2022-11-10_Important_Financial_Lessons_from_FTX_Collapse
00:00:00.000 | ♪ Blessing in the mornin' ♪
00:00:03.000 | ♪ Come back Sunday morning ♪
00:00:05.000 | California's top casino and entertainment destination
00:00:08.000 | is now your California to Vegas connection.
00:00:11.000 | Play at Yamava Resort and Casino at San Manuel
00:00:14.000 | to earn points, rewards, and complimentary experiences
00:00:17.000 | for the iconic Palms Casino Resort in Las Vegas.
00:00:21.000 | ♪ We got the store to sell ♪
00:00:23.000 | Two destinations, one loyalty card.
00:00:26.000 | Visit yamava.com/palms to discover more.
00:00:31.000 | - Welcome to Radical Personal Finance,
00:00:32.000 | a show dedicated to providing you with the knowledge,
00:00:34.000 | skills, insight, and encouragement you need
00:00:36.000 | to live a rich and meaningful life now
00:00:38.000 | while building a plan for financial freedom
00:00:40.000 | in 10 years or less.
00:00:41.000 | My name is Joshua Sheets, I'm your host,
00:00:43.000 | and today I want to talk about some useful
00:00:46.000 | personal finance rules to protect yourself
00:00:49.000 | from financial collapse.
00:00:52.000 | And in this case, when I use the term, I mean it.
00:00:54.000 | I'm not talking about a broad-scale collapse
00:00:57.000 | of an entire economy or a country, et cetera,
00:01:00.000 | but I'm talking about the collapse of an institution.
00:01:04.000 | And today's commentary is sparked by the ongoing collapse
00:01:08.000 | of the large cryptocurrency exchange called FTX.
00:01:12.000 | I would imagine that most listeners of the show
00:01:15.000 | are aware of what is happening,
00:01:18.000 | and so I'll just give you a quick overview
00:01:21.000 | of where we are right now,
00:01:22.000 | because my comments aren't specific to FTX.
00:01:26.000 | Rather, I'm using this as an opportunity for us to learn
00:01:29.000 | and for us to think about good practices
00:01:32.000 | to protect ourselves in general
00:01:34.000 | on a good defensive position.
00:01:36.000 | About 30 seconds on the background,
00:01:38.000 | FTX is a huge cryptocurrency exchange.
00:01:42.000 | And how do you even summarize the situation?
00:01:46.000 | It's a rapidly developing situation.
00:01:48.000 | As I record this particular podcast just now,
00:01:51.000 | the founder and CEO of FTX is releasing new details on Twitter.
00:01:57.000 | Basically, my summary is simply that FTX
00:02:02.000 | is getting completely demolished
00:02:05.000 | because of a number of unwise decisions,
00:02:09.000 | and many, many customers, if not all of the customers,
00:02:13.000 | at least on the international FTX company,
00:02:17.000 | are positioned now to lose huge amounts,
00:02:21.000 | if not all of the funds and assets that they had held
00:02:25.000 | on the FTX exchange.
00:02:28.000 | What we are watching in real time
00:02:30.000 | is the seemingly almost instantaneous collapse
00:02:34.000 | of a huge institution,
00:02:36.000 | and we are watching billions,
00:02:40.000 | I believe I should use the word with a B,
00:02:42.000 | a huge amount, hundreds and hundreds of millions,
00:02:45.000 | billions of dollars, of US fiat dollars,
00:02:48.000 | of value wiped out like that.
00:02:52.000 | And people are hurting.
00:02:54.000 | Many, many people are hurting.
00:02:57.000 | And it's a horrific situation.
00:02:59.000 | I need to record a separate show basically saying,
00:03:01.000 | "Don't kill yourself over money,
00:03:03.000 | and here's why you shouldn't.
00:03:04.000 | We'll deal with that on another time."
00:03:06.000 | But right now, many, many people are hurting,
00:03:09.000 | had their trading accounts wiped out,
00:03:11.000 | their savings wiped out, etc.
00:03:13.000 | So that's what I want to say right now.
00:03:15.000 | If you're interested,
00:03:16.000 | just go and read a little bit about the situation,
00:03:18.000 | but it's absolutely catastrophic.
00:03:20.000 | Here's what I want to emphasize.
00:03:22.000 | I want to emphasize what are the rules
00:03:24.000 | and the things that you can do
00:03:26.000 | from a personal finance perspective
00:03:27.000 | to minimize the chance of your getting wiped out.
00:03:32.000 | Now, a couple of these are obvious,
00:03:34.000 | and they are related to cryptocurrency management in general.
00:03:40.000 | First, obviously, when you are investing in cryptocurrencies,
00:03:47.000 | it makes a massive difference what you invest in,
00:03:50.000 | or at least I think it makes a big difference
00:03:52.000 | what you invest in.
00:03:54.000 | Some people don't see any functional difference
00:03:57.000 | between Bitcoin and the FTX token
00:04:00.000 | or Bitcoin and anything else that they lump them all in.
00:04:04.000 | I'm not so convinced of that myself.
00:04:06.000 | I think there is a fundamental difference,
00:04:08.000 | and it has to do with the fundamental nature
00:04:10.000 | of a decentralized algorithm like Bitcoin
00:04:13.000 | versus some of the other approaches
00:04:15.000 | that people are taking towards cryptocurrency.
00:04:18.000 | So I think it matters what you invest in.
00:04:20.000 | I myself am, I wouldn't call myself a Bitcoin maximalist,
00:04:24.000 | but I think that it certainly has a better argument
00:04:27.000 | than some of the other coins.
00:04:29.000 | And if you're getting involved in other coins,
00:04:31.000 | you should know your market
00:04:33.000 | and pay attention and follow your strategies.
00:04:36.000 | Number two, with all of your computer coins,
00:04:39.000 | if you do not hold the keys, you do not own them.
00:04:42.000 | In the Bitcoin privacy course
00:04:44.000 | that we have at bitcoinprivacycourse.com,
00:04:50.000 | one of the first things we teach you
00:04:54.000 | is how to hold your keys.
00:04:56.000 | And if you do not hold the keys to all of your computer coins,
00:04:58.000 | you do not own them.
00:05:00.000 | Your computer coins that are held on an exchange
00:05:03.000 | are not yours.
00:05:05.000 | They are held by the exchange.
00:05:07.000 | That's not to say there's not a use
00:05:09.000 | for buying and selling and owning coins on an exchange,
00:05:12.000 | but they are not yours.
00:05:14.000 | And the parallel analogy or metaphor,
00:05:16.000 | or just comparison, not metaphor,
00:05:18.000 | but comparison I would give for this,
00:05:20.000 | has to do with ownership of something like gold and silver.
00:05:23.000 | You do not own gold or silver unless you control it,
00:05:28.000 | unless you control the physical substance,
00:05:30.000 | be it coins, necklaces, watches, or bricks of gold.
00:05:34.000 | You do not own it unless you physically control it.
00:05:38.000 | That's not to say that there's not a place
00:05:40.000 | for paper gold and paper silver,
00:05:42.000 | but buying shares in a gold or silver ETF
00:05:46.000 | is not the same as owning physical gold coins
00:05:50.000 | or physical silver coins or physical something.
00:05:53.000 | If you own the physical product,
00:05:58.000 | then you can be certain of what's happening to it.
00:06:03.000 | You know who controls it.
00:06:05.000 | You know that if I have 100 ounces of silver
00:06:08.000 | sitting in my safe,
00:06:09.000 | that there are indeed 100 ounces of silver.
00:06:12.000 | And of course you would verify the authenticity of that,
00:06:14.000 | have properly assayed assets,
00:06:17.000 | but you know that 100 ounces of gold or silver
00:06:20.000 | is sitting there.
00:06:21.000 | It's not lent out.
00:06:22.000 | It's not owned by someone else.
00:06:24.000 | It's not being multiplied.
00:06:25.000 | It is just sitting there.
00:06:27.000 | That comes with major advantages and some disadvantages.
00:06:30.000 | The fact that it is sitting there renders it useless.
00:06:33.000 | It's not being traded.
00:06:34.000 | It's not being loaned against.
00:06:35.000 | It's not making money.
00:06:36.000 | It's not making interest.
00:06:37.000 | It's just a lump of metal sitting there in your safe.
00:06:39.000 | But you know it is there.
00:06:41.000 | On the other hand, if you own shares in an ETF,
00:06:45.000 | you don't actually know what is happening
00:06:48.000 | with the gold and silver that you allegedly own.
00:06:51.000 | You have to trust the intermediary institution
00:06:54.000 | to do its job.
00:06:55.000 | Now there are institutions of varying quality.
00:06:58.000 | At the most limited end, you can go to your buddy
00:07:01.000 | and you can say to him,
00:07:02.000 | "Hey, listen.
00:07:04.000 | Go ahead and buy 100 ounces of silver for me."
00:07:08.000 | And your buddy can say,
00:07:09.000 | "Okay, I got 100 ounces of your silver
00:07:10.000 | sitting here in my safe."
00:07:11.000 | And that may or may not be appropriate.
00:07:13.000 | Or you can go up to a very well-respected,
00:07:16.000 | audited, publicly transparent company
00:07:19.000 | and you can purchase shares.
00:07:21.000 | And they can say, "Look, here's where the gold is."
00:07:23.000 | The point is if you don't own it or control it,
00:07:25.000 | you don't actually have the asset.
00:07:28.000 | And it's the same with your computer coins.
00:07:30.000 | If you don't hold the keys to those coins,
00:07:33.000 | you,
00:07:34.000 | then you can't actually be confident
00:07:36.000 | of what is happening with them.
00:07:37.000 | And so if you have money on the exchanges,
00:07:40.000 | unless you are using that money actively
00:07:43.000 | for some purpose,
00:07:45.000 | do not hold the money there.
00:07:47.000 | And again, there are good reasons to hold money,
00:07:50.000 | computer coins, on exchanges.
00:07:52.000 | Just like there are good reasons to trade ETFs
00:07:54.000 | of gold and silver.
00:07:55.000 | If you want to speculate on something like gold or silver,
00:07:58.000 | then you speculate on the directional price
00:08:01.000 | much more inexpensively
00:08:03.000 | and with much less friction
00:08:05.000 | than using an ETF than you do
00:08:07.000 | with trying to buy and sell gold and silver coins.
00:08:09.000 | Physical gold and silver coins
00:08:11.000 | are horrible for speculation
00:08:13.000 | because the friction of buying them and selling them
00:08:15.000 | and all the costs involved
00:08:16.000 | makes it so that it's very hard
00:08:18.000 | to eke out a profit in that scenario.
00:08:20.000 | So trading paper gold and paper silver
00:08:23.000 | is the way to trade the markets
00:08:26.000 | in a much more low-cost way
00:08:29.000 | than owning the stuff.
00:08:30.000 | And so I think that's an appropriate way
00:08:32.000 | to think about your computer coins.
00:08:35.000 | The coins that you own
00:08:36.000 | must not ever be on an exchange.
00:08:39.000 | You must hold the keys
00:08:40.000 | and that way you can be confident that you own them.
00:08:43.000 | But if you're dealing with a trading scenario,
00:08:47.000 | then it may in many cases be simpler
00:08:50.000 | for you to use an exchange.
00:08:52.000 | So that's why lesson 101
00:08:54.000 | that we teach at BitcoinPrivacyCourse.com
00:08:56.000 | is make sure that you hold the keys
00:08:59.000 | and here's how you do it.
00:09:00.000 | It's not difficult to do.
00:09:02.000 | It just requires you to actually
00:09:05.000 | take the steps to do it.
00:09:07.000 | Now let's move out of specific
00:09:11.000 | cryptocurrency-related commentary
00:09:14.000 | and let's talk about good, sound,
00:09:16.000 | fundamental financial planning.
00:09:18.000 | I'm going to give you a few rules.
00:09:20.000 | I haven't talked much about these publicly.
00:09:22.000 | I've shared these with private clients along the way,
00:09:25.000 | but I think that these are useful rules.
00:09:30.000 | When you're involved,
00:09:31.000 | first, anytime you get involved in an investment,
00:09:34.000 | it's important that you understand
00:09:36.000 | what your goals are for that investment
00:09:40.000 | in order to make an intelligent choice
00:09:43.000 | with how to be involved in it.
00:09:46.000 | And this is something where
00:09:49.000 | we repeat these fundamentals
00:09:50.000 | over and over and over again,
00:09:52.000 | and yet it's so easy for us to get caught up
00:09:55.000 | in the emotions of the moment.
00:09:58.000 | And I don't know what the percentage of investors
00:10:01.000 | who get involved emotionally is,
00:10:03.000 | but it sure seems like the percentage of investors
00:10:05.000 | who get involved emotionally is very, very high
00:10:07.000 | compared to the percentage of investors
00:10:11.000 | who get involved based upon a strategic plan.
00:10:14.000 | The only thing that makes an investment
00:10:16.000 | right or wrong for you
00:10:18.000 | has to do with whether or not
00:10:19.000 | that investment can meet your goals.
00:10:22.000 | So in order for you to know
00:10:23.000 | if an investment is right for you,
00:10:25.000 | you need to begin with
00:10:26.000 | what are your investment goals.
00:10:29.000 | And if you are clear on your investment goals,
00:10:31.000 | then you can go to your chosen investment
00:10:33.000 | or your prospective investment
00:10:35.000 | and you can identify whether
00:10:37.000 | this is an appropriate investment for you or not.
00:10:40.000 | If you need big wins,
00:10:43.000 | then you're going to focus on speculative,
00:10:47.000 | very risky investments.
00:10:49.000 | If you don't need big wins,
00:10:51.000 | there's no reason to go for risk.
00:10:53.000 | And you need to carefully assess
00:10:55.000 | what you actually need for you to win.
00:10:58.000 | This will relate to your cash flow,
00:11:00.000 | the amount of money that you have coming in,
00:11:02.000 | your expenses,
00:11:03.000 | how much excess money you have.
00:11:05.000 | This will relate to your position in life, etc.
00:11:09.000 | There are a number of good rules of thumb
00:11:12.000 | that I think are very well worth considering.
00:11:15.000 | Some of the most commonly discussed rules
00:11:18.000 | I don't know how to apply.
00:11:19.000 | For example, Warren Buffett famously,
00:11:21.000 | rule number one of investing,
00:11:22.000 | don't lose money.
00:11:23.000 | Rule number two is,
00:11:25.000 | if you do lose money,
00:11:26.000 | see rule number one
00:11:27.000 | or whatever his various syntax is.
00:11:32.000 | The point is,
00:11:33.000 | I don't know how to say don't lose money.
00:11:36.000 | I think that's more of a useful heuristic
00:11:38.000 | for you to keep in mind to say,
00:11:40.000 | I'm going to make sure,
00:11:41.000 | I'm going to try very hard
00:11:42.000 | to make sure I understand enough
00:11:43.000 | to not lose money.
00:11:44.000 | But when you actually say to somebody,
00:11:45.000 | don't lose money,
00:11:47.000 | that's hard to put into play.
00:11:50.000 | On the other hand,
00:11:51.000 | there is a very useful rule of
00:11:53.000 | don't invest any money
00:11:54.000 | that you can't afford to lose.
00:11:57.000 | And I think that's a very useful one.
00:12:00.000 | It has its own difficulty of application
00:12:03.000 | because how much can you afford to lose?
00:12:06.000 | I don't want to lose any of it.
00:12:09.000 | So you're back to kind of the rule
00:12:10.000 | of don't lose money.
00:12:12.000 | But it is important for you to recognize
00:12:14.000 | how much of this can I not afford to lose?
00:12:15.000 | What if I did lose it all?
00:12:17.000 | What would happen to me
00:12:19.000 | and to my financial situation?
00:12:22.000 | Now, in order for you to assess this,
00:12:24.000 | you need to ask yourself,
00:12:25.000 | what would I do if I lost it all?
00:12:28.000 | This is why people's risk profile changes,
00:12:32.000 | especially as they age.
00:12:34.000 | I have been one who has
00:12:37.000 | lodged my share of criticism
00:12:39.000 | at the idea that older people
00:12:40.000 | should just automatically become
00:12:42.000 | more conservative investors
00:12:43.000 | as they grow older.
00:12:45.000 | And I've been vocal in that.
00:12:47.000 | I don't think that older investors
00:12:49.000 | should just automatically put everything
00:12:50.000 | into treasuries
00:12:51.000 | because they don't have any time.
00:12:53.000 | But there is a real truth to the fact
00:12:55.000 | that older investors
00:12:57.000 | have a much harder time
00:12:59.000 | if they lose money
00:13:00.000 | than a younger investor does.
00:13:02.000 | So, let's do two scenarios.
00:13:04.000 | If you are 25 years old
00:13:06.000 | and you're working a job
00:13:08.000 | earning $75,000 a year
00:13:10.000 | and your annual expenses
00:13:12.000 | are $35,000 a year
00:13:14.000 | and you're saving all the rest of the money
00:13:16.000 | and you're investing it aggressively
00:13:18.000 | into computer coins
00:13:20.000 | and you find yourself in a situation
00:13:23.000 | where you wind up
00:13:27.000 | losing all of your money
00:13:30.000 | and you are completely wiped out,
00:13:32.000 | you're not going to,
00:13:34.000 | other than the emotional risk
00:13:36.000 | of you losing all your money
00:13:37.000 | and having to deal with that psychology,
00:13:39.000 | you're not going to,
00:13:40.000 | you're not dead.
00:13:41.000 | You still have a job,
00:13:43.000 | you're still young,
00:13:44.000 | you still have plenty of income,
00:13:45.000 | you can recover from that situation.
00:13:47.000 | On the other hand,
00:13:48.000 | if you're 85 years old
00:13:50.000 | and you have $35,000 a year of expenses
00:13:55.000 | and you have $20,000 a year
00:13:57.000 | of Social Security income
00:13:59.000 | and you have a $300,000 portfolio
00:14:03.000 | and you lose all of your $300,000
00:14:05.000 | in a bad investment,
00:14:07.000 | it's very, very difficult
00:14:08.000 | for you to know how to survive.
00:14:11.000 | You're left with nothing.
00:14:13.000 | You're unemployable in that situation
00:14:16.000 | and you're basically going to be depending
00:14:18.000 | on the charity of others in that scenario.
00:14:21.000 | And so the risk,
00:14:22.000 | the loss for someone who is older,
00:14:23.000 | who is unemployed,
00:14:25.000 | is a much higher risk
00:14:26.000 | than for somebody who is younger
00:14:28.000 | and has more time.
00:14:29.000 | And so always ask yourself,
00:14:31.000 | what would I do
00:14:32.000 | if I got wiped out on this investment?
00:14:35.000 | And the secret to being able
00:14:37.000 | to make more aggressive investments,
00:14:39.000 | to take greater amounts of risk,
00:14:41.000 | is to be more conservative
00:14:43.000 | in your personal overview of life.
00:14:46.000 | What I mean is,
00:14:47.000 | this is why having low expenses
00:14:50.000 | is so helpful.
00:14:51.000 | If your expenses are very low,
00:14:53.000 | then you can make it
00:14:54.000 | even if your income falls apart.
00:14:57.000 | This is why it's useful to avoid debt,
00:14:59.000 | because if your debt payments are very low,
00:15:02.000 | you can make it
00:15:03.000 | even if everything falls apart.
00:15:05.000 | This is why it's so exceedingly useful
00:15:07.000 | to have cash savings,
00:15:09.000 | to have money set aside
00:15:10.000 | that is not in any way exposed to risk,
00:15:15.000 | so that if the worst case scenario happens,
00:15:18.000 | you have time and margin
00:15:19.000 | for you to figure out your next move.
00:15:22.000 | This is why it's so useful to have income,
00:15:24.000 | even if it's not strictly necessary
00:15:26.000 | because it allows you the confidence
00:15:28.000 | of knowing I can still support myself,
00:15:30.000 | my family, etc.
00:15:32.000 | And so you want to make sure that,
00:15:34.000 | especially if you're going
00:15:36.000 | for aggressive, high-risk investments,
00:15:40.000 | you want to make sure
00:15:41.000 | that your fundamentals are in excellent shape
00:15:44.000 | and that you have secured your foundation
00:15:47.000 | in a very strong way.
00:15:49.000 | That allows you to be more comfortable
00:15:52.000 | with taking larger risks.
00:15:55.000 | How much money should you invest?
00:15:57.000 | This one is a hard question to answer.
00:15:59.000 | There are some useful rules of thumb
00:16:01.000 | that I think are well worth considering,
00:16:04.000 | but most of them don't apply to people
00:16:06.000 | who are just starting out.
00:16:07.000 | So, for example,
00:16:08.000 | one rule of thumb that I appreciate,
00:16:10.000 | that I think has a lot of wisdom,
00:16:11.000 | is don't ever put more than 10% of your net worth
00:16:14.000 | into any particular venture.
00:16:17.000 | Is it a perfect rule?
00:16:20.000 | No, and I'll explain why not in a moment,
00:16:22.000 | but it's a very useful rule.
00:16:24.000 | Let's use an example.
00:16:27.000 | It's my understanding,
00:16:28.000 | by the public news reports
00:16:29.000 | and previous partnerships and whatnot,
00:16:32.000 | that the NFL football star Tom Brady
00:16:35.000 | had allied himself with the FTX Exchange
00:16:40.000 | and had invested into the company
00:16:45.000 | and had taken some of his compensation,
00:16:47.000 | perhaps in the form of ownership of some kind,
00:16:50.000 | in the company,
00:16:51.000 | was partnering with the company.
00:16:52.000 | Let's assume that FTX has a value of zero
00:16:55.000 | and he loses all of his investments.
00:16:58.000 | There was a headline floating around Twitter yesterday
00:17:02.000 | indicating how,
00:17:03.000 | "Wow, Tom Brady is broke."
00:17:05.000 | Guarantee you Tom Brady is not broke.
00:17:07.000 | But imagine you're in a situation
00:17:09.000 | of a guy like Tom Brady.
00:17:11.000 | You're close to the end
00:17:14.000 | of your actively earned income career.
00:17:17.000 | Obviously, his brand still has massive amounts of equity.
00:17:20.000 | He'll make plenty of money in the years to come.
00:17:22.000 | But you're in the twilight of your earned income
00:17:27.000 | from practicing your primary sport,
00:17:29.000 | in his case, obviously, football.
00:17:32.000 | Imagine yourself if he really did have,
00:17:35.000 | say, 70% of his wealth tied up
00:17:39.000 | in one particular business that went bust.
00:17:43.000 | Imagine how devastating that would be to him.
00:17:48.000 | Now, imagine that he had no more than 10%
00:17:52.000 | of his income tied up in any one particular venture.
00:17:58.000 | A 10% loss?
00:18:00.000 | You can stomach that.
00:18:02.000 | You can continue forward.
00:18:03.000 | It doesn't wipe you out.
00:18:04.000 | It hurts, obviously, to lose 10% of your net worth,
00:18:08.000 | but it doesn't wipe you out.
00:18:11.000 | Now, in his case, obviously,
00:18:12.000 | we don't know how much of his net worth,
00:18:14.000 | but I would imagine it's far less than 10%,
00:18:16.000 | but I'm just speculating, just like anyone else is.
00:18:19.000 | The point is simply use a public name,
00:18:21.000 | use a current example of an absolute wipeout of a company
00:18:26.000 | almost overnight,
00:18:27.000 | and imagine that happening in your investments,
00:18:29.000 | in your portfolio.
00:18:32.000 | Try to minimize your exposure to any one particular thing
00:18:38.000 | to 10% or less.
00:18:41.000 | Now, I said this is an imperfect scenario.
00:18:45.000 | The reason I said it's an imperfect scenario
00:18:46.000 | is that most of us can't start with this rule.
00:18:50.000 | So if we use a stereotypical example of a young person
00:18:53.000 | graduated from college, gets a job,
00:18:55.000 | that young person can be wiped out
00:18:57.000 | because 100% of their money is coming from one single job.
00:19:01.000 | You can't start by saying,
00:19:03.000 | "I'm not going to put more than 10% of my money
00:19:04.000 | "into any one thing,"
00:19:05.000 | and there are always levels of risk, right?
00:19:07.000 | That young person who has saved $100,000
00:19:10.000 | working in the United States has risk
00:19:12.000 | because $100,000 of their money is all in U.S. dollars.
00:19:15.000 | What if U.S. dollars decline in value?
00:19:18.000 | It's funny.
00:19:19.000 | When you think about the collapse of FTX,
00:19:22.000 | it just makes me think of bank collapses over the years.
00:19:26.000 | In our modern era,
00:19:27.000 | we feel very, very insulated from bank collapses
00:19:31.000 | because, especially for those of us
00:19:34.000 | who live in the United States, Great Britain, Canada, etc.,
00:19:37.000 | we just feel very, very insulated from these things.
00:19:40.000 | Our banks are highly regulated.
00:19:41.000 | We feel a significant degree of confidence in our currency.
00:19:46.000 | We believe it feels fairly bulletproof.
00:19:50.000 | But at its core, recognize that throughout history,
00:19:54.000 | banks have continually collapsed.
00:19:56.000 | That's why we have the whole concept of a bank run.
00:19:59.000 | It's immortalized throughout history.
00:20:00.000 | You go back to the history of any country,
00:20:02.000 | you'll find constant series of financial crises
00:20:05.000 | and bank runs and bank collapses
00:20:07.000 | and bankruptcies, etc., across the board.
00:20:10.000 | That's a very normal thing.
00:20:12.000 | And at its core,
00:20:13.000 | while we have a much more robust system in the modern day
00:20:18.000 | with government insurance,
00:20:19.000 | the backing of the Federal Reserve, etc.,
00:20:22.000 | I don't think that this fundamentally
00:20:25.000 | makes banking or currencies stronger.
00:20:29.000 | What it does is it increases the public confidence
00:20:36.000 | and all of banking lives or dies based upon confidence.
00:20:42.000 | It's all a con game.
00:20:44.000 | It's all a confidence game.
00:20:45.000 | That if people believe in the strength and power of the US dollar,
00:20:49.000 | then the US dollar has strength and power.
00:20:51.000 | If people stop believing in the power and the strength of the US dollar,
00:20:55.000 | the US dollar loses its power and strength.
00:20:57.000 | And so it's all a con game, all of it.
00:21:00.000 | I was explaining recently to my 9-year-old how banking works
00:21:05.000 | and it blew his mind,
00:21:06.000 | the concept of fractional reserve banking.
00:21:08.000 | It's like, yeah, you take your money to the bank,
00:21:09.000 | put it in there, they lend it out.
00:21:10.000 | It's like, but you can't get it out?
00:21:12.000 | And it was funny trying to explain to an elementary student
00:21:15.000 | how modern banking works.
00:21:17.000 | And the point is like, but then everybody can't get their money.
00:21:21.000 | And I explained, yeah, it's all a confidence game.
00:21:23.000 | People are confident in the bank, everything is going, it's good.
00:21:26.000 | And so what you see in the collapse of an institution like FTX
00:21:31.000 | is you see what has happened so many times in the world of banking
00:21:35.000 | the way that we understand it today.
00:21:38.000 | Now, because of the many decades of history and the many bank failures, etc.,
00:21:43.000 | we've developed these new forms of insurance,
00:21:45.000 | these new things to basically shore up the value and confidence in the banks.
00:21:49.000 | But go back and read a couple of the books on the 2008 banking crisis
00:21:55.000 | in the United States, the Lehman Brothers bailout, etc.
00:21:59.000 | And what you will discover is that the private conversations
00:22:03.000 | that the Federal Reserve personnel were having
00:22:06.000 | and the politicians and the president and whatnot,
00:22:09.000 | basically they were scared of exactly what happened to FTX
00:22:14.000 | happening across the entire institution,
00:22:16.000 | all of the institutions in the United States.
00:22:18.000 | A fundamental collapse, a fundamental instantaneous collapse.
00:22:22.000 | And the bankers had gotten so far out over the tips of their skis
00:22:26.000 | with their lending practices that if the Federal Reserve had not stepped in
00:22:31.000 | and basically bolstered the entire system and put in liquidity,
00:22:36.000 | then it probably would have happened.
00:22:37.000 | Now, you can choose your argument as to what's happened since then,
00:22:42.000 | but I'll skip that.
00:22:44.000 | The point is it was this close in your and my lifetime
00:22:47.000 | of the entire financial system unraveling.
00:22:51.000 | I don't think it's unhealthy, by the way.
00:22:53.000 | I think that collapse is healthy because it gets rid of the dead weight.
00:22:57.000 | And depending on your perspective, I find the arguments that
00:23:00.000 | because the US government didn't allow the dead weight to disappear,
00:23:03.000 | didn't allow the natural bankruptcy process to take its course,
00:23:06.000 | that there's good reason to think that things are not better,
00:23:09.000 | but time will tell.
00:23:11.000 | My argument is simply that don't look at FTX and poke your fingers and say,
00:23:15.000 | "Ha ha, those stupid people who invested in cryptocurrency,
00:23:18.000 | I'm so much smarter over here."
00:23:20.000 | Don't think that it can't happen here.
00:23:22.000 | The risks, the systemic risks on a global basis are not better.
00:23:26.000 | They're different, but they're not better.
00:23:28.000 | And we really were this close to having that kind of event happen in 2008, 2009.
00:23:35.000 | And there's no fundamental reason why it can't, won't,
00:23:38.000 | or shouldn't happen in the future.
00:23:40.000 | It all depends on public confidence.
00:23:42.000 | It's a con game, all of it.
00:23:44.000 | So there's no other choice other than to play the con game.
00:23:48.000 | There's no really reasonable alternative.
00:23:50.000 | You can argue, "Okay, Bitcoin," but even that, obviously,
00:23:53.000 | nothing's for sure.
00:23:56.000 | So we need to develop new systems,
00:23:59.000 | and banking has had a significant ongoing evolutionary process.
00:24:03.000 | The best situation that we have--
00:24:05.000 | the situation we have today is a result of hundreds of years of history,
00:24:10.000 | of thousands and thousands of bank runs and bank failures and bankruptcies
00:24:14.000 | and collapses of currencies, reissuing of currencies.
00:24:17.000 | The U.S. dollar has been reissued multiple times,
00:24:20.000 | has collapsed three or four key times.
00:24:22.000 | The U.S. national banks in the short couple hundred-year history
00:24:25.000 | of the United States has collapsed a couple of times
00:24:28.000 | and has been reinstituted and put in place again,
00:24:30.000 | and we're just living through the current wave of it.
00:24:33.000 | But financial contagion, financial panic, financial collapse
00:24:36.000 | will happen again.
00:24:37.000 | It always does.
00:24:38.000 | But every time we look at it, we try to come up with a new and better system
00:24:42.000 | and make it stronger and more robust.
00:24:44.000 | Back to the 10%.
00:24:47.000 | In the beginning of life, you can't really apply these rules.
00:24:50.000 | You're 100% committed to the salary from one company,
00:24:53.000 | and you get fired, and there goes 100% of your income.
00:24:55.000 | It's hugely risky, and yet there's really few other solutions in the beginning.
00:25:00.000 | But as your wealth grows, as your business grows,
00:25:02.000 | then you can start to spread out your risk,
00:25:04.000 | and you can say, "I'm not going to have any one particular job
00:25:07.000 | "or any one particular client responsible for more than 10% of my income,"
00:25:10.000 | and you can build a more robust portfolio.
00:25:13.000 | In the beginning of your life, let's say you have $10,000 saved.
00:25:17.000 | You might have $1,000 of physical currency and $9,000 in the bank,
00:25:22.000 | but it's all going to be in one institution.
00:25:24.000 | There's no benefit of you taking $10,000 and spreading it across 10 institutions.
00:25:28.000 | It's too unwieldy, too expensive.
00:25:30.000 | It doesn't make sense.
00:25:32.000 | So you can't apply that in the beginning.
00:25:34.000 | But fast forward, if you find yourself having $500,000 in savings,
00:25:40.000 | then having all of that in one bank is unwise,
00:25:44.000 | and so you want to spread it out and diversify it.
00:25:46.000 | You probably still can't follow a 10% rule.
00:25:49.000 | Having 10 different accounts with $50,000 in them is too many accounts.
00:25:53.000 | It's too unwieldy. It's too difficult to manage.
00:25:56.000 | But your money certainly should not all be in one account.
00:26:01.000 | The reason, even if you're not worried about a bank collapse,
00:26:04.000 | you say, "Well, I have a bank that's covered by FDIC insurance,
00:26:07.000 | and it's a very stable banking country, etc."
00:26:10.000 | Yeah, but banks have problems,
00:26:12.000 | and sometimes your money gets shut off for a few days.
00:26:15.000 | Or the regulators come in, and they show up,
00:26:18.000 | and they put the bank into receivership,
00:26:20.000 | and it takes them a few days before they get things going again.
00:26:23.000 | Or things simply as mundane as you get flagged
00:26:27.000 | because you're trying to make an international debit card transaction,
00:26:30.000 | and now your bank shuts down your debit card
00:26:32.000 | and forces you to come back to the country and walk into a bank office
00:26:35.000 | in order to prove your identity.
00:26:37.000 | So this is why you have to have multiple banks, multiple debit cards, etc.,
00:26:40.000 | and keep that infrastructure going.
00:26:42.000 | But again, you probably can't do 10, 10, 10, 10 on those scenarios.
00:26:46.000 | And so the 10% rule is not a perfect rule,
00:26:50.000 | but it's a valuable reminder to say
00:26:54.000 | that don't invest to a point of wiping you out.
00:27:00.000 | The next concept I want to convey to you is simply the concept of ratcheting.
00:27:05.000 | My example here is I think about the old show of "Who Wants to Be a Millionaire?"
00:27:09.000 | And the great thing about that show was it had these ratchet points.
00:27:13.000 | I think it was $1,000 and $64,000 and $1 million, something like that.
00:27:18.000 | But you knew at various points that if you were playing and you lost,
00:27:24.000 | you wouldn't go below the number that you were ratcheted up to.
00:27:28.000 | In life, I think there are a number of these ratchet points
00:27:31.000 | that are worth paying attention to and considering.
00:27:34.000 | I don't know exactly what they are.
00:27:36.000 | I can't identify the specific number.
00:27:38.000 | But I would encourage you to think about your own life.
00:27:41.000 | What amount of money do you never want to go below no matter what?
00:27:45.000 | In the past, I did a show on $1,000, $10,000, $100,000.
00:27:51.000 | That was primarily dedicated to people who were saving.
00:27:53.000 | And the point was that if you're poor and you can get $1,000 scraped together,
00:27:57.000 | you're no longer poor because now you have enough wiggle room
00:28:00.000 | to handle most of the expenses of life.
00:28:02.000 | You're not dependent on payday loans.
00:28:04.000 | You're not dependent on running around scraping, etc.
00:28:06.000 | With $10,000, which is an accessible savings target
00:28:09.000 | for just about anybody in a year or so, at really any level,
00:28:13.000 | you can pretty much free yourself from most of the needs.
00:28:16.000 | You can be your own bank for most things.
00:28:18.000 | You don't need to rely on credit.
00:28:20.000 | You can make first, last, and security on an apartment.
00:28:22.000 | You can go get a new job.
00:28:23.000 | You can handle two months out of income, etc.
00:28:26.000 | Then my argument on $100,000 was that if you save $100,000 in the beginning of life,
00:28:31.000 | that you're positioned to where all of your decisions that you want to make
00:28:37.000 | are open to you.
00:28:39.000 | Again, you can move across the country.
00:28:41.000 | You can move across the world.
00:28:42.000 | You can start almost any business.
00:28:44.000 | You can do all these things with having that amount of money.
00:28:48.000 | You're not addicted to the month-to-month living of paycheck-to-paycheck
00:28:51.000 | that keeps people stuck in a job.
00:28:53.000 | But none of those things make you wealthy.
00:28:56.000 | When you get too wealthy, then things start to change.
00:28:59.000 | I think that basically the next ratchet up between $100,000
00:29:04.000 | is basically kind of a modest--
00:29:10.000 | it's almost like an initial level of financial independence.
00:29:14.000 | If you think of somebody who has--let's use the 4% rule.
00:29:17.000 | You think of somebody who has $1 million in the bank
00:29:19.000 | and can withdraw $40,000 a year of income.
00:29:23.000 | That's not a high-level lifestyle, but you can live on $40,000 a year.
00:29:29.000 | In most places of the world, you can have an apartment that is safe
00:29:34.000 | and that is comfortable and that is not rat-infested and roach-infested.
00:29:38.000 | You can feed yourself high-quality food.
00:29:40.000 | You can cover your basic living expenses.
00:29:42.000 | You can live in most cities of the world,
00:29:45.000 | or at least all states and countries of the world, on $40,000.
00:29:50.000 | Maybe not in Luxembourg or Liechtenstein or Switzerland or Singapore,
00:29:55.000 | but you can live in many, many places on that.
00:29:58.000 | But it's not a great lifestyle.
00:29:59.000 | So you think about what your great lifestyle is.
00:30:01.000 | Maybe it's $3 million where you have $10,000 a month of income
00:30:05.000 | using a 4% rule.
00:30:07.000 | That's a very strong middle-class lifestyle in most of the world.
00:30:12.000 | So maybe you would just say, "I would never want to go below $3 million."
00:30:15.000 | My point in using these numbers is at $500,000,
00:30:19.000 | the difference between $100,000 saved and $2 million saved
00:30:25.000 | is massive in terms of a ratcheting effect.
00:30:27.000 | You can't live on the income from $500,000.
00:30:31.000 | $500,000 is just a bigger emergency fund, basically.
00:30:35.000 | It's not financial independence yet.
00:30:38.000 | But you can live on the income from $2 million.
00:30:41.000 | You're not living big time, but you're living comfortably,
00:30:44.000 | fine enough with plenty of time.
00:30:47.000 | So maybe your ratchet number is $100,000 and $2 million.
00:30:52.000 | Then after $2 million, the question is, "All right, what's the next ratchet number?"
00:30:57.000 | There's not a huge difference in lifestyle between $2 million and $3 million,
00:31:01.000 | but there is a huge difference in lifestyle between $2 million and $10 million.
00:31:06.000 | So maybe your ratchet number is then the next one is $10 million.
00:31:10.000 | These numbers are all personalized.
00:31:12.000 | What I encourage you to do to figure out your numbers is to choose an arbitrary number
00:31:16.000 | and then say, "If I had this amount of money saved, what would this allow me to do?
00:31:21.000 | What could I do? How could I live? How would I spend the income from this?"
00:31:26.000 | and clarify it in terms of a lifestyle.
00:31:29.000 | I've watched over the years many people who had, say, $3 million saved,
00:31:34.000 | a number that for their lifestyle would have been perfectly adequate
00:31:37.000 | to secure their financial freedom,
00:31:40.000 | and yet they just had this idea that, "I have to go, I have to go, I have to go."
00:31:44.000 | So they would risk the $3 million, and by risk here I'm thinking especially of bringing in leverage,
00:31:49.000 | too much leverage, too much risk, and they wind up shooting for $10,000,
00:31:53.000 | and they wind up dropping back to $200,000 or $500,000 or something like that,
00:31:57.000 | and now they're in a mess, and they've lost that initial stability of financial independence.
00:32:02.000 | I don't care what your numbers are, but think carefully about them.
00:32:05.000 | And as you reach a ratchet point, ask yourself,
00:32:08.000 | "Can I ensure that I don't go below this number again?
00:32:11.000 | Can I pull the risk off the table and then go for the next ratchet point
00:32:15.000 | in some way that's going to ensure that I never go below this current number?
00:32:20.000 | And how can I ensure and protect this current number?"
00:32:24.000 | There are many people who have been become--
00:32:28.000 | had hundreds of millions of dollars who then took another roll of the dice
00:32:33.000 | and went in something where they faced government regulation,
00:32:36.000 | they faced fraud accusations, they faced lawsuits, etc.,
00:32:41.000 | and if those people didn't have something set aside in an insurance fund,
00:32:46.000 | then being totally wiped out is not fun.
00:32:48.000 | But if you have something set aside in an insurance fund,
00:32:52.000 | then you can be very well protected.
00:32:54.000 | Let's talk about insurance funds.
00:32:56.000 | The way that you insure your assets, again, is very personalized.
00:32:59.000 | At one level it might just be saying, "You know what?
00:33:02.000 | I'm going to make sure that I take $10,000 of cash out of the bank
00:33:05.000 | so that I always have money and I'm going to put it in my buddy's gun safe
00:33:09.000 | where I know I can get at it."
00:33:10.000 | At another level, your insurance fund might be saying,
00:33:13.000 | "I'm going to pay off my house.
00:33:14.000 | And because my house has-- I live in Florida or Texas
00:33:17.000 | and my house is completely exempt from the claims of creditors,
00:33:20.000 | I've got homestead protection on my house,
00:33:22.000 | I'm going to make sure that I just pay off my house
00:33:25.000 | even though I could leverage it and go more,
00:33:27.000 | and that way I'll always be able to sell a piece of real estate
00:33:30.000 | and I'll always have the money in this house."
00:33:32.000 | Or, "I'm going to make sure that I fully fund my IRA or my 401(k) every year
00:33:38.000 | because that money in my 401(k) is protected from the claims of my creditors
00:33:42.000 | and I'm going to invest that money into traditional mutual funds
00:33:46.000 | that are going to do fine.
00:33:47.000 | I'm just never going to play with that.
00:33:49.000 | I'm not going to do some crazy strategy in my 401(k).
00:33:51.000 | This is my insurance fund."
00:33:52.000 | At another level, it may be, "I'm going to take $5 million out of my portfolio.
00:33:57.000 | I'm going to put this $5 million into a trust that is there
00:34:01.000 | to make sure that it's out of my estate, it's transferred out,
00:34:05.000 | it's going to be away and it's going to be protected from the claims of creditors.
00:34:09.000 | And my family members and I, we may not be able to live great on the $5 million,
00:34:14.000 | but by moving it offshore, moving it into an asset protection trust, etc.,
00:34:18.000 | at least if we lose everything, we'll still have that money.
00:34:21.000 | And then I'm going to go over here and I'm going to roll my dice
00:34:23.000 | on the other projects that I have going on."
00:34:26.000 | If you imagine yourself as Sam What's-His-Name, the founder of FTX,
00:34:33.000 | and here you are and one day you're a multi-billionaire
00:34:36.000 | and then a week later there's a good chance that not only do you have no money,
00:34:41.000 | but you wind up in a situation where you're going to face massive lawsuits
00:34:46.000 | and potentially have any personal assets that you have wiped out,
00:34:49.000 | you see the point.
00:34:50.000 | Or imagine you're Alex Jones and one day you're doing well,
00:34:55.000 | business is good, you've got millions of dollars flying in all over the place,
00:34:58.000 | and then a few years later you're facing a billion dollars of court costs
00:35:03.000 | and judgments against you.
00:35:06.000 | So think of yourself in these situations and recognize that none of these guys
00:35:11.000 | imagined that this was going to happen.
00:35:13.000 | If you had talked to Alex Jones 10 years ago,
00:35:16.000 | he would never have thought that the situation he's facing in would come to fruition.
00:35:19.000 | Or if you'd talked to the founder of FTX,
00:35:22.000 | he would never have thought that he'd be in this situation.
00:35:24.000 | But all of a sudden you're there.
00:35:27.000 | And so this is why in point four of the radical personal finance framework for wealth,
00:35:34.000 | we talk about avoid catastrophe.
00:35:36.000 | Is that you need to regularly--
00:35:38.000 | Remember number one is increase income, two, decrease expenses,
00:35:41.000 | three, invest wisely, four is avoid catastrophe,
00:35:44.000 | and five is optimize lifestyle.
00:35:47.000 | When you're avoiding catastrophe, you take off your rose-colored glasses
00:35:51.000 | and you put on your disaster glasses and you say,
00:35:53.000 | "What are all the bad things that could happen to me?"
00:35:55.000 | And you do that and you say, "I should have an emergency fund,"
00:35:58.000 | or "There might be a global famine and I should have three months of food in the house,"
00:36:02.000 | or "I might get sued and all of a sudden I had $20 million
00:36:06.000 | but now I'm wiped out and I've got a billion-dollar lawsuit against me,"
00:36:11.000 | or "I wind up owing a creditor hundreds of millions of dollars."
00:36:14.000 | And you have to do this on a regular consistent basis
00:36:17.000 | and then put in place the solutions way ahead of time
00:36:22.000 | for more than what you need.
00:36:23.000 | I've talked about asset protection planning.
00:36:25.000 | And the secret with asset protection planning,
00:36:27.000 | the rule is once an event happens that gives rise to claims against you,
00:36:33.000 | it is too late.
00:36:35.000 | All of the money moves that you make at that point in time
00:36:38.000 | can be undone by the judge and basically even to the point of taking away your freedom,
00:36:43.000 | your physical freedom, locking you in prison.
00:36:45.000 | But the stuff that happens long before that happens can be very well positioned.
00:36:51.000 | You put aside money for your five-year-old daughter, your five-year-old son,
00:37:00.000 | and you set up a family trust that is going to benefit your five-year-old daughter,
00:37:03.000 | your family son.
00:37:05.000 | Fast forward 20 years, your child gets married, then gets divorced.
00:37:09.000 | Well, the money that was in the trust can be positioned to be completely exempt
00:37:15.000 | from the divorce claims, and your child can continue to be wealthy
00:37:18.000 | regardless of what the judge says in the divorce case.
00:37:20.000 | But if you gave the money to your child at 20-something years old
00:37:24.000 | and it was never in the trust, and then the divorce happens,
00:37:26.000 | well, kiss off the money. It's gone.
00:37:28.000 | So you have to be proactive.
00:37:30.000 | You have to look at when disaster strikes other people
00:37:33.000 | and then ask yourself, "What will I do if disaster strikes me?"
00:37:37.000 | And I believe that this thinking is extremely valuable,
00:37:41.000 | and it's deeply underrepresented.
00:37:43.000 | And so all of the little stuff matters.
00:37:46.000 | How many smoke detectors do you have in your house?
00:37:48.000 | Have you checked the batteries? Do you have a ladder
00:37:50.000 | so that your children can get out of the second-floor window
00:37:53.000 | down to the first-floor window in case of a fire without breaking their legs?
00:37:57.000 | Have you prepared in advance a family meeting spot?
00:38:03.000 | If something happens, we meet here.
00:38:05.000 | All of the humdrum daily stuff is a big deal.
00:38:09.000 | Do you have the ability to flag down EMS when you have a heart attack?
00:38:14.000 | Is your driveway clearly labeled so that if you call 911 when having a heart attack,
00:38:19.000 | then you can get someone there quickly?
00:38:21.000 | And at every level, as your wealth increases,
00:38:23.000 | you have to think about more and more of these things,
00:38:25.000 | and you want to bring them in.
00:38:31.000 | What are those things, the defibrillation machines?
00:38:34.000 | An example would be that if somebody is completely broke,
00:38:38.000 | then having--the name completely went to me--the things that you put on your heart,
00:38:42.000 | those things save lives.
00:38:43.000 | That's why you see them in so many commercial locations.
00:38:47.000 | But when you get to a point with your wealth,
00:38:50.000 | you should have one of those in your own home
00:38:52.000 | so that if it comes down to you need one of those--
00:38:55.000 | and again, I'm not medical enough to do it.
00:38:57.000 | I don't have one yet anyway.
00:39:00.000 | But it's the kind of thing where you look at it and say,
00:39:02.000 | "Okay, I'm going to go ahead and get this because who knows,
00:39:05.000 | it might pay off someday."
00:39:07.000 | Same way I talk about bunkers,
00:39:09.000 | like nuclear fallout bunkers and bomb bunkers, etc.
00:39:12.000 | I think it's silly for somebody who is broke
00:39:15.000 | to worry about setting up a nuclear radiation fallout shelter.
00:39:20.000 | The risk of needing a nuclear radiation fallout shelter
00:39:24.000 | is so low that there's no point in somebody who is broke doing that.
00:39:28.000 | But if you're a multimillionaire
00:39:30.000 | and you don't have some form of nuclear fallout shelter prepared,
00:39:35.000 | then why are you not paying attention to these small things that could happen?
00:39:40.000 | Or a better example would be a tornado shelter.
00:39:42.000 | I don't think it's dumb.
00:39:43.000 | If you live in Tornado Alley,
00:39:44.000 | obviously you go and invest in a tornado shelter.
00:39:46.000 | But people just ignore it until the storm comes through.
00:39:50.000 | So when the tornadoes tear up the state next to you
00:39:54.000 | or when the guys get blown up on the FTX exchange,
00:39:58.000 | look at that and then go back to your own portfolio and say,
00:40:02.000 | "What could wipe me out?"
00:40:04.000 | And then think about what ratcheting points you don't want to go below.
00:40:09.000 | So if you're going to take a risk in some kind of aggressive investment,
00:40:14.000 | how much should you invest into that?
00:40:16.000 | This is one of those things that I'll give you the best answer
00:40:20.000 | that I've come up with over the years.
00:40:22.000 | You want to invest enough of your money
00:40:27.000 | so that if the investment hits,
00:40:32.000 | it will make a substantial difference to your life.
00:40:36.000 | But you don't want to invest so much
00:40:39.000 | so that if the investment gets wiped out,
00:40:43.000 | that it destroys your whole life.
00:40:45.000 | And here's the point.
00:40:46.000 | Let's imagine you've got a net worth of $5 million.
00:40:49.000 | And you think to yourself, "You know what?
00:40:51.000 | I'm going to go and I'm going to get involved.
00:40:53.000 | There's this fancy new project that I want to get involved in
00:40:55.000 | or I'm going to put my money in Bitcoin."
00:40:57.000 | And you say, "What's the best opportunity?
00:40:59.000 | I think this investment could 100x.
00:41:01.000 | So I'm going to take $5,000
00:41:03.000 | and I'm going to invest $5,000 in this investment."
00:41:07.000 | So you invest $5,000.
00:41:08.000 | And imagine your investment 100x,
00:41:11.000 | which is, of course, horrifically difficult to do.
00:41:14.000 | So you go from $5,000 to $500,000.
00:41:18.000 | Did that change your financial future in any meaningful way?
00:41:23.000 | Well, if you've got a $5 million net worth,
00:41:24.000 | it doesn't do anything for you.
00:41:26.000 | You don't do a thing differently.
00:41:28.000 | If you all of a sudden wake up
00:41:29.000 | and now your balance sheet shows
00:41:31.000 | that you've got $5,500,000 to your name
00:41:33.000 | instead of $5 million,
00:41:35.000 | you don't do anything differently.
00:41:38.000 | You could go buy a car to celebrate,
00:41:40.000 | but you could have bought a car anyway.
00:41:41.000 | It's just meaningless.
00:41:43.000 | So clearly, even if you had a 100x investment
00:41:48.000 | on your $5,000,
00:41:50.000 | clearly that wasn't enough money at risk
00:41:52.000 | to make any kind of difference in your financial situation.
00:41:56.000 | Now, let's play with another number.
00:41:59.000 | What if you invested $50,000?
00:42:01.000 | You have a $5 million net worth, $50,000.
00:42:04.000 | And let's assume this magical investment 100xs.
00:42:08.000 | Well, now all of a sudden you've got $5 million.
00:42:10.000 | And that does fundamentally change your overall lifestyle.
00:42:15.000 | To go from $5 million to $10 million
00:42:18.000 | in a short period of time
00:42:19.000 | with your magical investment that 100xed,
00:42:22.000 | that changes it.
00:42:24.000 | It still doesn't change it massively.
00:42:26.000 | You don't go all of a sudden to flying on private jets.
00:42:29.000 | So $50,000 is probably too little still.
00:42:32.000 | And so you run these numbers, right?
00:42:34.000 | What if you put $150,000 into your 100x investment?
00:42:37.000 | 150,000 times 100 is 15 million.
00:42:40.000 | Well, now you just fundamentally changed everything.
00:42:44.000 | To go from $5 million to $20 million in net worth
00:42:47.000 | is a ratchet up point.
00:42:49.000 | At $5 million, you can live well.
00:42:51.000 | At $20 million, you quickly move into
00:42:54.000 | a whole different style of living.
00:42:56.000 | And there's a big lifestyle benefit to that.
00:42:59.000 | So you run the numbers.
00:43:02.000 | And I used 100x, right?
00:43:03.000 | Obviously, 100x is virtually impossible to achieve
00:43:07.000 | in any reasonable investment.
00:43:08.000 | But let's say that you think it's 100x.
00:43:10.000 | You've got to invest enough to where the 100x return
00:43:13.000 | is going to make a difference.
00:43:15.000 | What about the downside?
00:43:16.000 | You've got $5 million and you lose $5,000?
00:43:20.000 | Doesn't matter to you.
00:43:21.000 | Lose $50,000?
00:43:23.000 | No one likes to lose $50,000.
00:43:25.000 | But remember, at $5 million of assets,
00:43:27.000 | your net worth is going to be bouncing around
00:43:30.000 | half a million dollars, a million dollars a year regardless,
00:43:32.000 | just with normal investment market fluctuations.
00:43:36.000 | $150,000?
00:43:37.000 | You're very much in the range of where it still
00:43:40.000 | is not a big deal.
00:43:41.000 | To lose $150,000 is not a big deal.
00:43:44.000 | And so you play with these numbers and you say,
00:43:46.000 | "What's the maximum upside I could ever engage in
00:43:49.000 | and you choose a number that's going to allow you
00:43:53.000 | to have enough of an impact to where it's going
00:43:58.000 | to make a difference in your life?"
00:44:00.000 | Now remember, most investments,
00:44:02.000 | virtually all investments will never 100x.
00:44:06.000 | So maybe you say, "My big speculation is to 10x."
00:44:10.000 | Man, if we could 10x investments,
00:44:11.000 | that would be awesome.
00:44:12.000 | But now go back to those numbers.
00:44:14.000 | You put $150,000 into an investment and it 10xs?
00:44:18.000 | Well, that's $1.5 million, but now it just doesn't make that,
00:44:23.000 | you know, $5 million to $6.5 million.
00:44:26.000 | I mean, you're richer, but it's not lifestyle changing.
00:44:30.000 | And so on the other hand, if you lose $150,000,
00:44:34.000 | it's not lifestyle changing as well.
00:44:36.000 | And so you play with your expected returns
00:44:38.000 | and your expected losses and assume your investment
00:44:40.000 | goes to zero and then try to figure out
00:44:42.000 | where do you want to be?
00:44:44.000 | Like, what do you do?
00:44:46.000 | And that's the only way I know how to do it,
00:44:49.000 | is choose a number where on the upside it makes enough sense
00:44:53.000 | to where you're actually excited about taking the huge risk
00:44:55.000 | with a speculative investment, and on the downside
00:44:58.000 | where it doesn't wipe you out
00:44:59.000 | and you can stomach the risk of losing it all.
00:45:02.000 | The numbers will be different depending on your income,
00:45:04.000 | depending on your assets, depending on your other
00:45:06.000 | investment portfolio, your insurance plans,
00:45:09.000 | what your personal ratchet numbers are.
00:45:11.000 | But that's the thinking process,
00:45:13.000 | the bracketing process that you go through
00:45:15.000 | in order to arrive at the right number for you.
00:45:19.000 | Now what if you've made it?
00:45:20.000 | What if you've been a big winner in a space
00:45:23.000 | and you have a big investment that has actually won for you?
00:45:28.000 | What do you do then?
00:45:29.000 | I've been fortunate over the years to have quite a lot
00:45:32.000 | of crypto millionaires in my audience,
00:45:33.000 | and I've worked with a lot of them in private consulting.
00:45:36.000 | And here's the advice that I have given.
00:45:38.000 | And here's what's so astonishing about crypto millionaires
00:45:42.000 | is that in many cases over the last decade,
00:45:45.000 | their wins have come exceedingly quickly,
00:45:48.000 | and yet they have come based upon market forces
00:45:51.000 | that they can't control.
00:45:52.000 | So there's a huge amount of insecurity and uncertainty
00:45:55.000 | around this suddenly grown fortune
00:45:58.000 | that is generally not there when people have a business.
00:46:03.000 | If you build your wealth in a business,
00:46:05.000 | then you can analyze it very differently
00:46:07.000 | than if you've built your wealth in a financial speculation.
00:46:11.000 | When you have a business, you have cash flow,
00:46:13.000 | you have customers.
00:46:14.000 | These are real assets that you can use then
00:46:18.000 | to value your business.
00:46:20.000 | And you can say, "My business is worth this
00:46:21.000 | because we have this amount of cash flow."
00:46:23.000 | But with financial speculations,
00:46:26.000 | such as big cryptocurrency wins,
00:46:28.000 | you wind up facing the reality that you can't value it.
00:46:33.000 | It's all--there's no cash flow.
00:46:35.000 | The value is based upon market demand.
00:46:38.000 | And how do you control market demand?
00:46:40.000 | You can't.
00:46:41.000 | You can only just ride with it.
00:46:43.000 | And in many cases, the wins have come so quickly
00:46:47.000 | that now what do I do?
00:46:49.000 | How do I approach this?
00:46:51.000 | And so the advice that I have given
00:46:53.000 | has always been to go back to these concepts that I've said,
00:46:57.000 | the concept of a ratcheting concept
00:46:59.000 | and the concept of what changes your life in the future
00:47:04.000 | versus where you are today.
00:47:06.000 | If you come from nothing
00:47:08.000 | and you wind up as a suddenly newly minted millionaire,
00:47:13.000 | losing millionaire status is not an attractive idea
00:47:16.000 | because what you've bought for yourself is freedom.
00:47:20.000 | If you've got $2 million in the bank,
00:47:23.000 | no debts, modest cash flow requirements, et cetera,
00:47:27.000 | for the rest of your life,
00:47:29.000 | you don't ever have to do anything you don't want to do.
00:47:33.000 | You don't ever have to take a job you don't want to have.
00:47:35.000 | You don't have to do anything that you don't want to do.
00:47:38.000 | And that's really, really valuable.
00:47:40.000 | And so what I've always counseled is choose the number
00:47:43.000 | that you don't ever want to go below again in your life
00:47:46.000 | and get that out of the speculative asset
00:47:49.000 | and get it into a good financial plan
00:47:53.000 | that has a better track record, a better history,
00:47:56.000 | a longer run history, et cetera.
00:47:58.000 | And there are various ways that you can do that.
00:48:01.000 | On the other hand, if you still want to play,
00:48:04.000 | then you've got to make sure that you're playing enough
00:48:06.000 | to go big.
00:48:08.000 | And so it's that same measurement.
00:48:10.000 | Okay, let's assume we go to zero.
00:48:12.000 | How much does that hurt?
00:48:13.000 | Let's assume we go to 100x.
00:48:14.000 | How much does that win for you?
00:48:17.000 | And each person, based upon his own risk tolerance,
00:48:22.000 | his own lifestyle ambitions and goals, et cetera,
00:48:25.000 | will have a different number.
00:48:27.000 | But you can get at the right number.
00:48:29.000 | When you have investments that go up,
00:48:32.000 | take your winnings.
00:48:33.000 | Always remember, profits that are not taken off the table
00:48:38.000 | are not actual profits.
00:48:40.000 | Paper profits are not real profits.
00:48:42.000 | Money that is up but you don't take it off the table
00:48:45.000 | is not actually profits.
00:48:48.000 | For me, I grew of age during the dot-com boom.
00:48:53.000 | And I just remember so much.
00:48:55.000 | A friend of a friend, kind of a middle-aged guy,
00:48:57.000 | he started some online business,
00:48:59.000 | and all of a sudden he was driving a Porsche.
00:49:01.000 | This is the dot-com boom, 2000.
00:49:03.000 | I was in high school.
00:49:05.000 | He's driving a Porsche.
00:49:06.000 | He's just making it big.
00:49:08.000 | And then six months later, the Porsche was sold.
00:49:10.000 | And he was back living in his parents' house,
00:49:13.000 | totally broke.
00:49:15.000 | When you win, no matter how confident you are in the future,
00:49:18.000 | go back to your ratchet mechanism and say,
00:49:21.000 | "If I can take profits and I can set them aside into cash,
00:49:27.000 | then I can fundamentally change the rest of my life."
00:49:30.000 | So don't play hot and heavy if you haven't ensured the downside.
00:49:39.000 | Take your winnings. Take your profits.
00:49:41.000 | If you double an investment, take money off the table.
00:49:47.000 | If you 5x an investment, take more money off the table.
00:49:50.000 | If you 10x an investment, take huge amounts of money off the table.
00:49:54.000 | Why do I say that?
00:49:56.000 | Earlier I used the example of 100x, right?
00:49:58.000 | Because it's fun to think about.
00:50:00.000 | And many people, in the massive increase in Bitcoin
00:50:05.000 | and other cryptocurrency values, have 100x their investment.
00:50:09.000 | But you cannot 100x something for long at all.
00:50:14.000 | You can't even go at a 3% growth for long at all.
00:50:19.000 | And what I mean is, just run the numbers.
00:50:21.000 | The power of compound interest is always there.
00:50:26.000 | Some months ago, somebody had gotten involved in some scheme.
00:50:31.000 | They came to me and promised extraordinary gains.
00:50:34.000 | And I just immediately said, "This is a scam."
00:50:37.000 | How do I know it's a scam?
00:50:39.000 | Because based upon the numbers that somebody is promising you,
00:50:43.000 | of an increase in your investment,
00:50:46.000 | within a very short time, all the money in the world sucked up.
00:50:49.000 | You have to run the math.
00:50:51.000 | And so, if you ever got one 100x growth in your life, that's it.
00:50:57.000 | You're very unlikely to ever get that again.
00:51:00.000 | And so, recognize. Don't think, "This is normal. I can just keep doing this."
00:51:04.000 | You can't. You won't.
00:51:06.000 | Doubling up, you can do it a few times.
00:51:09.000 | There are enough assets that if you have enough time, can double up.
00:51:12.000 | 5x something, could you do that once or twice in your life?
00:51:17.000 | If you can do it more, you'll be in the hallmark, the hall of the heroes.
00:51:21.000 | You'll be up there with Elon and Warren and all the great investors.
00:51:26.000 | Life doesn't work that way.
00:51:28.000 | There are physical constraints that hold back these assets.
00:51:33.000 | Any asset. Stock prices, value of the dollar, value of Bitcoin, etc.
00:51:38.000 | So, when you increase, take your winnings,
00:51:42.000 | take some of your winnings and deploy them.
00:51:44.000 | Do it on a ratcheting scale.
00:51:46.000 | Again, you can decide the numbers, but don't be stupid and keep everything going
00:51:51.000 | in something that has gone well.
00:51:53.000 | Recognize that booms are almost always followed by busts.
00:51:58.000 | And busts are often followed by booms.
00:52:01.000 | So, if you're booming, I want to be Mr. Negative and say, "The bust is coming."
00:52:06.000 | If you're busting, I want to be Mr. Encouragement to say, "Hey, the boom may come."
00:52:11.000 | But booms are always followed by busts.
00:52:13.000 | That's the fundamental nature of humanity.
00:52:17.000 | We're emotionally driven creatures that get irrationally exuberant when times are good
00:52:21.000 | and irrationally despondent when times are bad.
00:52:24.000 | So, I think that's what I wanted to share.
00:52:28.000 | There are more rules that could be applied to investing.
00:52:31.000 | I guess the final one I would say is this.
00:52:33.000 | If you can't explain it to a child, don't do it.
00:52:38.000 | This came up on the Friday Q&A show where somebody was talking about how--
00:52:45.000 | somebody was talking about--
00:52:49.000 | I just slipped my mind, excuse me--
00:52:52.000 | oh, advice from an attorney.
00:52:54.000 | The attorney was saying, "Well, you can do this kind of trust or this kind of trust,"
00:52:56.000 | and he couldn't explain it to me.
00:52:58.000 | My comment is, "That's the attorney's job.
00:53:00.000 | If you can't explain to me why the attorney is saying to do it,
00:53:03.000 | there's a good chance you're being swindled."
00:53:05.000 | Now, go back to the attorney, give another chance, say, "Maybe I'm just dense
00:53:08.000 | and I didn't understand. Can you try this again?"
00:53:10.000 | But if a financial expert can't explain something simple enough
00:53:13.000 | so that you clearly understand what it is and why you would want to do it
00:53:16.000 | or not want to do it, then that person is, in my opinion,
00:53:20.000 | not doing 101 of his job.
00:53:25.000 | Flip it to an investment.
00:53:26.000 | If you can't explain to your child, your elementary school child,
00:53:30.000 | or your niece, or your nephew, or a random child that you walk up to on the street,
00:53:34.000 | if you can't explain the basic value proposition of your business
00:53:40.000 | or of this company you want to invest in,
00:53:42.000 | or of this computer coin you want to buy,
00:53:46.000 | or what you're trying to do,
00:53:48.000 | then the emperor might just have no clothes.
00:53:53.000 | There might just not be any usefulness to it.
00:53:57.000 | It's easy to say that when everything is crashing.
00:54:01.000 | And you're like, "Now, of course, if I just stuck to it, that would be great."
00:54:05.000 | It's harder to say that when it seems like everyone is winning.
00:54:07.000 | But at its core, if you can't fundamentally explain the value of this to someone else,
00:54:13.000 | then you probably shouldn't get involved.
00:54:17.000 | It's a sign that it may have no value,
00:54:21.000 | or you just don't understand it well enough.
00:54:24.000 | I'm trying to be cautious here,
00:54:26.000 | because one of the things that's interesting over the years
00:54:28.000 | with my involvement in Bitcoin and my Bitcoin education,
00:54:31.000 | people say, "Well, if I just understand Bitcoin more, then I'll invest in it."
00:54:35.000 | And they go on, "I can't understand it, understand it, understand it."
00:54:39.000 | And they never understand it, they never invest in it, or they never buy coins.
00:54:42.000 | But what's funny is that I actually have a very hard time explaining something like a dollar.
00:54:49.000 | I try to explain it to my children.
00:54:51.000 | I have a master's degree in financial planning.
00:54:53.000 | I've been paying attention to finance for 20 years.
00:54:55.000 | I've read hundreds, if not, let's just say hundreds and hundreds of books on money.
00:55:00.000 | If you ask me today, off the cuff, to explain how money is created,
00:55:05.000 | it is such a convoluted, ridiculous system that it's exceedingly difficult for me to do.
00:55:10.000 | Now, there may be a lesson in that.
00:55:12.000 | Maybe that's the fundamental truth of the fakeness of money.
00:55:18.000 | Money really is fake.
00:55:20.000 | And so I can explain it as long as I just focus on the utility of money,
00:55:27.000 | the fact that it has value because everybody wants it,
00:55:30.000 | and when everybody doesn't want it, it no longer has value.
00:55:32.000 | I can explain that.
00:55:33.000 | When you try to explain how a dollar is magically created out of thin air,
00:55:37.000 | it's remarkably difficult to explain.
00:55:39.000 | So you've got to be careful, because sometimes that can go too far.
00:55:42.000 | But at its core, you should have some concept of how to explain this.
00:55:47.000 | If I explain Bitcoin to somebody, I can do it simply in about a minute
00:55:53.000 | to the point where you say, "Okay, if that works, and if people like how that works,
00:55:58.000 | I can understand what the utility of that is."
00:56:01.000 | Or some coins.
00:56:03.000 | But then there are other ones where it's just so obviously difficult,
00:56:07.000 | you're involved in a scam.
00:56:10.000 | So that's all I have to say.
00:56:14.000 | I'll close with this because I don't know if I'll actually make the other show or not.
00:56:18.000 | If you are in the midst of collapse, if your trading account on FTX is wiped out,
00:56:25.000 | if you've lost half your net worth, et cetera, what I beg of you is do not become despondent.
00:56:31.000 | Do not--in fact, I'm going to go for just a couple more minutes
00:56:36.000 | because I need to say this.
00:56:37.000 | This is important.
00:56:38.000 | It could save lives.
00:56:39.000 | I've been wanting to do a show on "Don't kill yourself over something so stupid
00:56:42.000 | that it's going to kill you for a while."
00:56:44.000 | But we'll just start with this comment.
00:56:47.000 | It was on Twitter this morning.
00:56:49.000 | And there was a crypto guy who was saying, "The last few days in the crypto world
00:56:52.000 | have sucked a lot."
00:56:54.000 | And a random person says, "I've lost almost everything.
00:56:57.000 | I don't know what to do."
00:56:58.000 | Here's my answer.
00:56:59.000 | Number one, cry.
00:57:01.000 | Have a good cry.
00:57:02.000 | Be angry.
00:57:04.000 | Embrace the emotions of the moment.
00:57:08.000 | Acknowledge the emotions.
00:57:11.000 | I'm sure you've gotten past it.
00:57:12.000 | It may take a day.
00:57:13.000 | It may take five days.
00:57:14.000 | For me, usually one or two nights of sleep can change things.
00:57:18.000 | There are times where something happens, my emotions are so upset that I feel sick to my stomach.
00:57:23.000 | I get a tingly feeling all over my body.
00:57:26.000 | Usually if I can get one night's sleep, then I can see everything clear.
00:57:29.000 | Everything's clear in the morning.
00:57:31.000 | So cry, be angry, be upset, get a night's sleep, and then with a calm head,
00:57:35.000 | come back and study your options and see if anything can be recovered.
00:57:39.000 | Can you get your money out?
00:57:40.000 | Can you hedge your bets in some way?
00:57:42.000 | Can you minimize your risk on the rest of your portfolio?
00:57:46.000 | Study your options.
00:57:47.000 | Then the most important thing is exercise and sunlight and relationships.
00:57:54.000 | Go for a walk.
00:57:55.000 | Go in the sunshine.
00:57:56.000 | Get sunlight.
00:57:57.000 | Get exercise and get relationships.
00:58:00.000 | And be with other people.
00:58:02.000 | Don't be alone.
00:58:03.000 | I know what it's like to be in a dark place mentally.
00:58:09.000 | In fact, interestingly, the last months of my life have been some of the darkest of my life.
00:58:13.000 | And it's not because anything is wrong.
00:58:16.000 | It's just emotionally you get into those black periods.
00:58:20.000 | And so you've got to start with what you can start with.
00:58:22.000 | And so exercise, sunlight, relationships, friendships, being with other people, et cetera.
00:58:28.000 | Then in terms of money, the situation is easy.
00:58:31.000 | If you don't have a job, you go get a job.
00:58:34.000 | If you don't have a job, you go get a job.
00:58:37.000 | You start earning money.
00:58:39.000 | Once you're earning money, you can figure out how much you can afford to live on.
00:58:42.000 | You can start saving money.
00:58:44.000 | You can start the process over again.
00:58:46.000 | But you simply need a job.
00:58:47.000 | You need work.
00:58:49.000 | And then some people, you might have to sell a house.
00:58:52.000 | You might have to dump some stuff.
00:58:55.000 | You might have to stop paying bills.
00:58:56.000 | You might have to go through bankruptcy.
00:58:58.000 | But the point is in our modern day, one of the things that we're very, very fortunate is
00:59:02.000 | you're not going to die from a financial mistake unless you literally choose to kill yourself,
00:59:09.000 | which is stupid because it's just money.
00:59:13.000 | Recognize it's all fake.
00:59:15.000 | It was always fake.
00:59:16.000 | It is always fake.
00:59:18.000 | Money is fake.
00:59:19.000 | It's made up out of thin air.
00:59:21.000 | It doesn't exist.
00:59:22.000 | It's an imaginary concept that we use to try to organize society.
00:59:27.000 | If you lose all your money, it was all fake in the beginning.
00:59:30.000 | And you can press forward.
00:59:32.000 | And you can make it all back.
00:59:34.000 | Most millionaires have gone completely broke at least a couple times.
00:59:38.000 | And because money is fake, in the same way that it can go quickly, it can come quickly.
00:59:45.000 | You can mint another fortune quickly.
00:59:47.000 | It may take 10 years, but 10 years of work puts you in a dramatically different place,
00:59:52.000 | and it's worth it.
00:59:53.000 | The only thing that ends your life is literally if you end your life.
00:59:58.000 | Don't do it.
01:00:00.000 | It's stupid.
01:00:01.000 | Stupid causes irreparable harm to you and to everyone around you.
01:00:06.000 | It's only money.
01:00:08.000 | Number one, just stop paying bills if you need to.
01:00:11.000 | The entire system can collapse around you, meaning the personal system, people.
01:00:15.000 | We all take risks when we lend money to people, et cetera.
01:00:18.000 | I had somebody--I lent someone a lot of money.
01:00:21.000 | Did it going in--last couple years, did it going in, knowing that it may not be returned.
01:00:26.000 | It wasn't returned.
01:00:29.000 | Write it off.
01:00:30.000 | You can declare bankruptcy.
01:00:32.000 | Bankruptcy will end most of your financial obligations.
01:00:35.000 | You can dig into the various kinds of bankruptcy and choose one that's right for you.
01:00:39.000 | But bankruptcy can control your creditors in a powerful way, and you can start over again.
01:00:44.000 | There's nobody who can't start over again.
01:00:47.000 | So recognize it's only money.
01:00:49.000 | Most people go broke a couple times before they make it.
01:00:51.000 | You'll learn your lessons, and you'll press on.
01:00:54.000 | It's all fake.
01:00:55.000 | It's all fake, the money stuff.
01:00:58.000 | So I guess my plea with you is if you're in a dark place, don't do the things that are irreparable.
01:01:05.000 | Don't end your life.
01:01:08.000 | Take a few days, and then just get back.
01:01:10.000 | Sunshine, exercise, a job, social contact, work steadily.
01:01:22.000 | I hope these rules help some of you to avoid the catastrophe that many people are facing right now.
01:01:26.000 | I hope that FTX can recover in some way and make whole the people who have depended upon it in some way.
01:01:33.000 | I wish you a great day.
01:01:34.000 | Remember that if you want to learn how to buy Bitcoin and other coins, but primarily Bitcoin,
01:01:42.000 | in a way where it's actually protected from things like the collapse of the second largest exchange out there,
01:01:49.000 | go to BitcoinPrivacyCourse.com.
01:01:54.000 | The holidays start here at Ralph's with a variety of options to celebrate traditions old and new.
01:02:00.000 | Whether you're making a traditional roasted turkey or spicy turkey tacos,
01:02:04.000 | your go-to shrimp cocktail, or your first Cajun risotto,
01:02:08.000 | Ralph's has all the freshest ingredients to embrace your traditions.
01:02:12.000 | Ralph's. Fresh for Everyone.
01:02:14.000 | We've locked in low prices to help you save big store-wide.
01:02:17.000 | Look for the locked in low prices tags and enjoy extra savings throughout the store.
01:02:21.000 | Ralph's. Fresh for Everyone.