Jamila Souffrant 0:00
You're listening to the journey to launch podcast An Introduction to Crypto Currency. Yep, we're going there. journeyers it's all about crypto today.
Welcome to the journey to launch podcast with your host Jamila Souffrant, as a money expert who walks her talk, she helps brave Journeyers like you get out of debt, save, invest and build real wealth. Join her on the journey to launch to financial freedom.
Jamila Souffrant 0:37
Hey, hey, journeyers Welcome to the journey to launch podcast. All right, I've been putting off this episode for a little bit. Now, I gotta admit, I was not prepared, or I did not want to really talk about this topic. But I thought it would be irresponsible actually, of me not to begin to explore this. Because I know there are a lot of you who are maybe already doing this or who are interested in doing this. And just because of my self, me, I have a little apprehensiveness around this new wave, which is not that new anymore. But it's still fairly new compared to the other investment vehicles that we know of is that this is this is the thing now it's not going away. And it's crypto currency. So I have on a special guest, Dr. Hans, who will be breaking down for us everything or the least some of the things we should know about cryptocurrency. Now I really wanted to do this episode because again, just because cryptocurrency right now from the date of this recording is not something I'm invested in, it is actually something I'm looking to invest in it. So I do want to share that journey for myself, I'm going to invest in crypto going forward with you. I'll share more of that when I start on the podcast. But I thought to myself that you know, I've you journey to launch and this platform as a buffet almost in terms of the content and information I give you. I really think you guys are really smart. If you're listening to this podcast, you're very smart. And you are building more trust within yourselves to make financial decisions that work for you. And so cryptocurrency is something that while it's not for everyone, it may be helpful for you right now in your financial freedom journey. Now, I am still a big proponent of the basics, okay? If you're not contributing to your 401k or company retirement plan, not maxing out that Roth IRA, or not at least getting those basics down of investing that you right now have, in my opinion, don't jump first to cryptocurrency because it's shiny and new. And you think that it's going to be an amazing return as what we will be talking about with Dr. Hans, I still want you to do the basics.
But I wanted to give you the information so you can make these decisions yourself. I trust you and you should trust you to do the research. And so that's why I am introducing cryptocurrency to the podcast. I hope it will help you. And I always say do your own research, do your own research and make decisions that are best for you in your situation right now. alright with that, let me tell you a little bit more about Dr. Hans. Dr. Hans earned his path of distinction MBA from William and Mary and holds a Doctor of Pharmacy from St. JOHN Fisher College. He was born and raised in Ghana, West Africa. And he recognized that the lack of investment literacy in immigrant and minority households was a problem. So he was dedicated to become an investor he spent over 400 books 4000 financial articles and spent 11 years essentially learning all about investing and money. He now has impacted the lives of countless professionals creating generational wealth through his company the investing tutor. So Dr. Hahn is going to really break down cryptocurrency for us and I literally I asked him because I don't know anything about cryptocurrency other than what I've read. So my conversation literally is me asking him everything from what I could think of that I needed to know. So we may have more episodes on this as we go deeper as I said, if I start and when I start investing in crypto, but here is just something to get you started to help pique that interest and or give you the building blocks to learn more.
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If you want the episode Show Notes for this episode, go to journeytolaunch.com or click the description of wherever you're listening to this episode. in the show notes, you'll get the transcribed version of the conversation, the links that we mentioned and so much more. Also, whether you are in OG journeyer are brand new to the podcast, I've created a free jumpstart guide to help you on your financial freedom journey. It includes the top episodes, so listen to stages to go through to reach financial freedom, resources and so much more. You can go to journeytolaunch.com/jumpstart to get your guide right now. Okay, let's hop into the episode.
I have a special episode I think that will be very educational. And I will admit it's something that I've been avoiding on this podcast, the topic of crypto currency, I think I found the perfect person to help me understand and you understand journeyer what cryptocurrency is why we should maybe be investing in it. And that is dr Hans' of the investing tutor calm. Welcome Dr. Hans.
Dr. Hans 6:11
Thank you so much, Jamila. I'm a big fan of your work. So it's just super incredible to be here.
Jamila Souffrant 6:17
Thank you, I'm glad that you're here. I'm glad that you're tackling what for me is a just a foreign topic in terms of understanding it. And so I was like, you know, I'm gonna have someone on who I feel like can explain this in a way that will be relatable and just in bite sized chunks. But first, before we hop into cryptocurrency, one on one, I do want to touch upon your background a bit because I think it's fascinating. And I was reading through your blog on your site. It talked about you immigrating here from Ghana, and living in the Bronx where I'm in New York, so I was like, okay, so he lived in the Bronx for a bit. So can you talk a little bit about your time here in New York and what you were doing and how you became eventually the investing tutor?
Dr. Hans 6:56
Yeah, I'd like to say, life started in Ghana, for me, you know, grew up in an upper middle class household. So for those that don't know, if your parents went to college, in Ghana, you are pretty much upper middle class. So top 10% of income earners. So that was the lifestyle in Ghana growing up. But then you used to watch like American movies, and you see like this incredible place, we'd like beaches, you know, frat parties, all of that. So when our family won the Green Card Lottery, which for those that don't know, the US provides a few families in a particular developing country, the opportunity to earn a permanent residency status. So our family was one of the few families that were picked for the Green Card Lottery. And we had the opportunity to come to the US I was super excited. After all the movies, I had watched Home Alone American Pie. I was like, Yes, America is like the place to be. And I like to say how I had this grand vision of America and I was dropped off in Bronx, New York.
Jamila Souffrant 8:13
Well, isn't that like, the coming to America story? Okay.
Dr. Hans 8:20
Jamila Souffrant 8:22
How old were you?
Dr. Hans 8:24
Jamila Souffrant 8:25
Dr. Hans 8:26
yes, when you know, life started in, in Bronx, New York. So you know, went from living in, you know, middle upper middle class house in Ghana, to initially sharing a two bedroom apartment with another couple, and then eventually getting our own. And when I say with another couple meaning like mom, with with us, the kids in one room, and then at you know, another couple with with with a kid in the room. And then eventually we kind of saved up money and were able to get a one bedroom apartment. Right? And for those who are like, how can you go from upper middle class to literally the bottom 20% in the country, it's because the currency you have to divide your wealth divided by five, when you look at the exchange rates of dollars to to the Ghana city. So essentially, you're losing, you know, four fifths of your wealth when you when you move to the US. So then life started then and I realized that in the beginning, everyone just kept saying, hey, just go to school, get a good job, work very hard. And you'd be you'd make it like you'd be successful in America. So then that was the path that I was on. And I remember meeting this gentleman when I was in college, and at that time, he was trying to sign me up for a network marketing type program. But the path to him getting me to, to sign up for that he asked me to read the book Rich Dad, Poor Dad. And that book exposed me to this mindset. And we have seen the world and way of understanding how the rich and wealthy accumulate and build wealth. And it transformed my life. Because after reading that book, it inspired me to go off and begin reading as much as I could, on the topic of investing.
So the first book was Rich Dad, Poor Dad, then I was reading, Think and Grow Rich, Napoleon Hill, if you're listening to this, and you haven't read, Think and Grow Rich, please go get a copy after this interview.
Jamila Souffrant 10:44
Dr. Hans 10:44
yes, it's, it's just absolutely phenomenal. And then I went off, and I've read well over 400 books on the topic of, you know, personal finance, investing, building wealth, right, I kind of honed in on that. I've read over 40,000 financial journals, you know, reports, articles. And on average, every day Jamila, I spend a good, let's say, four to five hours keeping up to date with just our financial world. And the reason is because most immigrants, minorities were not exposed to how to build wealth. So in 2016, a friend of mine, you know, asked me, hey, Hans, I'm working for a company, and they are trying to get me to sign up for this thing called a 401. k, and they are just trying to take my money from me. And I was like, wait, what are you talking about, they're not trying to take your money, your, you can use that as a path to building wealth. And in that moment, I realized that most immigrants don't really even know the financial instruments that they can use to build wealth. So I decided to just pause for a moment and, and reflect, and I was like, hey, for the past, give and take seven years, I've been accumulating all of this knowledge. And even when I was going to pharmacy school, I was spending more time reading about wealth building than I was about pharmacy. So then, in that moment, I was like, maybe this is a calling, a calling to be that individual who steps in to educate people in our community. Right, in 2016, it wasn't common to see individuals, a lot of individuals posting about investing in stocks, right? 2016 you just go buy an index fund or a mutual fund, right. But think about it. Imagine 2016 talking about the importance of stocks. Right now. It's common to buy stocks, but crypto is what is unconventional right now. So it will be it will be interesting as we we dive in further. So that's what led me to creating my business, the investing tutor and my goal was to simplify the topic of investing, so that I can teach it to individuals and underrepresented groups, individuals who are not exposed to these concepts of wealth building so that they can accumulate and build wealth while living in the US.
Jamila Souffrant 13:23
Yeah, I love that I can relate to that so much because as an immigrant myself and coming here as a child, you know, saving it was necessary. We had to work with a little we had and but it wasn't room for then investing and growing that money. So I'm really glad that you're here now to teach us about this. What I feel is still foreign. I don't understand yet but I just couldn't like not approach or talk about this subject because I do feel like it is important to demystify and that is cryptocurrency. So I'm gonna like ask you a series of questions. We're gonna see where this conversation takes us. But let's first start off with what is cryptocurrency?
Dr. Hans 14:01
I guess the simplest way to describe it Jamila is that it said digital asset. It's not something physical that you can hold, let's call it a digital asset, right digital token and digital currency. And the beauty of it is it is protected using encryption or cryptography. So in doing that, it makes it very difficult for an individual to try and creates more of that particular currency or digital asset once it's been programmed to have a fixed amount or certain properties. Okay, so it's a digital asset that is protected by encryption, okay, and it is decentralized. What that means is that no particular individual company, government Institute motion controls it. No one entity controls that digital assets. So in essence, it is free for all like me, and everyone can get access to it. Now before I jump ahead, I want you to think about this. When companies like let's say, Facebook, right, or even coin base when they were getting started, they were mainly available to the super rich and wealthy who initially wanted to write a check, and then get in, right, and they ride most of that growth in those particular companies. And once the company goes public, then we the individuals and the public can come in. After most of the wealth has been built, I was listening to a podcast episode yesterday how this gentleman bought into Coinbase, he put a $300,000 check into Coinbase and was offered their stock at 15 cents per share. Right now, as we talk coin basis, roughly about $250 per share, wow. And Coinbase listed on the stock market at about $390 a share. So you can see how individuals who come in early are able to benefit significantly. cryptocurrency because it's a digital assets, assets that is available to any and everyone. It's not excluded to only the rich and wealthy, literally individuals could buy bitcoin, when it was first created. And you know, 2009 2010,
Jamila Souffrant 16:44
okay, if it's not controlled by an entity or a government who created this asset.
Dr. Hans 16:49
So there was this blog post, it came in by an anonymous individual who goes by the name, Satoshi Nakamoto. Now Satoshi. It was like this group, and he just came up and said, Hey, can you imagine that we're all having some form of electronic cash that allows two individuals anywhere in the world to transact with each other without a third party meaning without a bank, without anyone in the middle to approve that transaction. And Satoshi said, he or she is in the process of creating that. And a couple of months later, you know, Bitcoin went live.
Jamila Souffrant 17:36
And so that was created by Satoshi
Dr. Hans 17:39
Satoshi Nakamoto. And now, some individuals, you know, speculate to Satoshi can be an individual Satoshi can be, you know, a group of individuals, no one knows. But this anonymous person created Bitcoin. And it was created immediately after the stock market crash or if I should say, the housing market crash of 2000 2008. It inspired this group of individuals or this particular individual to create it, because he felt that it was unfair that the government can just come in print a ton of money, and then bailout rich and wealthy individuals and corporations. So he wanted to create an asset that was not controlled by the government. And that's what's fascinating about it.
Jamila Souffrant 18:32
Yeah, okay, and I'm gonna go back just to the base, because for me, this allows me to establish like viability and like trust of this asset. So this person now Is he still around this heat, but he doesn't control the asset anymore, or not anymore, but what is his role in it now?
Dr. Hans 18:46
He has no role. So he came in 2009 put it out, and 2010 he disappeared. So if you can imagine this asset has stayed around for 11 years without any governing body, any government entity, no individual, no Corporation nothing. That is what makes Bitcoin and not only Bitcoin but the whole concept of cryptocurrency a fascinating development there's there's been nothing like it before. So to go from that, to this year, hearing, Tesla has bought you know, $1.8 billion worth of Bitcoin or square has purchased 100 million dollars of Bitcoin or MicroStrategy has put all of the cash into bitcoin, to hold Bitcoin instead of dollars. He like it makes you pause for a second and you're like wow, or that Visa and MasterCard are building electronic rails, if you will, to allow individuals to be able to transact with their debit or credit card. On a crypto currency blockchain like Bitcoin or aetherium, it's just revolutionary.
Jamila Souffrant 20:09
And yeah, I mean, it's, it's, it's fascinating. So for someone, I mean, obviously, I've heard of it, I've done light, very light research on it, but I've stayed away from really diving deep because it felt like especially in the beginning, when I first started to hear about it was like, so who is where it's, like regulations? Like, how do we not know, like, this person doesn't come back and just blow the whole thing up? Like, if no one's in control of it, who's making sure that this stays around and stays legit? You know?
Dr. Hans 20:37
Yeah, I don't know, if you remember back in the day, we had something called limewire or those Yeah, those types of music 100% I want you to think of limewire the thing that made limewire great was when other people download that limewire. So you download limewire you download that music or that video, and all of a sudden your computer becomes a server for someone else who wants that, that same music or video, right? Granted, you know, we can, we could say that, hey, the music industry and the filming industry didn't want people to have access to that right. Fast forward to now we have like Netflix, and we have Spotify, which is like a similar concept, but it's centralized. So that's, in a sense, the way that our computers After you download limewire had was acting as a server. That's the same way that Bitcoin is any individual who wants to include mine Bitcoin, which means they want to protect their Bitcoin network. And they want to be a part of this opportunity to be able to get access to new coins, right? So there's an incentive process built into bitcoin, if you look at how it's created, what it incentivizes, it's almost revolutionary, because the way by which you get new coins, is you have to use your computer to protect the Bitcoin network. So if you can imagine it, so if more people want bitcoins, they have to, you know, go get more computer systems, which further protects the Bitcoin network,
Jamila Souffrant 22:28
so that you're incentivized as an owner, if you are an owner like to keep this going, and to protect it the asset itself.
Dr. Hans 22:36
So individuals can just own the asset and not necessarily want to mine for it. Because if you want to mine for it, meaning you want to get additional bitcoins without necessarily paying for it, then you have to go get computer servers, and you have to use a lot of electricity. I'm sure you've heard about the news, oh, Bitcoin uses a lot of electricity, you have to use a lot of electricity to mine for this asset. So me, for example, I don't necessarily mine for it, but I'm okay with exchanging, you know, fiat currency, which is dollars to convert it into this fixed asset, which is, you know, Bitcoin or cryptocurrency and then hold it. And the reason I am comfortable doing that is there's a finite amount of bitcoins that will ever be created. So currently, we have about 18 point 4 million that are in circulation.
Jamila Souffrant 23:41
So if we're imagining this as a coin, there's like 18 million of them, okay,
Dr. Hans 23:45
18 million in circulation and roughly only about an it's about 2.5 million, but let's just say 3 million, only 3 million additional coins will be added to their circulation over the next let's say, Give and take 100 years
Jamila Souffrant 24:04
Wait, and that is by mining. Exactly. Only by mining.
That's how you got a coin.
Dr. Hans 24:10
That's how you get the coin. And it's been programmed to distribute a certain number of coins every 10 minutes. And no matter how hard you mind, it's not going to produce more. So it's a fixed quantity that is released,
Jamila Souffrant 24:27
who's controlling the release of these coins,
Dr. Hans 24:28
Satoshi Nakamoto and 2009 created the program which fixes this so Bitcoin is called programmable money. So there are laws of Bitcoin has been placed has been put in place at the onset. And the law was every four years the quantity of Bitcoin that was placed into circulation reduces by half. Okay, so in the first year when individuals were mining every 10 minutes 50 You know, miners get like 50 coins every 10 minutes. So you can imagine in the beginning, there's this huge incentive to mine and you're not using a lot of energy, right? It's super new. But over time the quantity of coins reduced so we went from individual excuse me, miners getting 50 coins every 10 minutes to every four years, it's reducing by half now currently, it's about 6.25 coins every 10 minutes and four years from now it's going to be only three coins every, you know, 10 minutes and it keeps reducing. So we're going to get to a point to in about 100 years, all the bitcoins will be mined and there will never ever be an additional coin ever in circulation. So I want you to think about that. We have a digital asset which unlike gold, like gold, someone can just go buy mining equipment and just go start mining anywhere and they find gold. Bitcoin has been programmed so you cannot go just randomly mined anywhere you want. So it's a fixed verifiable assets. That is what makes it absolutely mind blowing. If you think about it, only 21 million of them of those coins will ever be available.
Jamila Souffrant 26:28
Okay, and so Bitcoin is a type of cryptocurrency right? Yes. So let's go back to that because I think so in the early stages, you could have gotten Bitcoin For how much?
Dr. Hans 26:39
Yeah, so probably like three cents,
Jamila Souffrant 26:42
three cents for one bitcoin now. What is this? What is it now? trading? Is it called trading
Dr. Hans 26:48
or how much is it worth? Yeah, about $40,000
Jamila Souffrant 26:52
so if you want to buy one bitcoin now you have to have $40,000
Dr. Hans 26:56
Yes. Okay, let me say this. And this is just a rough estimate. By 2025 2027. I'm estimating one bitcoin will probably be anywhere between 500,000 to $750,000.
Jamila Souffrant 27:13
Okay, question so sure, you can buy let's say you got an early and you bought Bitcoin for $1? Yeah, you can sell your Bitcoin and actually get cash like so that you could sell it right now and get you set $40,000 so I can make a profit of $39,000 on one bitcoin now, on one bitcoin, if I bought it at $1
Dr. Hans 27:33
Jamila Souffrant 27:35
Okay, now, so this is where the other currencies come into play, right, like so there's, there's other things other than Bitcoin, like Bitcoin I hear the most. But there are other ones. He talked about the other types of cryptocurrency and then the opportunities and why it's available for more people, because they're not as expensive, right?
Dr. Hans 27:52
Yeah. So I want individuals to think about it as let's say, tech companies, right? There isn't only Google, or there isn't only Microsoft, right? There's Facebook, there's Netflix. I mean, I can go on and on naming all of them like PayPal, right? So think about the crypto industry or like crypto tokens, as Bitcoin is serving one purpose. And I want individuals to imagine Bitcoin as being digital gold or a digital asset, right? That was the purpose of a Bitcoin Satoshi Nakamoto, wanted to create electronic cash or some kind of electronic digital payment system that allows individuals to transact with each other. Now, other tokens are meant to do other things. So Ethereum, which is the second most popular digital currency or digital token, is, the best way to describe it is I want individuals to think about it as essentially, the iOS or Android platform, right? Or even simpler, think about it as the app store where you can find other applications. Right? So for example, if you wanted to download Netflix or Spotify, you have to go to the Apple Store. If people have an Android, you know, that Google Store in the same way aetherium is the platform upon which companies can create other cryptocurrencies. Now the catch is to create a cryptocurrency on Ethereum you have to use Ethereum to pay for everything that you're doing. So in a sense, aetherium as the ENCODE token is used to power that Ethereum network, but now you know, so many Other cryptos are popping up. So for the average person who's trying to figure out okay, what should I do with regards to cryptocurrency? Or how do I know cryptocurrencies are legit? In my opinion? I would want to own the most popular cryptocurrencies, right. So in my opinion, let's say that top two, so Bitcoin and Ethereum, they are the most valuable when it comes to cryptocurrency assets. Bitcoin at a certain point, over the past two months was worth like $1 trillion. Ethereum was worth about $500 billion. So it's huge. I mean, By comparison, Amazon is worth over 1 trillion, right? And we have this asset, which is close to 1 trillion, which is 1 trillion. So we cannot ignore Bitcoin at this point. It's just way too important of a technology to ignore. Now for the, for the other tokens, I often see read about it, just even if it's just the abstract, what are they trying to accomplish? Some of them are created because they believe, oh, Ethereum isn't as fast. So maybe they've created another token that is 10 times as fast.
Jamila Souffrant 31:16
When you say fast? What does that mean?
Dr. Hans 31:17
Fast meaning transactions, like for example, I want to pay for something maybe Ethereum takes one second, but this other cryptocurrency takes a nanosecond. So then if individuals appreciate speed, they might want to use that particular crypto assets instead of Ethereum. So it allows for variety, does that make sense?
Jamila Souffrant 31:41
It does. And so when you say buy something, are you buying something like, what are you buying with this cryptocurrency?
Dr. Hans 31:47
So I want you to just understand that cryptocurrencies can be exchanged for any currency on the planet. So US dollars, it's individuals I live in, in, you know, in Europe, or UK to be specific, it could be the pounds, the euros, it is exchangeable or redeemable for cash. So if an individual is just transacting with it, from going from that crypto token, to fiat currency, then it's interchangeable, but they can also use it, you know, within that crypto ecosystem, and they can just use it as it is like, for example, let's say a person wants to create a crypto app that allows them to borrow money. So like you can do and this will take us into a whole different dimension, which is way more than people need to know. But they are creating like banking platforms and infrastructures on Ethereum. There's even a crypto token that is looking to allow anyone anywhere to build credit from scratch. And the way they build credit is, maybe you go borrow money, and you pay it back. So then the blockchain is able to document that transaction. So all of a sudden, over time you become credit worthy, because they know you're a person of your word. All of that, and more can be built on, you know, crypto assets.
Jamila Souffrant 33:25
So when it comes to Ethereum, um, how much is that if you want to buy a coin?
Dr. Hans 33:28
So right now aetherium, climbed up to about 4500. So $4,500 per token, and I believe we had a pullback, which crypto assets are volatile. So we had a pullback, and I believe it's trading currently around 2400 or $2,500.
Jamila Souffrant 33:49
So it's a discount now Wait, if you think of it that way.
Dr. Hans 33:52
It's a huge discounts, huge discount.
Jamila Souffrant 33:55
Okay, this interview may come out not too close to when we're recording this, but I do. I saw people talking about like, crypto, like my currency is down. So there is volatility, and I do want to get into that part of it. But before we do, I just want to talk about another one that I was seeing around called Dogecoin. And that was very cheap, right? Like, when I first saw people were like, I forgot how little it was. Everyone was like, I'm just gonna get into dodge coin. So can you explain what that was? And how that differs from the other cryptos? Yeah, so
Dr. Hans 34:24
the creators of this particular coin Some people say doggy coin Some people say Doge Some people say it you know, it's like kind of like your flavor and and you can use any word that you want. So it was created by these two individuals and they wanted to make fun of cryptocurrency, so they wanted to make fun of Bitcoin. So they said that, hey, imagine if we just take this Shiba Inu dog put put the face of the dog on a coin and we just call it you know, doggy coin or Doge right? Where people buy it. And the price of the coin was like point 00005 or point 00001, right per coin. And they literally created it as a joke to say like, hey, look, we can just make anything that we want, which is the beauty of crypto currency and crypto assets, literally anyone can create anything they want. But at the end of the day, are you going to have individuals who want to hold it and own it and use it? That's what determines its value? Right? So it was created as a joke. And Elon Musk took a liking to the coin, because he likes you know, memes and he likes that she buy a new dog. So he started to tweet about it and talk about it. And all of a sudden, individuals were started to look at that particular crypto assets, and people started to buy it. And the fascinating thing is, if you were to ask someone who is deep into kind of like the finance space, would you buy this coin? The answer would be no. And I used to say that I said that about Doge. Up until like, April, or may.
And it hit me that Whoa, hans, you missed a couple of very important factors, right? One, crypto assets. value is based on people wanting to use it. So it's based on demand. So if more people want to hold their assets, it doesn't matter whether it's a joke, it doesn't matter whether it makes people laugh, right? We watch Tik Tok, Tik Tok doesn't provide us any fundamental value in life. But it's a multi billion dollar company because people watch it. Once you begin to understand that, it's like wow, okay, so people want to have this Dogecoin. And we saw Doge literally climbed from like the point 005 cents per coin to right now, I believe Doge is anywhere like 50 cents, or 40 cents per coin. Literally, there was a math that was what that was done. If at the start of the pandemic, individuals placed all of the stimulus checks, which you can say, adds up to roughly maybe $3,000, or 30 $500, that individual be a multimillionaire today, if they had put all of this stimulus into doge. It's just mind blowing.
Jamila Souffrant 37:41
It is mind blowing. Okay, so now all right, I have a few more questions. Because I know we're not gonna be able to cover every single thing. But I do think this is a great start for people to get an understanding and then do more research. So now someone's listening now before i redirect them, or I because I'm gonna get some direction here, too. I'm like, Alright, maybe I should like, try some of this stuff. But before we get to that, I want to talk about the volatility and the risk like for you should people because even my little sister love her to death on one of them. They were like, I think I'm gonna go with doge coin. And I'm like, all right, I don't I don't problem with that. But I do want you to get the basics down. Like, are you maxing out your other like your Roth at least. And I want to be short, short sighted and might not tell people to go after these things. But I also want people like to skip steps. And because I feel people are like seeing this and saying, oh, here's something I can go after. But they're not even having the other basic investing principles down. So what is your opinion of who should and should not participate in this? And then you have some strong opinions on that. So I want to hear from you.
Dr. Hans 38:40
Sure, sure. And, you know, just like you said, it is an opinion, and it's for informational purposes, but I feel everyone, especially immigrants, and minorities and underrepresented groups, every one needs to participate in this asset, right. And the reason I say that is a study was done. And it's not like my study, literally, like I believe Goldman Sachs, these financial institutions, they did a study of a 6040 portfolio, which in the financial world, it means an individual puts 60% of the investments into equities, which you know, are stocks, and then 40% into bonds. They looked at the 6040 portfolio, which is the standard portfolio for most individuals. And they said, well, let's take 1% of that. So let's do 60 equity, so 60 stocks, 39% bonds, and then 1% crypto, let's say Bitcoin to be exact, that portfolio dynamic outperformed the 6040 by like about 10 times. And that was just a 1% allocation to Bitcoin. See that fascinating, but thing about Bitcoin is an individual can just start with 1% allocation, if they don't want to take too much risk, and Bitcoin doesn't care, eventually Bitcoin will be 10% of your portfolio because it's growing super fast. So a 1% allocation today could be worth 10% of your entire nest egg, five to seven years from now, because remember, the having events happen. So meaning that quantity of bitcoins that continue to go in circulation, it's going to continue to reduce every four years. So because of that, it's, you know, limiting the supply of these coins in circulation. But then five, seven years from now more people are going to want it because it's going to be worth more. So it's driving this human instinct, which is just natural. Imagine, imagine these are sitting here thinking to ourselves, wow, Bitcoin was worth less than, less than $1. Right? If even less than 10 cents in 2010 right now, it's like, what 40,000 It's estimated to grow anywhere up to 500k 1 million, I've even heard estimates of 5 million per coin. And I'm like, wow, like, how is that even possible? So at 1% allocation right now might might seem like money that someone is even comfortable losing. But the fact is, if Bitcoin and other top cryptocurrencies do what they were created to do, that 1% allocation, which is in my opinion, risk free, would literally be worth like, 10% 20% 30% of a person's portfolio if they just keep that 1% allocation.
Jamila Souffrant 41:53
Right? But then for people who are like wanting to use maybe cash flow, like cash or invest like there, they might, most people don't have a $40,000 to put down on Bitcoin, right? So what does the average person do if they are interested in this and they feel like they have done the research and they can take, they can lose what they're putting up? Right? Like and that's the biggest thing for me because I'm all about like, calculated risk taking, you know, you don't don't put up like your rent your mortgage or something that you know, you're going to need to live but for people who do have room to invest, and have their basics covered, like then what's the next thing that they would do? They can't do Bitcoin?
Dr. Hans 42:31
The truth is they can do Bitcoin. So most individuals here the price of bitcoin and the thing that you need to own a full coin, right? You absolutely do not. It's almost like a stock right to Amazon stock. It's like $3,000 Well, you don't need $3,000 to be able to buy Amazon stock when you own Robin Hood, you can buy fractional shares. So they are fractional pieces of Bitcoin. It's called like a fractional piece of one piece of a Bitcoin is called as Satoshi. Do you remember how the founder is Satoshi Nakamoto? So one tiny piece of Bitcoin is as Satoshi so Bitcoin so one bitcoin is broken into 100 million satoshis. So 100 million small units. So individuals in the Bitcoin community keep saying, like, just keep stacking SATs, so SATs for Satoshi. So just keep stacking SATs. So individuals should realize that, no, you don't need to just focus only on one bitcoin. I mean, there are only 21 million coins. In this world right now. There are 49 million millionaires. But there there's only 21 million coins. So even if every millionaire today wanted one bitcoin, they won't get it. There isn't enough, you know, for each millionaire.
Jamila Souffrant 44:03
Okay, so how then does one participate in getting fractional shares?
Dr. Hans 44:08
Yeah. So there are tons of apps out there, but I will share the ones that I've used personally. So there's cash app, right? So squares cash app, allows individuals to buy as little as $1 for you know, for Bitcoin, and that $1 is going to give them I'm just estimating here, maybe like 1000 satoshis, or like 10,000 satoshis or something, but like $1 gives an individual access to two bitcoins, so as little as $1. So there's cashapp there's Coinbase. There is Gemini, which is a brokerage app for crypto that was created created by the Winklevoss twins. So you know how the there was the whole Mark Zuckerberg versus those twins in Harvard? Who, whose idea was Facebook? So believe this or not, this is just a side story. The Winklevoss twins took the settlement from Facebook. And they put almost half of it into bitcoin in 2013. So currently they have almost about the money at that time, I believe was about 100 million. It's grown to about over $10 billion worth of Bitcoin. That was such a bold move. Yeah. So in terms of fractional shares, cash app, coin, base, Coinbase. Gemini, there's also Robin Hood. Some individuals might say, You know why Robin Hood, because Robin Hood doesn't allow individuals to be able to take their crypto assets off of their platform.
Jamila Souffrant 45:52
The other ones do, you can try it, you can take your as
Dr. Hans 45:55
the other ones do. Yes, cash app does. Coinbase does Gemini does, but Robin Hood said the end a process of creating what's called a digital wallet, so that individuals can take their kryptos off of the exchange if they want. So remember how I said Bitcoin, or crypto, it's like a freedom asset or a freedom type digital asset, by for example, if an individual were to purchase land rights in New York, or Virginia, you cannot just pick up the land and take it with you wherever you want. But guess what, like this is a digital assets that you can literally take with you any and everywhere. So if I had, let's say $50,000 worth of Bitcoin, and I, you know, just got on a plane, I don't even need a bank account, I can just sit in a plane go to any country on Earth, and I touched down, and I have access to that 50,000
Jamila Souffrant 47:00
as long as you have access to the platform, or Yes, or the internet, right to get cuz that's where it lives,
Dr. Hans 47:05
it lives on the internet to crypto assets are built on the internet, right? So once you are anywhere where you have access to internet, or a smartphone device that is connected to that, you know, to the internet, which I can guarantee, you know, by the next right now we can say a little over half of the entire population has access to the internet. But now that we have Amazon deploying, like satellites, we have SpaceX deploying satellites, pretty much the entire world will have internet connectivity over the next like five years.
Jamila Souffrant 47:44
And with that, once you're invested, right, let's say you're invested in this asset, whichever, you know, the coin you choose, is it a hold strategy? So it's not like you're you're buying this trading it to earn money, you know, in the now it's really a whole strategy that you're not supposed to sell it? Like what is your opinion on that
Dr. Hans 48:03
100% buy and hold like any great investment, right? That's what we learn is that fundamental but Jamila, let me even add more to it. And this I know is going to blow your mind because you know personal finance experts are passionate about high yield savings accounts, right? Likely let your money earn you that one or 2% What if I could tell you that if you're holding your Bitcoin, you could be paid six to 8% a year guaranteed just to hold on to your Bitcoin and allow the exchange so for example Coinbase you are essentially it's like holding your money in a CD a certificate of deposit. So you kind of do the same thing with your Bitcoin you allow them to hold it right and then lend it out or you know, allow that company or the institution to use it in doing that they pay anywhere between six to 8% guaranteed without taking any risk
Jamila Souffrant 49:04
and they paid back in your coin denomination or cat like cash
Dr. Hans 49:07
in coins. So they paid in Bitcoin or ether or aetherium if you stick to it depending on what you you put up you get that a percentage of that thing back.
Jamila Souffrant 49:19
So in theory, you could take your gain out to use if you want to in theory you should be invested just like you would like with dividends
Dr. Hans 49:27
100% I would reinvest it like you would with dividends.
Jamila Souffrant 49:32
And you know, it's important to note that too, because this is not a necessary This is definitely not a get rich quick like in the now scheme. I think for people to understand like this is a buy and hold strategy. So it's not like you buy it and you exit and now you know you take the money and you spend it I mean I'm sure some people are doing that, especially with the decline and the drop that you know the volatility I saw some posts that someone they were got, they got scared they sold they made money but I feel bad. I just I just really want To be clear, that this is not in the now kind of money. This is money you're literally putting up to stay.
Dr. Hans 50:06
Yeah, it's to stay. I want people to imagine if you're buying Bitcoin, it's like buying a piece of property in Manhattan. Right? Will you buy today and go sell it to like, you remember how I'm saying it's a finite assets, there's only 21 million of of those coins. So even if you have a portion, so you remember how we're talking about a fraction of a Bitcoin, it could be that it could be that you have like a parking lot, right? Or maybe you own three or four parking spaces of that lot. And it is yours forever. And once you begin to view it as an asset, why on earth would you sell it? So because it's a digital asset, guess what, Jamila? Right now, it's not every financial institution, but there are several financial institutions that will lend you money against your Bitcoin or your crypto asset, because it's an asset, the same way a bank is willing to give you a loan to buy, you know, a physical building, because they know you can take it away. So if you, you know, you allow them to hold your Bitcoin, right, they will lend you money against it. It is so in essence, in my opinion, never sell Bitcoin is rule number one that my best friend and I came up with. And rule number two is never wait to buy more Bitcoin, if you can, if you have the funds to buy it.
Jamila Souffrant 51:38
And again, for me, it's I'm just putting myself in the position of even someone listening who has the capacity to buy and you know, in their head or in my head, because I'm thinking like, then what is if I can't realize the gain, apart from maybe getting a loan, backed by it, like there's no gain for me if I can, if I'm never selling it, like even in my portfolio now, right? Like my long term portfolio that's buy and hold, eventually, we're going to draw down on that to live in retirement, or I know what's going to go to my kids. But this is like, okay, you're buying Bitcoin, you're holding it. So then even if it goes to a million dollars, in theory, I'm a millionaire. But I can't use that money now, like,
Dr. Hans 52:18
you can, okay, you can borrow against it. So I wouldn't say borrow, I wouldn't say borrow against the entire asset. So let's say your Bitcoin is worth a million dollars, you can literally pull 100k spend it. And unlike other assets, Bitcoin has been growing at about 150 to 250, exceeding 150 to 200% every year, on average for the past, let's say 11 years. So unlike other assets, where let's say you go spend 100k, you have to wait for that average return of 10%, right per year, which is a stock market return, now you have an asset that's going to be growing at roughly 100%. And I'm not saying it's gonna continue growing at 100%. But even if it, let's say it reduces to 50%, that's five times the growth of the stock market. So in essence, if you have a million dollars worth of this crypto asset, you can pull 100k from it, it doesn't impact the true value of the coin. And let's say the following years worth 2 million, okay. Now your Bitcoin is worth 2 million, and you already used 100k. It's just fascinating. And at any points that you want, realistically, you can just sell it and get that 2 million cash. You can, you really can
Jamila Souffrant 53:38
Alright, I think this is a lot. I feel like this is a great starting point. And you know, truly, I did want to bring this as an educational piece to journeyers. So that, you know, again, this is like a buffet of choices in life. And I want to educate as much as I can and bring people who are more educated on topic. And I feel like we may need to follow up, we'll see the responses and questions that come up because I feel like I have actually have more questions, but just to be considered up time. So I'm going to get the links for you from some of the studies and I'm going to share some of those links to that in the show notes for this episode so people can get that. But um, can you share more about where they can find more about you, and then any resources that you can think of right now that someone can now start to understand and learn more about the crypto currency?
Dr. Hans 54:23
Yeah, Jamial. I want to end by saying this it just seems so confusing, complicated, but at the end of the day, it's super simple. Bitcoin or aetherium, or any of these crypto assets are just digital assets, right? I'm no different from you know, a property which is land or gold, right. The only difference is now, you actually have proof that that particular asset exists and it belongs to Xyz, right? And the same way that a person can buy a property and then rent it out and be making rent. You can, you know, rent out your Bitcoin or your Etherium and you get paid every single year. My best friend has two duplexes that he rents out. And he was like Hans, I'm so tempted to sell my duplexes and buy bitcoin because if I was, if I convert that money into bitcoin, I will make much more money per year, even if I was just staking, meaning you're just placing that Bitcoin up to get that six to 8%, you know, guaranteed return every year, he said he would make much more money than he's making on rent right now, plus, the assets is still growing at anywhere close to 50 to 100% per year, but I told him, don't do that, because your wife is gonna probably be super upset. So we'll just tiptoe into that space. So with that being said, cryptocurrency is not something that's you're just taking all of your funds and putting it in individuals who are listening right now, maybe you don't like taking risk 1% 2% of what you invest, you can begin, you know, dip your toes in, for someone who's listening who's optimistic, and be like to take some level of risk, five to 10%
Jamila Souffrant 56:17
of their portfolio, just what they're investing now. So if they're investing maybe 300, into their Roth, you're saying, they take, I don't know the percentage, but you know, take $30 and start on the exchange kind of thing,
Dr. Hans 56:29
absolutely of new money or have cash that they believe they can take a percentage of that cash to invest, never sell any investment. So if you already have stocks, 401k, don't touch, don't sell anything, just keep it. But with new capital allocates anywhere between, you know, one to 5%, or one to 3% for people who don't like risk, right, or if it's cash that you have sitting in a bank account, in my opinion, that just besides that, an emergency fund, it just doesn't make sense. One to 3% of that should be allocated to some kind of crypto asset. But for people who are more aggressive, they are willing to take a little bit more risk, I would say five to 10%. And Jamila, like, that's how I started, I started with 5%. And then I got up to 10%. And without doing anything, like I said, without doing anything now crypto is like 30% or 35% of my assets because of the growth. Right? It's I'm not even doing anything, I'm not doing it intentionally. It's just doing its own thing. And I'm not looking at Bitcoin or crypto assets or something that I'm looking to make quick money from, I'm literally thinking multigenerational of those 21 million coins, I can pass a number of those coins on to the next generation. And they're gonna get the rule. never sell Bitcoin. never sell Bitcoin, you never want to sell Bitcoin, right? And let me say one more thing. You know how easy it is to pick up a phone send a text message to anyone that has a smartphone. The same way, it's easy to pick up a laptop or a smartphone device and send email to anyone that has, you know, a smartphone or a laptop. Essentially, Bitcoin is making it easy to send money or to send something of value to anyone who has access to the internet, just like text, just like email. And in itself, it converts to all currencies on Earth. Without a foreign exchange rate. It's it's just a beautiful invention. And once you begin to just sit down and study this crypto assets, I've spent over 100 hours studying it, and I'm just scratching the surface. So for those who are interested in learning more, I have a free program actually on my website, which you know, they can get access to it goes over some crypto assets. So my website is www.theinvestingtutor.com so they can get access to that free workshop. And for individuals who want to begin diving deeper, you can go to this website, it is hope.com because the main believers of Bitcoin know and understand that Bitcoin is hope for the future. So yeah, the website is hope, calm. I didn't create that website. But what it does is it accumulates some of the best research from, you know, institutions like Goldman Sachs, JP Morgan, or individuals who are software coders and engineers who are working on these projects. And once you begin to read about them,
Jamila Souffrant 59:49
yeah, I'm browsing it now. It's, it's Wow. Okay,
Dr. Hans 59:53
it is once you get into the let's call it that crypto rabbit hole. Yeah, we'll begin to look at the world completely different, like, like I'm saying, Why on earth? Jamila, would once people know that they are assets are safe, what their money is safe. Just try and explain to me why would someone want to hold Dr. money in a bank being paid 0.05%? Like, why would you do that?
Jamila Souffrant 1:00:23
Once you understand this the way this works,
Dr. Hans 1:00:25
once you understand this like, and we aren't at the point where, you know, most individuals will feel comfortable holding their assets in crypto, but in 10 years, we will. And now that 10 year mark when Dr. When individuals are comfortable, and converting all of their money into crypto to hold it in a safe savings account, guess what all of that capital is increasing the value of crypto and people will remember this conversation 10 years prior and I'll still be holding all of my crypto assets.
Jamila Souffrant 1:01:00
Well, okay, so this again, I will link all these resources or resources in the show notes so people can go do the work, do the research read up on this and it's piquing my interest I got to say like I I do believe I'm going to take the plunge but I want to I'll share that with journeyers like probably in another episode, or maybe in the intro or outro of this so thank you once again, Dr. Hans for teaching us this for introducing us to this new method. And let's see what happens. Absolutely. I'm excited.
All right, I hope you enjoyed that conversation with Dr. Hans, I really again want to do this as a introduction to cryptocurrency I hope you learned something and I hope it sparks a seed or something in you that then allows you to research more and like I said, it's not something that I currently am doing but I am looking into it and I will share my journey in investing in crypto. But you know, there's a lot to be said this this is not going away. And while it is a volatile investment and while I still am a proponent of doing the basics first please don't skip steps please don't skip steps we talked a lot about the basic steps and investing in other episodes. I do want to be able to give you this information in case you are ready to learn more and to start investing in cryptocurrency now if you enjoyed this episode if you learned something make sure you tag me on Instagram that's where I hang out most at journey to launch and then Dr Hans at investing tutor and tag dr Hahn's at be investing tutor so tag me at journey to launch and Dr Hans at the investing tutor shared on your stories shared on your feed. Let us know that you're listening and your takeaways Is this something that you are going to try? Have you been doing it already? What has been your experience? Share it with me and I can then share it with the community.
Don't forget you can get the episode Show Notes for this episode by going to journey to launch comm or click the description of wherever you're listening to this and you can still grab your jumpstart guide for free to help you on your journey to financial freedom by going to journeytolaunch.com/jumpstart.
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