Ric Edelman: Crypto, Longevity, and the Death of the 60/40 Portfolio

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Very few people have shaped the financial advice profession as profoundly or as broadly as Rick Edelman. Hi everyone, I'm business coach Steve Sandusky for Barron's Advisor, The Way Forward Podcast. My guest today is Rick Edelman. Rick is one of the most accomplished financial advisors in history. He's been ranked the number one independent financial advisor in the nation by Barron's 3 times and inducted into the Barron's Hall of Fame. His firm was ranked the number 1 RIA in the country 4 times by Barron's and named the number 1 investment company in America by Consumer Reports. He's also a multiple New York Times number 1 bestselling author. He's an award-winning radio and television host, university lecturer, patent holder, ETF creator, and the recipient of 3 Lifetime Achievement Awards. But today's conversation isn't about a resume. It's about how Rick thinks. We start by going back to his upbringing and early entrepreneurial instincts and what shaped his curiosity, his willingness to challenge the status quo, and his ability to see around corners long before ideas become mainstream. Rick shares why he believes the most dangerous phrase in our industry is This is how we've always done it, and how his background in journalism shaped his approach to advice, and why intellectual curiosity and not tactics is the real source of long-term success for advisors. From there, we explore his latest and most controversial thinking around longevity, why the traditional 60/40 glide path is broken, and how exponential technologies, including digital assets, are reshaping portfolios planning horizons and fiduciary responsibility itself. This is a wide-ranging conversation about mindset, leadership, curiosity, and what it really means to serve clients in a world that's changing faster than most advisors are prepared for. If you want to understand how the best thinkers in our profession anticipate the future and what that means for you, your clients, and your firm,, then you're in the right place. With that, here's my incredible conversation with Ric Edelman.

Well, Ric, I don't think there's any other financial advisor that has had as big of a transformational impact in so many different areas in the financial profession as you have.

I appreciate that. It's very kind.

And it's, it's well-deserved. But I don't want to start with talking about your accomplishments. I want to start with how you think, because I think so much of a person's success is like their mindset, their mental models. And so I want to go back to 18-year-old Rick Edelman. If you can think back to those days, was there anything in the 18-year-old Rick Edelman or in your upbringing that has stuck with you from a thinking standpoint, a mental model standpoint, that you think has enabled you to be so successful in so many different areas over the years?

I suppose I would have to credit my parents, who were entrepreneurs themselves. They were small business owners, and they instilled in me the importance of creativity, innovation, customer service and responsiveness, and curiosity. My father was a genius communicator. He was a tournament promoter, and so everything he did was he took a commodity, bowling, and turned it into the world's largest series of bowling tournaments, which is still in business today. My brother runs the company out of Las Vegas. And it was all about how do you take something pedestrian that everyone's familiar with and turn it into something exciting and different and unique. And he had to reinvent it constantly, otherwise it would get stale and old again. So the incentives, the prizes, the structure, the rules constantly needed evolution. And that helped me understand the basis of business formation and of communication, customer service, and marketing and promotion. And I think that helped set the foundation for our business success.

So did you know at an early age that you wanted to be an entrepreneur, or is that something that developed over time?

I think it was innate, yeah. Yes, I started my first business when I was 12. At 16, instead of working in a fast food joint like so many other kids in the summer, I started a window washing company. And entrepreneurship, I think, was instilled in us because of our parents. Both of my brothers were entrepreneurs as well. So I think it literally runs in the family.

One of the other things that I think you have been so good at is you have been early to things that then became big. So for example, you were super early in massive marketing. So radio shows, TV, books, super early in that, early in financial advice, financial planning, early in digital assets. So what in your way of thinking do you think enables you to sort of see what's going on, project that out into the future and say, hey, I think this is going to be sort of the next big thing, or this is where I should go. And along with that, how do you separate the signal from the noise there as well? Because not everything that looks like it's going to be a big deal turns out to be one.

Yeah, I think the advantage is that, again, building on my father's incredible communication and promotion skills was the ability to relate to ordinary people. I had the benefit of not going to business class. I didn't ever take a business class or economics class in college, I was a journalism major, communications, marketing, PR, advertising. And they teach you really only two things in journalism school: how to ask good questions and how to explain the answers in plain English. And what I realized coming out of school is that I had an innate curiosity because you're not really learning any content in journalism. You're only learning how to communicate and how to absorb information. And so when I got into this business, I began as a journalist in the financial trade press and then made the jump into being an advisor because my wife and I went to an advisor. We were young newlyweds who wanted to learn how to buy a house, and the advisor we went to ended up being a crook. Told us to lie on our mortgage application and commit a felony because he wanted his brother, the mortgage broker, to sell us the mortgage. So we were so unhappy with that experience experience, we said, let's teach ourselves how to do this and then teach others what we've learned. And that was the basis of the formation of our company. And I discovered pretty early on that most— I don't know if it's most— much of the advice that was traditionally provided by the financial services industry was bad advice. Not nefarious, not evil, not fraudulent, just not in the consumer's best interest. Either ineffective or too cumbersome than necessary, or too expensive than necessary, or too risky than necessary, because most of the advice emanated from the product manufacturers and the people selling those products who were trying to earn, back in the 1980s, big commissions. You had mutual funds that charged 7.5% commissions. You had annuity products that charged 15% commissions. There were no fee-based advisors back in that day. Financial planning was a relatively new phenomenon. And I began by applying my journalism hat of saying, why is that the advice? Why are you telling people to pay off their mortgage and own their home outright? Why are you telling people to buy municipal bonds? Why are you telling people whatever it is you're telling them? And the answers I got were insufficient. One of the most common was because we've always done it this way, which is the world's worst answer to any question you ever pose. And so I ended up realizing I needed to do my own research., and in the course of doing that, discovered that much of what others were saying, it was outdated, flat-out wrong, it was incomplete or inaccurate, and so I started offering advice that was very different from what other people traditionally heard from our industry. At one point, one of the major trade magazines in our industry put me on their cover, and the headline was, Rick Edelman might be the most successful advisor in America, 'But is that a good thing?' Because the advice I was giving was so contrary to what everybody else was saying, I was really causing a lot of noise and causing a lot of disruption, and it was pissing people off, quite frankly. Today, the advice I gave on mortgages is now mainstream. The advice we gave on munis is now mainstream. The advice we gave on rebalancing, which was innovative in its day, our use of ETFs, which was unheard of in the early 2000s, didn't know it at the time, but we were paving the way for the standard business practices and advisory services that are happening here at the Schwab IMPACT event and throughout our industry. And it's because we simply didn't agree to accept the status quo. Instead, we were curious, we were willing to confront the establishment, we were willing to go a different way. And what we discovered is that what we were saying, how we were saying it, resonated with the general population. They liked our message and they sought us out in large numbers to be their advisor. And all of that is what propelled our firm to becoming the largest advisory firm in the nation, now serving 1.4 million households.

And you're still giving advice that's raising a lot of eyebrows, particularly with crypto and digital assets. We'll get to that here in just a little bit. You talked about your dad, your parents were, were role models. You have a sense of curiosity. Were there any other people that you looked to back when you were in your 20s and 30s and said, okay, they're doing something interesting, I can learn some things from them? Because oftentimes we have some other people that we learn from. Were there people you were learning from, or were you just trying to do something and figure it out along the way?

In our industry, no, there wasn't anybody in the financial services sector I was learning from because nobody was doing what I liked. I wasn't respecting the standard business practices of the industry. It was all designed for their own benefit. There's a hierarchy in the financial industry. Number 1 is the shareholder, the stockholder, the board of directors. Number 2 is management. Number 3 is the advisor. And number 4, at the bottom of that list, is the client. And much of the product or the service, the platform The platform is designed to benefit in that order, and the clients are the least considered. And so there wasn't any mentor I found in our industry. First of all, I was doing things nobody had ever done. I was the first to have a radio show.

But oftentimes people will, will take someone from another industry and say, oh, I think I can apply that to my industry.

Was there anybody like that? And that's where I was going to go. So while we were doing firsts in this business of seminars and the radio show, and eventually books and television shows, that wasn't a first in total. Those have been around forever in other industries. So I was gravitating to the media, and I was getting a lot of mentorship from titans in the radio market, on the public lecture market, authors, advertising. You know, I ask advisors all the time when I do training for them, what do you read to stay current? And you know what their answers are. It's all the usual stuff from Investor's Business Daily to the Wall Street Journal to of course Barron's and so on. And you expect all that. But what none of them ever say is that they read Advertising Age. If you want to understand how to communicate, how to reach the audience you're trying to reach with effective messaging, you need to understand that industry. And so I spent a lot of time, again, again, thanks to my, my educational background in college, to understand that it's not just what you know, and it's not who you know. You heard that old adage, not what you know, but who you know?

Wrong.

It's who knows you. And that translates into mass media. And you need to understand how mass media works so that you can make it work for you in the growth and development of your practice. And nobody really understood or got that. And that's where I really devoted myself to catering those skills to be able to master the platforms. And that is one of the big things that has set us apart over the decades.

You mentioned advertising age. It reminds me when I was in grad school getting my MBA, I took marketing and I ended up being an assistant for the marketing professor. And one of the projects he had me do was to go into his office. He had all these videotapes of the world's best commercials. And he wanted me to go through all these videos and all of these commercials and just like write down the insights and like observations on like what made the—

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It's commercially successful, and I— wow, there's a great MBA education right there.

Absolutely right. And, and sociology study and psychology, demographics, to understand the world around us, what makes people behave the way they behave. We now refer to it as behavioral finance, and I'm a huge student of that. I've written a lot about it in my books, and we've done a lot of seminars on that topic. And we have to understand what makes the world tick, what makes societies do what they do, and what makes individuals within those societies behave the way they behave. And I find that most advisors are kind of oblivious to this because they grow up in the traditional channel of Wall Street, and that's just not what Wall Street teaches or is particularly really good at.

Yeah, one of my enduring memories of you was about 10 years ago. It was at the TD Ameritrade conference, and I'm in the exhibit hall, and who do I see? I see Rick Edelman walking down each of those aisles, you know, just kind of talking to different people. And even at your age or your level of success, you're still trying to figure out, like, what's going on here. And I think you and I talked about that on a podcast that we did not long after that.

And I'm still doing that here.

And again, and that's why I wanted to start with just the thinking, because we can talk about practice management, we can talk about leadership, and we can talk about this tactic or that strategy, and that's all well and good. But at the end of the day, if you don't really think in a way that is going to enable you to be successful, if indeed success is sort of your, you know, what you're striving for, you can get the best ideas in the world, but nothing's going to happen with them.

And that's why you have to have your eyes open to what's going on around you. Wandering the exhibit hall, I find the most valuable educational resource. I mean, sitting in on the meetings and listening to the speeches, that's all great, but being with the practitioners, the people that are offering the products and services that are making our industry function, and learning the latest and greatest, the innovative aspects of what's happening here is a tremendous way to maintain the pulse on what advisors are what their clients are thinking, and the new solutions that can make everything better. And that is a real key. So I find the biggest benefit of events are the exhibit halls.

But I also see a lot of people that have success, maybe not similar to yours, but have what we would all consider great success. They're like, I don't really go to the conferences anymore. You know, I sort of learned that. I don't know what I'm going to learn by going to that conference. Conference. Yet here you are, you're still here. And I know you go to other conferences outside of financial services to kind of pick up things. So tell me a little bit about how do you think about where you spend your time? Like, if you go to a professional event, how do you decide, oh, I'm going to go to Singularity or whatever? How do you decide where you go?

Well, the advice we've always given has been focused on where are we headed, what what do I need to be telling my clients today about the future? We're not accountants, we're not historians, we don't document the past. That's not a criticism of accountants, it's an important function, but we are planners by definition. We're focusing on the future, and that means we need to understand what is coming. And today more than ever, that means technology and technological innovation. And so I have been studying intently two broad areas areas that are massive in this. One is the study of longevity and aging, because we are having longer lifespans than ever in the course of human history in an unprecedented way. We are the very first humans as a species to be living as long as we're living, with incredible implications not just for the individual and their longevity and the financial elements associated with that, but the implications for for society as a whole. We are producing far fewer babies than is necessary to sustain the population. Meanwhile, old people aren't dying, they're simply getting older. This is changing everything from public policy to economics to investment opportunity. So longevity and aging is one big thing, and I've served on the advisory boards of Stanford Center on Longevity, the Milken Institute for the Study of Aging. I've done work at MIT's AgeLab. To exponential technologies. That's the other half. Nanotech, biotech, bioinformatics, 3D printing, neuroscience, big data, obviously AI and robotics, fintech, edtech, agtech, all helping us understand how are we going to live in this world, how are we going to deal with the problems of our world, and how are we going to resolve them, and how are we going to handle the challenges that we haven't even anticipated yet. Just as nobody anticipated the pandemic 5 years ago, we have similar unknowns, the black swans as they call them, of the future to help our clients build portfolios and develop strategies that can help them succeed no matter what's coming down the pike. And so that is what led me to Bitcoin in 2012. I came upon it early compared to most others. I went, did I didn't go looking for it. Nobody looks for Bitcoin.

It reaches out.

It finds you. It does. It finds you. And what I've discovered is that most people, when they stumble upon it, dismiss it out of hand. It's either a fad or a fraud. I'm intellectually curious. So while I didn't get it, and nobody gets it at first, like, huh, digital money? What's that? Why do I care? Why do I need it? But I'm curious. And so I jumped down that rabbit hole to study it, to try to figure out, is there a there there? And discovered pretty quickly there is. This is a transformative technology that will radically alter commerce on a global scale with immense investment potential. And I quickly also discovered that most in the financial industry don't know that, don't believe it, and they were therefore ignoring it. And so I created DACFP in 2015, the Digital Assets Council of Financial Professionals, as exclusively a crypto education company. We don't sell product, we're not managing money. We simply help advisors and firms understand what this is, how to adopt it into your practice, how to counsel clients regarding it that's in the client's best interest. It's not about buying Bitcoin, it's about understanding it so you can figure out should the client buy Bitcoin. And today, our CBDA program, Certified in Blockchain and Digital Assets, is the oldest, largest education program of its kind listed in FINRA's database of professional designations. And all we do is crypto education. That's what I was doing here at IMPACT yesterday, a 2-hour crypto keynote, the only crypto session at the whole conference, because advisors are behind the curve. We now know it's mainstream, massive asset flows, tremendous growth potential, but still rife with risks. So we need to know how to navigate all of and advisors are behind the curve. Their clients are engaging or they're curious, and their advisors are unable to largely help them because they themselves lack the knowledge. And that's what it's really all about— being curious, understanding what's going on in the world around you, to do the Wayne Gretzky thing, to go where the puck is headed, not where it was. And if you adopt that kind of a mindset, you'll be amazed at the ideas that will open up, the strategies that will develop, and the opportunities that you can create to improve your customer service, your client acquisition, and as a result, your AUM generation.

So full disclosure, I'm a graduate of your program, so definitely a proponent of it. And I want to talk more about crypto here in a moment, but I want to go back to— I can hear advisors say to themselves, Rick, I hear you. This is great. I need to be curious. I need to go learn about all this other stuff. I need to go to these different conferences. Is, but I got a business to run. Yeah, I got clients that need me. I got staff that needs me. I got a family that I want to spend time with. I don't have time to go do all of this.

So how do they balance, if that's the right word, how do they do all that? So I'll give you two answers, Steve. The first answer is you got to sharpen the sword in the middle of the battle sometimes, that you got to slow down, take a pause, and come to this conference as part of your ongoing education and staying plugged That's— it's just as simple as that. Look, you need CE credits anyway. You get a ton of them here at IMPACT and at conferences like it. The second answer though is that you're right. You don't really need to do this. You're running a successful practice. You've been in business 20, 30, 40 years. You got a couple hundred clients and a couple hundred million in AUM. You're making a lot of money. So are your clients. Life's good. Spend more time with your family and on the golf course. Great. That doesn't mean your firm and your practice can ignore all of this. It simply means you can delegate it. You don't have to do this. Hire a younger advisor to do it for you. Designate someone in your practice to be the crypto expert. Doesn't have to be you, but it's got to be someone in your practice that you can have your clients talk to if you don't want to take the time to understand what the heck blockchain is and the difference between Bitcoin and Ethereum and Solana. So it's the art of practice management. You don't have to do it all, but it doesn't mean it doesn't need to get done. You can simply delegate to others. That doesn't mean abdicate, it means delegate. And that can be a very effective way for you to grow your practice while keeping it manageable on a personal level.

I sometimes think of success as a pyramid, meaning at the base of the pyramid there's a whole bunch of people that don't have much success, and then as you go higher up the pyramid, it gets narrower and narrower because people get to the point where like, I'm pretty comfortable, just as you were saying a moment ago. I'm making a good income, clients are happy, life is good, right? I don't want to work any harder. I'm always interested when I talk to people like you who have said, eh, not good enough, not satisfied. What is it in you that makes you want to keep going? I mean, I think you're in your 60s, probably here. 67. 67. I'm 63, you know, we're still working.

No, we're not.

We're having fun. We're having fun. We are having fun, I grant you that. So what is it that keeps you out there in the game, so to speak, long after the point when financial reasons would still keep you in it?

There are two answers. First is intellectual curiosity, as I mentioned earlier. I'm just fascinated by this. I find it intellectually stimulating. And there is no subject in the field of personal finance and investment management that is more intellectually interesting than crypto. It's just fascinating. Forget about liking it or not. Forget about the politicalization of it with the Democrats versus Republican point of view. Forget about the risk management. Forget about the investment strategy or philosophy. This is just a fascinating conversation, and that alone is a reason to pay attention to it. The second element, though, goes back to the reason Jean and I, my wife, created our firm back in the day, 40 years ago. And that is we recognized that we as a young couple couldn't get access to effective financial advice in our best interest, and we had to invent the firm to deliver that. There are millions, tens of millions of American households that are in desperate need of good financial advice, and they have too little access to that advice because most in the financial advisory system won't serve them. If you're not already rich, I won't take you as a client. I want a million-dollar minimum. You see the ads all the time. You have half a million or more, give me a call. Well, what about the person who wants the half million but doesn't have it. The young couple just starting out, or the family where you have a stay-at-home parent because they have a disabled child, a special needs child, or elder care where the parent had to give up their career to take care of mom or dad, or someone who is dealing with divorce or bankruptcy or drug or alcohol issues or health issues, and they don't have the luxury of being able to hire somebody simply because they don't have enough money to pay the way. We don't do enough pro bono services. We all love to hate lawyers. Guess what? They do 2.5 times the rate of pro bono that we do. That's embarrassing in our industry. So Jean and I said from the very beginning, we will serve anyone who asks for our help. We never had an account minimum. Most of our early clients were pro bono services, and our attitude was, we'll take you on no matter how little money you've got. There's only one condition: you have to be willing to follow our advice, and we will grow our firm as necessary so that we never turn anyone away, which is why we kept growing. We said we'll stop growing when the demand for our services stops. The demand has never stopped, and so we keep growing. Now it's 1.4 million households and counting, and that's what propels us. Until we eliminate poverty in America, until we have inclusion in America, until we have financial security established for all Americans, we have work to do.

I hadn't planned on asking this, but based on what you just said, let's go to the end. Rick Edelman and your wife Jean have passed away. What's the legacy that you hope?

Well, we hope we leave the world a little better than we found it, and I think all of All of us have that aspiration. Some of us are doing it for our families, some for our local communities. Others have bigger, broader aspirations. Jean and I don't have children, so it's really charity is our end result. We spend probably 30, 40% of our time philanthropically in a variety of initiatives. I'm on the board of several nonprofits, as is Jean. We've created several nonprofits, the Museum of Personal Finance, the Personal Finance Institute. We're working closely with the Museum of American Finance on the development of a new museum in Boston that opens next summer. We've recently opened the Edelman Fossil Park at Rowan University. We created the Edelman Planetarium. The Rick Edelman College of Communication, Humanities, and Social Sciences at Rowan is named after me. So we do an awful lot of work in those areas, as well as a big focus on Alzheimer's. We've been making very heavy investments in the development of an Alzheimer's diagnostic tool because it is everybody's biggest fear. Growing old is the onset of Alzheimer's. It is the scariest of all diseases. It's the most expensive and the most fiscally damaging, not just to families but to entire governments. And we've got to eradicate this disease. So we've been spending a lot of time in those areas. And we do all of this because we're trying to leave the world a better place. And by the way, selfishly, I wouldn't mind if they cured Alzheimer's. Yeah. So we all— in your lifetime? In my lifetime. So we all have some motivated self-interest in these things. We know that if we can provide financial security for all Americans, crime will go down. We know that if we can improve access to medical care, health care costs will go down. So there's benefit to us as investors. To helping people become better off. And that's the wonderful thing about capitalism— doing well by doing good.

I think I know the answer to this, but I'm going to ask you anyway. Given everything that you hope to achieve or hope to see happen, are you optimistic that those things will happen sooner rather than later?

It depends on the topic we're dealing with specifically. For example, I am confident that over the next 10 years, maybe 15, we will conquer Alzheimer's. I'm on the board of the Alzheimer's Drug Discovery Foundation, and there's an incredible array of new drugs coming on the market in the next 5 years that will provide treatments that could slow, and we're hoping even reverse, the symptoms, and eventually leading to a cure, none of which exists today. I'm also hopeful that we will grow our way out of our debts and deficits. Limits on governmental levels, not just here in the US but worldwide, through innovation, particularly AI and crypto. We have the opportunity to generate wealth on an unprecedented scale, but it's going to come with disruption. We are going to see in the short term a lot of job loss, a lot of need for people to reinvent themselves, retrain themselves to remain marketable in the workplace, and it's going to be very difficult. The need for public policy is essential, Social Security is in a crisis right now. The trust fund will be eliminated by 2032. Until Congress acts, it's going to be a crisis and they have shown no indication of acting. So we have a lot of problems, a lot of headwinds geopolitically on a global scale. We know what's going on with Ukraine and with Israel and with threats in China and Taiwan, rogue nations, terrorism. We know the issues that we're facing. I am hopeful. But it's going to be difficult to overcome these. And the key for us to understand is that if we invest today in the technologies and the industries that are developing these solutions, that is not only how we're going to help the world solve these issues, but it's how you'll prosper along the way.

And on that note, let's segue. So I was at your session and Ken Dyckwalde Wald was speaking as well. And one of the things you said was we need to update the 60/40 glide path. And a lot of people have talked about, hey, the 60/40 doesn't really work anymore. But I think when people say that, they're thinking it a little differently than how you're thinking about how the 60/40 doesn't really work anymore. So give me a little context for how you think about 60/40 no longer being the right thing.

I've been doing a lot of work in the field of aging with Ken Dykewald for decades. Ken is the— probably the world's preeminent expert on aging. He's the CEO and founder of Age Wave. I encourage you to go to agewave.com. His research is amazing. He's written 19 books. He's counseled, I think, every living president, half the Fortune 500. The guy's incredible and an amazing public speaker. And Ken's Research has proven that we are living longer than ever and we are going to continue to live longer than ever. In 1900, life expectancy in America was 47. Today it's 85. And by the time you are 85, life expectancy will be 100 plus.

Let me interrupt you for a second. So COVID, I think, disrupted that a little bit, right? So I think some of the data I've seen is is that yes, we've seen the life expectancy go up, but now it's either flatlined or actually gone down a little bit because of COVID Is that just a temporary blip?

Completely temporary. That was due to an anomaly in society due to the pandemic, which we then cured. Now, World War III would have a big impact on life expectancies too. Those are short-term intermediate anomalies.

And the loneliness epidemic, the opioid crisis.

I'm talking about technological innovations in the fields of medicine and neuroscience science where we are going to cure over the next 10 years cancer, heart disease, respiratory illness, obesity, diabetes, the leading causes of death. And as we do, we are going to be extending our life expectancies. Sure, there's going to be anomalies and pockets and disruptions along the way, but it's not going to interfere with the fact that we are fundamentally changing this, as we've been doing for 50 years. Go back to the 1800s and the leading causes of death included pyemia and erysipelas. Ever heard of those?

Me neither. Not until yesterday.

What the hell are they? They were among the leading causes of death. Go back 100 years, not 200 years, but 100 years. Tuberculosis, typhoid, cholera were the leading causes of death. When's the last time anybody died in America of cholera? Medical science eradicated those. And we're going to eradicate today's leading causes of death. We're going to be living longer. You have to assume as a result, your money is going to have to last a lot longer than you think. That's why the 60/40 is dead. A 60% allocation that you begin to reduce in your 60s according to the traditional 60/40 glide path, so that by the time you're 75 or 80, you have virtually no money in stocks. That's crazy if you're going to live to age 100 or beyond. So we need to go from 60/40 to 80/20, and you need to maintain 60, 70, 80% equity exposure well into your 70s, 80s, and 90s to offset the impact of taxes and inflation. The same advice you give to a 30 and a 40-year-old, you now need to give to a 60 and a 70-year-old. That's my premise. And if you are going to have 80% of your money in equities, you need to include within that bucket crypto, because it's the fastest growing with the greatest potential for increase in value over the next decade.

Okay, so let's extend this life expectancy and think about the potential implications of that. And what I mean by that is, will the technology move faster and increase lifespans and health spans longer than us as humans will be able to deal with that. And what I mean is there are so many older people who have lost purpose in life, who don't feel like I've got a reason to get up in the morning. Now, if within a span of years we're eradicating some of these diseases and people are living 10, 20 years longer than they might have expected—

and all they're doing is watching TV Right.

It's like emotionally, mentally, right? Are we going to be able to keep up with technology enabling us to live longer? How are we going to deal with that? And who's dealing with that?

And will they have the money to be able to support themselves at age 95 or 105?

Right. Well, that's the second part we'll get to with your 80/20 thing. But like, how do we deal with it from a human standpoint?

So you're addressing what Ken discussed yesterday. Ken Dyckwald has devoted his career to those social issues, and he laments, as he did yesterday in his presentation, the fact that we don't have a guidebook for people in their later years. We devote massive amounts of energy and attention in this country to helping children grow up. We nurture them, we educate them, and we prepare them for career. The attitude was that's all you had to do because they would die during that In the 1800s, if you were alive, you worked because you needed to support yourself. The notion of retirement is a 20th century innovation because of the Industrial Age and the advent of pensions. But that pension was enough. Between pensions, Social Security, and the value of your home, that was all you needed because you retired at 65 and you were dead at 70. You didn't need a financial plan for the future because you weren't going to have a future. But today, if you retire at 65, and you live to 95, that's 30 years, which is almost as long as you spent working. There's no way you're going to amass enough money to be able to afford this. And what are you going to do with all those years? It's one thing to spoil the grandkids for a couple of years and take a round-the-world cruise. That works for a few years. But what do you do when you have a few decades instead? We haven't taught today's elders, those in their 60s and 70s and 80s and 90s, what to do with themselves because we've cast them aside. Very dear friend of ours is 87 years old, retired pastor, and we had a conversation recently and he was despondent, almost in tears, and he said, "I have nothing to do all day." This is a man who fought 3 tours in Vietnam as a chaplain in the Army, who started and operated numerous churches through his career, raised a family, a lifetime of experience, expertise, and wisdom, and society has offered him no use. Ken Dyckewald's answer is the creation of an elder corps, just like we have the Peace Corps and AmeriCorps. Put these tens of millions of older people, deploy them into society to help solve social issues that they are uniquely qualified to address. We need to come up with solutions like that to help people realize that just because you leave your career at 65 doesn't mean you stop working. You enter a new career, not 60 hours a week, maybe 10 or 15. You go back to college. You engage in a college course here and there. You do online learning. You go to museums. You travel with ecotourism. You engage in ways that keeps your mind active, that keeps you socially that keeps you fit mentally and therefore healthier longer. We need to reinvent what it means to have our lifeline. We're going, as Ken describes, from a linear lifeline where you go to school, you go to work, you retire and die one after the other, to a cyclical lifeline where you go to school, you go to work, then you go back to school, then you take a sabbatical for a couple of years, then you go back to school, you enter a new career, and then you do another sabbatical, then you go back into work, and then you go back to school, and you do this cyclically for as long as you live. The notion of retirement is becoming antiquated, and advisors need to realize all of this so that they can provide their clients better counsel for what their future is really likely to be.

Yeah, a couple things there. So one is with the cyclical life, I find that interesting because you and I are both baby boomers, and I think at least the way I grew up, the idea of, oh, I'm going to take a year off and maybe spend time with the family, I'm going to step out of my career, or I'm going to go to school when I'm 40 because I want to learn something new, and then I'm going to do something different. It's like, no, it's like you just work, right? I mean, that was sort of the socially, societal acceptable thing. I think that's changing quite a bit now with like Gen Z and like, you know, gap years, all those those have been around for a long time, but they're very much into, I don't have to live this linear life.

It's a work-life balance approach. We've never heard that phrase when we were growing up.

You're just lazy.

Yeah, you lived to work, and we are recognizing now that that's not how the younger generations think. And I don't think they're crazy. There is more to life than work. There's family, there's community, there's charity, there is personal development. And we need to recognize that that's the future, and it will all be augmented by technology because the machines are going to be doing a lot of the work for us, allowing us to emphasize creativity and thinking and imagining and delegating the chore to the machines. Yeah, and this is going to have a radical change on society as well as the individual household, and we need to understand it today and begin to prepare ourselves for this. And there's nobody better at preparing clients than their financial advisors. And if you recognize what's going on and these macro trends that are under development today in the early stages, you'll be ideally positioned to prepare your client. You'll win their heart and soul and therefore their AUM, and you will have a thriving business forever while you yourself enjoy the very same paradigm.

You mentioned your friend, the pastor, and sort of despondent these days. I'm experiencing that firsthand as well. So my dad retired when he was 58. He's 96 now. Wow. So he's been retired longer than he ever worked. But he's pretty happy in the sense that he has a passion, which has been the financial markets. And so his day consists of getting up at about 8:15 in the morning Central Time putting a pot of coffee on, going into the bedroom, turning on CNBC, watching how the market's opening, drinking his coffee, going out to the couch, turning on CNBC out there, falling asleep on the couch. Then at the end of the day, goes back in, checks his portfolio, writes it in his little sheet there and kind of updates it even though he doesn't need to do that. But it sort of keeps him sharp. So he's got a reason to get up in the morning, which is he loves the financial markets. My mom is just the opposite. She's 91. Bridge was her thing. So she still plays bridge once or twice a week. And she said, I'd have been dead a long time ago if I didn't have bridge to look forward to, because it was sort of her social lifeline. But even that's going away because she's got bad eyesight and so on and so forth. So this idea of you got to have a reason to get up in the morning, particularly as you get older, because neither of them can really drive. They can't hardly see. My dad can hardly hear. And it's like, what do you do?

And it sounds fortunate that they have the financial wherewithal to live independently and sustain their lifestyle. What happens if they had run out of money? Because we know so many Americans are entering retirement woefully unprepared. The average 401(k) balance is $150,000. For those 50-plus, it's $250,000. Insufficient for them to be able to support themselves in the future, especially with declining Social Security payments. Increasing inflation and cost of living, this is going to be a real crisis. Not to mention the cost of healthcare, which the average retired couple— Ken said it yesterday— will spend almost $500,000 in out-of-pocket healthcare costs during their retirement. Most U.S. households don't have that kind of money for healthcare, let alone anything else. So we have to increase preparation so that people can sit back and say, what do I want to do when I grow up? He had the great example of John Glenn, who went into space at age 77, and we need to recognize that fact. There was a woman a couple of weeks ago who just ran the Ironman in Hawaii. Did you read about her? She's 80 years old and did an Ironman. So there's an opportunity for our next chapter as opposed to merely retirement, and that's what we have to begin to train people to anticipate today as seeing the fundamental question: what's next?

Right. Well, and one of my favorite examples there is William Shatner. So Captain James T. Kirk of the Starship Enterprise from the '60s. And then I think he was like— wasn't he 90 when he got shot up into space?

Yeah, yeah, yeah. He's in his 90s and still at it. And that's what we need to recognize is thanks to medical innovation, you will be healthier at 95 than you are at 55.

Okay, so let's go back to the 60-40 glide path. I want to read probably a couple quotes here. I'll intersperse these and get your reaction because I think these are things that I know you've said. So one is, owning crypto is no longer a speculative position. Failing to do so is. So obviously a lot of advisors think it is speculation. They think it's a fraud, it's a Ponzi scheme, blah, blah, blah. We've heard all that stuff before. And you recently came out and said, originally you were saying crypto should be 1%, 2% of a portfolio. Now you're saying maybe 10%, maybe minimum, minimum 10%, possibly 30 or 40%.

So talk to me about that. Yeah, the only people, and there are a large number of people who continue to say Bitcoin is speculative, crypto is a fad or a fraud. The only The only people who say that, the only people, are those who have not studied it. They are relying on myths, on outdated, obsolete, and no longer accurate information. They are dealing with bias, and they are not doing their job as fiduciaries to properly engage in the due diligence process to understand this technology or this asset class. Challenge to you. Learn about this and then tell me why it's a fad or a fraud or speculation. The facts are that none of that is true. Some of it was true 10 years ago, 15 years ago. It's not true today. It is maturing and this is why it is becoming mainstreamed. So we need to recognize that if you look at the value of the financial markets here in America, the value of the stock market, the value of the bond market, it adds up to about $120 trillion is the value of all the stocks and bonds in the US. The crypto market is about $4 trillion, which means if you are a passive investor who believes in diversification, crypto has a 4% market cap relative to the stock and bond market. So if you're going to own stocks and bonds 60 40% because that's their weighting in market cap, you should have a 4% allocation to crypto just as a passive investor, not because you believe in it. You already own assets in your portfolio you don't believe in, that you don't like. You do it because they exist and that's part of diversification. So if you don't do that, you're essentially shorting the market. You're making an active decision to not invest, bet against it. Was that your intent? I don't think so. I think you did it inadvertently, accidentally, because you're not keeping up with what's really going on.

Yeah, and I agree with you 100% on this. If you've not studied it, you're just going to be against it. And a few years ago, I did 25 podcast episodes just on Bitcoin because, like you, I got into it a little bit later than you did. But once I got into it, I'm like, this is unbelievably fascinating.

So let me give you one little cute factoid. To it. I've met an awful lot of people in the crypto community, as you can imagine, over the last 15 years, and there are an awful lot of folks who grew up crypto native, we call them. They were never engaged in Wall Street or the financial industry. They just were the techies who grew up with this. I've also met an increasingly large number of people who are now running crypto companies companies who came from TradFi, who came from the traditional finance Wall Street machine, people who are very senior executives who have left to join or to start crypto companies. I have never met anyone in crypto who left crypto to go to Wall Street, but I've met a lot of Wall Streeters who left to go to crypto. Explain that to me. Right. So if you're your bias says, I don't believe it, I don't get it. I had that conversation with an advisor in the hallway here at IMPACT an hour ago. He pulled me aside, he went to my session yesterday, and he pulled me aside today and he said, you got to explain this to me, I don't understand Bitcoin, I don't understand why it isn't a speculation. My answer to him was, it doesn't matter that you don't get it. The fact is there's half a billion people in the world who do. So you can either believe that they're all going to change their mind tomorrow and that no one else will join them in their thinking. Or you can just go with the flow and allocate simply because everybody else is allocating. And he was like, oh, and that's just kind of what it comes down to. Are you really telling me in your opposition to crypto that you're smarter than everybody who's engaging in this asset class? All the billionaires? All the hedge funds, all the family offices, all of the sovereign wealth funds and the endowments and the pension funds and the insurance companies. You're smarter than all these people. I had no idea that so many advisors had such egos.

Another one of your quotes here is, when you can move money as easily as sending an email, everything changes. So talk to me about what that means and tie that into Bitcoin because another complaint I hear about Bitcoin is, oh, well, when it came out, it was supposed to like replace Visa and MasterCard. It was supposed to be a way to, you know, transact digitally and that never came. And so now they changed the narrative and now it's a store of value because the first thing didn't work. So that's why this thing is kind of fake because it's not serving the purpose that it was quote originally designed for.

So that's like saying Amazon is a fraud because Bezos said he was going to sell books online, right? And now they run the biggest cloud computing company on the planet, so that's obviously a fraud because they changed what they're doing. That's one of the dumbest things I've ever heard. What it comes down to is that you're right, Bitcoin was intended by Satoshi, who invented it, to be a transmittal, to enable you to move money from from one person to another 24/7 globally. That did no intermediary, with no intermediary. That premise has failed for the simple reason that Bitcoin's volatile. We can't have volatility in the movement of money because if I send you a dollar, it darn well better be a dollar by the time you get it, right? And that might not happen with Bitcoin, which is why the crypto community invented stablecoins. Stablecoins, because the stablecoin, hence its name, has a stable value. It's pegged by U.S. T-bills or U.S. dollar currencies. Stablecoins today hold 10% of all U.S. currency in circulation. Treasury Department says in the next 2 years, stablecoins will hold 80% of all U.S. currency. People are realizing this is a way I can move money using the internet at the speed of the the internet. And think about what that means. If you right now wanted to send money from New York to London, it takes on average 5 business days and costs 6%. With crypto, you can do it instantly, virtually free, technologically cyber secure. Why would anybody continue to do it the other way? Which is why why Goldman Sachs called stablecoins crypto's killer app, because this is astonishing in what it does. Everybody knows Jamie Dimon hates Bitcoin. He runs around the country saying no intrinsic value, and he at one point 5 years ago said, I'll fire any trader who engages in it because they're stupid. What people don't know is that JP Morgan, Jamie Dimon's company, has been operating its own private blockchain for 4 years. They have moved internationally $2 trillion. They do $2 billion a day for their institutional clients using blockchain technology. Every bank is developing this tech. Everybody is engaging in it because we recognize it allows businesses to operate faster, cheaper, with greater safety and security, and greater transparency and inclusion.

What's not to love? Right. I saw a post that you made some time ago. I think it was on LinkedIn. And you mentioned Sandy Call. Yes. And Sandy is an executive at Franklin Templeton, and she's really heading up a lot of Franklin Templeton's initiatives. And they're— them and Fidelity are really, I think, at the forefront from the fund companies in terms of dealing with blockchain and, and making that available and tokenization. And tokenization. Yeah. And so definitely— and I did a podcast with her. She's great on Barron's. So if you all want to learn more about stablecoins, coins, definitely go back and listen to that. One of the things that she said was because of stablecoins and tokenization, we're going to be moving from an account-based system like today we have an account at Schwab, we have an account at Fidelity, we have an account at the bank to more of a wallet-based system where everything's going to be in the wallet on your phone. On your phone. You have a wallet on your phone now.

Right.

Right. But we're going to have our credit card thing is going to be in there. Our bank is going to be in there.

Our brokerage is going to be in there. Your house is going to be there.

Yeah. And if I want to send anything to anybody, I just do it through my wallet as opposed to having to go through my brokerage account or my bank account or, or whatever. And so, yeah, talking about the killer app, is that your take as well that we'll be moving toward that?

Yes. Yeah. It won't be the elimination of custodians like Schwab. Your brokerage account will become a Schwab wallet. And they will provide the custodial services for you so you don't have to deal with this technology. It'll all be back office. You know, you and I are both old enough to remember when we had physical possession of our certificates, right, for our securities. And remember when they said to us, oh, let's put those certificates in street name, send your certificates to Merrill Lynch, let them put them on deposit. We're like, are you nuts? Right? You want me to hand you—

I don't try.

It's in my safety deposit box at the bank or the drawer in my bedroom. And turning them over to a Wall Street firm for safekeeping was crazy. Today, of course, that's routine. Nobody holds physical certificates anymore. That's what's crazy. Tokenization will do the same thing to brokerage accounts. It's not going to mean the elimination of Schwab or the other custodians. They'll become more important than ever because they'll provide the access to the tokens you're going to want to put into those wallets, and they're going to provide essential accounting services. And access services, lending services, that are going to make all the difference. So it's going to become an exciting era, and you need to realize it's coming really quick. Like, I'm talking 3 years, and you better be prepared so that you're able to respond and be adaptable and remain relevant for your client, or they'll do an end run around you. I cited one statistic yesterday in my presentation that blew everyone away: 62% in our research of investors say they're willing to switch advisors to get advice about crypto. If you're not giving them that advice, you lose.

It's that simple. So two more questions. One is, as a journalist guy, someone who's written lots of books, done a lot of writing, what's the one question I have not asked you that you think I should have asked you?

Well, I'd love for you to ask me about a new book that's coming out, The Truth About College.

Tell me about your new book, Rick.

We know that one of the biggest worries parents have, our clients have, is college because we know how expensive college is. The problem is that we tend to focus as advisors on helping our clients save for college. I'll resolve your fears by helping you with a 529 or a Roth or some other clever strategy to cover the cost. That's not the issue that you ought to be focusing focusing on, or I should say not the only issue. The real issue is, should your clients' teens go to college in the first place? 24% of college freshmen drop out. Only 62% graduate after 6 years. 10 years after graduating, half of college grads are working in fields that need a degree. The other half aren't. 20 years out, 42% still paying off their student loan debt. We are ruining their lives by sending them to college. College students report, over 75% of them, that because of their student loan debt, they delayed buying a car, buying a house, getting married, and having children. And college students today know all this, and that's why 51% of them have been diagnosed with depression. 24,000 college kids last year tried to commit suicide. And 1,100 of them succeeded. We are sending too many kids to college who aren't ready to be there, and that's why they're dropping out. It's why they're depressed. We need to help our clients figure out with their children, is college in fact the right choice right now? And if so, how can we create a strategy that will ensure your college success, that you'll graduate in 4 years debt-free on the Dean's List list ready to enter your field. That's what The Truth About College deals with. I don't talk about investments. I talk about the whole premise. How do you make the college experience successful so the child has a prosperous, happy life, so the college doesn't ruin their life?

In light of everything that's happening with technology and AI, do you think— and I'm going to say college, but I guess when I say college, I'm saying just some form of education. 'cause some people might say, well, just the traditional 4-year college experience is kind of obsolete, that there's different ways or perhaps better ways to get the education that you need to succeed going forward. So do you think technology and everything that's happening in society, is that gonna make the traditional college experience more relevant, less relevant, or we need to redesign the whole idea of education and not make it a 4-year point thing, but make it a lifelong learning because things change so much.

Lots in there, Steve, and you're right on all of it. And this is what parents need to realize, that the college experience today is not the college experience they had when they went to college 20, 30, 40 years ago. We need to realize that college is far more expensive, that many colleges are offering degrees in fields that literally won't exist in 5 or 10 years because of AI and robotics. So let's make sure the child is pursuing a course of study that will in fact make them marketable in the workforce. And they need to be marketable because they're going to spend a quarter of a million dollars to get that degree. So they can't just follow their passion. They have to have a marketable degree to generate the ROI on the endeavor. And that means we need to look at the innovative ways of getting the degree. And my book goes into all these details of the fact that 35 states make college free these days. Thousands of employers will pay you to go to college. There are apprenticeships that will pay you to get the education and then give you the job afterward. There are hundreds of careers— I list them all in the book— where you don't need a degree, yet you can emerge with an income that is far better than what you would have gotten from college. And I also list the careers that will disappear in the next decade. So we need to recognize that it's a very different paradigm. You can weave through it, you can thread that needle so that the outcome is what you and your child wants. If you don't do it that way, if you don't succeed in that journey, you'll ruin the student's life and potentially yours because you'll probably be the one footing that bill. And what it all comes down to are the two words you said at the end: lifelong learning. We were able to go to college, enter a career, and do it for 40 years. Can't do that anymore. Half of what a college freshman learns is obsolete by the time they graduate. That means we have to constantly reinvent ourselves, we have to reeducate ourselves. Lifelong learning is the path, and going to college in a formal methodology the way it used to be done is no longer necessarily the smart move.

Excellent. All right, well, that's fantastic. So final question here, I'm going to start a sentence and I want you to finish it. Okay. The one thing I want financial advisors to never forget is—

You're there for the client's benefit, not your own.

Perfect.

All right. Great way to end it. Rick, thank you. It's always great to connect with you. For folks that want to learn more, you've got the book coming out. What are the best ways for folks to stay in touch?

Best way to reach us is at DACFP, the Digital Assets Council of Financial Professionals, dacfp.com.

Excellent. All right.

Thank you.

Thanks, Steve. All right.

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