Getting RICH is NOT That Complicated (They Don't Teach You THIS in School!)

People get mad at the wealthy. What they should do is read the books the wealthy people wrote and then just do what they did. It's not that complicated. There's two types of education. There's real-world education, which is you out there, you know, slogging in the trenches. And then there's the education you get in school. I would make an argument that while I'm not suggesting you shouldn't go get a college degree, I am 100% telling you that you will make 10x or 100x on education that is outside of there. There's this disingenuousness of really wealthy people right now— not all, but a few that are in public—

and they say less than 1% of people retire wealthy at the age of 65. I'm not following what everyone's told us to do: go to university, get a good job, pay my taxes, invest, and one day I'll be free. Because I won't be, right? Statistically, it's impossible.

Money Revealed is an exclusive video series where self-made millionaires share their secrets on on how they got rich. In this episode, you'll learn how to invest in real estate, change the habits that keep you poor, and become a global citizen. These are the lessons that they don't teach you in school about making money, and we've partnered with the series creator Jeff Hays to bring it to you on my YouTube channel. Enjoy.

My interview with Ron Phillips changed my mind about a lot of things. I used to think that anybody getting into real estate investment was speculating, taking high risk. I myself had gotten hurt many times in real estate investments, saying, "Yeah, this isn't my business, this isn't my expertise, and there's no consistent way to really earn money by investing in real estate." Well, my opinion's completely changed on that. After my conversation that you're about to witness with Ron Phillips, I am now seeing how real estate investment could be a very profitable, very steady, very secure thing to do. So check out this interview that I did with Ron Phillips. Ron, thanks so much for sitting down with us and giving us your time.

Yeah, it's my pleasure. Happy to be here.

So you have a background in real estate. How did you get involved in that?

You know, I just, I love to read, so I just started reading books. And I was actually reading books about, just about money in general. And I traded one to a buddy of mine and he gave me a book that was specifically about real estate investing. And I'd had some experience with it in my past and not personally, but with some people that I knew. And so it just resonated. And then I just started diving in and trying to learn as much as I could learn. About it because it was fascinating to me.

Did you start your career here or was it somewhere else?

No, I started my career in, in Kansas City, actually, just cutting my teeth in real estate. But that was after a sales career. And so I had been in sales for a number of years after the military. And then, and then I did a real estate deal and never looked back.

So what form of real estate investing do you do?

Well, I started out doing wholesaling and rehabbing or fixing houses and selling to the market. And then I started to realize after I hung out with some— I was buying properties from a couple and they kept having houses. And I was a little bit fascinated as to why they continued to have properties. And it turns out they were selling off their rental pool and replacing it with with other properties constantly. So I was, I was buying these properties and they always seemed available for lunch. They didn't seem to work as hard as I did. And so I just started to ask them questions about what they did. And, and lo and behold, they really didn't work as hard as me and they made considerably more money than I did. So it didn't take me very long to try to start to understand why. Why is it that that they have time and they have money and I have time, I don't have any time and I have money, but it seems like there's a cap to that. And they owned a rental real estate portfolio that produced cash flow like a machine every single month. And I didn't. I was producing my income from buying properties or buying inventory, selling the inventory. Well, once I'm out of inventory, I'm out of business. So I had to— I just had to constantly fill this engine that I had made, which is not— there's nothing wrong with that. But once I realized that you could fill it once and it kept paying you over and over again, I just— I'm not the sharpest tool in the shed, but I figured that out real quick. You could actually have these things just constantly produce money for you.

So basically you were like flipping, you know, what they'd call flipping houses. You'd buy it, rehab, and then sell it, and then get the next one. So it was very transactional, the business. It's transaction to transaction that you were living.

It wasn't— and I was in business with my brother, and we, um, you know, we found a way to create a little bit more of a machine. You know, we had, uh, we had a mortgage broker, um, that was helping us out. He would get the people all qualified for us. And so we had people coming in on the buyer's side, uh, and, and, and we had figured out how to create a pretty decent funnel on our acquisition side too. And so, that thing was starting to churn out some pretty decent volume. And then, there was some regulation changes that really hurt our business in the early 2000s.

What were those? Because this is kind of important when you're dealing in a regulated industry and there's aspects that touch real estate that are very regulated, right?

Sure.

And those are things you have to kind of be prepared for. There could be shifts and how might that affect you? So what was it that actually happened?

Yeah, and we were completely unprepared for it. We were selling all of our properties. All the people that were coming to us were using HUD financing. And so we were very—

just explain what HUD financing is.

Yeah, it's a government-backed loan product. Right. So they— and this was pre-2008 crash. So back then, anybody that fogged a mirror could get a loan. I mean, literally anybody could get a loan. And so all of, all of our business— well, not because we were, we were rehabbing houses that were kind of in the lower income area. And so since we were so dependent on this one source, there was some fraud that had happened in Kansas City. HUD changed their guidelines for rehabbers. So we had to have 12 months on title before we could sell a property to a person that was using a HUD loan, which means you had to hold it longer. Yeah, for a year. Wow. So our machine that we had built all of a sudden came to a grinding halt because we couldn't get rid of our properties like we had to hold them for a year, which forced us into the rental market. Interestingly, right when I had already been talking to these, these other people And so it was fortuitous that I understood that. So that stopped my business, but it also forced me into another business that has been more lucrative. But to that point about regulation, there was also some things that happened in the, in the rental market right around the same time. Because in the area where we had these homes, Section 8 is prevalent and Section 8 is government paid for housing, right? So they get a voucher. And then they can go and rent a property. In Kansas City at the time, they had based housing on, or the amount of rent on a point system. That was to supposedly have better housing. And so you got points for ceiling fans, you got points for certain things that you put in the house. And so people could go in and they could point out a house. In other words, they could get the top rent But the house really wasn't that much nicer. Our properties were really nice because we had rehabbed them for retail, not for rental. And so, we were getting really, really high rent. Good news for us is that because we bought them very low and we had a spread in them, when they changed the guidelines, it didn't kill us, but it could have because a lot of people were paying very high prices for those properties because of this point system because the government was paying above normal rent range for these houses. And right around the same time, they decided they didn't want to do that anymore. So they went back to market rent and lowered the rents. I mean, the rents lowered several hundred dollars per door overnight. And so people who had overpaid, now, now they were in jeopardy of getting foreclosed on, which didn't, didn't happen to us. But those two things right there should tell— told me You don't want to be dependent on these programs that the government can just change overnight. You want to be dependent and you want to make sure that you run your numbers on market rents and understand, have more exit strategies than just one exit strategy on your properties.

So if I just want to fast forward to the end here, are you available a lot for lunch?

I am, yeah.

I am, yeah. So now you've figured that part out.

I am, yeah. I've actually moved into multifamily properties. They, I mean, it's a fantastic game to play if you just get in and learn it and start playing it, play it right.

So going back here though, I had to imagine that in the development of your business, when you were selling the homes, you needed sort of that windfall to be able to invest in the next property is what I'm imagining. So now all of a sudden you slow that because now you got rent trickling in as compared to saying that you have, you know, a large sum of cash to go and make another investment. So were you able to get other types of financing to support your business or how did you navigate that?

Well, I completely— I did a complete shift. So I did a mind shift at that time. I realized that I didn't want to do this transactional thing that much anymore. Not so much because of the HUD thing, but that was a wake-up call, but more because I really like the lifestyle these other people had. And that's really— when somebody goes into business, we go into business as entrepreneurs to make a lot of money so that we have time, right? What ultimately ends up happening though for a lot of entrepreneurs is they just don't ever quit working because there's always this next level or this next thing. And we actually don't ever get to the point over here where we have the time and we get to enjoy the fruits of our labors. What I saw in these other people, this, this couple specifically, was that they were doing both. They could add to their portfolio in a small amount of time, and at the same time, their portfolio was continuing to work. It's, it's, it's like having a business where someone is running it and you're just a passive investor of the business. And I didn't have that in the transactional-based business that, that I had. So I did a complete shift. When I did that complete shift, I realized that I wasn't the only one in that situation. I met another guy who was selling to people in California. So at the time I was in Kansas City, they were selling to people in California because in California the prices are ridiculously high, especially— this was in 2005, so especially in 2005— and the rents are low. So the numbers don't work. You can't buy a property and cash flow very well so that passive income doesn't come in or you have to put an enormous amount of money down to make them cash flow. We're in the Midwest. It's not like that. Prices are low. The rents for the prices are pretty high. And so the cash flow is really good. So I realized there's all these people out here, they can't do this in their backyard. And I already have all the systems in place right here in Kansas City to make this thing work. So, I partnered up with that guy and we started selling. We sold hundreds and hundreds and hundreds of homes to those people. At the same time, I used that income to build my own portfolio. And I just kept doing that. I've been doing that since 2005, helping people purchase investment properties that are managed for them professionally and produce this cash flow that I learned that was a really good thing. To help busy professionals do that on their own because it's hard for them to do it. That's because it's not their business.

So are you providing capital for them to do this or—

No, no. They— so just like my business produces the capital for me to invest in my own, a dentist or a dock worker or whatever it is that a person does for a living, they produce their income, they save it, they buy investment properties with it, just like I'm doing. So it's the exact same thing they do. They do their business, I do my business. Just happens to be that my business helps them in the pursuit of these rental properties.

And so now, and these rental properties are single family, or at least when you started out, these were single family home rentals?

Single family duplexes and some fourplexes. So all smaller residential rental properties.

And the market research that you do, the main factors I think you might have cited, I wonder if there's any others, but you said, you know, What is the cost to purchase a home? What are rentals going for in that market? And these things kind of have to equate somehow. So when you do this, are you looking to be at zero cash flow based on the debt service versus the rental, or do you look to have a little bit positive, a little bit negative? What's your calculus on it?

Now, the game is to have as absolutely as much rental income as you can above all of your expenses, right? So principal, interest, taxes, insurance. Homeowners association dues, and then the big ones that most people— those are all the ones that you can— you can clearly see what those are going to be, right? Know what your payment's going to be. You know what your insurance is going to be. You know, all these costs, those are hard costs, right? Then there's some soft costs that you have to figure in as well, which is vacancy rate, because your home's going to go vacant, right? Means you're going to lose some income. And maintenance, because anybody who's rented a property or who has owned a rental property knows knows things go wrong or just owns a house, knows things go wrong and the owner of the property has to pay for those things. So once you've figured in all of those numbers, after all of that, the house has to be positive cash flow. And the more you can get, the better.

Do you have sort of a standard for what you allot for vacancies and for maintenance?

You know, there's industry standards, but I prefer to do it based on the area, right? We're in 10 markets and then we move markets based on, on the economy and what's happening in those markets. Each one of those markets has different characteristics. And you could even take Kansas City, for instance, as a, as a macro. You could also do micro inside of there as well. Right in the Northland of Kansas City, there's a different vacancy rate than there is in inner city Kansas City, which is different from, you know, the east and the west, all of that stuff. And we prefer to run numbers based on actual data from our property management companies. Say this, this is the exact— for the last year, this is what the vacancy rate is.

How much does that fluctuate with time?

It's all over the place, especially with the markets, you know, because the vacancy rate after 2008, after the crash in Detroit, I mean, was above 50%. I mean, it was insane.

I mean, that kind of stuff happens. I mean, people in your business probably tank, I'd imagine.

Yeah, I mean, and that's, that's one of the rules. You don't buy in a one-horse town. The horse in Detroit was the auto industry. And when the horse got sick, well, the market followed, right? But there were a lot of marketplaces that, that still had a really solid underlying economy because their economy was diverse. So same thing with Las Vegas. Las Vegas is really good when it's, when it's really good. And then When the economy starts to go down, Vegas is built on companies and people going there to spend money. And when there's less money, less people go there. Same thing up in the oil fields. There's a really big boom recently up in the north of our country. And up there, I mean, the numbers were staggering. They were staggering. Except for there's only one thing up there, and it's oil. So if the oil market gets hit, it affects everything that goes on up there. And I don't want to be in places like that. I want to be in places where if this part of the economy gets hit, I still have a solid base over here. So we try to mitigate all of the risk. Can't eliminate it, but you try to mitigate it as much as possible.

[Speaker:ED HARRISON] What's interesting is like after 2008, so many people ended up in foreclosure. I imagine the rental markets might have been more demand for people to rent, because they couldn't stay and service a mortgage anymore.

Absolutely. Rents actually increased. So it's funny because if you, if you bought on, on solid fundamentals in 2008, the month before the crash, so you had all of your numbers dialed in, everything was dialed in. What actually happened with your property is as it lost value, which unless you sell it, you know, the house doesn't get its feelings hurt because it lost value. Right. So What actually happened with that is your cash flow rose because rents increased and vacancy rates decreased. Right. So it was a perfect storm. At the same time, our mortgage rates stayed and went down, stayed at historic lows and then went down. So you could actually refinance and, and you could have lower interest rates and then lock them for 30 years, which in effect shorts the dollar long term, right?

Yeah, very interesting. So do you rely a lot though on that equity in the current properties to purchase new ones or—

not at all.

How do you go about that?

Not at all. So I never buy and I never encourage other people to buy properties based on appreciation. Appreciation is a gift. And when the market gives you the gift, you harvest the gift and you go buy more properties, right? But you buy properties on fundamentals. You buy them like you would a business. Nobody goes in and buys a business because they think they're going to make it better. They buy the business on the profit and loss statement. So you go into the, to the business, you look at the P&L and then you'll get a multiple of whatever that business produces. It's no different with real estate. You've got to go in and you've got to look at it. Usually you have to build your own P&L on it, which is basically that pro forma. You've got to know what all the costs are and then you've got to understand what the underlying soft costs are. And when you do that, you buy it on— based on, you know, pretty good fundamentals. There's always things that could happen that can— there's always risk, right? But you can mitigate the majority of that risk. And then if the property loses value, it loses value. You're still— you're still producing a positive cash flow, which is giving you, you know, it should give you either high single-digit or double-digit cash-on-cash returns, someone is paying your mortgage for you, which is a return because there's principal reduction happening there. That's usually between 3% and 5% a year, which is better than most people get long-term in their funds, right? Just by itself.

So the principal paydown is usually 3% to 5% a year. Yeah.

And it's 3% to 5% on the invested capital. So that's the other thing, right, is you don't have to pay cash. You can leverage real estate. So you have to figure returns on what you put into the property, not on what the property's worth.

So what market are you most focused in right now?

I'm focused in several, actually, but they're all in the Midwest.

Okay.

So before the market tanked, you know, in 2006 through 2008, we started to pull away from the high appreciating markets. Because as they outappreciated the rent, the numbers didn't work anymore. So, we pulled into the Midwest where it's safe, you can still get cash flows and you can do that pretty much anytime. And then after 2008, when everything crashed, we went back. We went back into Florida, back into Phoenix. And actually, we didn't go into Vegas because of the economic things that I then talked about. We went into Boise, which was a very similar market except for it had a stronger economic footing. And we bought properties from 2009 to 2012, '13, depending on the market. And then the same thing happened. All of those markets have appreciated like crazy. And then by 2014, we were out of all of them and we went right back into the Midwest.

I don't mean you sold the houses.

No, we just stopped selling houses. So we stopped buying there and we stopped selling to our clients there because the fundamentals didn't work anymore. The numbers didn't work anymore, but we held those properties because we weren't at the top of the market yet.

So when you're saying clients, you're basically saying what are you selling to clients? When you say we're selling—

this is same thing I buy.

Okay.

So single-family, duplex, fourplex for, for entry-level people, people who don't, who don't have a big portfolio yet so they can start to understand how this works. And then larger multifamily properties for folks who have some experience and have assets.

So you literally have people that, for lack of a better term, follow you around and say, hey, when you're, when you're ready to sell some of these properties that are investment properties, we're here to buy them.

We're constantly selling them because I can't, I can't buy them all.

Right.

Right. So what my core business does is we— I realize that there's a demand for this, far more demand than, than I can personally buy. So what I do is when I go into a marketplace, I put all of the infrastructure in there that I would need anyway. I'm buying properties for myself and then I do the same thing for my clients and, and then they buy and they use the same infrastructure that I'm using in that area. And then when I pull out of that market, that means I just stop selling. It doesn't mean that my infrastructure is gone. My infrastructure is still there. But then we usually wait a few more years, let the market— so right over the past year, we've been telling people, look, in Boise and Phoenix and Florida, these markets have appreciated like crazy. And I don't know how much longer they have. Anybody who tells you that they do is lying to you. Nobody knows. But I know that you have appreciated substantial amount. The market has given you a gift. You know, you may have put $50,000 into this property over here, but that property is now worth $200,000 more. So take your $250,000 and then you go do it 4 more times. So you've added 4 properties to the original, to the original one that you bought. That's the name of the game because they didn't put any more of their own money in there. The market gave them that money. And if you harvest it and don't wait for the market to crash, you can, you can leverage that into more properties.

So it sort of becomes a, you know, a little bit of luck and timing as far as how fast you can scale something like this. Unless you have some type of capital resources.

Sure.

But it seems like, you know, when you get a little bit lucky and the market goes up, like you said, you can now leverage into other properties and now have a bigger portfolio.

Yeah, absolutely.

So let's go through like the whole process, maybe for somebody who's watching this right now saying, okay, what's the step-by-step? You're in a place like Boise or like, you know, somewhere in the Midwest or Florida, and now you're going to look for a home, you're going to negotiate, you're going to purchase it, you're going to maybe do some things to it, you're going to put it on the rental market. Can you just take us through your process, how that works?

Sure. So I don't buy and rehab and rent properties anymore because that process for me, those are, those are separate businesses. So what I do is I go into an area and I, and I find people who already have a rehab business, or I go in and I find a builder And I say, this is what, this is what I'm looking for. And then I either have them build that specific product for me and for my clients, or I go into the rehabber and I say, you need to find this type of home or this type of duplex and you rehab it, you do all of that stuff, you take all of the risk doing that part. And then we will pay just under market value for those. So you get, you get, you get your return. So you win. And then my clients win because they've got a property that usually has a tenant already in place. It's already being professionally managed. And all they have to do really is come up with the down payment for the property. So for them, it's super easy. For me and for my team, there's a lot more work, right? Because we have to go in and vet these people, make sure they know what they're doing, and then help like in the case of the builders, sometimes it takes us 6 months to a year to actually put that project together because they've got dirt, but they have to put the infrastructure in the dirt. We have to run the numbers. We have to chase all of the pricing that's constantly going up and trying to keep those numbers working the whole time we're doing that. And then we'll buy some of those and we'll sell the rest of them. To our clients.

And the— are you trying to work without realtors to save that?

I am a broker.

So, so you act as your own.

So I don't need them. Yeah.

So you can act as your own and that would save costs. So somebody who's getting into this business, would it be a good idea for them to get a broker's license?

Well, not necessarily. I mean, it's, it's not necessary if all they're going to do is buy real estate and hold it. They really don't need that. And if they're going to go do this on their own, and they live in the Midwest where you can do this all the time, it doesn't really matter what the market's doing. You can always do this. The fundamentals pretty much always work. Then they can go do it themselves. But I would also— I would strongly recommend that they still go out and find a professional property manager because 95% of us are not made for that business. It's a hard business.

Yeah.

When your tenant calls you up and, you know, they have health problems and whatever, most of us have a heart that says, "I got to let them slide." But you also have a payment you have to make, right? And it's business. So having a management company that can sort through that stuff for you and also take the calls about the toilet, take the calls about all the stuff that you don't want that's in the middle of the night that affects your, your, your personal life. They take all of that stuff for you and all of the headache and the angry tenants and all of the stuff you don't want to do. So I strongly encourage people, even if they're buying in their own market, to find a professional property management company.

Is that a major part when you talk about the infrastructure you put in? Is it a major part of that? Is the property—

it is, it is the absolute key to making this thing work. So if you have a solid property management company, they can take an, and a mediocre investment and turn it into one that's pretty good.

What percentage of revenue do you, you know, from rental income, do you allocate for property management?

Depends on the market, but it's usually somewhere between 7% and 10% of the gross rents.

Well, okay, so it's a pretty good chunk. Yeah.

I mean, for, for what they do, it's a really small chunk.

Yeah.

I've owned a property management company. It is one of the smallest margin thankless jobs you could possibly ever want to do. I can't believe people actually do it. Um, there's, there's— you have to scale it really big or keep it really small to make any money doing it. It's either got to be kind of a mom-and-pop deal or it's got to be a big outfit in order for the numbers to work. And then they get angry calls from the tenants and they get angry calls from the owners, and nearly nobody thanks them for doing a great job. So For those of you out there who actually own rental properties, thank your managers, send them Christmas cards. You're the only one doing it, I promise, and you'll get better service.

So at what point— so if somebody says, you know, I've got some extra money, I've been working for a while, I'm trying to figure out what to do with it. I don't like the stock market. Real estate has much more appeal for me. What do you think in the markets that you work in, at least, what do you think the minimal amount of capital you need to start becoming like a client of yours where, you know, they can follow you into markets and pick up some homes, what's the minimum amount of capital they would need and how long before you think they start to really see a return on that capital?

It really depends on the market, but let's, let's go from the low end. You probably need around $20,000 to $25,000 plus reserves, and usually that's 6 months, which is, you know, for that price of a property, you probably need another $5,000 to $10,000 total.

So the range of the actual property value is where?

That's around $100,000.

So you're looking at homes about $100,000?

Yeah, because you can do that on a single-family home right now. You can put 20% down on a property, leverage the rest out. There's some closing costs in there. And then, and then you got to have reserves. So one of the biggest mistakes people make is that they'll go in and they'll buy a property and they had reserves. And then they'll use the reserves for the property to go to Cancun or, you know, whatever. And then something goes wrong with the property and they don't have the reserves anymore. It's a, it's a big rookie mistake. You have to have reserves for your properties and you have to have reserves for your personal life too, right? So you got to have enough reserves for your personal life before you start having reserves for investment properties. And people like to get out ahead of themselves because the numbers look really good. They get super excited about it, right? And then they go out there and do it and they do it a little prematurely when if they just spent 6 more months getting their, their finances dialed in, right, then they would have had a better experience.

So then $20,000, $25,000 or $20,000 for deposit, $5,000 reserves, uh, you get your first property, uh, rent starts coming back, uh, I guess immediately. And then, you know, now you're— I, I guess as far as managing your rental income, you know, you're allocating for vacancy, allocating for repairs, allocating, you know, property management, all those things. But so what period of time? So if I started with $25,000, in what period of time do you think would be before I'm ready for my next home?

Depends on how much you can save, right? So when we meet with people, we try to help them understand that buying one property and then trying to leverage that property, another property, that takes time, you know, in the situation in Boise, I was just telling you, but we just did a 1031 exchange, which we could talk about in a minute, where we take those funds and tax-deferred exchange them into other properties. We did that. They bought in 2011 and we're doing it this year. That's, that's 6 years, 7 years, right? In 7 years, there's $200,000 plus all the cash flow, plus the principal reduction, plus the tax benefits. So there's 4 returns. That are happening simultaneously on that property. But that, that client didn't just buy that property. So they saved money that year, bought the next year, save money and then buy. And when you, when you do that, when you keep doing that, you, you've accelerated this thing because then this one property turns into— for her, that one property turned into 4.

Right.

Right. And then it did it with the same amount of money. But the one that she bought the next year, it's doing the same thing. She's currently trying to sell that one right now. And it's going to spawn another one, too. So, it depends on how much capital you have, how quickly all of that can happen. But we see clients all the time who have $200,000, $500,000, $1 million in a retirement account. And they're scared to death because they've watched the stock market for over a decade now go straight up. I mean, the thing has just been going up and they don't know what to do with their money now because as soon as that thing crashes again, they could lose 50% of their money.

Right.

And away we go again. Right. Where they can take that money and with— they don't have to take it out and have a taxable event because a lot of people don't realize this. But you can move money from a 401(k) into a self-directed IRA And an IRA can actually buy and own real estate just like it can a stock. And so they can actually buy real estate inside of their IRA. All that money goes into their IRA tax-deferred, all the gains. So if this client I was talking about had purchased inside of their IRA, they wouldn't have to do a 1031 exchange. They're just selling a property and replacing a property because it's all tax-deferred inside of there.

Does the rental income have to come into the IRA also?

It does.

So everything just— it's almost the IRA is its own LLC business. Business, it sounds like.

It is. It's a tax-deferred or it's a tax-free. So imagine that inside of a Roth, right? A Roth, you don't get any tax benefit putting it in there. But all of that growth that I just talked about happens inside of a Roth. Now we've spawned 1 into 4 inside of a Roth. All of the cash flow is going back in there as a return. There's still principal reduction because you can, you can actually leverage inside of your IRA too. So your IRA can actually go get a loan to buy real estate. And all of that money goes back into there. So you've got all 4 of those returns still happening inside of a tax-free environment. Tax-free forever can be tax-free for your kids. I mean, it's super powerful what you can do.

You'd be taxed on it though once you pull it out.

Not in a Roth. No, no, it's tax-free money.

It's not deferred. Okay.

Imagine this. You take 10, maybe you're young and you take 20 years, but whatever it is, 10 years, 20 years, and you build up this rental pool inside of your retirement account. And so now you've got all this capital that's sitting in there, but it's producing rental income. The rental income you can take out, it's tax-free, and you're still not cannibalizing your money. Most people, they'll put their money into an annuity at the end so that they don't outlive it. But the reality of the situation is that they do. If the market goes down and your annuity payout if the percentage rate that you're getting paid out goes down, now all of a sudden you're eating into the capital and you'll run out of money. But with, with rental properties, when the market went down, the actual rent went up. People got more income. I got more income during that time. And if it's inside of a Roth IRA, you can take that income out. It's all tax-free while your properties are growing in value inside of there and you're building generational wealth.

So in your mind, you know, 'cause so many people who are watching this series, you know, they're trying to figure out what's the smartest or the best or the most leveraged thing I can do with whatever, you know, money I have saved in a retirement account or that I might have in some other types of savings account. It sounds like, especially from a tax perspective, 'cause it's very hard to accumulate cash when you're paying a lot of tax, right? Absolutely. So when you—

It kills it.

It kills it. I mean, you know, it's like, you know, even if you're a high wagerer, by the time you live a decent lifestyle, pay your taxes, etc. There's not a whole lot left.

Right.

So, but in this particular circumstance, you're talking about a Roth IRA and saying you can now acquire assets in it, they grow tax-free over time, and that's, you know, your future waiting for you. And income that it generates, you can pull out during the course of that, of the hold period, I guess, for the property. You can pull that out tax-free.

And yes, so long as you're 59 and a half, right? So this is a retirement account. You can pull the principal that you put in there out tax-free if you need it for things, right? But you can't pull gains out until you're 59 and a half.

Right.

At that point, you can start pulling it out in your retirement years, but it's all tax-free.

But what about the profit side of it from the rental income?

Yeah, no, it all goes into the IRA and has the same exact rules. You can't pull it out for personal use. And you also, you can't go use one of the houses. So if one of them, you know, just happens to be, you know, in Palm Bay, You don't get to go stay there on vacation.

It's got to be an investment.

It's an investment property only. But I tell my people, I said, look, if you're comparing this to a stock, here's the comparison. You go in and you buy a stock, you own a piece of a company of which you have no control. You really don't know anything about it. The CEO can tank that company, the market can tank that company, nothing you can do about it, right? You paid cash for your share and you're going to get whatever return. If it's a dividend-producing stock, it's going to give you some dividend, right? But usually a dividend-producing stock is not a growth stock. And the same is true of the other way, right? So if you can ask your stockbroker to give you a stock that both produces a high dividend also has pretty strong potential for growth and that you can buy on payments that are fixed for 30 years and that you have 100% control of. So in other words, you've bought the company now, you control the company, and there are things that you can do that will actually change the value of the property. I can actually affect change in this investment because I own 100% of it, and that has significant tax benefits. And oh, by the way, I'm buying it on payments, but I want someone else to pay for it the whole time. And if a stockbroker can produce a stock that'll do that, then it can compare to real estate. Otherwise, it doesn't.

Really interesting way to characterize it because there's always that ongoing debate with what's the best thing to do. And I think your argument's very compelling. But people have to trust themselves that they would know how to buy a company, metaphorically speaking. So if the market were to stabilize or go down as far as the value of real estate, so now basically saying, okay, so we're not really able to take the gift, as you call it, that you could take and reinvest. The actual typical rate of return as far as saying, okay, my positive cash flow I have to imagine it's fairly minimum. By the time you've paid all the expenses, allowed for vacancies, allowed for your management fees, there's probably in a typical area that you would invest in at this level of $100,000 home, how much positive cash flow as a percentage would you say there is?

Yeah, so we see typically somewhere between 8 and 12%.

Oh, is that high?

Yeah. And that's actually low because the— because again, we're in a market cycle right now where the prices have gone up. And, and, you know, I talked about the stock chart. Well, look at the real estate chart. I mean, nationally, the real estate chart has gone pretty crazy, too. The difference being that in real estate, it's all local. So where California's graph is a little bit psychotic right now, it's not the same way in the Midwest. They're kind of boring markets. They don't appreciate crazy. You know, they don't have crazy swings in the market conditions. And that's why we pull back in there when the market starts to get crazy. But there, after figuring all of your expenses, short of something, you know, really, really crazy happening. Yeah. I mean, we see returns that are somewhere between 8% and 12%. And of course, anything can happen to your property. I mean, I have— I had a property last year where we had we had a really, really crazy thing happen. We had 5 units that had pipes freeze. It's in the South where it doesn't get cold, so they don't build them the same as they do here in Utah. Right. And it got really, really, really cold there and pipes froze, flooded 9 of my units. And, you know, that turned into a— that turned into vacancies and it turned into— which is, which is out of the scope of anything that I prepared for. Other than that, I had reserves for it. Right. But, and I had to use the reserves while I was waiting for the insurance to come in.

I would say you're insured, but that might take some time also.

Yeah, because you have to work with them. And during that whole time, well, I have tenants who can't live in a flooded place, right? So I had to pay for hotels for them while I found another place for them to go live. And then I had 9 vacancies for all of those months. So can something really crazy happen to your real estate? Absolutely. It can't happen to me last year. And so last year, after all the insurance payments and everything like that, I didn't make any money on that property from the cash flow, but someone was still paying my mortgage for me. Right. I still got tax benefits. And last year my values went up. They could have just as easily gone down.

Right.

Right. So when you've got 4 levers you can pull, it's a lot better than having one. Yeah. And that's the thing that I love about real estate is I can actually affect change. Then when you move into actually the multifamily properties, you can affect even more change because the value of a multifamily property is based on the P&L. And I can, I can 100% affect change in a P&L because there's a whole bunch of costs in there that are, that are not fixed costs that I can affect change in through proper management. And so when I go look at real estate deals that are multifamily deals, I'll go look at those. The first thing I'm going to look at is the profit and loss statement. Well, let's see what they're spending money on and what I can do better and, and be more efficient with. Because as soon as I do that, I get a multiple on my money, and I don't have to wait for a property to sell down the street for more money, or an appraiser that's going to say, well, house next door sold for this, so yours is only worth this. It's not that way. I just forced appreciation into a property by affecting the financials. And that's why I really, really love multifamily properties, because I can— as a businessman, I can go in there and go, this is just run horribly. So let's put some efficiencies in here, manage this property better. I don't have to change rents. I don't have to do any— I don't have to fix anything. I'm just fixing money on an income statement, right? That's all I have to do. And I can raise the price. And the equity in the property dramatically.

Yeah, I was about to say, so it seems like multifamily properties are even preferable, at least from what you're describing for you at this point.

Not for somebody who's new, right? Because if you mess up, you've messed up by a multiple.

Yeah, it's a big—

that's a big mess up, right? People can— people can withstand a single-family home mess up. Right. But once you're in there and you understand how things work, it's a natural progression. So this— the client I keep talking about because it's fresh in my mind is, you know, it was a fourplex and she's traded into a little bit larger property, right, into a multi-family property. That multi-family property, she can actually affect the value of that home where she couldn't the fourplex. That is specifically dependent on the market. It's specifically dependent on the appraiser and what they're going to say about the value. Which is also dependent on everything that's happening around it. Multifamily properties, while there is a market kind of cap rate or level as to what the multiple is, the financials are 100% in my control. I can affect those.

Right. What percentage of your business right now is your own investment in properties versus serving clients?

Well, I separate them completely out. And so We sell hundreds of properties a year to our clients. And that's my core business. That's my business. So, like a dentist has, they're operating on teeth all day long. That's my business that makes me money.

And is the profit that comes in from that business based on increase in equity in the homes that you're selling?

No, because the homes that I sell, I don't own. So, I don't take percentage ownership in the property. The deals that I help my clients buy. They own them 100%.

So you're just taking a transaction fee on every one of those?

Correct. I'm a broker, so the seller pays my fees. So our clients don't actually ever pay us a dime for anything that we do. I get paid by the seller, which is fantastic for our clients.

So this is interesting because I've never heard this before. So basically what you're doing is you're taking your knowledge and expertise in this arena and you're sourcing homes that would be the right targets. They have the right profile for a good investment property.

Correct.

And then you have clients who say, hey, we're going to buy those homes from you. You're going to take a transaction fee as a realtor. They're going to get into investment properties and they're going to get a lot more intelligence in purchasing them because they have your experience. And so you're specializing there and you just transact a volume of these and they get to use our infrastructure.

That's correct. So I guess the other thing I have to add to the whole stock thing is that the seller or the company has to pay the stockbroker. In addition, so I don't have to pay the stockbroker. Right.

That's right.

I forgot about that one. Yeah, but it's a good one.

It's a good one.

It's a— it's a— it's a—

sellers in real estate, almost invariably sellers pay the fee, right? So the buyers don't have to. And all I did was position myself so that I can— I could help the maximum number of people, not take their money away because their money's better spent in the investment.

Right.

But I'm at the same time, I'm helping these sellers because we can move a whole lot of properties because We've got a whole bunch of people over here that want the product that they can produce. Right.

That makes a lot of sense. You know, 401(k)s, for example, if you're invested in the market, your mutual funds, even if you're not in a 401(k), but any investment mutual funds, there's all these fees that are baked in that, that you're— that you don't see, that you don't see, and you're taking all the risk.

Yeah. And so it's funny because you'll turn on financial TV and the financial TV will tell you this is— this has been the return. And then you open up your statement and you go, what the hell happened to my return? It's 3 or 4 points less than what they're telling me, right? Or even what they tell you on the statement. And it's because of fees and it's because the market does this. So every time you lose money, you paid fees all the way down and you pay fees all the way up. It doesn't make any difference. The stockbrokers and the fund managers all make fees whether you make money or you lose money.

And they've got guaranteed income out of it. Absolutely. Yeah. So you've given a very compelling argument for how this style of real estate investment really makes a lot of sense. Who shouldn't do this? Who's the person that, you know, you want to avoid this?

That's because it is not for everybody. Right. So I'm glad you actually asked that. If you are the kind of investor that doesn't want to open their statement on their 401(k) because they— you don't want to see if it's good and you don't want to see if it's bad. You just want it to be. You should never own real estate because, you know, people say passive income and then that triggers something in people's mind that says I have to do nothing. But you got a management company out there, but you do have to communicate with them. I mean, they're going to, they're going to make sure that the work gets done. You don't have to fly there. You don't have to do any of that stuff. But they do need your authority. You have to give them the authority to actually make the repairs, right? You have to communicate them about, look, my property's been vacant for 30 days. Should we lower the rent a little bit? Should we offer an incentive? Like, what can we do? Because they're going to kind of stick with what you told them. You got to be a little bit present. You got to be a little bit involved in your investment. You have to open up the bank account every month and go, okay, I have 10 units. Let's see if all 10 of them came in this month. And if they didn't, what's my next logical step? I'm going to call the management company and say, why didn't the money come in and what are we doing about it? And there are some people, I don't understand why, but there are some people who just don't.

So, passive income doesn't mean mindless income.

Exactly. Yeah, that's great.

They have to pay somebody.

I'm going to steal that and I'm going to use it in every presentation I do. Yes, thank you.

Perfect. So the management companies collect your rents also?

Yeah, absolutely.

I mean, so it's not just maintenance management, but they're collecting the rent there. Are they renting the property too? They're showing the place.

Absolutely.

And all that for 8 or 10%. Yeah.

Now it doesn't seem like a very big number.

Now it seems like a good number.

Yeah, that's a pretty good deal. Yeah. And their margins are so slim and they just get beat up. I already said that, but I mean, you People don't understand how bad they get beat up for such a small amount of money, which is why I don't do that business anymore. But yeah, they collect the rent, they take all of the phone calls, they produce reports. At the end of the year, they produce reports so that you can give them to your accountant so your accountant can prepare your taxes. They do so much, far and away above what people think they do. And you know, for $1,000, They're getting $100. They're getting $100 a month to take all of that abuse from everybody and then make sure that the property is— make sure that your investment that's yours, that you own 100% of, is working correctly. Well, it's a small fee and we get them reduced because of volume. But even if you had to pay 10%, which is pretty much retail, right? It's not a bad deal at all.

I've got some decades of business experience. I've been around, you know, varying forms of investments, investment advisors, what they recommend, etc. Everything you're talking about makes a whole lot of sense. I mean, it really seems like it's a very solid place for someone who can produce enough to have some excess capital or has saved some excess capital, maybe even inherited some excess capital. To say that this is really a great common sense approach towards how to put it to work for you and how to build on that capital and turn it into a nest egg or security or retirement. But I don't see this taught anywhere. You know, this is not common practice, common knowledge, at least in my view. And I see a lot of things. So why do you think that is?

You know, I'm not sure why there's not a whole lot more financial education actually taught. At a very, very young age, because it's, it's a critical piece to living, uh, to living a life that's not enslaved. And unfortunately, what makes the companies money is not teaching financial literacy. It's teaching why you should have the, the greatest, you know, credit card in the world that produces all these awesome rewards. Oh, except for the fact that they're the ones that are getting the compounded interest and not you. So it is taught to some people somewhere because the banks know it, wealthy people know it. I mean, the really wealthy families know that. That's why they have, you know, the family offices that are out there. They buy multifamily properties, they buy real estate, and they do it because They understand all of the benefits of it and they teach their kids to do that. And the people that hang around them know that. You got to ask yourself, like, we're, we're constantly talking about taxes and the super rich getting over on taxes, right? Why doesn't that ever get fixed? It's the same question. The people who are making the laws, they themselves benefit from the tax. They wrote the tax laws to benefit themselves, right? They're all wealthy people, right? So if we're not— if you didn't grow up as a wealthy person, which I did not, at some point you got to seek it out. You got to say, this is screwed up over here. Why? Why is their life not screwed up over there? What is different about those people over there? The only difference is that they understand money. They understand that they don't want to pay the interest. They want to collect the interest. And they understand that taxes annihilates any gains. I mean, everybody's heard the, would you take a penny a day compounded every day for a month, or would you take, you know, $2 or $3 million right now? Well, it works out to be an— I don't remember what the number is, like above $10 million. It's a lot of money. Right.

Right.

But if you tax the penny every single time, instead of like $10 million or whatever it is, it's like $60,000. Wow. People don't realize what taxes do. Wealthy people do. And that's why there's all these loopholes in there that they can utilize. And, you know, people get mad at the wealthy. What they should do is read the books the wealthy people wrote and then just do what they did. It's not that complicated. It really isn't. Why don't they teach it in school? It doesn't further any of the large companies. It doesn't further what they need. They need sales. In order to get sales, they need people to have credit, and they need people to go into debt buying their stuff.

Well, I think you said— I mean, first of all, taxpaying teachers don't get this either, so how can they teach what they don't know?

And most of the people who are teaching business never themselves actually ran a business.

They're academics. So it's all theory to them. But you said something and you used a very strong word, but it's accurate, is there's sort of this built-in enslavement, which is, you know, between Fed and the policy and how that's all kind of manipulated, the tax system and how that takes, you know, you put all these things together and everything is the blinky shiny parts of what you are taught along the way leads you to an enslaved life. And incidentally, your kids are born into debt and enslavement, etc., as compared to kind of rising above it like I think you have in your view and looking down and saying, wow, this is really a system that's gamed against me to be able to really accumulate any wealth. And I imagine, are there all kinds of tax benefits to be a real estate investor.

There are. But let me say one thing right before that. Yeah, because there is this disingenuous— and that's a super nice word— there's this disingenuousness of really wealthy people right now. Not all, but a few that are in public. And they say, I'm willing to pay more in taxes. Yeah, right. Okay. So your net worth is $1 billion and you're willing to pay more taxes on your income. Well, that's very— I mean, that's kind of you. You've made it. We don't pay taxes on our net worth.

That's right.

So go ask Warren and all these jokers that are out there saying that I'm happy to pay more taxes if they'll pay the same percentage, 70% of their net worth. Because all it does, all that does when you take— when you, when you raise the tax rates like that, which they didn't pay, right, accumulating their wealth. That's right. So when they raise that tax rate, All that does is keep their wealth and make it so that other people have a harder time raising to the level that they did. It's disingenuous and it is— it's dangerous for America because right now in America, a guy like me who grew up with no money can figure this code out by just reading books. Right. And studying. And then you can apply it. And I can break through barriers. And in other countries, they've already done this. They've already capped it out. Right. The people who have the money have the money. Right. And nobody else is going to get them. You can have your little piece, but you can't have this. Right. Well, in America right now, that's not the case. But let these uber wealthy people get out there and tell people, I'm willing to— everybody should pay more. Everybody should pay more. Okay. So the guy now who's making $750,000 who's now rich, right, has to pay a 70% tax bracket when Warren Buffett— because Warren Buffett said that it's a cool thing when he's a billionaire and he's not going to get taxed on his billions, right? It's disingenuous and it is dangerous in our country to do that. Yes, there are massive, incredible tax benefits to owning real estate. First off, as your property increases in value, you can depreciate the value off of your taxes.

Which is phenomenal. So the property appreciates in value. There's no transaction that occurs, but yet you can still do what on your taxes? You can depreciate. What is it you can depreciate?

So you can't depreciate the land, but the structure on top falls apart over time.

Right.

So the government has arbitrarily said that's 27.5 years on a residential property. So you can take a $100,000 property and you can write off 3.63% of it every single year against your income that comes in from it. So you're making passive income cash flow and you're writing off against the cash flow a depreciation on your property. Now there's something that very few people know, and that is that if you're a real estate professional, so if this is your business, there's no cap. So if I can rack up passive losses or if I can rack up these losses, I can write them off against all of my passive income and my active income.

And but you can take your losses and like, let's say the unit that had the frozen pipes, let's say that equated to losses. I think you said it was kind of like a break-even. You could take those losses and put against your gains in other parts of your—

Yeah. So like if you have income and expenses, obviously those can. But now you get to add depreciation on top of that.

Yeah.

The government just changed the tax codes. You could always do an accelerated depreciation. This comes really big into multifamily. Family, because in multifamily you've got a whole bunch of units. So let's say you have 100 units in there. Each of them have a kitchen, bathroom or two. And so the scale of the things that would fall apart sooner, HVAC, things like that, those things, there's a part in the code that says that you can accelerate the depreciation. As a matter of fact, I can take this big apartment building, I can break it up into little pieces and I can say these pieces really they depreciate over a year, these over 5 years, 7 years, 15 years, etc., right?

Right.

Well, there's a whole lot more of them that are 1 to 5 years. Okay. Now, the government has also made bonuses and have accelerated that depreciation so that in the first year it's insane what you can take and write off. Now you can write that off. It's— you can write it off against the income of the property. But if you're a real estate professional, professional, you can write it off against the rest of your income. And so, again, you can get angry about the taxes and the way that it works, or you can educate yourself about it and you can use it just like wealthy people do. It's not against the law to use the tax code as it's written. It's written so that you can become more wealthy if you know how to use it. And that's one of the big ways to be able to do it. You can, in effect, pay no taxes on a building that's producing you a wild amount of cash flow.

When you take all this depreciation, when you sell the home, are you, you know, any sort of profit? I guess that's when you end up having to—

Yeah, there's some recapture.

Yeah.

Some of that stuff has, if you've held it long enough, has been past its useful life.

Right.

So your recapture goes down every year that you hold it, right? But you can also tax-deferred exchange all of your gains and everything into other properties. And you can do that all the way until you die. And if you set it up properly, you can give everything to your kids at a stepped-up basis. And a lot of people don't know that either, right? But there's ways that you can pass everything along to your kids at a stepped-up basis so they don't— It kind of eliminates all of that, most of that gain that you had throughout your life if you just keep playing the game.

Isn't it crazy though, just speaking of taxes, that we have to find ways to eliminate gains? I mean, isn't it the wrong incentive? Shouldn't we be incentivized to want to have bigger gains?

It is.

And the real insidious piece of this is that 90% 5 or more percent of our country doesn't have any idea how any of this works. They don't understand money. They don't understand finances. All they understand is at the end of every month, they've got more month than they've got money.

Right.

They don't know how to fix it. So they just get angry. And then we have the more insidious people that come in and they fuel— they just fuel the anger. Right. And they, and they, they do class warfare and separate people instead of saying, How did you get wealthy? How did that happen? Instead of thinking to themselves, wait a second, I know somebody who has more money than me. Why don't I just go figure out what they did? You know, because—

which is how you got started, right? With the people that I had no— I had no money.

I had no money.

But you looked at what these people are doing and saying, how are they doing that? They're doing better than me.

And rather than resent them, I was like, wow, okay, so in America we have the— I have the opportunity to just copy what they did. I can steal their whole business plan and I can go implement it. And better than that, almost every one of them, if you ask them, will give you their business plan and help you implement it. Because that's— once, once you get to a certain place, somebody actually ever asks, like, how do you do that? Man, they— I'm glad somebody actually wants to know because most people don't care. They just want to be mad at me for being successful, that's all. And it's crazy to me how many people do that. And there's people they know that are in their circle that they could just ask a simple question and understand how to do it. It's amazing that they don't.

Our whole purpose in creating this docuseries has been about trying to solve this financial illiteracy because I believe it is something that is a real spiritual disease, really, in our culture because of how it affects people. It really can take away your drive, your motivation, depress your sense of life because you feel like you're enslaved and there's no way out. And then you start resenting rich people as compared to admiring wealth creation. And then of course, taxes very often, that's the government's way of being able to not only collect money but manipulate consumer behavior, right?

Absolutely.

We want consumers to do this. Well, we'll give tax incentives. So it's really interesting, but I— I think that you really made a very powerful argument for how the style of real estate investment that you do has a lot of compelling facets to it that a lot of people can benefit from. And you don't need a 4 or an 8-year degree specified on this to be able to do it.

No, you don't. All you need to do is— and there's two types of education, right? There's real-world education, which is you out there slogging in the trenches. And then there's the education you get in school. And I would make an argument that while I'm not suggesting you shouldn't go get a college degree, I am 100% telling you that you will make 10x or 100x on education that is outside of there, because there isn't an agenda on that education. The education where you actually go seek something that will benefit you and you can apply it right now, that doesn't make you a good employee or doesn't make you, you know, a W-2 worker, but puts you in the business arena or puts you in the investor arena, that education will 10x or 100x itself every single time when applied.

Yeah, that's, that's good advice. Do you have a blog or a website if people want to follow you or say, you know, I'm kind of interested in this, I want to learn more?

Yeah, sure. And all of our— we don't sell education. So, everything we do is free and people can certainly get on and just absorb it and tell us where we're missing. We'll put other education out there. It's RPC, stands for RP Capital, RPCinvest.com. They can look us up on Facebook and all of the other social media sites. And we just started a podcast. We're trying to educate as many people, trying to fix the problem. I agree. And the spiritual piece actually goes a little deeper, I think, because when you take someone's time away from them, it robs them of their family time. I mean, that's where we— I mean, if you ask anybody why they're doing any of the stuff they're doing to create income, it's for their loved ones.

Right.

And yet Unfortunately, I mean, when you work 70 hours a week, 90 hours a week, you don't get to do that. All in hopes that one day, if we live long enough, that we can, when we're all broken down, spend time with our family. What a messed up deal that is. I say, get out there, figure out how to make the money now. Don't leverage yourself into a whole bunch of debt. So that you can actually spend time with your family and not be enslaved right now. It's— yeah, it is spiritual. It's interesting you say that. I believe that 100%. Yeah.

Well, this was an extraordinary conversation. I really appreciate you sharing your wisdom and your experience with us. I know a lot of people are going to benefit. So thanks for your time here.

Thank you. Appreciate it.

I know you might be thinking the same thing I did as I was having this interview. Wow, this makes a lot of sense. Wow, can it really be this easy? And nothing is ever really easy, but it's just very clear and it's simple. So I don't know, this is something that maybe you will act upon, or you know somebody else that might want to act upon it. For me, I learned a ton. I have a new context for real estate investment, and I really appreciate the fact that you were here with me for this interview. Can you imagine being on such a mission and having such a passion for what we are doing with Money Revealed that you would fly halfway around the world from South Africa to Utah to appear in this series? Well, that's exactly what Scott Picken did, and I have to tell you, I was mesmerized by his vision for closing the wealth gap, ending poverty, and and having more people experience wealth in the world. Enjoy this interview, it's going to be really exciting. Well, Scott, I know you traveled a long way, so thank you for making the trip and taking the time to sit and have this conversation.

It's a pleasure. You know, we always want to add value, and most importantly, I was intrigued by what you guys were doing, so I thought, how could we help?

Awesome. This, this, uh, project requires some international flavor there, you know, it We don't want to just look at narrow pockets of influence relative to money and what it means, but also there's maybe a more global view that we have to talk about. So tell us about your background and what got you doing what you're doing.

Well, it's a long story. My family originally came from Zimbabwe. So in 1976, we were run out of the country.

When you say run out of the country, what does that mean exactly?

Well, literally run out of the country with guns at your back. My parents packed whatever they could into a car and they left to South Africa. And, uh, we had 3 farms in Zimbabwe. And, uh, so at a very young age— I was actually only born in South Africa 6 weeks later— but at a very young age, my father and my mother taught me that education is the most important thing that you can have, and that no matter what happens, they can't take education away from you. Now, why is this important to the big picture story? Well, I studied and went to a good school, went to a good university, but literally within 1 month of finishing my degree, I got on an airplane, flew to London, and then lived in London for 9 years, and have only ever built international businesses and international balance sheet, if you want to call it that. The reason being is that at a very young age, I thought to myself, it's critically important to become a global citizen. And that I wouldn't be tied to one country, one asset class, one currency, and that no one effectively could do what they'd done to my family. Which is where— and it's not just Zimbabwe, it's happened in multiple countries all over the world. I believe it's really, really important. Ultimately, being a global citizen is really what everyone should be aspiring towards, even if you live in North America.

When your parents left Zimbabwe, basically, They left all their assets. They just had to show up and, you know, basically escape with their lives, and that's about it.

Pretty much they left with whatever they could fit in a car.

Wow.

So, you know, we'd been living in that country for over 120 years.

Wow.

So it wasn't just their wealth, it was, you know, generational. And yeah, pretty much what they could pack in a car.

So you went and you hung out in London for 9 years, you said. Uh, what kind of work were you doing?

So let's take a couple of steps back then. And, um, there was another really interesting part of that story because my father did what we were all told to do. He went to school, he went to university, and I've already told you about the farming problem. But, but then he became a chartered accountant, and, um, basically he, he became financial director of a listed company. He trusted the financial industry like everyone else is taught to. And he pretty much did what every single person, you and I and every other person, work hard, go to school, get a good degree, et cetera, et cetera. And yet on the 1st of August, 2005, he died broke. And for me, that really made me look at the world. And I went and did the stats and the maths behind it. And I found it absolutely fascinating. In the Western world, Less than 1% of people retire wealthy at the age of 65. Now, when you look at my dad, 94% of people follow my father. So, they're either at the age of 65, they're either broke, dead, or reliant on the government. And only another 5% are financially independent, which I find fascinating because people think that's a good thing to be, but it's 25% poorer than the day that you got your last paycheck. So for me, that's just 25% poorer.

Wow. And so you're saying— what you're saying is they might say, okay, I can, I can retire, and— but they don't really have— they're living a lower lifestyle, or they have less means than when they were working.

25% poorer. It's simple math. They're 25% poorer. So, and the reason I wanted to interject with, you know, I just went to London and hung out, was that I looked at life from a very different perspective. I was like, this is ridiculous. I'm not following what everyone's told us to do— go to university, get a good job, pay my taxes, invest, and one day I'll be free— because I won't be, right? Statistically, it's impossible, practically. And honestly, I think we're all set up for failure by the current system. So I looked— I worked backwards, and I'd— at a very young age, I'd loved property. And I did my first real estate project when I was 13 years old.

And, um, 13?

13, yeah. So I basically I persuaded my parents to renovate. My brother and I were sharing a bedroom, and I didn't want to share with my brother anymore. So I showed them how we could knock through the toilet and put on a double bedroom ensuite, double bedroom, um, you know, project. Now don't get me wrong, there would have been quantity surveyors and architects and everyone else involved, but in my own head, my father let me believe it was my project. And on top of that, I did a computer programming course when I was 6. So anyone that knows what a Commodore 64 is—

I do—

and Logo and the little turtle I was 6 years old. And so my whole life I've been trying to marry these two industries together. Now, why this is relevant for what your question was, is I went to London, I did my honours degree at UCT, Cape Town University. And in 1998, I did my dissertation on how technology was going to change the real estate and construction industry. Now, back in '98, you know, they couldn't spell IT. So, it was pretty far-fetched, you know, in those days. And then I went to London and I actually got a job, interestingly enough, for people around humility. I thought having left university, having done really well, without being arrogant, but I cum laude'd my degree, and I expected to be CEO of a property development firm within a matter of weeks. And my first job was sweeping a construction site, which did wonders to my humility. I'm not going to lie. Anyway, I was lucky enough to get a good job at an Irish a construction development company. And quite quickly I noticed they didn't have any tech. So I persuaded them to let me do my master's at London, in London. There were at the time only 2 universities that were doing a master's in tech within the construction property real estate. I don't know which word you want me to use, but property real estate industry. And so I did a full-time master's on top of a full-time job. Which is actually illegal in England. You're not allowed to work so hard in England. And then, yes, at the age of 23, 24, I was pretty much at board level of this £100 million company where I was putting an ERP across their system. So an enterprise resource planning, basically a tech system across the system.

And what did that tech system do for the company?

Well, effectively, it was trying to pull them into the 21st century, if that makes sense. Because beforehand, Nothing was talking to anything else.

Was it on the finance and accounting side?

Finance, accounting, quants, everything. So you're effectively taking all the— the construction and property real estate industry is so backward that you're basically just taking all the information that's all dispersed and bringing it, trying to bring it into a central place. But I realized quite quickly at a young age that I would be the world's worst employee. I'd been there 5 years, and in simple terms, I'd already been doing real estate projects on the side. So I did my first property development when I was 22, my first project in London when I was 24. And at the age of 25, all my friends were coming to me and going, well, how do you do these projects? Like, why don't— can you help us? And so I decided to resign and effectively set up a company to help others invest into property, into real estate.

Were you doing commercial or private, or what were you doing?

No, so to start off with, it was residential. Primarily houses. So the development I did in Cape Town, South Africa, we bought an old house, we rezoned it, and we built 6 townhouses and sold them off. In London, we bought a 3-bedroom house, we renovated it, uh, we effectively turned into a 5-bedroom house. I still own that project to this day.

Wow.

And, um, it pays me over £1,000 passive income to this day. And actually, based on this, you know, the the value you're trying to create out of this whole story, I actually think there's a great lesson in that. So my buddy wanted me to go and buy the 2-bedroom pad on the hill with a beautiful view, and we were buying it together. It would have been me and him, right? It would have been great for, you know, bringing girls home, getting a girlfriend, whatever you want to call it. But I said to him, no, because we can't add value. It's— it just would have been a nice place to live. So we lived on a construction site We renovated the house, so from a 3-bedroom to a 5-bedroom, like I said. And then we stuck multiple tenants in it. And so, it was short-term pain for long-term gain, if that makes sense.

Yes.

All my friends said to us, we're absolutely crazy. We bought it in early 2002. We just had September 11th. Everyone said to me, well, oil prices are going to go up, interest rates are going to go up. And you know, all the fearmongering that always exists. It doesn't matter what time of the economy you're in. And I went, well, I sat down with my friend and I showed him. I said, look, if we put these 2 extra bedrooms on, we're going to earn more than £1,000 above our costs. Even if interest rates go up, we're fine. And so we bought that house and we started to make actually, quite frankly, good money out of it. And most of my friends bought their first London property in 2007. And it's a really interesting thing when it comes to the psychology of money because people are always too scared to do something until everyone else is doing it. And at the time everyone else is doing it, it's the wrong time in the market. Does that make sense?

Yeah, it's very interesting. I remember once reading a book that somebody wrote on, you know, that was a real estate investor and said, you know, they like to go the other way. You know, like everybody's doing this, let me go the other way. How much do you let macroeconomic factors influence your decision-making when you're making a real estate investment?

Sure, it's a good question. And I actually wrote the book on this. So I—

Well, then I'm talking to the right guy.

I have a published book called Property Going Global. And there's a guy called Clem Sunter that is one of the top 5 scenario planners in the world. I mean, so much so that the Chinese government's worked with him on his scenario planning.

What do you mean by a scenario planner? Like they propose potential futures, what might happen?

Macroeconomic scenario planning. So, they don't at any point say it will definitely be this or definitely be this. But what they do is give probability for different scenarios. And I find it absolutely fascinating. And so, I sat back and I said, well, If I'm investing, because most property investors, real estate investors, they look at one market. If you're from— we're here in Salt Lake City today. Most investors, quite frankly, investing even outside of Utah for them is like, they can't even get their mind over it. The thought of investing outside of America, I mean, that's just mind-blowing. Whereas actually, I believe you should be looking for the best opportunities in the best markets at any one time. So, to come back to your question around macroeconomics, I built a 4-dimensional model on top of this gentleman's scenario planning statistics. And from that, you pull in all the big data from all over the world. And it actually tells you where to invest based on risk and return versus using your gut feel. So right now, is it a good time or a bad time to invest in England based on Brexit? Well, it's interesting, because everyone would say, have an opinion. You shouldn't be based on your opinion. You should be based on the maths. And the data.

And what are you showing?

Well, it's very much what your other friend said, which is sentiment. Ultimately, when sentiment is going in the opposite direction, often opportunity exists, and really good opportunity. And so, what I tried to do in the book was to show people where to get access to the best information. I mean, it's all out there, and it's free. The problem is that there's so much information on the internet, no one knows where to look. And so, I think there's probably 3 lessons from that. The first one is that if you try and make decisions based on your gut, you will fail. Secondly, if you try and ask your mates or the estate agent or your banker, you will also fail. You have to have a system in place. And quite frankly, one system is not much better than another system. It's just you need a system. Put the data in and then it'll give you a much better analysis and help you make the right decisions. To come back to your question, do I believe in macroeconomics? Definitely. Do I believe there's only one scenario? No. Because we've all been sideswiped in our investment strategies. Things change overnight that we can't control. And probably the best lesson I ever got taught was by my uncle when I was about 20 years old. And he said to me, he's a very successful stockbroker, hates real estate, by the way. So, we've always had a debate about those two industries. But But he said to me, Scott, work out what your worst case scenario is. And if you can manage your worst case scenario, then everything else is upside.

Yeah, take care of the downside and the upside will take care of itself.

What do most people do? Oh, that's amazing. But if interest rates go up like 0.25%, back out. You know what I mean? Like, it's really interesting philosophy.

I agree with that. Yeah, I've often said the great thing about entrepreneurs is they fall in love with their ideas. And the problem with entrepreneurs is that they fall in love with their ideas. And what you're talking about is having sort of an independent, more rational system to make decisions with as compared to saying, ah, you know, I'm excited, I love this idea, it's going to work, and not having the supporting data under it. Is the majority of your business activities right now still in real estate, or where do you spend most of your time?

So I like to play at the intersection of technology and real estate.

Okay.

So when you ask, am I in real estate? Very much so. Am I in technology? Very much so. And so I believe that I call it the 4 Ps. You've got people, you've got profit, you've got property, and you've got purpose. Okay. And I tend to play at the intersection of those 4 things. And why do I say that? Well, at the end of the day, the real estate industry is a people game. Most people think that they invest in property. They don't. They invest in partners. And so it's a people game. And then, so, and then when you marry together that with technology, you know, The real estate industry is one of the oldest and most archaic industries in the world, and it's very localized. Now, what does technology do? Well, it changes that. It really is starting to disrupt this industry, and it's taking a localized industry and it's providing a global trusted framework that people can participate within. And so, for me, you add that to purpose, and that's where it starts to get exciting.

So, where's your purpose in all this?

Where's the purpose?

Yours, personally.

Sure. When I wrote the book, I did the maths. Now, growing up in South Africa, here in North America, a lot of people talk about the wealth gap and they talk about income inequality and how bad it is, et cetera, et cetera. Honestly, if you want my opinion, I don't think anyone here actually really knows what it really is. Why do I say that? Because someone who supposedly lives here in poverty in America most often still has a house and probably has cable TV, et cetera, et cetera. Whereas for me growing up in Africa, the wealth gap really is, you know, we live in one of those countries where the gap is probably widest almost anywhere in the world. And so you live in spectacular— people certainly live in spectacular wealth, and you've got spectacular poverty like literally over the fence type thing. And so for me growing up, that's always been something I've been very aware of. You can't not be aware of it. And so you say, why do I get out of bed? What's my purpose? Well, When I wrote the book, I did the maths and 12.9% of the world's population has access to property, about 1 billion people. And so, we sat back and we said, well, why can't we double it? Why can't we help more people get access? And what people don't know is that 49% of the world's wealth is held in property. Now, let's look at this wealth gap. OK, why is it getting worse? Is it because certain people aren't earning enough money? It's got nothing to do with that. It's because the top 1% are investing in better assets than the 99%. It's a fact. And again, 49% of real estate is owned— so 49% of wealth is in real estate. But why are they saying it's like, "He who owns the land is king"? I mean, everyone knows this stuff. I'm not telling you stuff you don't know. But what people don't know is the limited access. And what I love about technology, I called an Uber here today. Before Uber turned up, how many people had a private driver? Well, only the top 1%. Simple. Now that you've got Uber, most of us that have a smartphone have access to a private driver. So why can't we do the same with real estate? Why can't the 99% get access to good quality opportunities through, literally through their mobile phone? But what gets really interesting is that once they go through their mobile phone, we can bring the minimum entry down. So, why don't people get involved in real estate? Well, they don't have the knowledge, they don't have the time, they don't have the money, they don't have the access either. They didn't go to the right school, they didn't go to the right university, they don't get the call when there's a good deal. And I believe that technology can change that. And so, when you say, what's my purpose? You know, we actually started The Wealth Movement in 2014. We originally called it Project W Wealth, which I'm embarrassed by, but it's now The Wealth Movement. And it's to create a better and more sustainable planet for all. And I truly believe it's possible by allowing the 99% to be able to invest like the top 1%. And so, we want to empower a billion people with access to wealth through real estate and using technology and smart investing.

I have a feeling where you might be going with this, but so how would that work? What is the technology? And how do you get these people to be able to invest?

So, let's look at it simply. Everyone, well, not everyone, but the majority of the middle class now around the world has a smartphone. Good quality real estate is at the moment still very difficult to get access to. I mean, even houses, most people think, oh, I can get access to house. Well, most people don't have access to houses. Billionaires don't make money out of buying houses. Let's not beat around the bush. They don't. They buy good quality commercial property. Or real estate. And certainly the 99%, not even the middle class or the professionals have access to commercial most often. So, what we do is we take a commercial property or residential property, it doesn't matter, one or the two, we bring it together, but we allow lots of people to invest in it, which allows them to have the buying power of the institutions. Now, let me give you a real-life story to explain that. In 2008, when we had the global financial crisis in London, there was a tremendous opportunity. And one of the opportunities was Wimbledon, you know, where the tennis is? And there were 48 units. And they were literally selling for 50p on the pound. I mean, it was an absolute amazing discount. But that's not the number I— I don't look at capital growth. Like, wealthy people do not look at capital growth. They look at income. And the fascinating number was it was a ready tenanted, and it was already furnished, and the net return was 12%. Now, in pounds net in London, it's unheard of. Okay, there was just one small problem. I needed £10 million. Now, I'd built up this business since 2004. I had 2,500 investors around the world. Do you think I could get them to work together? It just didn't happen. And so I couldn't buy that building. We ended up failing. And that created enough pain to create a platform to allow people to come together to have the buying power of the institutions. And so, your question is really quite a simple one, in my opinion, and that I think people try and overcomplicate things. And if you and I were buying this building we're sitting in, how would we do it? Well, in simple terms, if there was this building, we would put an SPV on top, a special purpose vehicle. No matter where you are in the world, it's pretty much the same thing. If you put in 70% of the money and I put in 30%, you would expect to own 70% of that special purpose vehicle. I would own 30%. We would have to agree if we're going to get a mortgage from the bank. And most often we would, and we'd have to agree who's going to do that. We'd have to agree who's going to manage the property and we'd have to agree how we're going to exit the property. It's stock standard 101, how you do real estate investment. All that we've done is take that exact same process and overlay it with technology. Because before technology came along, you and I would have to know each other. We'd have to know, like each other, trust each other. What technology allows is that exact same process to take place, but just without you and I knowing each other and being able to invest with far smaller amounts of money.

It's a form of crowdfunding.

It is crowdfunding. Yeah. In fact, we— so crowdfunding is legal in certain countries. We actually believe that it's actually a step above crowdfunding, and I recommend everyone goes and looks up collaborative investing. So collaborative investing has been happening for decades, in fact centuries, and the wealthiest people around the world have used the power of networks to come together, collaborative investing. And there's 5 key points to collaborative investing that you were not taught at school, and neither was I, I guarantee it. And so when you go and study that It's like you've got to be in the top 1% to learn those rules. And so all we've done is take collaborative investing and stick the word smart in the middle, which is technology. Collaborative smart investing, which allows you and I to participate in what pretty much the kings and queens were doing for centuries, the monarchs and the whatever. We just weren't invited to the table.

So with that, in looking at the varying regulations around investing in different countries, Is there an issue about people being qualified investors before they can put their money into something like this?

It depends by country.

Okay.

So, in America, obviously, you've got the SEC, and you've got accredited investors, and I'm not going to bore you. I could go into all the regulation here. Right. And it's pretty clear on what you can do with the JOBS Act, et cetera, on the different levels of accreditation. There's 193 countries around the world, and every single one of them has different regulation and different levels. What's quite interesting though, is most countries don't have the difference between a normal investor and an accredited investor, if that makes sense. And one of the reasons we've got collaborative— why we call it collaborative smart investing and not crowdfunding, and I just think it's crowdfunding 10x if you want to take that, but is because every jurisdiction is different, and you've got to have a system that can accommodate and be regulatory compliant per per country, basically, if that makes sense.

So, what stage are you at with this right now? So you've got this concept of inviting the masses, if you will, to be able to invest in real estate, and you are looking at a platform that overlays the traditional process. Where are you at as far as deploying it and getting this to happen, and where do you want to see it go?

So in 2010, we launched the company. Took us about 3.5 years to figure out the— I mean, the tech is one thing. The compliance and the regulation and everything we've just been talking about is actually even more complex. Because if you think it's tough just in America to help Americans invest in American property, try go cross-border. And so anyway, the platform launched in October 2013. So, wealthmigrate.com launched in October 2013. And I'm very grateful to now let you know, 5 years later, We've got members in 127 countries. We've had more than $80 million invested through the platform, and we've facilitated more than $520 million worth of real estate deals on 4 different continents. And so, yeah, so it's up and running. It's more than a dream. Yeah.

So now let's say I'm somebody that said, wow, this looks really interesting. I'd like to, uh, you know, put, put some money in there or invest. What would the process be for me?

So, again, depending on what country you're in, there's a different sort of customer journey depending on what country you're in from a compliance perspective. But let's keep it simple and, in terms of, take a step back. There's really only 4 steps. You've got to sign up in a compliant way. You then go and choose a project that actually suits your requirement. And again, remember, I'm not giving you financial advice. I'm not a financial advisor. What we do do is give you the tools, and remember the book I told you about? We call it smart investing. We give you the tools to help you make better decisions for yourself. You can then transact online. And the part I like most is I can manage my whole global portfolio in one place. So, those are the 4 simple steps.

And is there a minimum buy-in? Or I could just like, you know, because I guess a part of this is saying when one person has to try to buy a piece of real estate, maybe even a residential piece of real estate that they want to invest in and rent it et cetera, most people don't have access to the kind of funds to make that happen. So I'm imagining that a part of what this platform does is say, hey, there could be a smaller buy-in. You can have a piece of that residential house rather than have the whole residential house and get in the game. Is that accurate? And then is there a minimum buy-in to do this?

So do you mind if I tell you a story? And I think it epitomizes your question.

OK.

But it's going to take a little bit longer to understand.

We got time.

And I do actually fundamentally believe that stories explain it much better than just hypothetical conversations.

Yes.

So it was Bondi Beach, 2009, and I've now started this company in 2004. I've helped 2,500 people invest in Australia, England, America, and South Africa, all in houses and apartments. Now, how do I say this without being arrogant? I studied real estate or property. I have a master's degree from London, cum laude, in this topic. You would think I would know a little bit about it. And yet all I'd ever done was buying houses and apartments. So, I'm in Bondi Beach and I meet these two US dollar billionaires. We're right in the heart of the crash. Everyone's running around scared. And what are they doing? They're buying hospitals. Now, just as my interest, do you own a medical building?

I don't.

OK, so neither did I. I'd never even considered buying medical. I remember sitting there and I said to the gentleman, I said, why medical? He said, well, think about it, Scott. There's 3 things. No matter what happens in the global economy, people need doctors. That makes sense. Secondly, doctors never leave their premises. Now you think about it, OK? Go back to when you were a child. Think of where you went to go and see your doctor. Is that still a medical premise to this day?

To this day, yeah.

Of course it is. Almost without fail, I promise you it is.

I sold my practice in 1991 and it's still there. Exactly.

In my case, unfortunately, the doctors died, but the premises are still medical premises. So I'm like, wow, that makes sense. And he said, thirdly, doctors are great at what they do, but they're not accountants. And so they sign very good, favorable, long-term leases. I was like, that is like 101 real estate. You've got an economically resilient tenant that stays for a long time and pays you well. And I'm sitting there going, with all this great education I've got, why has no one ever let me in on this little trade secret? So I was like, oh, I'm in. You know, I was probably 30 years old at the time. I was like, right, how do I buy some of this medical stuff? And they said, no, it's easy. There's 8 slots for friends and family, and it's $5 million Australian each. I was like, ah, there's the catch, there's the problem. So now I'm I didn't even know what I didn't know, but now I did know what I wanted, but now I didn't have $5 million. And so unfortunately, I didn't participate. That company now to this day is listed on the Australian Stock Exchange and it's worth $700 million.

Wow.

Started with $40 million. Wow. So that is what I call the wealth gap or wealth exclusion or whatever you want to call it, because forget about the person living in, I don't know, poverty in South America or poverty in Africa. I'm highly educated with all the degrees and whatever, and I still wasn't able to participate. So, it comes back to your question. And that was really where I reversed engineered to say, well, we should be doing medical, we should be doing commercial. However, we should be using technology to enable more of us to be able to participate. And so, when we started, the minimum investment was $100,000. And that was primarily because of a regulatory thing. Accredited Investors, to be exact. And then we got it to $10,000, and we're now at $1,000. So I'm quite excited. A lot of people can participate at $1,000, but we haven't moved the needle yet. Why I get truly excited, and actually the logo that I've got on my chest, is that— and I want to be very clear, we're not there yet, but this is where we want to get to— is that I want to ultimately get it to $1 per person per investment. Now, why?

Why?

And people say to me, that just sounds like a lot of effort. But honestly and truly is that at $1 per person, there's about something like 3 billion people on this planet that live on $2 a day. So, you and I at $1,000, people can participate. But if we truly want to empower the 99% to invest like the top 1%, We have to literally remove all barriers to entry. And I believe, you know, a lot of people say to me, well, a dollar, it's not going to change people's lives. And I say, well, I disagree with you, because if I can change your habits, I can change your financial destiny. And so even yourself, okay, if I can get a dollar or even $10 and you can invest in a medical building and start to see a good return, you're going to go, well, hang on, this is better than my house. And maybe you might change your habits. And if I can change your habits, I'll change your financial destiny. So, again, I want to repeat, we're not there yet. But I have a dream that one day, investing on a smartphone just like this will be as simple as a swipe of a finger and from $1. And I believe if we can get to that one day, then we truly can empower the 99%. And I've got goose pimples telling you this, because at $1,000, I really believe that we've already materially moved the needle because go back to my story from 2009, you and I could not participate. And pretty much almost everyone watching this show could not participate in those medical buildings in Bondi Beach. Today we can. Today with $1,000, we can participate in those deals. I've invested in every deal those guys have done since 2013 on 4 different continents.

Wow.

And sometimes with as little as $1,000. So, it's not— in my opinion, it's no longer an excuse to not participate.

So, now tell me, what does this all have to do with what's on your chest?

I feel like I'm giving you very long answers to your short questions. But in 2014, I learned about blockchain. And if people out there don't know what blockchain is, I recommend they go and look it up.

If they're watching this series, they're going to learn—

Well, I hope so.

—a lot about it.

I hope so. Because if you look back over the last 20 years and you think the internet has affected your life, I believe, and many others do, that blockchain is going to have a bigger impact on your next 20 years than the internet has on your past 20 years, which is a pretty big statement. Yeah, it is. But when I understood what blockchain was, I really could now join the dots of how we could empower the 99%. Why? Because we've basically got— and I learned this from Roger Hamilton, and I know he's one of the other people— you've got e-commerce and you've got social media, and it's come together. And we now got social commerce. But the reason that you and I still don't invest generally online is because we don't trust. It's the number one blockage. What does blockchain do? Well, it's the foundation that builds the trust for social commerce. And so, I sat back and I was like, there's the answer. It's this blockchain thing that we can really now unlock the capacity. The second thing was, What most people don't know is that cryptocurrencies are built on top of blockchain. So, when I look at Bitcoin, and there's people that know a hell of a lot more about Bitcoin than me, but I don't understand what's based on its value, what's its intrinsic value. And I always joke with everyone is that if I put a gun to your head, and I said, tell me the value, what is the intrinsic value of Bitcoin? And if you don't get it right, I'm going to shoot you. There's very few people in the world that would volunteer. To say, yes, I know what Bitcoin's based on. Well, it's fiat in essence, right?

I mean, it's— It's not too dissimilar to fiat.

But even if you took the US dollar, people would still have excuses, oh, it's backed by the American government, et cetera. Whereas if you take Bitcoin, technically, it's very hard to judge it. And to get mass adoption— my mom is a teacher, my brother's a doctor. Do they understand Bitcoin? No chance. I have a master's degree cum laude in technology. And even I struggle to understand what it's about. And so, when I look at that, and I say, well, how do we get mass adoption? Well, what is an asset class that everyone on the planet understands? Real estate. Exactly. If you're a goat herder in Africa, a rice farmer in China, a rickshaw driver in India, every single person on the planet understands the value of real estate, whether they've got access to it or not. And so, I see a future. Where we will have a cryptocurrency that will be backed by real estate. It won't have the highs and lows of Bitcoin, because it'll have a tangible asset. And normally I would be banging on a wall now, because everyone understands it. Where ultimately you take the best of Bitcoin, but you marry it together with an asset class people understand. And so, the logo I've got on my chest is that we wanted to, we believe that we can, that grand vision of how do we empower the 99%, is that if we can marry together technology and real estate, and ultimately allow people to participate. And cryptocurrency is quite, at the moment, a dirty word after the rise of 2017 and the crash of 2018. But just because we had the dot-com boom-bust didn't mean the internet was broken. And I fundamentally believe that 10, 20 years from now, everyone will be investing in real estate. However, using cryptocurrencies and blockchain and that technology. And why that excites me is that the blockchain is obvious. And I'll tell you why it's obvious. If I said to you, do you want to invest in that medical building in Bondi Beach? Even if it was $1,000, if you're honest with yourself, the number one reason you wouldn't do it is trust. You'd be, well, how do I trust you? How do I trust the platform? Do I know the building even exists? How do I know I'm going to get a return? Et cetera, et cetera, et cetera. And blockchain actually solves that problem. And then secondly, if I want to get it to $1 per person per investor, even $10, the current fiat system just has too many blockages. It's impossible. It'll never happen. It can only happen using the likes of blockchain and cryptocurrency. And again, will it happen tomorrow morning? No. Is it going to happen in, certainly in our lifetime? Definitely. It's probably in the next decade, I would believe. And that's what gets me out of bed in the morning, because that's what excites me. And again, that's why I say to you, I learned something from Ray Kurzweil. I don't know if you know Ray Kurzweil, sort of the father of AI and everything else. He learned something which I would recommend that everyone goes and looks this up. And a great example is if you use Siri. He said, well, the best way to predict the future is to look for long-term trends. That are intersecting, and then build solutions for those intersecting trends. And I believe there's a lot of intersecting trends, both on the technology side and the social. And we can go into those details if you want. But the relevance being is that we need to build solutions for where that's going. And I'm talking sort of 2022 to 2025 in terms of the big picture. And why this gets so exciting is that real estate is this old archaic industry that no one has access to, pretty much. And technology is this new exciting industry that everyone has access to now. Everyone's getting smartphones. And when you marry the two together, I think we can solve some of the greatest challenges on the planet and really materially change people's lives.

Well, you're speaking to, and I'm sure you're aware, there's a great interest in, I guess I'd say, unleashing assets, property assets in Africa, for example, that there's no title, governments are not really governed very well, there's no systems, and blockchain can solve that and bring these assets to the market and start to make something valuable that was not valuable before because ownership was an issue to discern. And you're talking about securitizing a token. As compared to like you're saying, you know, some like Bitcoin, as you said, it's just basically an agreement where people put their own psychological value on it as compared to saying there's an asset that backs the coin that can go up or down in value. And now you have, you know, a sort of gold standard for the currency. So your, I guess, premise or where you're moving toward is saying You want to create a blockchain and a securitized token that can take these assets that you're working with, and anybody then can get in at lower levels as compared to working with traditional currencies right now.

That's exactly it. Yeah. And that's why we call the coin Wealthy, Wealth with an E, Electronic. I like it. And ultimately, I've said this already, 49% of the world's wealth is held in real estate. There's a reason being. It's not volatile. It has been the store of wealth long before gold and long after gold will ever be. And I think what's really interesting is that now everyone's going to be able to participate in that. And that really excites me. And the way that you've described it, honestly, I think that people sometimes get too caught up in all the acronyms and it all sounds too complicated. And really, all that we're doing is bringing technology to real estate. Right. All the fancy terms and blockchain and crypto and securitization and tokens, 100% agree with you, you're 100% right. But in simple terms, for the men and women watching this show, it's really just technology coming to the real estate industry. And whenever technology comes to any industry, it does 3 things. It cuts out the middleman, it cuts the costs, and it increases the trust, the transparency, and the accessibility. And if you take the Uber I just caught, Yeah, it's cut the cost, it's cut out the middleman, and it's increased the trust, the transparency, and the accessibility. That's what I believe is going to happen. How it's going to happen actually is irrelevant. I caught that taxi today. I don't even know how Uber works. I don't know how their algorithms work. All I know is it got me from my hotel to this venue safely and easily and everything. I think that technology is going to give the same service to people to be able to participate in an industry that has traditionally been very difficult to get into.

Do you have a forecast of time? Like, how long do you think before you'll start to actually get traction on the technology side being integrated into what you're doing?

Sure. Look, so I mean, we're ready. I mean, our platform's obviously live, and people can participate using the fiat model right now. In terms of where it goes around security tokens and everything you've spoken of, that's a harder one to predict. In this period, so we're in Q1 20— what are we, in 2019? There's literally security exchanges going live right now in America. So, the SEC and the other regulators have just got to the point where it's like brand new, like it's just literally happening right now. And there's still a whole lot of people that are arguing that it's still too watered down and it's not exactly where it needs to be and everything else. And quite frankly, I don't have an opinion on that. Yet. I think we're still in a state of massive volatility. Every person I pretty much know bought cryptocurrency at the end of 2017, and it's more than halved or whatever, less than halved or whatever the right way to describe it is. And now they're gun-shy. Now they're like, oh, that crypto thing, Bitcoin's a waste of time, et cetera. So, when you say a timeline, I guesstimate that we'll have the early adopters. Think of it a bit like Bitcoin over the last 10 years. I think we probably will have at least 5 years now where it'll be purely early adopters. There'll be some sensational stories, good and bad. I think we're going to see some people make some really good money, and I also think we're going to see a lot of people lose money. Because the one problem I believe is that a lot of people think technology comes along and just solves all problems, and it doesn't. There's fundamentals to investing in real estate. There's fundamentals to investing in business, and that's why we had the dot-com boom-bust. We're seeing the exact same half cycle in this process. And so honestly, I wish it would be quicker. But I'd say probably closer to 2030 is once you're going to start to see mass adoption. And the reason being is that it's going to be the confluence of so many other things, like AI, like big data, like trust, social proofing, etc., blockchain and all that sort of thing. That I think that only do you really start to see something change when you get mass adoption. I think we're still quite far off mass adoption. My mom, I love my mom to bits, but it took her a while to get into internet banking. And the majority of people are now on internet banking. And most of us have consumed publishing. We go online and read stuff online. Most of us have bought something online. Almost all of us are on social media talking to our friends and whatever. But very few of us are investing online. True, without human interaction. Maybe we speak to our broker, and then we go online, but completely on our own online. And that's really where the complete, you know, forward adopters or thought leaders are, you know, in cryptocurrency and all that. But the majority of people are not.

Yeah, you know, and as I think about it, you lay that out so clearly. It's inevitable, right? It's just, you know, when it's going to all happen. But as you're describing all the things all the other aspects of adoption, this one is coming, and it's just a matter of when. So, it's interesting to see when that might happen.

So, we're trying to enable people and speed them up. And so, one of the things we launched at the end of last year was the Wealth University. And the reason being, I call it the TED Talks for wealth, is that you don't want just anyone to be able to go on there. You want curated stuff. However, when I go to TED Talks, it's got everything, whereas this is just around the wealth space. Why is that relevant? Well, because people need to get the education. If you don't know what to do, and that's why I love what you guys are doing and I've flown many miles to be part of it, was that I believe if you don't get the education, people don't even have the self-belief. The biggest barrier to entry is that even if you give people accessibility, they don't believe it's possible. Literally, they don't have the mindset to believe it's even possible. They always think, oh, it must be you know, it's too good to be true and it must be for someone else. And so the Wealth University for us was a way to teach people whether you're a rank beginner, whether you're an intermediate, whether you're a complete high net worth, globally sophisticated investor. Every single one of us has our own personal journey and everyone is somewhere on that path. And yet we want to know where to go to the next, to the next step. So this is very interesting.

Um, and I love the concept, for example, about Wealth University. But here's what I'm seeing going on culturally, and actually something I'm very opposed to. I think there's a war on wealth. I think there's, you know, I'm seeing, for example, in the United States, the emergence of a lot of people who are attacking wealth and the wealthy as something that's bad. They want to socialize. They want to redistribute it. It's inappropriate that these people have wealth and these people don't. And to aspire for wealth is almost an evil thing as far as they're concerned. So how do you see that? And, you know, maybe I don't have much of a global perspective, but I sort of, when I'm traveling to other countries, whether it be Australasia or if I'm in Europe, I'm getting that vibe, that sort of anti-wealth philosophy seems to be more pervasive now.

Honestly, it's going to get worse. Why? Because if this wealth gap continues to grow, in America, they want to build a wall, but so do they want to do it everywhere else. What is Brexit? They don't need to build a wall because they've got the Channel, but they're still wanting to build a wall. Let's be frank. It doesn't help. You can build the biggest wall you want, the 99% are going to then want to break the wall down. We've only got one option. We can empower the 99% or we can try to build a wall, but the wall will not work. We're back to one option. We have to empower the 99%. That's when my eyes light up actually, because if you remember what I said earlier, I spoke about purpose. I believe that we're going to see a future where the 20th century was, it was the Rockefellers of the world. You make money at all costs. It was the JP Morgans and the Andrew Carnegie's and the whatever. Really, it was. It was all about making money for me. And then in the '80s and the '90s, it became all about making money for shareholders at all cost. Fire whatever employees, it didn't matter if they'd been there 50 years.

Gordon Gekko.

The Gordon Gekkos, ruin the environment, it didn't matter. Just do whatever it takes to make money. And not even for the long term, just for the quarter. And now you've got— I'm not quite a millennial, I'm stuck in the middle of nowhere, nowhere man, but you've got the millennials coming through and they're going, well, hang on, this doesn't make sense. Do you have all the stats that I just told you? So if I do all the stuff that you tell me I'm going to do, I'm going to work my whole life and I'm still going to be on the treadmill when I'm 65, best case scenario, right? And I'm going to ruin the, you know, the bloody— the environment and everything in the process. People are going, this doesn't make any sense anymore. And so that's where I think purpose comes into it. And I did an interview with a gentleman who I've actually got a huge amount of respect for called Paul Dunn. He runs an organization out of Singapore called B1G1. Highly recommend everyone goes and looks it up. What I love most about that is that when we talk about purpose, people think, "I'm not Bill Gates. I can't just write a check for $50 billion or whatever he did and go and solve malaria in Africa." Then they even think to themselves, "Well, maybe I sponsor a kid." It's like, "Well, that's really complicated. How am I going to find the right kid? Maybe I'll go on crowdfunding and put a bit of money in." Quite frankly, it's too difficult. And so, I see a future where people are going to be participating and they're going to want to make a profit, but they also want to have a purpose. And Richard Branson was one of the ones that led the drive. And I've had the privilege of spending 2 weeks with him on Necker Island, which is just amazing meeting— what an incredible guy. And he says, it's business for good. But what's really interesting now is that impact investing in 2009, It was a $50 billion business. Do you know what it's expected to be by 2020, next year? What? $1 trillion. Wow. Yeah. Now take that in terms of growth in 10 years. And so, again, I've spoken a lot today about long-term trends. You want to get wealthy, you want to make money, follow long-term trends. You read any book, read Principles by Ray Dalio, read any book you want to, it's long-term trends. And this purpose impact investing, is where the future is going. And so, I believe really strongly now that when people are investing, whether it's in real estate, whether it's in technology, whether it's in cryptocurrency, whether it's in a business or the stock market, they're going to want to see a purposeful impact. And one of the things that Paul Dunn was talking about, literally on Sunday when I was having an interview with him, was that— I presume you know who BlackRock is, the biggest investment fund in the world. And they pretty much sat down at the end of last year when they do their annual reports. And the CEO of BlackRock, in fact, I don't know if it was CEO or chairman, it doesn't matter, came out and basically said, right, purpose is now a major thing and it's going to be on our balance sheet and everything else. And then he went, if you don't have a purposeful part to your business, we won't be investing in you. And it was the first time that Wall Street actually woke up and went, oh, wow. This is now not just a nice-to-have or a little, you know, gimmick on the side. This is now part of my P&L, part of my profit. And look, this is now part of business. And so to come back to your, to your question, I think we, we're actually seeing a generational shift towards making money and being wealthy is fantastic. And I don't think it has to be either or, but it's definitely both. And people now want to make a profit and have a purposeful impact in the process. And I don't know how deep you want to go into that. You can see I'm pretty passionate about it.

Well, yeah, I am too.

I can see this is where the world's going.

When you're using the word purpose, you're implying a benevolent purpose. In other words, even in the '80s, '90s, these businesses had a purpose, but it was profit. The purpose was profit. You're looking at a purpose that is somewhat maybe humanitarian in nature. I actually am working with a group of entrepreneurs on a book called The Moral Virtue of Capitalism because, you know, people think that capitalism is sort of counterproductive to helping people, but really it's what eliminates poverty. However, if it's blind and lustful in the sense that we just want profit at any cost, that's not what we're talking about. You're talking about literally a group I used to belong to called Conscious Capitalism. So my partner and our producer who's who's sitting right over there, has told me a story about you and him in South Africa and sort of a visible experience, as you explained this to Jeff Hayes, who I just pointed at, that you had this visual experience that you have every single day where you live that kind of, you know, makes it very poignant. So can you describe what you— the experience you gave him when you were visiting each other?

Well, it's interesting because, I mean, your previous question was the people don't like wealth and they want to attack the wealthy and everything else. And, you know, whether I'm supposed to be grateful for this or embarrassed, I'm not quite sure. But I am— I live in one of the top 5 estates in South Africa. It's arguably one of the best estates in the world. It's, it's amazing. I mean, it's a marina, it's, you know, it's incredible, and it's got water all around it and it's got the best security and, you know, etc., etc., etc. And The only thing I will say is that it's not daddy's money or mommy's money or inherited. I've built it. I put myself through university. There's no silver spoon in the mouth. Anyone watching this, I can promise you it's possible because I've done it myself. However, every single day I look up on the hill, which is literally the hill that is my view, and there's a squatter camp. A squatter camp?

Can you describe what that is?

Squatter camp is people that live in shanty towns. With no running water, no electricity, no sanitation. The rubbish is literally chucked down the hill. The toilets are the hill. The children at best go to school in classes of 60 to 100 kids with teachers that aren't qualified. It's just, it's just ladies that are prepared to help. And the thing that really scares me is that is that those children are born into that environment virtually with no hope of success. And so the, the story you're alluding to is, is that I vociferously live this every single day. And my attitude— and that's why when people say like, why a dollar? You know, like, you can get very wealthy, Scott, by helping people invest. You and me invested $1,000, and there's— I mean, there's 1.8 billion people, middle-class people joining the middle class around the world. I know I can get very wealthy just helping middle-class people get more wealthy. But I don't believe that we're going to solve the greatest challenge on the planet, which is the wealth gap, unless we can truly empower the full 99%. And so, that's the story that motivates me. And it's not like I went on holiday once to Puerto Rico, and I saw a couple of poor people, and I thought, shit, I should change the world. I live that every single day. And—

I think that's part of the global perspective. And it certainly left an impression on Jeff, saying, Wow, you know, when you're— it's one thing to abstractly talk about it in a conversation, it's another thing to be witnessing it.

Well, exactly. And also witnessing how quickly it can change. So, you know, there's a lady that we employed about nearly 10 years ago. No, I lie, maybe 8 years ago. She lived in one of those squatter camps that I told you about. She grew up— she basically was brought up with no hope. And that's not my words, those are her words. And yet, by just empowering her and giving her self-belief, this lady's gone on, she's got her driver's license, she's flown all over the world with us, she's been to China, she's now just qualified as a teacher. And, you know, I got goose pimples telling you this. Like, I'm super excited because I don't know if you've ever heard of the starfish story. Yes. You've heard of the starfish story. Do you want me to repeat it? Go ahead.

Sure. Yeah, of course.

You know, because I think it epitomizes so much what we're talking about, you know, because a lot of people say, listen, "Let's go change the world." It's like, "Okay, well, how?" The starfish story for me epitomizes it. As I understand it, there's an old man and a young boy walking along the beach. There's just millions of starfish up this beach. The old man keeps bending down, picking up starfish and throwing it into the sea. The young boy says to the old man, he says, "Why? What are you doing?" The old man bends down, picks up a starfish and throws it into the sea. He says, "Well, I'm saving that starfish." The young boy goes, he looks up and he's confused because there's just millions of starfish up this beach. He goes, "But granddad or old man or whoever this person is," he goes, "there's millions of them. What are you going to do?" He says, "Well," bends back down, he picks it up, throws that one in the sea and he says, "It mattered to that one." That's I believe how we can change the world, is that we change one person at a time. In my case, this beautiful lady's called Zanelle and brings tears to my eyes actually just thinking about when she graduated, because she's come from that environment I told you about and she's just soared. And it gives me proof that we can do this if it's one person at a time. And, and so my question that I keep asking myself, well, if we can do it for one person, how can we do it for 10? And we do it for 10, how can we do it for 100? And we do it for 100, how can we do it for 1,000? And you get, you get the maths. Yeah. And that now comes then reverses back into your question of attacking the the wealthy. Because truly, if we think we're going to live in this world sustainably and we're going to have people in squatter camps and we're going to just keep getting richer, it ain't going to happen, right? Like, it's only a matter of time until we have the French Revolution of the 1700s where they literally come in with their sticks and their knives and they, they, they will take it over. And, uh, and no matter how big your wall is, it won't work, right? Um, particularly in where the world's going now with technology. So I'm not doing this because I'm scared. I'm doing it from a place of passion and purpose because I think it's possible, actually. Hopefully, if nothing else, today I'm instilling in other people that it's possible for them, that they can start to have a meaningful contribution. I heard something recently by Tony Hsieh, which— we're talking a lot about money now. Tony Hsieh, the founder of Zappos, et cetera, et cetera— well, not even the founder, actually.

He was just the CEO. He was the CEO who grew it.

Exactly. He said something so profoundly that I listened to. I mean, his book Delivering Happiness is like 10 years old, but I just listened to it recently. He pretty much said most people want to get happy. When you look at everything you want in the world, you want more money, you want to get married, you want to start a business, and eventually if you ask why, why, why, why, why, you eventually get back to happiness. This really resonated with me because when I was 18 years old, my father had resigned from his corporate job and he had gone bankrupt and unfortunately got sick, cancer, and etc. And it's all a— it's not a story that people like to hear. And I was sitting in Amway, you know, Amway. Sure. I'm sitting in Amway, I'm 18, 19 years old, and you've got all these people like trying to make money. That's why they're there, let's be frank, you know. And they want to get ahead and whatever. And this guy was trying to do a sales pitch and he was like, what do you want, what do you want? And everyone's like, I want more money and I want this. And you know, it's a big rah-rah session. I was like 18, 19 at the time and put my hand up and I was like, I want happiness. Everyone was like, "He's the weird kid in the corner," type thing. Why I tie this together with Tony Hsieh, because it was so weird, because I'm 42 now, so it's 20-something years later. He said, "Well, what's really interesting when it comes to happiness is that the lowest level of happiness is where you get a fix. You play sport, or you go see your friends, or you go watch a great movie, or you go to the pub, or something." I'm in Salt Lake City here, you go skiing, whatever. But it's short, it doesn't last long. The next level of happiness is when you're in flow, like you're doing something you love and, you know, life's easy. I mean, you and me having this conversation, like, I love this stuff, sharing, and like we're in flow, and I think, you know, same for yourself. But when you get to ultimate happiness, the longest lasting happiness is when it's about purpose and you're living a purposeful life. And, and that's where I think we're getting to, to a new paradigm actually, because I think this attacking the wealthy and whatever is changing. And I think more and more people are figuring out what their purpose is and how they can make a profit but have a purposeful impact as well. And I think it gets quite profound.

No, it is. You know, the thing that makes a human being different than every other form of animal is the fact that we can choose a purpose. You know, a dog can't do that. You know, probably wouldn't be living with Jeff, at least, uh, if that were true. You know, a cow can't do that. But, but we can choose purpose, which is how you feel fully alive, fully human, rather than being in survival like every other animal. So it makes a lot of sense to me, you know, what you're saying. And, you know, and it's, it's very apparent that this is what lights you up. I mean, you know, as you're talking about the purposeful side of all this, you know, the lights under your eyes, the excitement is there, etc., which, you know, I think validates the fact that when people people who can add value and produce get that kind of purpose and they start to commune together, some magical things can happen.

Look, it's one of the things that I'm most grateful for. Peter Diamantes talks a lot about having an MTP, a massive transformative purpose. And I've been amazed. Since we really— and ironically, it was when I— you've spoken about Jeff— when I first met Jeff in Bali and we really got clear on our MTP, our massive transformative purpose of how we wanted to empower a billion people. It's been amazing who showed up in our lives. Incredible shareholders, you know, capital, incredible team members, you know, where they've gone, oh, you're paying me half what I could get down the road, but I love your purposeful impact. And it's just, you know what I mean, it's just hard to explain it. Like, it's a lot of people think about this stuff hypothetically, like, I'm living it, witnessed it. And it's amazing how when you find your purpose, the universe like helps you. If that makes sense. Yeah, it does. And yeah, so like it's something I'm super grateful for. And I just hope that in my lifetime we can have a meaningful impact. And, you know, we've spoken a lot today about money. And I think there's a big difference between money and wealth. And make that distinction, please. Well, you know, Roger Hamilton actually talks about how wealth is what you've got after you've lost all your money. If you've got good health and you've got great friends and you go on beautiful holidays and you can have a massive purpose on the planet, you can be wealthy and not even have a lot of money. Money and wealth are not the same things, in my opinion. That's why I actually tend to talk less about money and more about wealth, because I think they're two different things. Money is just a part of wealth. Don't get me wrong, you want money to be able to do stuff. You need to be able to have money to, to help others. But for me personally, wealth is so much more, and, uh, and just living life and enjoying every day. You know, my uncle taught me— the same uncle, I was lucky, you know, you've got Rich Dad Poor Dad, or I, I had Rich, Rich Uncle Poor Dad, pretty much. And, uh, and my uncle said to me, he said— he, he was like, I was like 20 or something— and he said I go on holiday every single day and I get paid to do it. I was sitting there going— it took me a while because that's so simple. Like, I go on holiday every single day and I get paid to do it. And I was like, what does that mean? I was like confused. And for years I was like, had to think about that. Then I thought about it, you know, he literally goes on holiday and he takes The Economist and the financial newspapers. He's a stockbroker and that's what he does on holiday. Like, he He loves that stuff and he gets paid for it basically. And I don't think enough people do that. Yeah. You know, I really don't. And that's where I tie in the wealth part. You know, do you live where you love? Do you, are you doing something you love? Are you having a purposeful impact? And I think too many of us live in fear. Yeah. Honestly. And they all want that, but they're not prepared to do what it takes. And I think it's possible now. I really do. I think we live in a beautiful time where, where we don't have excuses anymore, you know. And, uh, yeah, I could go on and on and on about it.

So what are the 5 rules of collaborative investing?

So it's really interesting because collaborative investing is not just property or real estate related, it's, it's in general. Ironically, it's actually worked really well in the stock market as well. So the first thing is have local partners, so people that are on the ground that know what's going on in that industry in terms of where you are. The second one, which is a lesson I got taught more than 10 years ago by those two US dollar billionaires, which is get the person you're partnering with to invest in the deal as well. So, what most of us don't do is most of us just invest blindly. And generally, you know, the person, the agent, the broker, someone's just making a commission, but they're not— so, they're selling you the thing, they're telling you it's wonderful, but they don't have any money in the deal. So, that's the second one, which is really, really important. And quite frankly, for me, the deal breaker. The third one is for them to report back on a regular basis, but directly with regards to that specific investment in terms of what is actually happening, and how it's happening. The fourth one is actually to believe in the model. So, collaborative investing is a different way of investing. Again, it's not top-down. There's a great book, actually, just by the way, that's just come out in terms of this whole new power, old power. And I recommend people go— it's called New Power. Go and look it up. And what I mean by believing in the model is this whole collaborative approach, because generally the traditional market doesn't believe in it. And the fifth one, and this is where I believe it gets exciting, is because technology can enable us, is to have regular one-to-ones, like regular conversations, but not from a, I'm going to meet my financial planner and he's telling me how I'm doing. It's actually about the investment, what's happening, learning, growing, you know, through the process. And if you take those 5 laws of collaborative investing, It's literally what the monarchs of the world were doing centuries ago. That's why you went to Cambridge and Oxford and you were part of the club. Then they would follow those 5 rules. That's how the wealth just continued to grow. That's why the wealth got wealthy, basically, in terms of where it is. What's interesting to me is that people can now follow those philosophies, but using technology. Because again, you and I, It's a great concept, but if you only got $1,000, what are you going to do? You're not exactly going to phone BlackRock and go, hey, I want to have a one-to-one meeting on my investment. It just doesn't happen. Whereas with technology, it can happen now. People can participate. And I think the beauty of what you're doing even with this documentary is where in the past, it was go out and read a book, or go and get a coach, or go on a course or whatever, and then go try buy some property. Good luck. Whereas now, it's much more different. It's learning while doing. And that's really the approach to collaborative investing. It's a team effort. So, I want to finish with a story, a metaphor about collaborative investing for people who understand. In the 20th century, we were all taught to do it on our own. Even when we were in the classroom, you studied for a test, and if someone wanted to look over your shoulder, you did one of these, because it was cheating. Or if you did show them, it was cheating. What are the laws of nature? When a bird flies, on its own versus a bird flying in a flock, a bird flying in a flock can fly 70% further than a bird flying on its own. You know, what about the schools of fish that swim in the sea or the animals? You know, I come from Africa, the bucks that go across the savanna, like they never walk on their own. They go together because the power of collaboration is 1 1 3. In some cases, 1 1 11. So, when it comes to investing, who are you collaborating with? And that's what collaborative investing is all about. And I use the metaphor of animals because people understand the metaphor of animals. Otherwise, it just sounds some hypothetical thing that I'm talking about. And yet the question I ask people that are listening to this is, are you walking on your own or are you flying in a flock? And if you're flying in a flock, how do you find the right flock? How do you know that they're going in the right direction and that they're You know, you're going to— what's that great saying? You're going to soar with eagles versus hang around with the ducks on the ground or, you know, whatever it is, chickens on the ground. And so, you know, for me, one of the greatest challenges we all got is who's our flock. And what I love about where the world's going now, and one of the reasons we created that Wealth University, is that you can find better flocks. It doesn't need to be who you went to school with anymore. Or university, or if you didn't go to university, or whatever excuses people come up with. Again, to finish off with the concept of clever investing, that's where I put the word, we put the word smart into the middle of it. Because clever investing is a great concept, but most people didn't have access to it. I wasn't invited to the medical story I gave you. I wasn't invited to the story because I didn't have $5 million. But with technology, because I've got a smartphone, I can participate. Participate. And therefore, no one has an excuse not to be part of it.

Well, this has been stimulating, to say the least. Your vision for what you're doing, your view of the world, and getting kind of the global context of wealth, what wealth means, and how the wealth gap can be narrowed is really exciting. So I'm wishing you well in the venture, and your success is everybody's success. So thanks for taking the time to come here and to share this all with us.

I really, really appreciate it. Do you mind if I leave you with 3 thoughts? Please. So, the first thought that I think is fascinating is that right now, capital is flying from the emerging world into the first world. There's a flight of capital for safety. I see a future where technology is going to enable it, where there's going to be the opposite. The first world is actually going to be investing in Africa and Asia and South America, as you've rightly said, because opportunities will now become possible and trust will be there. And that's a very interesting one, and it's a thought I think people should look at. The second one that I think is really relevant is that, and I've mentioned this, but I want to repeat it, technology will not solve problems. There are fundamentals to business, there are fundamentals to real estate, there are fundamentals to investing. All technology is, is an enabler. And I beg people who are listening to this to not just run out and think, oh, it's because it's a platform, I can make money. Right. You know, there's self-responsibility, and the fundamentals are still there. And the number one law to investing is invest in yourself first, as in learn what you need to know. Don't make excuses. Don't trust the government. Don't trust the financial industry. Don't trust your financial planner. Stop making excuses. Take control of your life and take personal responsibility. You know, and it's really— I just— it's such an important message, you know, to get across. And the third one, is that if you've watched this, this documentary, I now believe that you've got a responsibility. Yeah, because the world is changing, technology is enabling, there are opportunities out there, whether it's in the real estate industry or the stock market or cryptocurrency or whatever. And yet the vast majority of people are just going on living their lives and their problems are getting worse. And I believe we've all got a responsibility now to go and share it with others, you know. Wealth, money used to be hoarded in one's chest. You know, no one— don't tell anyone how much money I've got or don't share my secrets. And I think the world's changing. And I challenge everyone watching this to remember the story of the starfish. Go and find a starfish and see what you can do to be part of the solution.

That's really excellent points to make as we close here. So thanks so much for sharing all this and for making the long journey and getting this information out into the world. It's a pleasure.

Thanks, Bill. Thanks for having me.

To see the next episode in the Money Revealed series, check the video right there next to me. I think you'll love it. Continue to believe, and I'll see you there. What's beautiful is blockchain lets us recreate all these institutions of society, both private and government, can be recreated in blockchain, and there's no way they can be captured.