answer on that one, Charlie, before I get off on another tangent is I think we have w we’re going to put out a podcast pretty soon.

[00:22:27]I’m hoping if less, Charlie. It says no it’s called the financial freedom checklist, which is basically walking through, Hey, we have all these buckets, which ones do I fill first? Which ones? Don’t I feel first. And we’re talking about 401ks Roth, IRAs, you fill those buckets first kid’s college fund five 20 nines.

[00:22:45]Making sure you have your emergency fund set up all these different things that we’ll get into in more detail. And that’ll probably be episode 10 or 11 here, or flight 10 or 11, but. After you’ve done those things, then that’s where your speculation and this is really speculative. And maybe you want to talk to this chart a little bit investment versus speculation.

[00:23:05] That’s where well, yeah,

[00:23:07] Charlie: [00:23:07] for me. Yep. Yeah, man. I love it because this is the difference. Like just with us here on the call between me and you’ve been like in my life right now, we’re building a house which is absorbing all of our extra money and then some, yeah. So anyway and I’ve got to. A few kids.

[00:23:24] I’ve lost track of how many right now, because I’ve got a right now. We’ve got one kind of through school, mom, my stepdaughter. And we’ve got two that I’ve got to get through college and I’m joking about the number cause we’re fostering right now. So yeah, we might need to plan for that one too.

[00:23:41] I don’t know. So I’m not being disrespectful to my wonderful children. I’m just. We’ve got a lot of stuff going on. So I’m thinking about college. I’m thinking about building a house I’m thinking about I’ll just left the airlines. I’m thinking about building up more of an emergency fund than I already have.

[00:23:57] So man, like you just said, Rob, Bitcoin falls way down the list falls off my list right now, as a matter of fact, and I think the way to frame this is, that your money that you’re saving investing has to be attached and tied to your goals somehow. It has to have a purpose. Each of your dollars has to have a purpose.

[00:24:12] So once those purposes run out, you might speculate, you could speculate on a stock individual stock. You could speculate by going to Vegas and playing blackjack. You might want some money. We don’t know race cars and race cars, anything, but speculations, there’s nothing wrong with speculation.

[00:24:29] It just has to fit in your financial life. In other words, when all your other goals, important goals, the kids are going to school. Like I’m not going to invest my dollars co daughter’s college fund on Bitcoin. It’s too risky. And she may not go to college and I can’t take that chance. Whereas Ben, you’re younger.

[00:24:43]By a couple of years. And so you don’t have those things going on in your life right now. Man you’re much more eager and it’s much more appropriate for you to do Bitcoin and Crypto Investing right now than it has been. Yeah.

[00:24:52]Rob: [00:24:52] With the cabinets, I would say even, no matter your age, my, my 2 cents here is be ready to, if you lost it all, don’t be too surprised because it’s so untested.

[00:25:02] It’s like one of those startup companies that, 90% fail or whatever, it, it could be one of those. And the other thing too is yeah. Which one are you gonna invest in? We’ve been talking about Bitcoin, which is the big , but there’s all these different ones out there.  I think I heard something like there’s 5,000 cryptocurrencies out there. Just like back in the.com era, who knew. Everyone knows in hindsight that Google and Netflix and all these, companies that are great now that become the fat tails. If you will, are out there and they’re doing great, but Bitcoin, because of its $21 million cap, maybe that’s not the best cryptocurrency.

[00:25:33] That’s going to come along. Maybe it’s going to be a, what is it? A theory, the other second place one. And they’ve all back to your point earlier, Charlie, they’re so volatile because.   They’re computer-based so whether they can be hacked or not, there’s a lot of differing opinions on that, but they’ve all had problems, right?

[00:25:51] Ethereum lost 50 million cryptocurrency and they went back and rolled back the blockchain, which I think is the first rule of blockchain, which is. Don’t tamper with the blockchain. He rolled it back and gave it back. They’d get back to the blockchain. Whereas I think Mt. Gox, which was the big exchange for Bitcoin and Crypto Investing prior to Coinbase and the other exchanges out there which was sounds like, just a bunch of folks getting together playing cards or playing a game.

[00:26:17] And then they stumbled on the Bitcoin and came out with Mt. Gox and they had a a hack or somebody stole because they were able to. To manipulate the code or one of the holes in the code and they still like $850,000 worth of Bitcoin. So there’s a lot of different, things out there that you gotta be careful about.

[00:26:35] Hey, Robert,

[00:26:36] Charlie: [00:26:36] I think that Mt. Gox thing is cool and I’m sorry to interrupt you, but it’s it was actually 850,000 Bitcoins. Sorry. That we’re currently, or that we’re valued at 450 million at that time.

[00:26:47] Rob: [00:26:47] Yeah. That’s slightly different.

[00:26:50] Charlie: [00:26:50] That’s the only reason I interrupt you. I’m sorry, go ahead. That’s great. Hey, but but I love this.

[00:26:55] What we’re talking about right now, I think is really important and And I want to frame this discussion a little bit more along that speculative discussion that you hit Rob, because I think that’s totally appropriate and I’m done being crusty old guy. I just wanted it to be that for a second, but but I think it’s interesting that let’s pretend for a second.

[00:27:10]This is a behavioral thing that we need to be ready for and you nailed it. Just like any other investment, Hey, be ready to lose your money.  So let’s pretend that Bitcoin makes it and it becomes a great, a store of value, inflation, hedge, whatever we, whatever happens, who knows.

[00:27:25]But that doesn’t mean you’re going to be profitable as an investor. So let me delineate those two things. That’s very important for. So here’s an example. There’s a stock that is let’s use quantum scape as an example. We’re not invested in quantum scape, but I’m just gonna use that in his example.

[00:27:39]It’s amazing technology, potentially this could make battery lives like  10 times what they are right now, which would be, can you imagine the game changing technology that would be Volkswagen’s involved in this this company per se and Gates is an early investor. So man, it is amazing.

[00:27:54]And so let’s, we don’t know exactly what’s going to happen, but there’s an amazing technology. There’s no doubt it’s going to be around for a long time. No doubt about it, but that doesn’t mean I’m going to be profitable as an investor. For example, if I bought quantum scape at the wrong time, in other words, these new concepts, these new things that their prices bid up so quick, when they come out sometimes maybe an IPO or whatever.

[00:28:15] If I buy it at the wrong price. It’s still a great company. It still has amazing potential, but it could be 10 years before if you bought the wrong price, it could be 10 years for this particular example before you become profitable. Again, let me give another example. If it’s, and we’ve talked about gold before we came on, when gold first became an investible asset, if you bought gold and let’s say the late seventies, early eighties.

[00:28:42] You still have not recovered your value from gold as an investment in, in, 30 years later. Yeah. So in other words, gold is great. We sometimes use gold as an investment. There’s nothing wrong with it. Great. But if people buy it, what’s that is it great? Yeah, exactly. Yeah, exactly. That’s another show, but that’s my only thing is there, there’s a very good chance and that’s why I think what you said, Rob is so important.

[00:29:07] Be ready to either have it go down in value for a long time, and we’ve already been through this with Bitcoin and Crypto Investing and I’m going to cherry pick some data right now. And I’ll tell you that if you invested in Bitcoin in December of 2017, then three years later, December, 2020, you may have broken even, so that you gotta be ready for that as an investor.

[00:29:27] And that’s a long time, it’s easy to now say three years. Yeah. No big deal, but. During that time you lost money and you didn’t know if it was ever going to come back. True, but

[00:29:36] Rob: [00:29:36] let me just be ready for that. Throw this at you, Charlie. If you invested $1 in Bitcoin in 2010, it would now be worth $90,000.

[00:29:47] So crazy. Yeah, that’s right. It was the best investment. Best save investment. I shouldn’t say investment. I’m sorry. Best asset. Of the decade from 2010 to 2019, it made the most money. Yeah.

[00:29:59] Charlie: [00:29:59] I there’s no denying that. And I just think you gotta be ready to to stick with it no matter what. And that means you gotta be ready to part ways with that money that you’ve invested.

[00:30:09] Because again, those people that invested in December 17, 2017, they’re Hey, I think my money’s gone. I don’t think it’ll ever come back,  I’m done ranting, so I,

[00:30:16] Ben: [00:30:16] yeah, what I’ve  run up against when I was thinking about Bitcoin as well, is you can put in money into Bitcoin.

[00:30:23] Yes. And, but Bitcoin doesn’t make any products. It doesn’t sell anything. It has no assets that. To liabilities. It has no property, no patents, no, nothing about it. It w I can, so I can put a, a hundred dollars into Bitcoin or I could put a hundred dollars into Apple and the Apple makes him great computers and probably will continue to do or at least fight to make more earn profits in the future.

[00:30:48] Bitcoin doesn’t do that. . That for me, gives me a lot of safety and comfort. Knowing that I have a business  that is trying to make as much profit as possible. They have to Bitcoin really has no intrinsic value at that.

[00:31:00] I understand at least  . I think there, there is a chance that in the future, this could be a wonderful currency that we all use to transact. But as far as right now,  there’s a big hype. There’s some scarcity involved in that,  the value keeps going up and up. What is the, what’s the peak. We don’t know, we don’t know what it will be. We don’t know. Will it ever stable stabilize it all. We don’t. We just don’t know. And then, like you said, would another, if another coin could easily come over and be, wow, this takes half the energy to verify the blockchain, which another is a whole nother.

[00:31:33] Issue about Bitcoin is the energy consumption it takes. But there could be another one that comes along with it’s so much easier to mine and to keep track of this blockchain then maybe more popular. So we just don’t know it’s so new me, I personally, I do invest into it, but I would prefer to invest in something  that’s trying to make products at selling a service, something along those lines, but I don’t

[00:31:54] Rob: [00:31:54] know. Yeah. I think it’s important. You brought that up too is the ICO. So I may be wrong on the exact terminology, but it is as opposed to an IPO that they have ICS and so many get rich quick folks.

[00:32:06] They say it’s not a Ponzi and Bitcoin, I would say that’s true. And there’s a lot of cryptos out there that are trying to do the right thing, I would think. But there’s a lot that are, there’s quite a few that went public and, or went through one of these ICO’s and made a bunch of money.

[00:32:22] And then boom disappeared. So you gotta be really careful if you are going to invest. You’re really careful about what you’re doing because a lot of money has gone missing,  so that’s amazing. Fascinating. I just think, yeah, it could be something. In the future, that takes a hold, but who knows, which one of these crypto’s is, that’s

[00:32:39] Ben: [00:32:39] going to be speaking of which Ben coin is about to come out. It’s about to be the next big thing. No, I’m just kidding.

[00:32:46] I don’t know if you’ve ever heard of Jim Mack, but he, the McAfee antivirus guy who’s. Yeah, it seems absolutely crazy to me. I don’t know much about him, but he came out with a coin and was pumping it up like crazy last year and then just took all the money and lives on like a boat now. And no one can get, in the international waters knowing.

[00:33:03] So it’s just, anyone can make these things. It’s. It’s definitely not something to get into. If you don’t understand it, I would just recommend just avoiding it.

[00:33:11] Rob: [00:33:11] And if you if you’re really passionate about it and you think this is the next currency, it’s the best thing. Since the, the internet was invented, then  my thought is you fill those other buckets and then you can invest in it. Just realize you might lose it. But if you’re really passionate about, thank you, you have a big fear of missing out. And you need to scratch that itch. Go ahead and scratch it. After you’ve done the, the responsible things, if you put your kids through college.

[00:33:34] Yeah, exactly. And we talked about stability, I guess there’s a coin out there, a crypto coin out there now that is tied to the dollar, which may be could stabilize. So maybe that’s one that will come up, but where maybe Ethereum will or what, you’ve got all these different kinds, but like you said, it goes back to 2008, which we should talk about that a little bit.

[00:33:53] The timing of when the white paper by Satoshi Nakamoto, who is either a person or persons, no one knows who, but they’re obviously a world-class programmer with economics background. And I’m not telling you, I wrote that. Did you write that bit? I knew it

[00:34:15] Ben: [00:34:15] business partner kicked me out, but

[00:34:18] Rob: [00:34:18] yeah, just fascinating stuff, but that was about six weeks after Lehman brothers failed.

[00:34:22] It was when that paper came out. So re you know, the financial crisis 2008 is happening. That’s when it came out to say, Hey, maybe, some people say that the banks have gotten too big to fail, or some people say too big to jail, they didn’t jail any of those folks. So anyways, super fascinating. Yeah.

[00:34:42] I think you

[00:34:42] Charlie: [00:34:42] hit it though. Rob, and it’s just we’ve got to be careful of fear of missing out.  We’ve got to make sure we understand it’s a speculative investment, which is fine.

[00:34:51]Rob: [00:34:51] Getting back to the volatility too, Tesla announced that they were at some point in the future going to accept, I think it’s Bitcoin for a payment for Teslas.

[00:34:58] Can you imagine that? People as volatile, it is right now, people just wait until it goes up or goes down and then, the price of a car in dollar value could be worth a hundred thousand one day and 30,000 the next. So just wait until it’s 30,000 and buy it with Bitcoin. I don’t know that seems like a problem that Tesla might have in the future.

[00:35:18] Ben: [00:35:18] Yup. And market manipulation is another thing too. These influencers go out there, pumping up a coin here. They’re I you on Musk, you see him pumping up doge coin, which again is literally a joke. It says, so in Encore invasion, its description on the, in the origination of it. But anyway, we just, that could also get you in trouble.

[00:35:36] Just something that, something as simple as that. No,

[00:35:38] Rob: [00:35:38] so it’s fascinating. That is fascinating.

[00:35:42] I’ll wrap it up with a quick quote from Warren buffet.  Is quote is cryptocurrencies basically have no value and they don’t produce anything. They don’t reproduce. They can’t mail you a check. They can’t do anything. And what you hope is that somebody else comes along and pays you more money for them later on.

[00:35:58] But then that person’s got the problem in terms of value. Zero Warren buffet. That’s what he said. And then I’ll leave you with, the Elon Musk quote. I think Bitcoin is on the verge of getting broad acceptance by conventional finance people. And to that point, Charlie, you were talking yeah.

[00:36:14] About the ETF. I’ll just leave it at that, that the ETF I guess is in front of the sec. And if they can get the sec to sign off on it, there’ll be a big coin or a cryptocurrency ETF. That’s all I got. All right. Thanks folks. We’ve reached our final destination. Thanks for joining us here at the pilot money guys podcast as always.

[00:36:34] If you liked what you heard, hit that subscribe button, and if you have any questions or want any topics covered. Hit us up@robertatleadingedgeplanning.com and as always remember what Emerson said, the world makes way for those know where they’re going.

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