The Pomp Podcast - #1102 Meet Kevin - Millionaire YouTuber Reveals His Business Strategies

Episode Date: October 10, 2022

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what's up everyone this is anthony pompliano most of you know me as pomp you're listening to the pomp podcast simply the best podcast out there now let's kick this thing off meet kevin is a prolific entrepreneur investor and youtuber in this conversation we talk about youtube the economy stocks real estate bitcoin and cryptocurrencies fed policy the potential for a recession his etf and real estate business and then things like taxes stock buybacks and much much more. I really enjoyed this conversation with me, Kevin, and I hope you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by LMAX Digital, the number one institutional crypto exchange.

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so run, don't walk, over to Exodus.com slash Pomp to download the Exodus Web3 wallet right now. Again, Exodus.com slash Pomp. Go check him out today. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement

to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. I'm here with me, Kevin. I've got a question to start off. I heard a rumor that while you're recording, you actually are editing the video and cutting at the same time. Is that true?

Some live streams, I'll do that. So for example, if I switch to like CNBC or it's Jerome Powell talking, I could be, it can already be cutting kind of how like parts that I want to have in the video. So absolutely. So you're literally talking to the camera in an articulate manner and also at the same time, basically running the control room. Yeah, exactly. Yeah. Yeah. my goal is to have as little friction as possible so I can, you know, switch angles or stop, pause recording, send text messages, you know, whatever I got to do. Yeah. And how did you build that skill set? Like, I think most people would be like, Hey, just recording live is hard enough, but also to be able to cut the videos. What the hell's going on? Yeah. I mean, I think I attribute

some of it to just in speech and debate in high school. Uh, sometimes we would get a topic and sort of a final round of, uh, con or congressional debate. It was like, okay, now we're going to talk about this topic go and so we have to debate with no prep and talk coherently and so i think that helped a lot uh with speaking live but then actually like editing or or even just refining the way i want to put my videos together i mean that just took years of of trial and error it went from you know one camera with the sd card to having a live switcher and no more sd card let's get rid of the battery everything that got in the way i just wanted to get rid of uh so now i just walk in, I go, Alexa, office on. And lights are on, the recording's on, press record, boom.

You wired it all to Alexa? It's all wired to Alexa because really what I want is I want to, my most enjoyable part is actually talking to the camera and filming. My least enjoyable part is editing. So my goal is if I spend more than five minutes editing, I'm unhappy. So my goal is less than that. I just want it posted. Do you worry that Jeff Bezos is listening? Oh, I know they're all listening. It's very scary. It's so weird because I'll talk about certain brands, you know, oh, we're doing a Nike fundamental analysis or whatever. Sure enough, then I'm on Amazon. Everything's Nike. You know, it's scary. They're definitely listening. So when somebody asks you, like, what do you do for a living? Do you say that you're a YouTuber, an entrepreneur, you fuck around on the Internet? How do you describe, like, the strategy that you're employing? Usually I say real estate. And the reason I do that is I always try to kind of downplay what I've got going on because I don't love the whole like, oh, what kind of channel? What do you do? So I usually say, oh, real estate, you know, sales and things like that. And I mean, those are both true. Sales are accurate. But yeah, I mean, sometimes it comes up in discussion, but I try to keep it simple. if you go back and you look at your early YouTube videos, like what is the most cringeworthy part?

And then what's the part where you're like, man, now I got that right. Or like that really serves as the foundation for which I ended up building. Yeah. I think going back to some of my original videos, I was very critical of, of other, uh, creators in the real estate space. And I wish I had been a little bit less critical because that leads to problems. And, uh, really you could do well in social media without just always being negative about something else. And so that was probably – if I could go back, that's one thing I would do differently. You could still be critical but have a nice positive message. Like for example, when I first reviewed Grant Cardone's syndications and that, I started out with, hey, this is a brilliant business model.

Here are the fees. Here's how it works. And I would do explanatory videos. Those I'm very proud of, those sort of original videos. But then when it devolves into like, oh, now Cardone's doing this, that's when it doesn't get too good. So that's when I cringe at it. And so like let's go through the different asset classes, right? So if you look at stocks, real estate, and crypto, it feels like you touch on all three of those.

And that's really kind of the full thing you're looking at. You're not really looking at lots of venture capital or private equity or commodities. It's pretty much those three is the area that you evaluate? Yeah, generally. I don't know enough about private equity to really go, at least at this point, to really go deep into those. So I try my best to stick to what can I talk about without any prep because that's where when news hits, I can break it fast. So, for example, if somebody at the Fed says something, I have so much in my memory bank of everything else that's been said or done at the Fed over the last two decades. I could easily start talking about that.

We could start talking about opportunistic disinflation in the 80s, which is something maybe we'll see again. Who knows? We could talk about the Fed. But I could talk about those things because I love researching it. So if I get asked about venture capital, I'm a little bit more in the dark. Yeah. What do you think is going on at the Fed? Do you think they actually have control of the situation or do you think that they have kind of lost control and they're along for the ride like the rest of us?

The problem with the Fed right now is they've got this big credibility challenge. So they've got to act tough because they have to talk the market down. And I'm worried about that because really the best thing that could happen in my opinion would be inflation plummets to like 5% or 4%, but then they relax, right? They go, OK, OK, we're trending down. Let's be patient now. Let's let the big drop go from 8% to 5%, 4% and just let it taper out. But the problem is they've talked so hardcore about getting us to 2% that they might just have to keep the screws tight and they'll push us into deflation, which I think is terrible. So they'll over-tighten because they have to from a credibility point of view.

Back in the 80s when they went through this, in the 90s, they let inflation go from double digits down to 4% or 5%. But they let that ride for 15 years. It took 15 years to go from 5% inflation to 2% inflation. If the Fed did that now with how much they're like, we won't stop until we get to 2%, they'd have, again, no credibility. And so now they have to keep the screws tight longer. And I think that's bad for all asset classes in the short term. certainly creates an opportunity though, especially in real estate. Yeah. When you think of that specific strategy, it feels like between March of 2020 and maybe November, December of

2021, kind of that 18 month timeframe, people were just drunk, right? They were still conducting asset purchases. They still had interest rates at zero all the way even into the beginning of 2022, even though inflation was over 7%, right? And so they kind of over-rotated there. What you're basically maybe warning about or calling out is that, look, even if inflation starts to come down, it doesn't seem like they're going to stop tightening financial conditions. And so you're worried about them over-rotating in the other direction. Yeah, and not only am I worried about them over-rotating, but I'm also worried that even though we could get to a level of 4 percent inflation, let's say, which isn't shown to be bad for the economy. I mean, there are no studies that say 4% inflation is somehow devastating, that we have to tighten the screws. But because they've backed themselves into this corner of we won't stop until we get to 2%, that's where I'm worried that, sure, now it looks like they're overtightening.

See what it feels like when we're at 4% inflation and they're not relenting. That's the part where I'm worried about. Everybody's right now hoping for the relent, right? When are they going to U-turn? When are they going to pause? What if they don't? How do you think about the Fed continuing to tighten both the Federal Reserve in the United States, but central banks around the world are all kind of following the Fed's lead and saying, look, we will create these tighter financial conditions. But we've also seen the United States is shipping billions of dollars to Ukraine.

We've seen in the UK them talk about these tax cuts. We've seen many other kind of loose fiscal policy around the world. And it feels like the central banks and the politicians are in like a proxy war almost or like an indirect war with each other. Can we create looser conditions or can we create tighter financial conditions? One, who wins? And two, like do they even realize that they're fighting this war with each other? You know, I think politics and monetary policy are so terrible they should never be competing with each other. But that's exactly what's happening.

For example, in England now, you've got their new prime minister and their essentially treasury secretary going, let's have the largest tax cuts for the wealthy and have this policy of trickle-down economics. which, you know, as an entrepreneur, I'm like, this is great. Like, hopefully that inspires that in America, because I'm a big fan of lower taxes, because I'm paying 55% in taxes in California. I need to move here to Florida, right? But so when I hear them talk about, hey, we're a country of entrepreneurs, let's cut taxes, that's great for an entrepreneur. But that's going to hurt people who are suffering the most from inflation in the short term. And it's also now stimulating their economy at a time when inflation's already at double digits, double digit levels. We don't need more of that right now. We need less of that. So you're right. You've got this weird

aspect of stimulus while tightening happening. And all that's going to do is continue to make the dollar stronger relative to the pound, for example. The same time China is stimulating because they're probably in a depression, even though their official numbers are still two to four percent growth. I don't believe it. I think they're in a depression. You do have a very weird situation though, where the, I don't think we're ever going to be in a situation again, where the dollar is so relatively strong because we're the only economy that's actually going to get through this. I think relatively unscathed. Now I shouldn't say unscathed because there are going to be a lot of people who lose their jobs and suffer, but we're going to have companies with corporate

earnings that are still phenomenally strong, but we're still going to be what feels like going through a long recession. Most of the leaders in America keep pointing to the strong labor market, even housing growth. In some of the recent comments, Jerome Powell said, hey, I think he used the word pain over and over and over again. And he was talking about, look, we're going to have to have a maybe not as strong of a labor market. We're going to see housing prices come down and even some sort of corrective period is necessary to get this inflation down. Do you feel like the market really is taking it seriously in pricing and the fact that unemployment could go from 3.6%, 3.7% to 5%? Or do you feel like people are kind of, eh, let's call this bluff and see if

we're really going to get there? Yeah, the market is expecting the Fed to U-turn. The market has always bottomed out when the Fed U-turns. It bottomed out in 89. It bottomed out in March of 2003. It bottomed out in 2009 in February. It bottomed out in December of 2018, bottomed out in March of 2020. All of those bottoms aligned with Fed policy, not Congress passing some stimulus bill, it aligned with Fed policy, U-turning on rates or promising unlimited bailouts like what we saw not only in 89 when they first created the standard of bailing out markets, but also in March of 2020. Those were the bottoms. March 23rd, never forget the day, Fed bailouts. Infinite bailout. We'll bail out corporate bonds. We'll buy everything. And so the market now is wise to

that. And so the market is trying to regularly price in this idea of, okay, well, as soon as the Fed U-turns, that's the bottom. So let's try to find the bottom before that. So there's a lot of this euphoria and optimism that, okay, well, they're going to turn around soon. Problem is, they're not. And they probably won't. So we're probably going to go through, as Jerome Powell puts it, that pain for a lot longer. I personally think that it creates phenomenal buying opportunities. At the beginning of this year, I said the best asset was cash. And I sold my portfolio. I bought back in way too early. But I sold my portfolio in January, and I got a lot of hate because people were saying, why would you go into cash during some of the worst inflation ever?

I'm like, because I'm not buying food or groceries or gas with my cash. I'm buying assets. And assets go down when the Fed fights inflation. So I want to hoard cash to buy stocks at discounted levels or real estate, which is what we're doing now, hoarding cash for real estate. So there are opportunities in that. But yeah, I think we still have a good amount of pain ahead before the markets fully realize this is not going to be a Fed that U-turns as quickly as we thought. Yeah. Why did you go back into the market? What was the thought process there? And then now given hindsight being 2020, what do you think you either got wrong or misjudged or whatever? Yeah. So the reason I got back into the market is I actually went 90%. And this is not financial

advice. Even though I passed my test to be a financial advisor, this by no means, I could not recommend this to anyone. I went 90% into Tesla. And the reason I did that was because my purchases were between $630 and about $800 pre-split. And the reason I went into Tesla was around the fear of not only the Shanghai shutdowns that we had this summer, but also this idea that potentially Tesla could survive the coming earnings recession. And so I believe we're going to see companies like we just saw Nike reported. Again, their last quarter, their net earnings were down 5%. Now they're like down 21% on net earnings. Their margins are getting squeezed. Their inventory is so high, they're having to discount all this excess inventory

massively ahead of the holiday season. It's terrible for earnings. Tesla, on the other hand, they have so much excess demand that even if we kill 20% or 30% of the excess demand we have for Tesla, they're still going to sell every car they can produce. So Tesla's in this very unique situation where we'll be going through, in my opinion, this bottoming of earnings for a lot of companies through an earnings recession, where people will then look and go, wait a minute, Tesla earnings, though, are still going up. I think we've already seen the multiple compression, price to earnings, multiple compression. Now it's just the earnings recession we got to get through. And I believe Tesla will actually come out of this recession at a higher price than it was

substantially before. So I moved into Tesla. Now, we'll see if that ends up being the right move or not, I think Q3, Q4 earnings are going to be phenomenal. And every other company, most other companies are going to be pretty miserable. I think if there was another company that is going to do well for the next or another couple of companies that are going to do well for the next couple of quarters, they'd be American Express, which I just found not only are they hiring like crazy, but they've got a huge office. I think their headquarters is here at Sunrise, which is amazing. I'm like, I want to buy homes and rent them out to American Express people here, right? And Enphase, but Enphase, the solar company for inverters,

I think they're going to get hit when housing gets hit. See, Home Depot tells us that when people spend money on their homes and prices are going up, it's an investment. When people spend money on their homes and prices are going down, it's an expense. It's a great line from a Home Depot earnings report. So I think that's where Enphase could end up getting hit, and they've done really well. I think they're positive year-to-date, which is great.

but uh it'll come so anyway i'm like 90 of tesla uh what's the other 10 miscellaneous basket so that's like uh that is some exposure to end phase i wanted to get back into the chips so i started buying back into the chips although that ended up being they ended up having a lot more pain than anyone expected so so that's not so great cyber security some crowd strikes cloud flare some of those how do you think about allocating in these types of environments to stocks versus um real estate versus uh bitcoin cryptocurrencies uh well in in these environments where uh everything is getting crushed so badly i love that we can now buy companies at great valuations in my opinion or much better valuations so i love the idea of of hooking into some of those lower valuations

on companies and then when we get into maybe coming out of these recessions some more euphoric times. Then I like going more into, I like to call more of the spec assets, right? Where, okay, well, you know, hey, how's the Cardano, right? You know, or Bitcoin or whatever. That's when I generally like to broaden out to those is more of a, hey, it's boom time. Yeah. You mentioned earlier the word recession. Obviously there seems to be a debate. I joke that one of the new wars in culture is literally in the dictionary, right? Of like, what are the definitions of these words? I think you and I probably say, hey, a recession is two consecutive quarters of negative GDP growth, which we have. So put aside for a second the conversation in terms of are we in a recession

or are we not? Do you expect it to continue to get much, much worse? And if so, is it sector by sector you're analyzing this? Or do you look at this as all one big trade where all assets, kind of correlations go towards one and we'll just see assets bleed. It doesn't matter if you're in stocks, you know, large cap, micro cap. If you're in real estate commodities, like this is all just one big trade in the Fed's in control. Yeah, there are definitely differences. I think commodities are going to continue their plummet. Oil is going to come down more, especially with China collapsing. You know, I mean, their economy is already so slowed down. It's already helped oil drive oil down a lot. Natural gas. Once we get through this winter with Europe, natural gas

prices will come down substantially. You know, Italy just got cut off from Russia. Right. So They're importing with ships. It's like, oh, great. Now we got to get natural gas from other places. So the commodities will come down. Used car prices will come down. Iron, steel, all of these commodities will come down except for lithium. Lithium probably will continue to do quite well.

Stocks and cryptos I think will be relatively aligned. And it doesn't even matter in my opinion if you're in discretionaries or staples or what. I think they are going to be relatively on a similar ride. As far as real estate, though, there'll be a big lag, in my opinion. See, the stock market last bottomed in the last large recession in 2009. We bottomed out somewhere in the earlier part of 2009, like February. Real estate didn't bottom until November of 2011. And so there's this really unique opportunity, in my opinion, where I think stocks will trough and start rising.

And stocks will rise as real estate is really starting to show year-over-year declines. And stocks, in my opinion, my crystal ball says, will be at nice, more normalized levels, not at the pit of the market anymore, as real estate bottoms. And so I think there's this opportunity to ride a company like Tesla, for example, where you could survive an earnings recession, in my opinion, could be wrong. Ride that, and then as real estate troughs, move that money from there into real estate. generally i think a lot of people if you have a net worth of under five hundred thousand dollars you should you're the first investment you should make is your own home get into real estate uh and then i'm a big fan of diversifying maybe 50 real estate and then 50 stocks and crypto so it's interesting you say that because i know there's a lot of other guys who have pretty big uh youtube

channels or kind of public commentary uh and one of the talking points they love to hammer home is like, don't buy your home, rent it. Talk a little bit in terms of the pros and cons of buying versus renting and why you feel like it's better to actually go ahead and purchase it. Yeah. So the biggest way to wealth or easiest way, in my opinion, to wealth is home ownership. If we look at the average net worth of a tenant, it's $5,000 to $7,000. Average net worth of a homeowner is around $200,000 right now. It's incredible. And there's a very simple reason for that. If you just buy a home, even if it's with five or 10% down, and the payment is even remotely similar to what the rent would be, you have to pay to live somewhere. So if you're paying $2,000 a month

rent-a-place or $2,000 a month to own a home, one of the beautiful things here is the first easy difference you have is principal pay down. You are paying that property off. In 30 years, you'll own it. So every single month, that's like a forced savings account. And if there's one thing that Americans are really bad at saving. But because you have to make that payment, you're actually forcing yourself to save. And the neat thing is the payment stays fixed, minus, you know, insurance and property taxes and that. The payment stays fixed. So your payment on a home over 30 years barely goes up, whereas rent goes up at least generally with inflation or more. And of course, home value goes up because the rents are going up. So your payment is staying the same for

an asset that's actually growing in value, and you're avoiding the danger of having rent increases every single year. Now, I know people make this argument that, oh, but a home's not investment. Yeah, it is a phenomenal investment, but you can definitely make it not an investment. See, where people go wrong is they go, oh, well, if I'm going to remodel my home, I may as well do the high-end kitchen and the high-end bathrooms and the Tesla solar roof. All those things are a ripoff. You should do the bare minimum. And we don't want to sound like a slumlord, but you want to do the bare minimum to make a house healthy, like health and safety standards, bring those standards up and move in ready, rental grade, maybe a little bit above rental grade. And it's

something that you can live in, you can rent out, you can Airbnb, you have flexibility. And this is something that you could grow your wealth with. Not only that, but as your wealth grows, you can get a credit line against that and go buy another home. Or do something that I like to do is two things I like to do. One thing is bank hacking. You buy a place for three and a half or 5% down, live there for a year, do it again and do it again and do it again. And now all of a sudden you could have four or five properties by the, you know, if you started when you were 25, by the time you're 40, you could easily have four or five, 10 properties that you just moved around it. And eventually you stop moving. A lot of people want to wait

until they have a family. Terrible idea. Moving with kids is a nightmare. I got two kids. I don't want to move. The best time to move is when you're young. If you're in college, right? You can rent out the other rooms and help you make the payment. Great. You can get a fixer upper at that. Second favorite thing I like to do. And you could buy. I just looked at a foreclosure in Pembroke Pines just this morning. It was listed for $450,000, sold for, I think, $420,000. And it's in a $650,000 neighborhood. Sure, it needs work, needs about $80,000 worth of work. But even a first-time homebuyer can call up the bank and say, I need a renovation loan on this. So you're into the deal for $500,000 in a $650,000 neighborhood. Your net worth just went up by $150,000. Where else can you

do that if you're buying and you're getting into it for 5% down, which could be, you know, 20 to 30, $40,000 of your own money. That's a huge move in your net worth. So real estate, you got to own it. Yeah. When you start to think the stock market specifically, you're very, very heavy weight there compared to real estate. Do you try to trade the home values and kind of market dynamics talking about, Hey, I'm going to be allocated to Tesla. And then I'm going to kind of go back into homeownership or kind of real estate? Like, how do you think about going in and out? And really gets to the question of like, when do you know to sell assets versus just hold them forever? Yeah. So this is something that's changed because of very unique circumstances for me,

and I'll explain those. But I generally don't recommend selling real estate unless you're going to exchange it or just keep it forever, because then you, in theory, could never pay taxes. That's the beautiful thing about homeownership is you could have a whole rental portfolio, never pay a dime of taxes because when that day comes, you pass away, you can pass it onto your family. They get a stepped up tax base. They never pay taxes on it. It's incredible. And there are ways to not pay taxes while you're alive too. So there's some wonderful ways and reasons to never sell real estate. So I love the idea of don't sell. However, the real estate macro cycle exists. It goes up and down. And so I sold 85% of my properties. We had 27 properties

in Southern California. I sold 85% in the first half of this year. And the reason I did, I have no tenants right now, which is remarkable. It's like the New York Times labels me a landlord influencer, yet I have no tenants. I'm not a landlord. It's so weird to say. But the reason I did that is because I knew we were going to start this real estate company, HouseHack. And so I thought, let me sell my real estate, move all that money into this company, because that's my dream. That's my goal. That's what I want to do. It's what I want to create. And now we're just going to sit and wait and buy real estate once we think it gets closer to bottom and that trend is working. So I believe I sold relatively close to the top in real estate and I think I'll

be able to buy relatively close to a low in real estate. I'm not that perfect at all with stocks, right? I mean, I sold in January. I was back in the market by the summer, right? Now in hindsight, I'm like, damn, I wish I just didn't get back in and just sit on cash. We'll see. Maybe Tesla, it'll work out in terms of the earnings recession play. But for most people, I think trying to move in and out is just a bad idea. I sit and study the macro cycle every single day, and it's hard for even me. I can't pull it off in stocks.

I think real estate is a little easier because it moves so slowly. So I think that's also why now – not to go into so many different topics, but we're launching three exchange-traded funds is because the neat thing with those is when we trade stocks within those and let's say if I personally am just holding the ticker, I never pay taxes on trades that happen within it. The beautiful thing about that is anytime you can trade out of a stock that's run and not pay taxes, that's a wonderful opportunity. ETFs give you that opportunity. Otherwise, if you sold a stock that ran to a euphoric level, you'd be paying capital gains on it. How much of the time that you spend looking at the market is on macro versus on what I'll call more like asset class evaluation versus just tax mitigation? Well, with tax mitigation, very little time because that's just is what it is. Once you understand the tax game, then that just becomes sort of a side note in an analysis.

What are the things you do there? Like what are the practical things that people at home are like, OK, he obviously looks at all this stuff. Like what are some of the things that you're like, yeah, this is the easy stuff to get started with and then maybe what's the most exotic thing you do on the tax side? Sure. OK. So on tax side or just – Taxes. Okay, so taxes. Okay, so I mean, the easy stuff is everybody should have like a side hustle. Because if everybody has a side hustle, and as long as there's an intent to earn income with that side hustle, or ideally, you actually earn some income, anything that you would ordinarily be spending money on could be a write off like a phone is a necessary and ordinary expense for an entrepreneur. But if you're an employee, and you're paying your own phone bill $100 a month, you're paying $100 a month in after tax money. If you happen to have a side hustle, and now you can write off that $100 a month, Well, now you're saving, in some cases, 50%. So it's like getting a 50% off coupon code on all of these crazy expenses.

Your car, your phone, that laptop that you need, you know, need, right, whatever. Like, these are, that I think, bare minimum, everybody should have some form of a side hustle for that purpose. You know, as far as getting creative, I think the, I mean, I don't think it's that creative, but I think a wonderful thing everybody should do is maximize their Roth contributions every single year. if they end up buying a car, hey, if it's over a certain weight, you can almost fully write off some of these vehicles, some huge tax deductions there. Although I do think cars are a very bad investment unless you're into exotics and you're like a professional into that. I think cars are a terrible investment. I always say buy the stock, not the car. That's the most exotic thing you do

is car write-offs and 401ks or Roth IRAs. Oh, well, I wouldn't say that's more exotic. I think that's more like baseline right i think exotic would be like what we were looking at last year which was i had a an 11 million dollar tax bill last year and i would have loved to have bought a plane uh because i could have written off i mean i could have avoided about 90 of those taxes if i bought a plane the problem with that is and it's the reason i didn't buy a plane is i thought well and i didn't know this in november but i'm like well things are great now but what if we go into a recession next year or a few years down the road which here we are in a recession uh you know now you have to pay for a plane and that's insane i mean the cost i mean it's millions of dollars a

year and pilots and hangar fees and maintenance it's terrible so uh i decided just eat bite the bullet and pay the taxes uh so you paid 11 million in taxes and elon paid 11 billion i think so like yeah exactly you're getting your way towards uh towards elon exactly we're basically brothers man. We're step bros. So like, it's interesting, right? Because, uh, if you're paying that size of a tax bill, why don't you spend more time on trying to mitigate it? Is it just, you're just more interested in how do I create more income or like, no, no, no, no. I think there are great ways to, to mitigate it. Even, even just buying real estate. I mean, I looked at apartment buildings at the end of last year, uh, starting in September. I'm like, gosh, I should just buy

a few $10 million buildings, which you just finance, you know, with $3 million down. and finance it, and then you cost segregate it, you're taking a write-off on a bulk of the building. And you're only putting a fraction of the percent down. You do the same thing with a plane. You put like 15% down on a plane, right? It's remarkable. Financing is a cool thing when it comes to tax benefits. So that's where it gets a little bit more exotic. But I decided not to because I was looking at all of the apartment buildings that I wanted to buy. I'm like, these valuations are insane. Now, I didn't actually think we were about to walk into a real estate recession, because I don't think anybody in November thought the Fed was going

to go this dirty. So obviously things change. Well, and they had talked, I think, tough before and not really followed through. Exactly. This was the time where they were like, okay, cool, we're going to talk tough. And then by maybe January, February, I think people were like, I think they're really serious. And then by March, I think was the first interest rate hike. People were like, oh, here we go. Oh, yeah. And since then, it's just been pain. the digital asset class you'll need access to granular on-chain and market data from multiple venues to power research trading risk management and compliance amber data delivers comprehensive data and insights into blockchain networks crypto markets and decentralized finance

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Yeah, it's, I think I remember back on January 5th, it was January 5th or 6th, I reviewed the Federal Reserve minutes for December and that was the first time their tone started changing in their minutes, their tone change. They didn't actually change their actions until like you say March, which is so ridiculous that as you said earlier, they were still printing money through like March and April. That's so dumb, so dumb. But their tone changed in December and it was so bad. I think the title of my video, and I know a lot of the titles of my videos are aggressive and dramatic, but that one was the worst Fed report or most disastrous Fed report I've ever read. And I spent an hour on a live

stream just reading how their tone was changing. But even after reading through that, I don't think anybody actually believed that the transitory Fed was about to go dirty on us. And here we are. You're going dirty on us. Is the main platform for the content on YouTube or do you have other platforms that you feel? Mostly YouTube. YouTube. And talk a little bit about the content you create there and like, what have you learned over the years and why stay on that platform when TikTok is rising or these other platforms seem to kind of come and go in popularity? Uh, well, YouTube pays. Uh, I mean, just honestly, there are people who get millions of views on, on TikTok. They can get 10 million views a month on TikTok and earn 200 bucks, uh, in, in ad revenue. Whereas 10

million views on YouTube could, could pay, uh, uh, you know, a hundred thousand dollars. It's, insane, the differences. So that's certainly a driver. YouTube's where I built my audience. So I like providing value where I started. So it's not always just about numbers. I mean, there's a business sense to that. If I'm going to sit down and decide, well, do I want to spend an hour making TikToks or an hour making a good YouTube video? I'd rather make a YouTube video because it makes sense. It financially is incentivizing. But beyond that, you know, I've tried so many different things but one of the things i realized is kevin just do what's been working keep providing value about the macro market or real estate or whatever on a daily basis on your channel and yeah look i

post a lot more and i don't edit my videos you know some people are like well why why don't you spend more time and like just post three times a week and then do like a high quality video where you're like doing the punch-ins and the music and the sound and all this and i've personally found that I don't think my audience cares. I think they're like, Kevin, we just want the information. We don't need all the glitz and glam or whatever that maybe a channel

that caters more to a 16 to 18 year old cares about. Where, oh, this is so cool and engaging. Oh, I'm not going to click off because there were some, you know, memes or whatever that popped up. That's fine. That works for a lot of people. My audience gets pissed off.

They're like, Kevin, this is annoying. Do you have one channel or multiple channels? I've tried multiple channels. It's never worked for me. So it's just meet Kevin. That's it. That's where I post. And I don't need any other platforms.

I, you know, I'll still occasionally post a TikTok, you know, Nancy Pelosi's trades. Can't believe she did this right before the stock plummeted. She sold, you know, it's always do well. I mean, it is crazy. Yeah, it is crazy. She's obviously one example. But the fact that we have Fed presidents that were day trading assets that the Fed was actively engaged in buying. We have politicians who are buying and selling assets.

uh and it's unclear i think part of what i think makes people really upset is that they don't know what information uh certain people had uh and so like that's kind of crazy um and then even if you go and you look like there are disclosure rules and things like that in the public markets but there's still many examples of like some kind of crazy behavior that we've seen people go through and and um i don't know what the answer is because like completely banning ownership feels like a pretty aggressive step and uh uh in some ways you don't want uh uh a ton of people with no assets to be politicians right because then they're worried about like where are they gonna make money from elsewhere um and on the other hand like they probably shouldn't be day trading

and so like how do you come up with the rule set i don't know what do you think i think uh immediate disclosure would would solve a lot of issues because now you've got you know nancy pelosi makes a trade she's got a 45 day window to disclose it a lot of changes in 45 days especially in the stock or options market. But even beyond that, there are exemptions to where you can extend that 45 days to sometimes 90 days or 120 days. And it's remarkable because if we just had immediate disclosure, for me, I'd think, go ahead, let everybody trade. Go ahead. You want to buy or sell, but it's just instantly available. Then at least people can spot trends or investigative if journalists could go, oh, okay, they just had a committee meeting. Nancy Pelosi literally just

walked out of that committee meeting and 20 minutes after the meeting, she went and bought this stock or whatever. Okay. That I think would be very useful for the public. But now it's like, okay, well, what meeting did you walk out of, you know, when you traded? Well, we have no idea because that was 45 days ago. And as you continue to watch kind of the markets play out, you have the content business, you have the real estate business that you're building, you have the ETFs, is there anything else that really that you're doing? Or it's those three things, and you're kind of using the distribution audience to drive the businesses? Yeah, I mean, those are the three core things. And the ETFs, I've really launched those. Initially, I've launched them just to be

a tax tool for me. So that way, if a stock runs, I can sell it without having to pay capital gains taxes. The last thing I want to do is pay more taxes. So the ETFs, they're expensive to launch, but I think it'll be worth it. It's probably $300,000 to $400,000 a year. And that's every year just to manage these things. And how much assets do you have to get into the fund for you to kind of, okay, cool, this would make sense for me? Well, it makes sense for me just right away.

Like, I don't really care if anybody else invests or not. People are like, oh, I'm a short-year ETF. It's like, I don't care. Do whatever you want. But if we wanted to break even from a business point of view on ETFs, probably need 20 to 30 mil under management of those. I don't foresee that happening anytime soon. I mean, maybe if they do really well, that'll happen. But that's not the goal. My primary, and so that's to me like a little sideshow. It's a little tax strategy. It's not terribly important, but I had to get licensed to do that. There's a lot of compliance that comes

with that. And it's fine with me. We can handle it. And you have a team that works on that? Well, for the ETFs, it's mostly going to be me, although we're going to have two more series 65 licensees. So it will be a very small team, but, uh, and they're like running operations or they're more on the investment side. Well, we, so for the operating the ETF, we can outsource that. That's part of the three to 400 K, but, uh, we need series 65 licensees who can do research and compliance. Those are the most important things. So it'd be a very small team, but research and compliance are the big deals. Yeah. And on this, I'm fascinated by this idea that, uh, people using the internet can now launch these businesses.

like there are not many people in the uh professional financial services business who would say oh you can create an asset management firm essentially with three people and have etfs and kind of do all this stuff how much of that is driven just by your thought process of how to build something and like you want to be more efficient and kind of uh strategy versus there's technology innovation that's happened in the last decade or so where you're like okay now this is actually possible because technology's changed oh it's both it's both yeah i mean look at it this way with, um, house hack, my, uh, house hack.com, not a solicitation, read the PPM there, all the compliance stuff you have to do now, uh, with house hack, which is a regulation D fundraise

that we're doing. We've raised now 27 million in 21 days, which is remarkable. Yeah, we, we were, and that's at the bottom of the market. We were worried, like, what if we only get like 400 K in the first month? That's terrible. It's like, shut the doors, forget it. How does it work? Like what, what is the idea behind house hack oh yeah um so we're gonna buy single family multi-family deals that are fixer-uppers we'll rent them out short-term and long-term rentals in maybe three markets diversified through the united states and we'll grow it we but this is uh people who are investing they're investing in a fund or they're investing in the equity oh they're getting shares of the company so the way it works is we're actually selling founder shares because my look

I've never done a fund before or a fundraise like this. So nobody knows Meet Kevin and fundraising. So my thought is, okay, give folks founder shares because I want those people to be so well-rewarded when and if we IPO in the future because that just establishes and cements my reputation as like, oh, well, that's what you did before and look what it turned into, right?

This is going to take a lot of work. But I'm hanging my whole reputation on it. And so if we raise $100 million, the company's valuation is going to be $100 million. dollars. So if somebody invests a million dollars, they'll have 1% ownership of the company. Now, obviously like in the future after IPO, they'll always be stock-based comp and things like that, but as with any company. So, uh, but anyway, going back to your efficiency question, I'll just give you an example. When I first started the fund, uh, raise for this company, we were told, okay,

we're going to need a team of people who can man the phones. We're going to need, you know, people who can take the subscription agreements and take people's information. Do they want to own it in an LLC, a trust, and then we'll prepare the documents. Then we'll send the documents to them after we verified that they're accredited investors. And, and I was just so overwhelmed with all of these steps that they wanted people to go through. I thought, no, no, no, no. Here's, here's the way me, Kevin's going to do it. First of all, we're not doing any phone calls. Second of all, we're not doing any sales. I'm the sales guy and we're going to do it through live streams. Third of all, I am paying anybody's wire fees. So people are like, Oh, well, like if people wire

they're in 25 grand, like there's, you're going to have a receiving fee of $15. I'm like, no, we're not. The investor is going to pay that. Otherwise they're going to get $15 less of shares. And the reason for that is if I have 2000 people wire me money, that's 30 grand. And that's an entire year of rental property income for a property that we own cash, right? Without even considering expense. I'm like, no, no, no. We can streamline things and people can pay their own $15 while keeping expenses low. Expenses is what kills businesses. Employees and employee costs kill businesses. So no, we're not having any man phones. Kevin will sell it. Have a question, email it, post it on Discord, or wait for the next Q&A live stream. Easy. I think the best

person to sell is me. So those were areas where we really thought we could scale. But also, technology that we have now is not even that impressive, but it's just like DocuSign. It's electronically signing stuff. Everybody's done that already before. But we can now do conditional forms where people click, okay, I want to invest as an LLC. Okay. Boop. Now it fills in. Okay. Now you have to fill out the name of the LLC or the date of the trust or the name of your retirement custodian. Like those forms pop up when you click a certain button. So now we don't have to do it. It's all automated. So people can literally, this is how easy we wanted to make it. People can literally go to househack.com, click apply, upload their W-2s to prove that they're accredited,

take a picture of their driver's license, sign the agreement, and go to the bank and wire money all within 30 minutes. And I could have money show up before I've ever even opened their document to countersign it. Now it sits in escrow until we countersign it and verify, but it's easy enough. If I open it up, it's signed. I look and I go W-2, social, driver's license, names, they all match up. The incomes are such that you've made over $200,000 on average the last two years. You're an individual investor. Okay, I hit sign, done.

So I could spend three minutes doing that entire process on one person and they could send $50,000 and pay their own wire fee, right? But that's just an example of how social media is allowing us to raise money without advertising. Technology is allowing us to sell the fund without salespeople on the phone. And we can streamline these processes to create a company at very low cost, and I think that's the future. Yeah, talk a little bit about actually fundraising to the public, right? Because I think there's some people who are like, this is amazing, it's going to democratize access, all this stuff. But you also talked about the accreditation laws and the fact that they still need to meet certain criteria, I'm guessing, but don't want to assume that you would like to see those changed if possible. But unfortunately, that's just the way the rules are today.

And so how do you think about this like new way of fundraising where you can use something like a YouTube channel or whatever to go directly to people? Yeah, well, that means is incredible because it just lowers the startup costs for businesses, which is actually better for businesses. I want to invest in businesses that have low expenses. Like people hear, oh, Tesla's laying off a bunch of, you know, office staff. Most people are like, oh, they must be suffering. I'm like, oh, Margin, that's really evil because people are losing their jobs, right? It's like totally terrible. But so like from a humanitarian point of view, I'm like, that sucks.

Like now they're out of a job. From a business point of view, I'm like, that's great, right? And that's just capitalism. That's the way it is. As far as the accreditation laws, it's tough because they're there for a reason. And people get really mad about that. They're like, oh, this is only for the 1%. Well, the SEC has established those rules for a reason because most people shouldn't be investing in private equity because they don't realize they could lose 100% of their money.

So that's really important, and they have to have that capability. So, I mean, I've invested in venture capital before and I've lost a lot of money investing in venture capital before, but that's okay. It's just like, that was the risk I took going into the business, knowing that like I could lose all of this.

So you write that check, it could all go away. But I don't even think about it anymore because it didn't change my life. It was just a little number in an account, whatever. That's the way it works. That's very different for somebody who's got a net worth that's $10,000 and they invest 10% of their net worth,

$1,000 into something and they lose all of that. That's huge. that's would it be better if it was percentage like so sure rather than say hey you have to make two hundred thousand dollars you know every year or whatever or have a million dollar net worth uh and then you can just invest whatever you want i always joked like i know a lot of dumb smart uh dumb rich people yeah right oh that's true yeah and so uh it still allows you to go like max bid and so if you make two hundred thousand dollars and you just take all two hundred thousand and just invest it right uh then then maybe that's not the greatest thing either but

if there was some sort of percentage basis where it was like hey look you can't uh i don't know you can't invest any more than one year's income, 50% of one year's income in a single investment, unless you meet some criteria. Or the other thing is like, just have them take the test. Like just literally create a test. If you have the information,

I don't give a shit how much money you make, right? Like you have the information, you're a big boy or girl, like go knock yourself out and see what happens. But it just feels like the whole idea of like, we've written the rich get richer, right? Into law, like, you know, when people talk about this,

but like there has to be a better way. and it's almost like pick your poison because there's a couple of different ways you could do it. Just what do they want to do where they feel like they can still have oversight over the market, which is, to your point, is important. So they let you do a lot of these things, but it's surprising.

A lot of people just choose not to even go those avenues. So for example, if you're a Series 7 licensee, you're a broker, you can invest. You can have a net worth of 20K. You can invest. You're a credited investor. So you can pass the test. And what's remarkable is two months, two or three months before I started HouseHack and we started raising money, I said, hey, if you go past the test, you can invest.

Two people did. Wow. But two people did it is actually the impressive part. That's the impressive part. It's like I'm actually impressed that two people actually did. They went out of their way to get their test so that they could invest. But it also is like, okay, well, it's only two people. So it also is like, see, there is an avenue for you to invest, but very few want to go through that effort.

If we then do, and this is where it gets scary, is like you then do a Regulation A offering, we can open up to $100 investments if we want. And I think the rule there is you can't invest more than 10% of your net worth. It's like a self-certification thing or whatever. But what I found is that most companies who do reg A's and then they offer initial investments of a very low amount, like $100, that's where all the lawsuits come from. It's a really low amount because maybe the investors just don't understand that. Oh, I know I signed a thing that said I could lose all my money, but I didn't actually think you meant that, right? uh so one of the things we're thinking of is okay well we're going to go in that regulation a route we'll open it up to non-accredited investors maybe in january but we're actually thinking

about setting the minimum threshold up say a fifteen thousand dollar investment so that way theoretically they'd have to certify that their net worth is at least 150k so even though we could take as little as a hundred dollars we don't know if we want that because that just opens up liability. Not that we expect to do anything wrong. We're going to have audited financials for a reg A. All of our financials will be transparent. Here's the money. Here are our expenses. Oh, wait, there are very few expenses because we're not even operating it. We're not even buying real estate yet because we're waiting for the market. But still, you can open yourself up to risk. And the lower you go, just the more you open yourself up to liability. So as a retail

investor who might be watching and they're like, you know, I have a $50,000 net worth. I'd love to put a thousand dollars in it's just unfortunately you statistically are more likely to file a lawsuit than someone who's got two million dollars to invest so a lot of businesses shy away from that do you spend a lot of your time thinking about risk and kind of how to mitigate it and part of it is like you live at this intersection of the content so very public and uh i joke all the time that uh there's not a lot of billionaires watching youtube some of them do but uh for the most part the people in the audience no matter how sophisticated they are or whatever just naturally aren't billionaires because there's not that many in the world. And YouTube, I think has 2 billion

monthly active. So there's a mismatch in numbers. But the second thing then is the financial industry where there's heavy regulation and kind of laws and all these things. How do you think about risk? And have you ever wanted to do something, it was legal and you thought it was a good idea, but you decided not to do it because of risk mitigation? No, I'm always a fan of do it. And the reason for that is I have this belief that as much as we might hate the rules and laws, they're probably there for a reason. So, for example, I have read the entire Security and Exchange Commission regulation on investment advisors advertising rules, read the entire thing multiple times. And there's one section, for example, that a lot of people screw up on all the time, and it's that, hey, here's a testimonial. look, they really like my ETF. Come buy it. The SEC wants you to say, was that person paid to

make that disclosure? Is that person going to benefit from your promotion of them as a testimonial? Or will you benefit from them? And are they somehow affiliated with your business? That to me sounds natural. I should say, hey, by the way, this person has an ownership interest in my ETF business. They're making a testimonial. By the way, this is their feedback. We think it's non-biased, but this is what they're saying. Here's a person who is not paid to make a testimony. This is what they said. I don't think that's a terrible thing. It's a compliance headache because now you have to go through and, okay, if you're doing testimonials, which could be as simple as a YouTube comment. A YouTube comment, somebody could leave, oh, I've made so much money

on your ETF. And if you heart it, that's a compliance nightmare because now that becomes a testimonial that you've endorsed, YouTube sorts it a little higher, big headache. You could get in trouble for doing that because you didn't disclose, hey, you know, do they have ownership interest? Do they have a conflict of interest or whatever? But when I look at the actual merit of the law, I'm like, I mean, to protect investors, that makes sense, you know? Or for example, they say, another rule is, hey, if you talk about performance of your ETF, you have to provide net performance, as in net of fees. So if

you have outperformed the S&P, but your fees are 2%, and now you've actually underperformed the S&P 500, well, the investor deserves to know that. I actually think that's a good thing. So I'm actually all for those sort of transparency. I do feel like the transparency stuff, you're hard

pressed to find people who don't like them, other than operations teams, compliance teams, the cost, right? uh but to some degree like that's the cost of doing business exactly yeah yeah that's that's the big thing is like it's now you have to hire somebody who's a compliance person and nobody likes the compliance person because the compliance person like no you said that wrong you have to delete the tweet or you have reposted or whatever uh and uh so they have a miserable job in my

opinion yeah talking about house hack and uh you mentioned earlier if you bought all the real estate uh cash yeah is that what the plan is or are you going to finance any of it eventually so the plan is, so let's say we, just to make math easy, I don't know if we'll get there, but that'd be great, but we'll see. Let's say we raised $100 million. We can now go buy real estate. We don't need to finance it day one because we have all this cash. May as well have it, it's either sitting in the bank or it's enrolling six-month treasuries or it's in real estate. May as well deploy it in real estate as cash. First of all, we can get better deals. And second of all, we're shielded from higher interest rates for longer, because we think prices will bottom when the Fed U-turns,

but it'll take a while for mortgage rates to actually fall. So if mortgage rates are 7% right now, we don't want to pay 7% on a mortgage. They'll go back to 3% in the future. So buy prices low cash, negotiate better deals when we're at more peak fear in the market, and then when rates are maybe back down to 4%, well, then we can start refinancing after we've deployed the capital. So the thesis is a lot of startups fail because they create a new product and then there's not enough demand for that product and they don't have money that comes in. They have high payrolls and then they go bankrupt because they're not selling and they have high costs. The cool thing about real estate is this is not like a secret product that we don't know how the market is going to like it. This is you buy a house, you rent it out, cash flow comes in.

If you buy cash, you cash flow. Now, you just need your first 30 or 40 homes or so to cover all the payroll for the operating company, your property managers, your acquisition team, your accountants. After that, it's just pure cash flow. And so our goal is to build this really strong foundation of if we have 100 mil, we spend 100 mil in three diversified markets. Now we cash flow. Now we look and say, OK, what if we refinance 25% of the portfolio?

Took out 70% of those. Use that money. go buy more properties. Now maybe refinance the next 25%. I mean, we could do this for the next five years. We will, if we raised a hundred million dollars, we, and then we could end up having, you know, certainly, uh, somewhere around. Can you get to a billion dollars of real estate with a hundred million dollars raised? Probably not. Uh, you know, if, if we got really good deals, had great cashflow, maybe we could get to 500, uh, with, with a hundred raise. Which is no different than if you had a hundred million sitting there and you wanted to go buy

500 million dollars real estate you put 20 percent down you get the financing right kind of backs into similar yeah and i was you could do it that way i was thinking more like uh 35 percent uh and so leaving a little bit more in that way you have more cash flow a little bit more margin of safety and uh and then getting good deals to kind of get you there yeah but yes yeah somewhere around 350 you get good deals they appreciate a little bit because you bought them right at the bottom of the market sure will it grow to 1 billion hopefully at some point in the future right How do you think about risk for this business specifically? What are the big risks that you guys have identified where you're like, hey, this is how we screw this up?

It's all – any business, it's always payroll. It's keeping payroll low is so important. So what we don't want to do is have like a massive construction team that's running around every time a light fixture breaks. You've got to have really good people who can coordinate subcontractors really well. And that's key. So I have four people that are full-time construction workers for me personally outside of this company.

And they're working on my renovations. They do all my own renovations. And the beautiful thing is we've got two renovations that are probably going to take them about six or seven months. Large projects, we're turning like a three-unit building into a six-unit building, a one-unit into three, so on and so forth.

This will keep them busy for the next six months. But what's great is they know my formula. They know exactly what I want. They know how to do the job. they know what I complain about. And so the more they work for me, the more educated they get in sort of refining how they work. They've been working, some of them have been working with me since 2017. And what's neat is when those projects are done and we start buying for HouseHack, they're not going to be swinging the hammer anymore. They're now going to take

everything that they've perfected there and just coordinate subcontractors, electricians, plumbers, concrete whatever flooring companies in our different markets and so i already have those people i don't have that risk of now i gotta find people who can coordinate and learn my model i already have them i just move them over from my personal payroll to the house hack payroll when we're ready for them which is great because it's kind of like having a reservation on a really good employee but paying no money for them while we don't need them so i'm very excited about that but yeah at some point in the future expanding you know hiring more employees in different areas and this is where, yeah, I got to be really careful that we don't expand into too many different

markets because then you're not an expert in all of those markets. I grew up in Broward County, Florida. That's an easy market for me. I live in Ventura County, California. That's an easy market for me. I start expanding into, you know, a third, fourth market. Okay. I can handle that. But if we start talking about five, six, seven, eight, that's where it gets scarier because now it's like, okay, now I gotta be really careful. So that's where the risk comes. How do you pick the third and fourth market? Like what are the things you look at to say, like, this is a good market to actually go into? Yeah, absolutely. So the first key is poverty. The poverty rate's got to be low. We certainly

don't want to be investing in areas where the poverty rate is anywhere above 13%, 14%. We want to be in those markets where the poverty rate's between 9% and 12%. We want population growth and median income growth. Population growth can be flat, but median income would have to be going up. So there's a little caveat there. That means poor people are leaving and wealthier people are coming in, or it's just leaving the wealthier people. We want to rent to middle to upper class individuals, people who have white collar jobs, 700 plus credit scores. And, you know, I get a lot of flack for that. People are like, why? Oh my gosh, I can't believe you, you wouldn't rent to somebody with less than a 700 credit

score. We don't want risk. This business will fail if we let risk controls run away. So we want people who have steady incomes. This is why, like when you say, well, why is it that the SEC requires like a $200,000 income for an accredited investor? Well, because they can turn around and even if they get fired, they can get another job for $180,000 and they can survive, right? And so the same is true of somebody frequently with a 700 plus credit score is that they, even if they have hardship, they can figure out how to get through it. If somebody has a 550 credit score, they lose their job and they have some debts. Just go bankrupt. Stop paying. Who cares? Like your credit score is not going to get any worse. You have no leverage against the tenant. So

mitigating those is very important. So we want to be in the markets that I've described, upper to middle, middle to upper, middle class. And ideally price points between 400 to 800K for a fixer-upper. If we're closer to beaches, we can Airbnb. If we're closer inland, then we'll long-term rent. And we'll want to be in areas like the Cleveland Clinic in Weston, where we have professionals and nurses and doctors that can rent. That's what we're looking for. This episode is brought to you by Alto IRA. They can help you invest in Bitcoin and crypto in a tax-advantaged way. That helps you preserve your hard-earned money. Alto's crypto IRA lets you invest in Bitcoin and over 200 other different coins and tokens, and it has all the same tax

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can use your PIN and Arculus key card along with biometrics. They don't compromise your holdings by requiring a USB port, charging, or browser connections. With Arculus, you're protected from hackers and institutions freezing your access. Learn more today and buy it now at GetArculus.com. You can use promo code POMP to save 15%. GetArculus.com, use promo code POMP, and remember, with Arculus, it's your keys, your crypto. The short-term rental business has become very popular. It's become popular with professional investors. It's become popular with TikTok stock, influencers, the whole thing. How do you evaluate when outside of just location is the right time to short-term rent versus long-term rent? And is it a economic argument of like,

hey, we can make more money, but there's more headache? Or how do you kind of evaluate it? Oh, yeah. It's all just the numbers. You've got to figure there's a lot more intensity of a short-term rental than a long-term rental. Our typical long-term rentals, we talk to the tenant once a year. Hey, 30-day notice, it's lease renewal time. Oh, yeah. Okay, cool. Send me the lease renewal done. You know, like there's nothing to do on long-term rentals. And that's frequently because we buy fixer uppers, we renovate them. We, we think we do a very good job to where the tenants don't complain about anything because everything's new. You know, like there's nothing to complain about. So, uh, long-term... And you guys are managing those

properties or they have other, you... All internal management. Okay. Yep. And it will continue and always be internal management because long-term rentals are easy in our opinion. Uh, so we don't see a reason to pay for those fees. Where it gets expensive to manage properties is short-term rentals because you're constantly, you need a concierge service that can answer the phone. Some cities require you have a 24-hour hotline that somebody can call in order to get your short-term rental license. A lot of short-term rentals suck because it's a landlord who has one or two properties. They don't have that 24-hour service. They don't have the connections to vendors to get problems solved quickly. They don't, or they cheap out on things or whatever.

I think there's a huge opportunity to really improve on the existing short-term rental space. But to answer your question, we have to look at, hey, if we can rent a property out for $3,000 a month, long-term have no headache and virtually no employee costs, you know, where one employee can manage 200 single families because there's like no work to do. And that's their full-time job. You know, one employee could probably only manage, you know, a fourth as many or even less short-term rentals because it's so much more intensive. So at what point does that make sense? Is it, okay, long-term rental, $3,000 a month, short-term rental is $3,500 a month? Probably doesn't make sense. Short-term rental is $6,000 a month of income. Okay. Yeah. Now, now we've got

margin. That's where we can play with. And so those are the kinds of markets we want to look I mean I just looked at – I just went through a neighborhood where I'm like I would never buy a long-term rental here. It's just not the kind of tenant we're looking for. I don't even want to be here. Like I don't even feel good about being here right now. And then I'm looking at the Airbnb competition. I'm looking at this three-unit building and I look at the Airbnbs and I'm like, well, if I long-term rented this, I could get $2,500 in long-term rent for the whole building. Then I look at Airbnb because it's so close to the beach.

I'm like, I could get $8,600 a month for this building. This is insane. And how do you calculate that? Like, do you just calculate some sort of occupancy rate, you know, on a per, like, what is the rate that you normally use? Is it half the month, a third of the month, the full month? So it depends on the area. Usually the areas I was looking at today, they'll go with 65 to 70% occupancy.

And you could use, you know, matrices online, like AirDNA or whatever. They give you these average occupancy rates. I like to be conservative and I go with half most of the time. Just half the month is the assumption, 15 days out of the month because you have seasonality as well. Some seasons are going to be a lot busier. Some are going to be a lot slower. So I think half is a good safety net to go with.

And what I like to do is I just like to look at all the competition. Go, okay, what's a one-bedroom renting out for? Okay, well, if that one-bedroom is renting for $150, I'll just run my numbers at $120. I'll undercut the competition 20% or whatever. And if the numbers make sense there, glaringly, well, then it could really only be better if we get more. That makes sense. Talk to me about Bitcoin and crypto.

Like you, I think, weren't into it. Then you were into it. Then you weren't into it. Are you back into it? Like where do you stand? How do you look at it? Yeah, yeah, yeah. So what's crazy is I – boy, I messed up.

I, uh, I've been making videos for like two years about how I thought that stable coins were, were dangerous. And so I never invested in stable coins. And so what I thought was the safer option was investing into, uh, the, the companies like Voyager, right? Uh, and so what's remarkable is the things I even had interviews, the CEOs of, of BlockFi and Voyager. And I would ask them about, tell me about the stable coin risks, right? Because I was so worried about stable coins. I'm like-

What were you worried about with stable coins? With the rates of return are not sustainable. You can't get 8% annualized returns on an asset that's as good as cash in theory, unless it's actually not as good as cash. It's just re-hypothecated four or five times down the road or more. And there's no transparency.

We like to think that crypto is very transparent, but there's no transparency and how often these are re-hypothecated. There's just no regulation around that. Whereas at least with the banks, because we know they're re-hypothecating as well, we can do stress tests and we know, oh, Credit Suisse is about to go under.

We could see, oh, credit default swaps are getting really expensive on Credit Suisse. We got some problems here, right? So we can see those things. With stable coins, you can't. There's no pricing or market risk adjustment for what the valuation of these is because they're in theory pegged to a dollar

for the stable coins. So, that has always been a fear for me. And so, I stayed away from those and instead invested in, you know, companies directly, whether it's BlockFi or Voyager or whatever. You know, turns out, it's actually those companies that end up getting whacked when stablecoins break. So when Terra Luna collapsed, thanks to the three Eros Capital collapse, which led Voyager Digital to bankruptcy, I got screwed, you know, and BlockFi to its knees and so on and so forth. So I got screwed on some of those investments. But that's my fault, you know. So I'm a big boy. I'm like, all right, well, that's the way it works. So as much as I was warning about that, I ended up – I still ended up on the wrong side of the trade.

Oh, well, it happens. But as far as Bitcoin, Ethereum, I'm – if I had to choose, I'm probably the biggest proponent of Bitcoin. I'm not – I'm worried that once the Ethereum lockups occur, we're going to actually really see a crash in Ethereum. And the reason for that is I think there are a lot of companies in the crypto space that have a lot of their money tied up into Ethereum's lockup, the 2.0 lockup. Now that the merge has occurred and we know they're going to start phasing out the lockups over six months and after, I worry that there's going to be a lot of liquidity demand, so a lot of selling pressure. And that's no different than a company going public, all of a sudden that stock six months and one day later gets handed to the investors. many of them it's just their mandate is to sell it some of them are like hey i've held this for five six ten twelve years i'm selling uh and so naturally when those lockup uh expire usually

there is some depression in price uh generally because of the the market dynamics that's what you think is similar here absolutely absolutely so if i was going to pick it'd probably be a focus right now on on bitcoin but again that's where i have to evaluate well do i want companies that at inexpensive valuations right now or Bitcoin. And so my choice right now is stocks because I think there's some very attractive valuations and companies that can get through the earnings recession. See, if the stock market falls

because of an earnings recession in aggregate, the S&P 500 moves down another 10%, crypto's probably going to go with it. I think they're on the same ride. So if I can hide in companies, hopefully like Tesla, that survive that earnings recession, that's just the best thesis I have right now. Although I've been wrong in the past,

I'll be wrong again in the future. just hopefully not this time but we'll see well i'm laughing to myself because uh i think you've articulated the tesla thesis but i know when people hear like hide in tesla there's some people who are like oh what the fuck is this guy talking about right sure uh but but i think that's how markets get made right is uh you have a thesis you are allocating money you're taking risk in the market somebody's on the other side uh and somebody right somebody wrong and like that's kind of the beauty of capitalism it really is uh it's put your money where your mouth is you know If that's what you believe, then do it.

There are a lot of people who say, oh, Tesla's valuation is so stupid. It's fine. If you look at the last 12-month trailing PE, it's terrible. You're paying like 180 times earnings. If you now look at something like the Ford PE ratio, it's like, oh, Ford PE ratio is actually only like 49 right now.

Their growth rate is 50 to 60% of earnings. Their earnings growth rate is 50 to 60%. that means we're potentially looking at a company that has a peg ratio of under one well gee you know snap has a peg ratio of five apple has a peg ratio i i i want to say right now of somewhere actually i mean it could be closer to three and so you have companies that when we value them based on their earnings growth rate are actually they seem like a good opportunity but then they're very expensive so it all depends on how do you value companies what do you actually think the growth rate is going to be. If somebody is listening and they think, well, I don't think

Tesla is going to be able to sell all their cars, you know, their growth rate is going to plummet. Then obviously Tesla is a horrible investment. If you think Tesla is going to be able to continue to sell their cars and all they have to do is manufacture more of them, then I think they're going to be a great investment over the next two years. But like you said, the market is an opportunity for you to make a choice and allocate that way. And you're either going to be right or me wrong yeah i think a lot about uh a thesis is actually made up of a bunch of sub-thesis right yeah and so your idea of like hey i'm going to allocate to tesla because i think they're going to survive the uh kind of earnings recession as you described it is really predicated on the

fact that uh one tesla is going to continue to make cars at some rate that is uh attractive two is that the demand for tesla cars is not going to uh ever be uh inferior to the number of cars they are producing and therefore they'll always be able to sell all of their cars at full price without discounts like there's all these little components to it and i think part of uh what's exciting and intellectually stimulating about investing is that like there's a lot of analysis there right and you've got to kind of think through this stuff the part that makes investing hard is you really only need like one thing to go wrong in that entire equation and it's like oh by the way tesla's only going to produce 50 of the cars that they thought they were going to

uh produce yeah that'd be a major problem right and and so it's a the complex machine of just one company and then you kind of compound it with looking at a bunch of companies the entire economy and it comes back to this idea of like, I don't think that there's a lot of really young people who don't have experience that understand how complex and hard this stuff is. It's remarkable. I mean, you know, one of the things

that I try to do on a daily basis is I try to read earnings calls on a daily basis. And so the nuance gets so extreme that three months ago, I looked at Carnival Cruise Lines. I'm like, oh, these seem cheap. Let's go to the earnings call because the CEOs will leave hints, but they'll try to dress up those hints, right?

So you look at Carnival Cruise Lines three months ago and they're like, yeah, you know, our demand is going back up from 2021. Well, sure it is. Every travel industry is going up from 2021. But what are you saying about, you know, demand going forward? Well, we're working on advertising in a new way. And so we're going to do this new advertising strategy and we're going to double down. We're going to spend a lot more money on advertising. And so that was sending a signal to me that like, wait a minute.

So you're saying things are getting so much better, but not only are you saying, now we're going to advertise a lot more, but you're also saying, and we're going to try this new advertising strategy. So what you're telling me is the old advertising strategy is not working. So now you want me to take a gamble

on your new advertising strategy. And you need to advertise because you don't see enough organic demand keeping you. So you have to advertise more. You're increasing costs with the hope that you're going to get increased revenue in a positive manner. But if for some reason you increase your costs

and don't get the increase in revenue, then you're screwed especially since you're doing it in a new manner like this new advertising it's like well what what if you suck at advertising advertising's hard okay so uh i'm like yeah no thanks and uh they just had their last earnings report and they fell like 25 percent and in it they're like we're still gonna double down on advertising and our new strategy hasn't worked yet but still and i'm like this is terrible all right and and they're so indebted and that's the other factor that went into Carnival. They're so in debt is I want to say if I were off the top of my head, they're paying over a million dollars a day in interest, which is insane because I think

their quarterly net, I'll butcher these numbers, but I think their quarterly net in 2019 was somewhere around like $300 million. And the way the math worked out, it was somewhere around a third to 40% of what their quarterly net used to be is now going to debt because they didn't used to have as much high interest rate debt. Now they're spending it all on debt and they're losing money hand over fist. I'm like, this is a terrible industry to be in right now. So the point of all of that is not to turn this podcast into a Carnival Cruise Lines analysis, is to say, you're right. There's so much you could look at. I mean, you could look at But going back to Tesla, this idea that, okay, well, what if consumers stop buying and we do end up seeing that drop in demand?

Well, then there's this counter thesis that, no problem, Hertz will come in and buy them. It's insane. Maybe, exactly. But then what if people are traveling less because consumer demand is going down and Hertz is like, yeah, never mind on those contracts. It's exhausting, but I love it. What about stock buybacks? Like there's one argument of, hey, these companies are all idiot capital allocators. They're wasting all their money on stock buybacks, COVID hits, and in March of 2020, they go running to the government for bailouts of the airline industry, and they spent the last decade doing stock buybacks.

On the other hand, it's like, no, actually, stock buybacks are just a tax-efficient way to return value to shareholders. Then you overlay that with the complexity of the executive teams are actually compensated via stock price milestones, and so are they actually making bad capital allocation decisions to drive the stock price up, which should help shareholders, but really it's just so they get paid more money. like it's not a simple topic uh but how do you evaluate what you're seeing now around stock buybacks and maybe how that's changed over the last couple of months yeah that's really it's first of all very politically touchy because you're right it's like oh they're just trying to prop up their stock price so i'm going to try to look at it from a a bottom-up approach here and i'm going to put myself in the shoes of let's say a ceo via house hack and so here's a thesis that I have. My thesis with HouseHack is that we're going to buy homes below market value.

That's the plan, hopefully. So let's say we buy a $400,000 fixer-upper. It needs $50,000 of work. We're in it for $450,000. It's in a $600,000 neighborhood. We got that property at a discount. Great. We're going to put that aside. Now, let's say we're a public company and we bought this property for a discount. And now all of a sudden, let's say, instead of trading for two or three times book value, like a lot of real estate companies do. Let's say there's some kind of real estate crash or market crash in the stock market. And we're like Lenar Homes, the second largest home builder. And they're actually selling for 90 cents on the dollar, right? They're selling for less than book value right now. Well, if I'm a CEO of, let's say, HouseHack

in this case, and I'm looking at my stock and I'm like, we're selling for 90 cents on the dollar. I know those properties are quality properties. I know what those assets are worth. I would be an idiot not to buy our own stock back because now I'm actually able to do the same thing that I did on that single house where I'm buying a house for less than it's worth in a neighborhood. I'm doing the same thing with a stock that I know what the value is because I'm running the company. I know the assets of it. I know more than probably anybody else. So I think stock buybacks completely make sense in that example. Now, where it gets complicated is what you said. Well, what if now you're getting compensated on stock options or whatever. Well, yeah, then you have some

political implications. And I think that's why the Biden administration is now trying to tax stock buybacks. So we're going to do a 1% tax on buybacks or whatever. Yeah, I think there's a balance. I think there's a balance there where you can have some tax where you're able to use that money to help people who are not in markets because the people who made the most money during the pandemic weren't poor people. It was businesses getting bailed out. It was real estate getting bailed out. And it was stock owners getting bailed out. They made the most money. So yeah, there's an element of fairness there. And there's, I think, a reasonable argument for some taxation. What's the one thing in financial markets right now that you think is

really, really important, but you feel like other people aren't talking about or aren't paying attention to? Is there something that you're like, I know, I would yell it from the rooftop if people would listen? Buy a home. It's buy a home. There's so much anti-buy a home. And I don't think now's the best time. I think you can wait a year or so, but that should be everybody's goal is buy a home. And unfortunately, there are so many people who argue, no, always rent, never buy. and there's this financial wisdom some say of only buy a home cash or wait until you have 25% to buy a home, never buy a home with 3% down or 5%. I think a lot of those things are really misplaced because if you get a good deal with 5% down, it could be like you're getting it for 20%

down because you got a good deal. But the problem is most people will save money. Here, I'll reveal something. I've talked about this before, so it's not going to be a secret to everybody, but it might be a surprise to some i love overdrafting my bank account and i what yeah i absolutely love it when my wife sends me a text and goes hey we just got overdrafted on our bank account because it makes us both feel poor and so we want to spend less money now as long as you you i love Does this happen often? Not so much this year, but last year it probably happened, I don't know, like eight or nine times. And I never got charged with an overdraft fee because I would just, okay, all right, I'll transfer some money in, right?

But I want to keep the accounts as low as possible because I put them all into investments. And to me, the investments are the emergency fund. I can always go to my stock broker, like I could go to my stock brokerage account, and I could have, you know, $10 million of margin, zero outstanding balance on it, and a million dollars of cash sitting there. But my personal account has like $20,000. So we pay off a credit card with $30,000 in expenses. Oops, it auto paid, it's upside down or whatever. Okay, we got to quickly transfer it. That always keeps me awake to this idea of, okay, we have to manage expenses, we have to make sure we're not paying overdraft fees, right?

I think people hear overdraft, they think you're paying the fee, but as long as you put the money in the same day, you're fine. Uh, and we do, but it makes us feel like, well, no, we got to watch our money, right? No matter how much money you have, you have to watch the dollars and your expenses. Because for most people going back to that house thing, if you're like, all right, I'm going to save up 25% for a home. They put it all in their savings or checking account or whatever. Every day they open up their bank account. They're like, ah, I got a hundred thousand dollars now now they're looser at dinner they buy that bottle of wine they they buy that new jacket for four thousand dollars whatever and they're looser because they see it there

i open up i see red and i'm like we ain't buying a four thousand dollar jacket so like even though i know i have the money to buy it psychologically it i prefer feeling tight like no no it's allocated because it's very painful to go into your stock brokerage and take money out of there to go spend it on a jacket. It's a lot easier to spend $4,000 if it's sitting in a savings account because you just swiped your debit card or whatever. Hopefully you're not using a debit card, but whatever.

It's a lot easier to do that. And so that's why I think saving up 25% and waiting to buy is such terrible advice because it just lets people feel rich. They get loose. They don't feel motivated to work. That's another thing. When I overdraft, I'm like, I work.

Oh, you know, I thought I was going to be done at five today. You know what? I'm going to make another video tonight. What are some things that you and your wife have done money-wise that you feel like really powerful or conversations that you've had, things that people should consider around money and their significant other? Wow. Well, with significant other, it's so important to be on the same page and, you know, knock on wood, I think we just lucked into it or what it is and hopefully it stays that way but we're both on the same page when it comes to money it's look we we live we could easily live in a fancy posh gated community or whatever and spend five or ten million dollars on a home but you know we live in a it's and it's still nice i mean we run but it's

like an eight hundred thousand dollar home and we live in a very normal neighborhood with people who make between 80 to 100 000 120 000 a year some of them maybe a little more some a little less And we live in a very normal neighborhood. Our kids play with very normal – we could easily move to the Pacific Palisades and play with billionaire kids as they say. But we're like, no, no, no. We're going to stay in Ventura where the incomes are a little lower. And we think that sort of frugality is really important. And I'm glad we're on the same page of that.

we would rather spend money on travel than on super flashy houses or cars or clothing or things like that yeah and what about your kids like how do you ensure that they don't end up spoiled like it's something uh hard i think a lot of my friends i hear them especially as kids get uh more aware kind of 5 to 12 like in that where it's like oh shit okay like this is different right what do you do there? I don't know that I have an answer for that because now, you know, I've got a seven year old and four and a half year old. One thing that I think I realized this summer is I took them to Europe and they had no idea the value of money. They're like, oh, this $80 Lego set. I just want it. And so what we actually implemented was this policy that you would earn, you know, $10 if you

were really good all day, like best behavior or whatever. And so if you wanted to buy that Lego at the end of the week, you'd have to earn it. So we're on vacation. So we increased the allocations a little bit like, oh, if you're just really good for dinner, you know, you'll get $5 or whatever. If you do this, you'll get a few dollars. And then as soon as they were fussy or mean or, you know, did something mean to their sibling or mean to us, we minus that. And so it really made them realize oh man like it's actually a little harder to earn this and so that's something we've tried to carry over now that we're not on vacation uh back to to the household where like okay well if you want to misbehave it's just money away you do good on a test you earn money

and so i think helping them see okay scorecard yeah and there's not this infinite credit card is good you know i got a little four and a half year old he's always like oh dad how much money do you have in your bank account and i'm like i don't like two thousand dollars and a lot of times it's true because it's like very close to little uh and uh and then he's like oh can i have it i go well here's a bill it's and then i'll show him like a mortgage statement and he's like it says two thousand eight hundred dollars i go yeah exactly and he's like but you only have two exactly got to go to work now yeah like oh dang and really it sounds like you're doing in kind of a unique way is you're just reinforcing the idea that like the money is tied to work yes right

And if they work, they can make money and kind of grounds them a little bit, I guess. I hope so. Yeah. Anything else that you guys do? You mentioned earlier that they don't hang out with billionaires' kids. Anything else? Well, yeah. I mean, gosh, what else?

No, I mean, not that I could really think of off the top of my head. I think, well, okay, one thing that we'll do is, this has been useful, is we used to give them their reward immediately. so if they did something great we would give them their reward right away which these days it's like roblox money so now what we do is if you earn it on let's say a tuesday you have to wait until friday the great thing then is we get leverage oh you were mean minus one and they freak out but then they actually behave nicer because they're like no i want to earn that back oh i'll be nice and then you could earn it back so that delayed gratification i think is really important if they

feel they can walk up and say, I want $4.99 for Robux, and you buy it for them right away. That, I think, is where that spoiling comes in, because now they get that instant dopamine connection with, okay, money's not an object, no problem, swipe the card, boom, face ID, great, bing, oh, yeah, you get to go spend it right away. Another thing is, a four-and-a-half-year-old, he'll make a mistake on Robux, or he'll spend his Robux or whatever on something he didn't mean to, or I'll get scammed or whatever. I'm like, guess you got to wait. We're not here to bail you out.

We're not your J-PAL. Yeah. And when they go to school, do you think that they talk about money? I'm fascinated by parents who, like I talk about Bitcoin and macro and like all this stuff. And so like naturally my wife or our friends,

like we'll talk about some of that same stuff. And it's like, you probably pick just things up at the dinner table or whatever and like i don't think a four and a half year i was going to talk about macro yeah right but like there is this element of the internet also like there's so much more information that is available and they see numbers like they know what kanye west made on something or or an athlete or whatever and so it just feels like somehow money has become much more obvious in our society uh than maybe it was and it's not that money wasn't a thing previously it's just that like now literally a seven-year-old can use the

internet to figure out uh what the salary of a certain type of job is right and and i don't know if that necessarily was it that easy previously i i certainly don't think so i think money has gotten a whole lot more transparent now and and people have become more comfortable talking about money my kids certainly it's i i try to get them to not say it but every time at school or whatever I hear that they're talking about their parents. My dad does YouTube. And it's like, ah. It's like, stop.

Do the people in your neighborhood know? Oh, yeah. Yeah, well, it doesn't help that last Halloween, I dressed my father-in-law up as Janet Yellen, and I built the Federal Reserve in front of my house. Really? Yeah, out of plywood. We built the Federal Reserve.

And I dressed up as Jerome Powell. Wait, what? yeah yeah last halloween you built a replica of the federal reserve outside of your house plywood uh-huh you dressed up like jerome powell and your father-in-law dressed up like janet yellen and then we give money away like real money yes so we we got about uh four thousand dollars of two dollar bills uh-huh and uh we we would go outside and we would um we would go inflation is transitory and and make it rain two dollar bills did people film this oh yeah you can go on youtube it's like i don't know i'm sure if we typed in like meet kevin halloween or something

it would come up it's there it actually didn't get that many views uh relative to other videos but but yeah yeah um people at first didn't think it was real money yeah and they're like is that is that real they thought i was just throwing money and i'm like yeah those are real two dollar bills panic it's great how many of the parents were doing it versus the kids oh yeah the parents were probably more enthusiastic ironically yeah i would i would uh think so i was at a a dinner speaking at two dollar bills and uh i'm gonna forget the guy's name i think it's two dollar uh two dollar steve maybe uh there's a lawyer who's like drake's lawyer and a bunch of these lawyers and stuff and he walks around so he does he hands out two dollar bills and uh uh i was there

um 40 people or something at this dinner some guy walks in everyone's all excited he's literally just handing out two dollar bills to everyone i was like what a calling card right it's to be the guy who walks around probably hundreds of dollars for the two dollar bills and like you meet somebody and you're just like here's two dollar bill two dollar bills are like the best freaking value like that guy's brilliant and and if like if before every trip i could just go to the bank and get all the twos they have it's so great because like you want to let's say you go to a hotel you want to leave a tip for for the people who are going to clean the room uh or the door person or the person who helps you with your bags or whatever one dollar is too little five dollars for holding

the door open or helping with one bag that's a little rich okay like i got that much money okay two dollars that's like four dollars of value man but it's two they just call like the tipping dollar yeah it's great i mean two dollars for tips absolutely the best. Oh, I've always wanted one or like, oh, I'm going to give this to somebody. Like there's so much joy

that comes with a two. Yeah. It's actually worth more than $2, but it only cost me two. There's a, there's a lot of study, maybe not a lot, but there's a number of studies

that show if you give people the option between like, do you want the $100 or do you want the physical item that actually is only worth $70? People usually will pick the item and they feel more joy and emotional response

to the physical item versus the pure cash. Cold cash. Even though it is a lesser value. And so same thing with like giving gifts and like all this type of stuff is, whether it's for sentimental reasons or whatever, it's fascinating because like you're actually getting a $70 of value, but it's something cool or whatever.

And so you place some extra value outside of just the monetary value on it. And so $2 bills is very similar, right? the novelty is almost worth a couple extra dollars it seems oh yeah i mean that's that's that's a great way to put it i mean yeah i think that almost goes to gift giving i mean i for example elon replied to one of my tweets he's only ever replied to one and uh one of my employees printed that out and put it in a picture frame you know what picture frames are like five dollars like it doesn't cost a lot of money to print something but that thought is worth like hundreds of dollars

right whereas if you just handed me a hundred dollars i would have forgotten it it certainly wouldn't have been memorable there'd be and uh it would have cost you a lot more i mean theory you gave me a lot more value but it just that that feeling big deal i agree what what did uh you tweet and what did he respond with oh yeah it was it was something to the effect of uh hey it was about the twitter deal like hey you know i mean if if they gave elon if it could be proven that that Twitter gave Elon fraudulent information, then Elon will win. And so I quoted some SEC rules and laws and Elon replied, correct. Do you think he's going to be forced to buy it? Well, because it depends what comes out. I mean, there have been some whistleblowers and that that

have come out, you know, some things are going in his way in that direction. I think what will end up happening is there'll be some kind of a negotiated deal. Generally, people don't want to take lawsuits to the end. Most, I would say 99% of lawsuits come to some form of settlement. I don't think this is going to be an exception. So I think he'll either, he'll probably end up buying it because the penalty, the walkaway penalty he would have to pay would be so high if he negotiated something with Twitter, because the Twitter board would have to go back to their shareholders and say, well, this is why we only took this as a penalty, as opposed to going all the way through and trying to get that 5420. So I think there'll be a negotiated purchase amount.

So you think he'll end up buying it just for a lower amount? I think so. Yeah. Is that part of his strategy? Oh, probably. Oh, yeah. I mean, think about it. I mean, when he initiated this,

we were in no means in this macro environment that we are in now. And even though he's talked about this potential for a recession coming, it's one thing to say, oh, yeah, there's a chance of recession coming, and then, oh, there's a recession. Yeah, we're in the recession. Yeah, yeah, yeah. What do you think the lowest amount is that he could buy it for? Oh, probably.

$20 billion? you know i'm more familiar with the share price i think the share price is probably around 40 bucks right now i think he agreed at 54 20 i you know i think the lowest he could probably get is like 35 bucks it's a pretty big discount huge huge discount yeah but if it weren't for this potential deal happening twitter stock would be like 19 well he probably uh from uh understanding his humor would not settle for 35 it would have to be 34 20 exactly yeah or uh you know 35 69 exactly like there would be some element to it which would be the uh just so you guys didn't forget uh i still have my humor i love that though i mean i think that's so important because people get so serious

about everything uh you know i'll make jokes on the channel and i'll constantly get cause you know we're in a recession people are losing their jobs how could you make fun of them and it's just all this like hate and i just always hate on the internet and it's been worse this year compared to any before because people are actually hurting like people are losing money oh well yeah well you always it's um if you're joking right i think it's a little bit uh a little bit different right you hope but but people how could you make light of that you know yeah comedians seem to be the uh the last remaining people who could say whatever they want on the internet i don't know how they But now that might be in jeopardy?

Maybe. I mean, I went to a Lisa Lampanelli show a few years ago. Actually, it was probably more like 10 years ago now. And boy, she could make fun of every race. It didn't matter, or religion. It didn't matter if you were from Afghanistan or you're black or you're Jewish. She could make fun of everybody. And they're clapping and loving it.

And I'm just like, oh my gosh, that takes skill to pull that off. That's impressive. That impresses me. I think comedians are actually really, really smart. Like the good ones. You have to be really wise and witty. Absolutely. It's incredible.

Where can we send people to find you on the internet outside of YouTube? So YouTube, just meet Kevin, but where else? So outside would be meet Kevin on Instagram, real meet Kevin on Twitter. I'm generally active on Twitter. Fake meet Kevin on Twitter? There he is. He's got like two followers.

I think I've emailed Twitter like a million times to see like, come on, he hasn't logged in since 2014. Like this is ridiculous. but you know, they, they allow squatting. So, Hey, they got to keep those user numbers up, you know, the bots are, uh, uh, I'm convinced at least double digit percentage of the users has to be, it has to be, it's even YouTube, the YouTube comments. It's so bad. Instagram's bad too. Yeah. Oh, it's, it's, yeah, it's true. It's, it's just all bad now. And people fall for this stuff. And it's very sad. You know, when I ran for governor, I, uh, in California,

we got over 700,000 votes was really good. Obviously I lost, but, uh, how much did Newsome get? Oh, Newsome, I think was a three or four mil and the next contender was like 2.2. So you were like decently close. I got some numbers, you know? Yeah. Five or six X away. Yeah. The, I, the, so I was running as a Democrat against the Democrat and I consider myself like a JFK democrat i'm like right in the middle but um the republican was getting most of the other votes because it was like well if i'm not gonna vote damn i'll vote for the republican but i actually beat him in san francisco and what's interesting is most of the people that we're getting who are investing in my my startup house hack are addresses from like i shouldn't say most but a lot of them

are from san francisco but a lot of the people are in tech so it seems like the tech audience really seems to enjoy my content but um now i forgot what you would ask will you try to run for president oh i can't i wasn't born in america sadly where were you born i mean i could always say i was born in hawaii i was born in germany in germany yeah but i was going somewhere with that but oh people would come up to me uh very few but it happened they're like kevin you know we want you to be governor and you've got it you've got to have some regulation around the spam because i lost two thousand dollars to a crypto scammer yes from the comments and i'm like no they're like there's and people have come up to me and shown me uh i'll never forget this lady

she comes up to me in bakersfield at this campaign rally we're doing scrolling through i mean probably uh months worth of conversation with this scammer building a relationship with her making her think that that person was me taking and she didn't follow me on instagram but that person was taking pictures from my instagram story dated that day and sending it to her she didn't follow me on Instagram. She followed me on YouTube. And, uh, and, and so she thought, well, it had to be Kevin and then, yeah, it's terrible. We, um, yeah, I, I've seen, uh, very, very sophisticated, uh, scams that people have pulled. Um, there was one that we saw, uh, that included like fake business cards, uh, fake contracts, like bad. And, uh, unfortunately, you know, uh, there's

not much that the individuals can do uh and then you know law enforcement will try to do the best they can but uh especially if it's somebody outside the united states or whatever they're always out of the yeah it's a pretty tough situation and it's so easy now to turn on a vpn and i mean you could be in nigeria browsing from london you know i mean one click and i'm in london now i'm in germany now where do you want to be with your ip address it's it's almost impossible to hunt these folks down and as transparent as we know cryptocurrency is via the blockchain

what's been remarkable is innovations like Tornado Cash which has recently I think either been shuttered or mostly shut down but those make it just impossible to trace and it's really incredible on one hand because it gives so many freedoms away from government and the existing monetary regimes that we have But on the other hand, it does enable stuff like this.

And it's sad. Yeah. I appreciate you coming in here. I really enjoyed this conversation. And you're a fascinating guy in terms of kind of running multiple businesses. And I wish you the best of luck. And we'll definitely do it again in the future. Thanks, man.

I appreciate it. Thanks so much for listening to today's episode. I really hope you enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to transition into a brand new job in the Bitcoin or crypto industry, we've got you covered. Head over to thecryptoacademy.io. My team and I have been working with the top HR teams in the industry to develop an intensive three-week training program with over 50 live events. We teach you exactly what you need to know to break

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