Money Rehab with Nicole Lapin - Can Blockchain End Poverty? with Hill Harper, Actor and Financial Literacy Advocate

Episode Date: January 12, 2023

It's expensive to be poor. That's what Hill Harper— actor, author, financial literacy advocate, and fan-favorite Money Rehab guest—has found in his ongoing mission to end the wealth gap. Hill joins Nicole to share how blockchain might democratize pathways to wealth for marginalized communities, and how the private sector can step up. Plus, he gives a tip for improving your investing strategy that you can use today.

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Find a co-host at Airbnb.com slash host. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. So I was talking to my friend Hill Harper recently. He's one of my favorite people ever. He's also the actor I'm sure you've seen on hit shows like The Good Doctor and CSI New York. actor I'm sure you've seen on hit shows like The Good Doctor and CSI New York. He's also graced the cover of People magazine as their pick for sexiest man alive twice. But he's also a sneak

attack total nerd. He has two advanced degrees from Harvard. He's a financial advocate, best selling author. And last but certainly not least, he's a money rehab fan favorite guest. Anyway, we were talking and he said something that really struck me. It's expensive to be poor. I'll say that again. It's expensive to be poor. This is something that brought me back to the days when I was living paycheck to paycheck. When I couldn't afford my credit card bill, that's when my credit card bill got bigger. It's expensive to be poor. There are, of course, a lot of complicated systemic issues that drive the divide between the rich and the poor. But there are also

simple solutions we can all take to bridge the gap, whether you're someone who's directly disadvantaged by the wealth discrepancy or if you just want to be a good ally and a good human being. So I wanted to share that conversation with you. Here's my chat with Hill. Hill Harper. Yes. Welcome to Money Rehab. Money Rehab. This is the best show ever. I can't believe it. I can't even believe that I've been asked to be on Money Rehab. Twice. So the last time you were on the show, I'll refresh your memory. Okay, please. You were talking about the Black Wall Street. Yes. So for new listeners, please share what the Black Wall Street is. So the Black Wall Street is a digital platform squarely aimed at solving racial wealth gap. It is something that when I wrote my book,

The Wealth Cure, that was way before blockchain technology. It was like it was right at the inception, really around 2011, right when blockchain was just starting. And what's happened with blockchain technology since then is clearly it's a technology that allows for access to people who have historically and traditionally been marginalized, left out of traditional financial services, actually been preyed upon through payday lending, check cashing, onerous fees. Even from the big bank side, folks who have $600, $800 in a bank account, but they're getting charged $200, $250 a year in fees, it's very difficult. account, but they're getting charged $200, $250 a year in fees is very difficult. And there's a saying that I have, it's that a lot of folks can't wrap their head around, but it's expensive to be

poor. And a lot of people who experience privilege don't realize that folks coming from certain communities, their marginal and relative cost of living is so extremely high compared to other communities. And so the beautiful thing about digital platforms and blockchain technology is you can break down and strip down all of these costs of access into ascending value asset classes, into creating cross-generational wealth transfer, and all of those things. And so the Black Wall Street is fundamentally a fintech and a tech platform that is hopefully going to disrupt the way folks can participate in our financial services. Let's double click on it being expensive to be poor. Yes. By saying that you mean with high fees, so payday loans, high interest rates, the folks that can't pay the high

fees and the high interest rates are the ones that have to pay. Yes. But it just doesn't stop with money. And I give you a great example, Nicole. I own a building in New Orleans that is in a neighborhood that's experienced a great deal of challenge. And I was on a hotel in New Orleans. And so my connection to New Orleans is really kind of, kind of deep. And I really want to do something, you know, want to do something for that city. And, and you had this massive food desert and I felt some kind of way about the fact that I own this building where there's a food desert. So I was like, okay, got to do something about that. So I brought in the executives from Whole Foods because the building is perfect for that type of service and that type of company. And it was so interesting,

these meetings, and it just goes to show you how out of touch many people are and the assumptions they make about communities. And they said to me, you know, this is, I'm kind of just paraphrasing, but Hill, we can't put Whole Foods here. You know, this community is not used to paying premium amounts for organic milk. And I took them to the bodega on the corner and I said, how much is your milk in Whole Foods for a quart? And you know, it's more expensive. Yeah, at the bodega.

And it's crap milk, right? Yeah, at the bodega. of services and there's monopoly activity through bodegas, et cetera, they're able to jack prices to the point where I say it's expensive to be poor, not just in financial services, but living your life, putting money into a laundromat every day and putting money on a card rather than being in a building that has its own laundry services where you can wash clothes for free every day except for what you pay to buy the machine. And so all of these things are these hidden or not-so-hidden costs for marginalized communities that if we can figure out different ways to disintermediate and provide opportunity to change and shift their experience, whether it just be through financial services, because ultimately my platform, I want to launch marketplace. I want to launch e-business and e-literacy around business formation. I mean, just think about we're coming out of a pandemic and we had trillions of dollars flying everywhere. Do they make it to these communities? No. Why?

Did PPP money make it to these businesses? small businesses that are black and Latino-owned? No. Why? Because most of those businesses are 1099 businesses. They're not incorporated. Not incorporated. They weren't available. No S-corp LLC.

Exactly. And so having a platform where through a few clicks I could shift the nature of your business and give you access to potential funding and money flow and capital that otherwise you'd never have access to because and cheaper and cheaper money, which ultimately is what everyone else is doing, but the communities that actually need it the most. What's crazy too, and I love that so much, is that so many folks think that starting an LLC or opening an S-Corp is out of reach. I mean, so much of investing is out of reach, and it's not.

No. There's just the education gap. There's a huge education gap. And that's what, with the Black Wall Street, that's what we seek to do. Because part of the biggest problem with many communities that have been ripped off historically is that they're so, there's such a lack of trust. And then that's why they're shilled to the most. And so if we look at what happened with FTX, there was an article in The Atlantic that

came out a couple of weeks ago that talked about how much money black community lost because they had a higher interest in crypto because traditional finance, they've been ripped off. They thought crypto was a better answer. Yet if you look at what happened was these communities were shilled the worst of the crypto products. been was these communities were shilled the worst of the crypto products. And without the education to say, hey, there's a difference between a token that has an unlimited supply and one that has a limited supply. Fundamental difference. And that's true for anything. If you're rare and unique and you're a great bottle of wine, it's better than two buck chalk, right? So there are three pillars that I'm talking about that I believe create cross-generational wealth shift. Pillar number one is ownership. You have to own the

businesses on your land, own your work product. Pillar number two, trust. You have to trust the people that you transact with, and then you actually transact with them. Pillar number three, and the most important, I think, is the movement of money or capital within an ecosystem. The reason why I called it the Black Wall Street is that historically there were all these so-called Black Wall Streets in our country from the late 1800s through Great Depression and even some beyond where there was hyper job and opportunity creation and wealth being created in the black communities. wealth being created in the black communities and not just the Greenwood District in Tulsa, which was one of them, the most famous because of the massacre that happened in 1921 in Tulsa. But you had Bronzeville in Chicago. You had Paradise Valley and Black Bottom in Detroit. You had Harlem, Durham, North Carolina, Wilmington, North Carolina, many communities throughout Virginia. You had Rosewood in Florida. You had all of these really dynamic communities that shared

those three pillars. And part of it, and many people will say that Jim Crow segregation and de facto segregation was one of the reasons that there was this wealth creation because folks had to legally only transact with each other. So what did that do? It grew businesses. And that's in part why you saw the Greenwood District in Tulsa burnt to the ground, literally, because white folks were actually coming into Greenwood looking for jobs because the economy was so robust. And so the question is, Nicole, can we replicate that type of robust activity, that type of ownership, and that type of trust on a digital platform? That's what we're doing. Black community has $1.6 trillion of spending power. Latino community has $1.4 trillion spending power, yet the money leaves those communities

within six to seven hours. Juxtapose that against white America, 28 days, Asian America, 21 days. Why and how? It happens because the folks in the communities where they live don't own their businesses. And so we have to create capital flow and business opportunity and business ownership in these communities. And we can do that both online and in the communities themselves if we create capital flow. If and only if you also make it accessible, which is what I think you're saying. And what I also love about what you're doing is that you're bringing in the private sector. Like you said, you call Total Foods up because you can and you're

using your platform and your reach to actually do something about these problems. Hold on to your wallets. Money Rehab will be right back. I love hosting on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests.

Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host.

And now for some more money rehab. OK, so the last time you were here, you were a big fan of crypto. Crypto Stan, as the kids say. time you were here, you were a big fan of crypto, crypto stan, as the kids say. Big fan of blockchain technology, which includes cryptocurrency within it. Yes. So let's clarify it. Because since we talked last, we had FTX, we had a whole bunch of craziness happen in the crypto space. So tell me what part of crypto and the blockchain is actually going to be helpful for closing the wealth gap. So much.

So much. But it's not like the – I call it dogecoin, but dogecoins and the random coins of the world. No. And so here's the problem is that you have this big term cryptocurrency that catches so much, right? And what it really is, what we're really talking about, and this is why it's really important to be very clear, we're talking about blockchain or ledger-based technology that can be used to create contracts. I mean, there's so much work that technology and you combine it with, because basically all blockchain really means, and I just want to strip it down, is that you can have a trustless transaction. And that's all it is, is that I don't need to trust you

to transact with you. I don't even need to know you to transact with you. And it's extremely inexpensive. So I can move a billion dollars of value in two seconds for virtually no cost. So why is that so powerful? Because what historically has happened in financial services is that folks have always said, you can't let this population participate in these ascending value asset classes because the amount of money they have to participate doesn't match the fees and the cost of doing it. For instance, everyone says, wouldn't it be better for folks to dollar cost average into a Vanguard 500 account than into Bitcoin? Yeah, that'd be awesome. What's the problem with that, Nicole?

The problem with that is you go on a Vanguard website. Ooh, this account has a $3 in their bank account, they can maybe do $6 a week, dollar cost averaging, $6 a day maybe. But they don't have $1,500 or $3,000 to just establish the account to participate and buy in. Blockchain technology rips that away. The barrier to entry. Rips the barrier. The minimums, the barriers, the costs. And you can provide the opportunity in a really easy, clear, simple way. Fractal shares of Tesla,

fractal shares of Google, fractal Bitcoin, which is a Satoshi. You can do all of that through this ledger system that's extremely low cost. Now, flip side, crypto pump and dumps. Crypto pump and dumps are exactly the same thing as payday lenders. They're cheats. They're saying, how can we actually look at the most vulnerable population, the least educated population, and take advantage of them?

That's why what Elon Musk was doing with Dogecoin was, in Mark Cuban, was so incredibly irresponsible. And so you had these people out there pumping these unlimited supply coins. Making them go high. Making them go high. And then selling. Selling and leaving the people that got in late withholding the bag. So basically saying, if I can convince you to buy in, I am going to take your money. And with protocols and projects that have finite supply or real value, there's a fundamental difference. I always try to get people to focus on the actual blockchain itself

than the crypto piece of it. So let's talk about why crypto has a bad name. It has a bad name because of all the shilling that's happened, all this yield bull. Everyone's talking about, oh, get this token and park it here with me and we're going to pay you back a 20% yield and we're going to do this and we're going to do that. And they're basically – it's a huge grift. And that's what FTX is, right? It's rehypothecation of an asset. It's just like anything else. Folks were acting, blockchain technology is the exact opposite of what you're supposed to do with banks, right? Banks take your money, then they loan it out 10 times, right? Folks in the crypto space were trying to do the same thing, but that's not what blockchain

is meant to do. It's meant to be one-to-one transaction. It's not meant to be rehypothecated in that way. Blockchain technology is a very simple, fundamental technology. So what I talk about and what I recommend folks to do is do their own research, but dollar cost average into asset classes that you understand and you understand what their value is. And I'm not, I don't go online trying to tell people what they should buy or what they shouldn't buy. My goal is to just educate from a place of, I want the Black Wall Street to be Switzerland, literally. Bring all your education and all your materials here, once you go through it all, make your own choices. But dollar cost average into something.

Dollar cost average into a Roth IRA. Dollar cost average into fractal shares of something. Dollar cost average into a 500 account. Dollar cost average into Bitcoin if that's what you want to do or whatever. Point is it doesn't matter. Just dollar cost average into something. And don't bet everything all at once on anything. If you got $2,000, you got $1,500, $6 a day is better than popping it all down all at once.

The rationale behind that is just the buy low, sell high is probably one of the only truisms on Wall Street. And you don't know where the low is and you don't know where the high is. So what you're saying is spread it around and you'll get the average of whatever that time period is. Yes, exactly. I say time in the market is more valuable than timing the market. And so the idea is that if you are just a lay person, an average person, you don't have three screens up and you're not doing these 18-second, 6-second in and out positions, you aren't a trader. That's not what you're trained to do. And you shouldn't be.

So what you do is you smooth out the volatility curve by going slow and steady. $6, $10, $100, $1,000, whatever you can do every day or every week, whatever tempo you can find, and be agnostic to price. That's why our technology is a set-it-and-forget-it technology. You don't need to be on our app doing buys every day or even be thinking about cost. You just set it up. You go into the app. You put in $6. You put in daily, weekly, monthly, and then the app does the work for you. thing about it is everybody that is on our platform has more money in their digital wallet

than maybe they've ever had in their family's lifetime. And that's moving the meter. Because if I can get you, if you only have 600 bucks in a savings account, but I can get you to do $6 a week, all of a sudden you didn't even miss miss that money and you look at your digital wallet and you're like, whoa. Even if you're seeing price drawdowns and pullbacks, whether it's in equities or whether it's in Bitcoin or whatever, the point is it doesn't matter if you're agnostic to price and you keep buying. And you take the emotion out. You totally take the emotion out. And you take fear out hopefully because you say, you know what? I'm in a – we got to be honest here.

I also talk about, and this is the education process, having a long time horizon. This is not get in, get out, make a quick buck, move on. This is about having a long hold time horizon. I talk about 10 years. That's the time horizon I want. A lot of people talk about one year, they talk about four years. I'm a 10 year person. So when your dollar cost averaging, think about what's being purchased that day, that week, you're going to hold it for 10 years. That's the type of type of mentality we want to have. And that's what we're instituting. So we end the episodes with one financial tip you can take to the bank. A friend of mine said, come down to the Santa Monica hangar. They're going to unveil this

little roadster called a Tesla. So I go down to it. I go to Santa Monica and there's this little tiny car and it's so beautiful. And I was like, it's so cute. And I'm like, I want one. And so I go talk to the guy and I was like, hey, I want one. I want to get one of these. And he says, OK, join this list. So I got I was number 82. And, you know, you should slap me in the face right now, because if I would have put the same amount of money down that I put for number 82 car in the stock, I wouldn't have to go to VCs right now.

And therefore, when a valuable asset is in its infancy, that's when you want to enter the game with it, if you can. And but do it in a even if I would have just started dollar cost averaging six dollars a day into Tesla from that day forth, it would still be the similar story. So it's not even about putting a big amount of money down. It's about just getting into the asset class and letting it do its work. And that was my conversation with Hill. I told you at the top that he is one of my favorite people, and now I'm sure you can see why. And I have some good news for all of us in the Hill Harper fan club. Hill is going to be hosting a podcast on Money News Network. It's a financial crime show

called Dirty Money that will be launching later this year. If you want to be the first to know when Dirty Money drops, follow Money News Network on Instagram. It's at Money News. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Our executive producer is Morgan Lavoie. Do you need some money rehab? And let's be honest, we all do. So email us your money questions at moneyrehab atmoneynewsnetwork.com to have your question answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you. Seriously, thank you for listening and investing in yourself,

which is the most important investment you can make.