Wanting to get into Bitcoin but don’t know where to start? Join Ken McElroy and finance personality Mark Moss in a discussion all about bitcoin: how to get started, why corporations are buying in, and how you can take advantage of it right now.
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Ken McElroy:
Welcome everybody to real estate strategies, today we’re going to be discussing Bitcoin with Mark Moss and of course, real estate. Before we get started, I get a lot of questions from people asking how I created wealth and how it all started, budgeting the money correctly. So I created a financial stress test for you. You can start by looking at your financials today. Just go to KenMcElroy.com/StressTest to check it out. So Mark welcome to the channel.
Mark Moss:
Yeah. Thanks so much, Ken. And it’s always a pleasure to talk to you and I’m excited.
Ken McElroy:
Yeah. So if you guys don’t know him, who Mark Moss is, you got to jump over his channel. He’s got hundreds of thousands of people watching. He releases great videos. He’s really talks a lot about currency and Bitcoin and crypto. And, and, uh, we were just talking before this, he’s going to a bunch of conferences as you guys know, uh, the economy started to open up and, and a bunch of that. Now I know you’ve been a proponent of Bitcoin and you quoted Janet Yellen, the U S secretary of the treasury. He said that the access to digital currency will help lower income people open bank accounts. And I’m curious, how do you think Bitcoin will increase the access to banking?
Mark Moss:
Well, um, yeah, Bitcoin will increase it. What Janet Yellen is proposing won’t so let me break that down for you. So, um, in order to join the financial system, you have to have permission, right? You have to go to the bank account and they ask for lots of documentation. Um, you know, if it’s a corporation or whatever, you have to show proof of address and ID and all these things. So you have to have permission in order to join that. Um, and because of that permission, that’s required to join the financial system today in the world per the UN, we have 2 billion, again, 2 billion adults in the world that have no access to the financial system. It’s a staggering number now, how can they get ahead if they can’t even access the financial system? Of course the answer is they can’t. And so it’s because it’s permissioned.
Mark Moss:
Uh, w we, you know, that I’ve recently moved to Puerto Rico. It took me 26 days to get a bank account open there, I’m a known person. I’m a high value client with my bank. I have 25 years of banking history, and it took 26 days to get permission to join us. So Bitcoin is what we call permission lists. And so what that means is anybody right now can grab their phone, download a wallet, and I can send you money, right? There’s no permission that’s required. And so, because of that, anybody in any part of the world, as long as they have access to even the most basic smartphone could join the finance, the Bitcoin network without permission and enter the financial world. Yeah,
Ken McElroy:
That’s great because that’s actually what people want. Right. They want to just be able to have access. However, it might be. I remember going back to Asia, I was back there with Kiyosaki and, you know, they were using their smartphones. It went boop, boop. You know, as they were checking out, like it was just all kind of done through these digital wallets already. It’s been going on, this is a little bit different here, but, uh, I think that, uh, the fact that they don’t, you know, the, the, the old banks are archaic, man, like they’re dinosaurs.
Mark Moss:
I mean, ease of payments for sure is cool. Like, you’re talking about being able to use your smartphone, but I just think it’s really about democratizing decentralizing finance. And so, I mean, I know you’re, you’re a big investor, you wire, I’m sure. Big chunks of money around the world, and I’m sure you’ve had problems like me when I go into wire money. Um, why are you sending it? Do you know who you’re sending it to? What do you need to do that for? Then they have to get approval. And like, uh, recently I was sending six figures up to Canada on this mining deal that I’m in. And I sent my wife to the bank, it took her an hour. They had to call this manager and that manager, she had to leave before she could even get the money out, had to go back a second time and that’s to send my own money.
Mark Moss:
I have to have permission. And so I think it’s, uh, you know, today’s day information, age is pretty easy to see how that is a messed up system, as you just said, it’s archaic. And so that’s really the thing. The thing back to just the original quote, you said with Janet Yellen is they’re talking about these central bank, digital currencies. And so they basically want to turn the dollar into a form of cryptocurrency like Bitcoin, but to her quote, it’s not going to fix anything because it’s still going to be just as permissioned as it is today. It’s their regulations that caused the problem. Yeah.
Ken McElroy:
A hundred percent. So, so do you see Bitcoin as something anyone should invest in or is there, is it for so specific type of investors, should people break it up and allocate it?
Mark Moss:
What do you recommend? Yeah, I absolutely do think it’s for every single person. Um, so, you know, obviously past performance, no guarantee of the future, the history, but, uh, but, uh, if you would have just bought Bitcoin and that’s it, you would have outperformed every single hedge fund, every single institutional investor, the smartest investors, smartest ones in the entire world, you would have outperformed everyone. So you don’t have to be that smart. You go to this, bought it and held it. And he would have outperformed everybody. And that’s, that’s, that’s this year, that’s year to date this year that’s at any, any time period you want to choose. Now, obviously you could say, well, during these six months, it wasn’t, but a year to date it’s been the best performing asset. So I definitely think it should be a part of everybody’s strategy. And as a matter of fact, now, all the big banks are starting to say that just today, Goldman Sachs, probably the leader in the financial space came out and said, now they’re advising their high net worth clients to buy it. But guess what? News alert, you don’t have to be a high net worth client by anybody can buy it. So right now they’re telling their high net worth right. Get their good buddies in first. But you and I, everybody has the opportunity to get in right now today, right. A hundred percent.
Ken McElroy:
So we’re going to take a quick break. When we come back, we’re going to be talking about why the financial institutions are also buying a Bitcoin. So Mark, so you referenced to the lot of financial institutions like Morgan Stanley and cash app. I’ve been buying a Bitcoin and are they anticipating a wave of customers using crypto or, or the big fishes buying first and figuring out how, how to actually use it?
Mark Moss:
Well, we’re seeing both, right? So what’s interesting about Bitcoin is it’s the people’s money. And so the government, the fed, they can have whatever they want, but we can also have what we want. And so this is the first time in history that the people have gotten into Bitcoin first, before venture capitalists, before banks. So they’re all coming in after the fact, there’s a few different things going on. So you mentioned like PayPal, so they’re buying it so they can resell it, right? So they’re buying it as to your point in, in, uh, preparing for the people that want to come buy that for them. But then you have, you know, Morgan Stanley, other financial institutions that might be buying it for their own balance sheets. So we’re seeing this big trend where S and P 500 publicly traded companies are using it for their treasury, right?
Mark Moss:
Yeah. I mean, it’s like, Hey, I don’t want all my money sitting in us dollars because they’re losing 15, 20% of their purchasing power per year. So I’m going to move a big chunk of it over into Bitcoin. We saw Tesla do 1.5 billion of it. You know, micro strategy has been the big proponent, a billion dollars and whatnot. So they’re buying for different reasons. Some because of the financial services are demanding it to your point. Um, some of it are they’re moving their treasury funds over because, um, as Michael Saylor says, like, uh, their funds in the treasury, like a melting ice cube and they don’t like their funds disappearing in like an ice cube.
Ken McElroy:
Yeah. So I think everybody might’ve missed that little nuance that Mark said, you know, like big companies are now considering Bitcoin because they’re afraid of cash. That’s actually the point. Right. And so w you know, when massive, big companies like, like, um, you know, Elon Musk is now, uh, you, you can buy a Tesla with Bitcoin when you start to see stuff like this, you really should be taking notice, because basically they’re saying that they don’t trust the dollar. Right.
Mark Moss:
Yeah, that’s exactly right. And I think, and, you know, obviously your brand is in real estate. I mean, I, I’m a real estate investor as well. And the goal has always been to try to beat the deflation or the inflation of the dollar. And so I think if people can start to look at things differently, and the way that you need to look at things is like, what’s the purchasing power of my dollar? How much do my, how much does my dollar buy? So if I had a hundred thousand dollars in the bank 10 years ago, and I still have a hundred thousand dollars in the bank, the difference is that a hundred thousand buys way less today than it did 10 years ago. Right? So it’s purchasing power. So I might decide not to hold cash. I might put it into real estate. Well, now that a hundred thousand dollar property is now worth 250, 300,000.
Mark Moss:
So it kept up with my purchasing power. The same with Bitcoin. I might have one Bitcoin in my account five years ago, I still have one Bitcoin. But the difference is that it buys way more today than it would have. And so I think if people could just kind of switch their thinking to like maintaining purchasing power, which is why you want to go into real estate, why you’d want to hold stocks or why you want to hold Bitcoin. Um, we just need to maintain that and dollars dollars are designed to lose purchasing power. So the fed targets a 2% inflation. It’s probably more about 15% depending on what your shopping habits are, but let’s just say a 2%. That means over a 10 year period, you’ve lost 20% of your purchasing power by design. That’s their goal.
Ken McElroy:
That’s insane at, uh, people just need to know that, like, if you’re, that’s why Kiyosaki says savers are losers, he’s not really saying you personally are. What he’s saying is that you’re losing purchasing power of the money that you actually have in the bank. So one of the things Mark that’s been kind of interesting to watch is obviously this run that’s been incredible. Uh, but there’s some videos popping up on YouTube about, you know, taking Bitcoin investing in real estate. And I mean, when you and I talk, we’re like, that would be a fun video, you know? So I was talking to somebody the other day. I was like, what do you mean? Well, I said, well, like if I go to Vegas and I put some money up and all of a sudden, you know, I’m up, you know, 50, a hundred grand or whatever, I, you know, I take what I have arrived, pull off of the table and started with it. Just stick it in my pocket. Now I’ve got house money. Is that kinda what you’re talking about?
Mark Moss:
Um, it’s sort of like that, but I think it goes a little bit deeper. I mean, there’s a little bit more strategy there. And I like to say that methods are few I’m sorry. Principles are few methods are many, so we can talk about the principle and there’s a bunch of ways you can slice and dice this. I’ve done a couple of videos on my channel and I call it the velocity of money. So when you typically hear the velocity of money, the fed is using that to measure how fast a dollar moves through the economy. So again, if I gave you here’s 20 bucks for lunch, and then you go spend that 20 bucks at the tire shop, you get your tire fixed. That guy takes that 20 bucks and goes to the auto parts store to get more parts supplies. That guy goes and pays his rent, that same $20 moves through the economy five times.
Mark Moss:
Right? So we also want to think about how many times we can get our own dollar moving through our own investments. Can I spend the same dollar five times or 10 times? And so you can do this with real estate is a perfect way to do this. People use whole life insurance policies, but you can also do it with Bitcoin. So for example, a perfect analogy would be, this is a true story. in, uh, December, I sold one of my apartment complexes. I didn’t identify what properties I wanted to go into yet. So I put the money into Bitcoin since then it’s doubled. So I’ve doubled the money. I can now take a loan against that asset at say, 50% LTV for like one or 2%. And I could go buy the same amount of real estate. And now I have the Bitcoin and I have the real estate with the same dollar. And so it’s, it’s, it’s no different than Kiyosaki strategy, which he shared with me, we were talking about, but you know, you, you take a trophy asset and this is how the rich get rich. They take trophy assets and they never sell them. They leverage those assets to live off of, live off the debt. It’s not tax, you know, it’s not taxable. And then in reinvest it.
Ken McElroy:
So what we’re trying to talk about guys here is really diversification. You know, Bitcoin is speculative and, and obviously we’ve had a very, very good run. Real estate is tangible, it’s physical. It’s something that, you know, sits there. It’s something that you can control much easier. He, you stick a renter in there. Well, if you buy well, um, and you, it can cashflow and you get tax benefits as well. Whereas on the Bitcoin side, you know, they’re starting to come after you on the capital gains side, right?
Mark Moss:
Yeah, definitely. But I think, you know, the strategy is how do you use both of those, right. So how could I, like I just said, how could I use the Bitcoin to leverage, to buy more real estate? Because as, as your point is right, yes, real estate provides cashflow and Bitcoin doesn’t really do that. And so I like to invest for cashflow. That’s like my number one goal, which is why I’ve been investing in real estate for 25 years that we need cashflow to live. But I think it’s about building that strategy where you can take that dollar out of the real estate asset to go buy more real estate assets or take the dollar out of a Bitcoin asset and go buy more real estate assets or back and forth. And that’s really how you get that. But I think ultimately it just kind of comes back to owning that trophy asset for life, leveraging it with debt to continue to scale that up. And, um, I guess you have to believe that Bitcoin is a, is an investment for life. And so that maybe that’s a, that’s a different conversation. One that I’m very passionate about, but, um, yeah. Yeah.
Ken McElroy:
Well, so let me ask you a question. You know, I remember, um, well I had Anthem Blanchard on the channel and, uh, you know, his dad, James Blanchard sat in front of you, you know, the, uh, Congress and basically, you know, when they outlawed gold. And, and so the, you know, the government back in the seventies obviously did outlaw gold and, um, you know, and, um, uh, back in, uh, let’s see, I think Roosevelt 30, 34, that’s what it was. And, and, um, and then, um, you know, do you think that they’re going to come after Bitcoin and outlaw Bitcoin and what do you think is going to happen around that?
Mark Moss:
So I just recorded a video. It hasn’t gone live on my channel yet, but, um, I made a video for that exact topic because Ray Dalio just came out and said that he believes that the government will outlaw Bitcoin because they outlawed gold because they don’t want a competing form of money. And I went on the video and I said, Ray, Dalio’s understanding of history is wrong. Unfortunately, I love Ray Dalio. I respect them. I read his books, but his understanding of history is wrong. So what happened is in 1913, they created the federal reserve in the IRS. And then we had to start using fake Fiat currency. And we had to start paying taxes that was in 1913, the banks were supposed to hold 40% of their reserves in gold by 1933, guess what happened? They printed way too much money and they didn’t have the reserves.
Mark Moss:
And the government was bankrupt and the government needed a bailout, all the creditors demanded gold. So the government had to bail themselves out and steal the people’s gold to pay back to the credit. And the reason why it’s different today is that there’s no, no creditors are demanding gold today. No creditors are demanding Bitcoin. So they’d have no reason to go sees that, right? They have, they just print more dollars to give to the creditors. So that’s that’s number one. So his understand it wasn’t about competition. It was about the bail themselves out. The other thing that I would say is that, um, I mean, a bunch of points here. You, you know, all too well, Ken, how fragile the economy and the markets are today, the government, the fed is fighting deflation with all they have. They’re pumping trillions to keep the housing market and the, and the stock markets up because that’s a, that’s a Prince of GDP. If the stock market real estate markets drop, we go to 250, 300% GDP. We debt to GDP. We can’t have that. So what would happen? They made Bitcoin illegal. It’s suck a trillion dollars out of the economy. How can they afford to do that? Yeah,
Ken McElroy:
That’s a good point. That’s a really, really good point
Mark Moss:
There’s no way they would because, I mean, they can’t suck a trillion dollars out of the economy right now. There’s just no way on top of that. The head of the SEC is, has been teaching Bitcoin at MIT for a long time. I think there’s 17 senators and congressmen that are pro Bitcoin, the city of Miami. I think it’s the second largest city in United States just made, uh, made it where now you can pay your fees and taxes to the city and Bitcoin, and they’re paying their employees and Bitcoin, they’re putting their treasury into Bitcoins. So they’re going to make it illegal in the second largest city in the U S loses all their money. Like I just don’t see that happening anymore. Um, in addition, if we want to go even deeper, um, the Supreme court ruled on encryption and ruled, it falls under the first amendment of free speech because it’s code. And so Bitcoin is just computer code. And so they’ve already ruled that it it’s, it’s, it’s, uh, protecting the first amendment. So it’d be a massive uphill battle. They’d be killing the economy. I just don’t ever see that happen.
Ken McElroy:
Some good points. And the most important thing is it’s not physical. Like gold was right.
Mark Moss:
Well, that’s even, that’s even a better point. I mean, so the reason why they were able to seize gold back in 34 is because gold was already in the banks, the bank, they had already centralized the gold. So they just, what they did is they actually shut the banks down. I think it was 12 days, so nobody could go withdraw their goal. And then they took it. Um, if they had to go door to door, to door to try to seize it, it would have been a whole different story, especially back then people have guns. Right. Um, so it had been a different story. And today it’s digital, you can’t steal my Bitcoin. You can’t see it. So it, I mean, it’s just, it’s, it would, it would, it would ruin the, the country ruin the economy would kill cities. Um, it would be impossible to do. I even made the chart. The interesting enough that the war on drugs started in 1971, the DEA was formed since 71. We every year spend more money fighting the war on drugs, but drugs just continued to grow. They haven’t put a single dent in drugs and drugs have to be grown and cultivated and processed and shipped and packed and smuggled was digital. So it’s just a losing battle. Um, it’s too much entrenchment politicians. Aren’t gonna go for it. So I just, anything is possible, but the probability is so small. I don’t worry about,
Ken McElroy:
I would totally agree. That’s those are the same kind of things I’ve been reading. So next, I’m going to chat with Mark about the percentage of Bitcoin that he recommends that you should have in your portfolio. You can sign up for this and other exclusive interview questions at KenMcElroy.com/Premium.