Joshuas_WhatsApp_Metaphor_and_How_It_Will_Apply_to_the_Changing_Financial_World
00:00:00.000 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,
00:00:03.520 | skills, insight and encouragement you need to live a rich and meaningful life now while
00:00:07.840 | building a plan for financial freedom in 10 years or less.
00:00:11.180 | My name is Josh Rasheeds.
00:00:12.180 | I'm your host and today on the show I want to share with you some insights that I have,
00:00:17.960 | few ideas that I've come up with personally and it's my hope that these ideas might
00:00:22.600 | help you to, as the great Wayne Gretzky said, "Skate to where the puck is going to be,
00:00:28.880 | not where it is."
00:00:30.600 | I call this the WhatsApp phenomenon and this is an idea that I've considered for a good
00:00:35.840 | number of years now but I see applications of it to the world around us, to some of the
00:00:41.760 | questions that you might be thinking about, some of the ideas that you might be considering
00:00:47.400 | and yet this is something that has happened within your and my lifetime and I think the
00:00:53.160 | drivers of what I'm about to describe to you are something that you can see personally
00:00:58.080 | which makes it interesting as a philosophical tool.
00:01:00.200 | One of the definitions of philosophy that I like is those things that people everywhere
00:01:04.480 | can think about just based upon their personal experience.
00:01:07.720 | You don't need to go out and do research on anything.
00:01:09.740 | You can just think about this and so I'm going to elaborate a theory that I came up with
00:01:12.840 | personally.
00:01:13.840 | I've never seen this theory read or I've never gone looking for articles on this theory.
00:01:17.800 | They might be out there but I came up with this theory but I think you'll probably be
00:01:21.160 | able to see the point that I'm making in this theory and then see the application of it.
00:01:26.400 | I want to talk about how the world develops and is developing.
00:01:31.320 | My undergraduate degree is in international business and when I was an international business
00:01:38.720 | student one of many books that I read when I was in college was Thomas Friedman's book
00:01:44.820 | called The World is Flat and in that book I think, I haven't read it in 20 years, excuse
00:01:53.200 | me, in 15 years, I haven't read the book in 15 years and so I hope I'm citing the right
00:02:00.200 | book.
00:02:01.200 | But in that book Friedman talks about how mobile communications technology was transforming
00:02:07.880 | the African continent and the argument that Friedman advanced in that book was basically
00:02:13.760 | this.
00:02:14.840 | If you were to go back to say 1950, one of the most connected places in the world would
00:02:22.640 | have been a place like the United States.
00:02:25.560 | Other countries as well but once the telephone was developed you had an incredible investment
00:02:35.760 | into making sure that that technology was accessible.
00:02:41.480 | The ability to speak to somebody with synchronous voice communications was a tremendous path
00:02:49.160 | forward, a tremendous advance, a tremendous step forward and so in the United States you
00:02:54.600 | had tremendous investment into wiring the country.
00:02:59.440 | Over time the country of the United States became completely wired with electricity and
00:03:05.920 | it became completely wired with telephone lines, telephone communications.
00:03:11.280 | It was not always that way.
00:03:13.960 | My father grew up on a remote ranch in the mountains of Colorado and the only form of
00:03:20.320 | communication that they had with the outside world was through the use of radio.
00:03:26.360 | My grandmother was a ham radio operator because that allowed her to talk to her friends across
00:03:32.240 | the state and across the region.
00:03:34.920 | Then a telephone was installed eventually but of course it was a different kind of telephone
00:03:39.200 | system and you started to see the fact that the United States had invested heavily into
00:03:45.240 | getting even the remote regions of the country connected with telephone lines.
00:03:52.040 | In my childhood cell phone technology, mobile telephone technology started to become useful.
00:04:01.720 | At first it was of course the domain of the rich to be able to have a car phone.
00:04:06.840 | Then they started to become more popular and when I graduated high school that was basically
00:04:12.440 | the turning point at which a cell phone went from being a luxury good to being a common
00:04:20.120 | ordinary necessity.
00:04:22.920 | Now when I was in college one of the pieces of data that I read in the Friedman book was
00:04:28.060 | how this technology was transforming Africa and how much faster it was being accepted
00:04:35.100 | in Africa than it was in the United States.
00:04:40.040 | Friedman made the point that the ability that a rural farmer now had on his small farm somewhere
00:04:47.920 | in the African continent to reach real-time market data of the price of crops or current
00:04:54.240 | events or things that would affect his life, that was tremendous and yet that technology
00:05:00.600 | curve, that development curve in Africa was far faster than it was in the United States.
00:05:07.520 | Now the technology was designed, many parts of it originally in the United States and
00:05:12.320 | other nations as well.
00:05:14.320 | Different systems were rolled out and there was good application but in many ways it was
00:05:20.440 | a lot faster in Africa because there was no need to install the infrastructure that the
00:05:28.320 | United States and Germany and Canada and Great Britain had gone through being some of the
00:05:33.760 | more developed countries.
00:05:34.840 | They had invested a lot of money and time into stringing the entire country with wires
00:05:41.000 | whereas in the African continent all they had to do to realize a communications revolution
00:05:48.520 | was to go in and install cell phone towers and it's much much easier to install cell
00:05:52.960 | phone towers than it is to install millions of miles of wires connected to central plants
00:05:59.560 | and connected to each house and so the pace of development was far faster which is phenomenal,
00:06:05.600 | just wonderful for the economic growth and development in the African continent.
00:06:11.720 | But here's where I observe that things changed.
00:06:17.500 | If you were to go to many parts of the world today, Africa, Latin America, really many
00:06:25.380 | parts of the world outside of the United States, perhaps outside of Western Europe, if you
00:06:31.040 | were to try to call somebody or try to connect with them on their telephone you will almost
00:06:35.640 | never do it.
00:06:37.200 | You'll almost never connect with someone using the telephone.
00:06:41.720 | Rather what you will do is you will use an app and it's most likely to be WhatsApp.
00:06:47.520 | There may be regional variations in China, it'll be WeChat but in many parts of the world
00:06:52.520 | it'll be WhatsApp, the largest most popular app used on a regular basis by something like
00:06:57.480 | two billion people and I've thought a lot about why that is and here I see an interesting
00:07:05.240 | trend that is happening on a global basis right now, that I can observe right now.
00:07:13.080 | When I meet somebody, for example right now my family and I are here in Costa Rica, when
00:07:17.160 | I meet a Costa Rican and I want to communicate with that person we're going to communicate
00:07:22.320 | on WhatsApp whereas in the United States when I meet a US American we're going to communicate
00:07:29.940 | on the phone.
00:07:31.580 | And so in the US American culture, while of course there are millions and millions of
00:07:35.480 | US Americans who have WhatsApp on their devices, in that culture the phone is a perfectly viable
00:07:43.640 | alternative.
00:07:44.640 | We're used to talking on the phone, we've been talking on the phone for a very long
00:07:47.880 | time, the phone works fine and so we do business based on phone numbers.
00:07:52.060 | But in Latin America and Africa it's not that same way.
00:07:55.200 | You'll often see instead of a phone number you'll often see the business post their WhatsApp
00:08:00.440 | phone number right on the front door, a little WhatsApp logo, contact us on WhatsApp.
00:08:04.840 | You go to their website and when you click contact us it'll pop open the WhatsApp chat
00:08:09.360 | and you can chat with them right on WhatsApp instead of using either an external chat client
00:08:14.440 | or instead of having their phone number or their email.
00:08:18.200 | And so the point here is that technologies are adopted differently based upon different
00:08:22.440 | needs.
00:08:23.440 | Now let's talk about WhatsApp versus telephones.
00:08:27.680 | WhatsApp is superior to the telephone in every single way that I can come up with.
00:08:34.240 | I cannot come up with one single point wherein a telephone, even a mobile phone, is better
00:08:43.800 | than WhatsApp.
00:08:46.400 | Let me give you some examples.
00:08:48.320 | WhatsApp doesn't restrict your communication to one form of communication.
00:08:53.260 | WhatsApp allows you to call and use a voice call.
00:08:57.560 | WhatsApp allows you to do a video call and add a video image when that's convenient.
00:09:03.980 | WhatsApp allows you to send written text messages.
00:09:08.260 | WhatsApp allows you to send audio messages.
00:09:12.400 | So you can choose.
00:09:13.800 | WhatsApp allows you to send gifts and stickers and whatever else you want to do to express
00:09:17.280 | yourself.
00:09:18.440 | WhatsApp allows you to do all of those things.
00:09:20.720 | WhatsApp allows you to communicate with one single individual.
00:09:26.320 | WhatsApp also allows you to communicate with groups and to create them on the fly.
00:09:30.400 | You can just create a group in a moment and then you can disband it.
00:09:33.000 | You can clear it out.
00:09:34.520 | You can do anything with it.
00:09:37.880 | WhatsApp works on any device.
00:09:39.640 | It'll work on a tablet.
00:09:41.040 | It'll work on a computer.
00:09:42.400 | It'll work on a cell phone and it'll stay connected and organized among all of those.
00:09:47.600 | WhatsApp allows you to function without paying any kind of monthly fees.
00:09:52.920 | Now one of the unique things about WhatsApp as compared to some other platforms which
00:09:56.800 | also provide the same technology.
00:09:58.640 | I'm just using WhatsApp because it's the most prominent.
00:10:00.520 | You could apply the same logic to some of the other platforms.
00:10:04.080 | But you don't have to have an active phone number.
00:10:06.040 | You do have to have an active cell phone with a connection, an active device, but that doesn't
00:10:10.040 | have to actually be tied to an active phone number.
00:10:13.320 | You can run it with a voice number.
00:10:16.160 | You can run it with a free number.
00:10:17.680 | You can run it in a couple of different ways.
00:10:19.600 | And so it's a really useful system.
00:10:22.480 | And the reason that, I forgot, encryption, right?
00:10:26.080 | WhatsApp is encrypted and encrypted which is a tremendous benefit that the telephone
00:10:30.080 | and standard SMS messaging doesn't offer to you.
00:10:33.640 | WhatsApp is really good at giving you additional data.
00:10:35.600 | Hey like message received, message read.
00:10:39.800 | It allows you to, it's good at sitting there and queuing up messages and waiting until
00:10:44.320 | you have a signal to send them out.
00:10:46.200 | So it's just a better solution technologically on every level.
00:10:50.840 | So why is it that the world has not noticed it and everyone adopted WhatsApp to the same
00:10:57.360 | level?
00:10:58.360 | Why is it that a store, a massage parlor or a chiropractor office in the United States
00:11:05.640 | of America won't have a WhatsApp profile?
00:11:10.240 | Perhaps some individuals working in there will have their own personal thing but they
00:11:12.920 | won't use it on a business level whereas a chiropractor or a massage parlor or something
00:11:18.000 | in Latin America likely will.
00:11:20.400 | Well, I think it comes down to the need and who benefits from the system.
00:11:25.560 | So let's go back to the development of mobile telephony.
00:11:30.960 | In the United States when phones first came out they were very expensive but we were accustomed
00:11:36.640 | to working in a phone system.
00:11:38.640 | My early plans had a certain number of text messages, had a certain number of minutes,
00:11:43.760 | you had in network minutes, you had out of network minutes, you tracked all that stuff.
00:11:49.600 | Then cost came down, competition came up.
00:11:52.120 | Today virtually any plan that I'm aware of will certainly allow for unlimited talk and
00:11:57.200 | text and your plans are mainly differentiated based upon the amount of data that you consume.
00:12:03.280 | But WhatsApp came out of the need around the world for people to use their communication
00:12:08.640 | devices more frugally.
00:12:10.840 | WhatsApp solved a problem.
00:12:12.680 | It allowed somebody, it allowed that proverbial, you know, Friedman's farmer in Africa to just
00:12:19.720 | pay for a little bit of data and WhatsApp was much better with his data usage because
00:12:25.080 | instead of sending one SMS message he could just send a little tiny data burst and communicate
00:12:30.160 | on WhatsApp.
00:12:31.640 | He could send data when he needed and the data would get through, the message would
00:12:35.080 | get through pretty reliably.
00:12:37.180 | And so it was just cheaper, it was more frugal on data.
00:12:39.400 | To this day I find that WhatsApp, I'll often be on a conversation on Signal or FaceTime
00:12:45.600 | or even Messenger, something like that, and I'll find that of any of those WhatsApp has
00:12:50.980 | the best protocols to work well on a slow connection.
00:12:54.480 | You can have a genuinely decent voice conversation, a simultaneous synchronous voice communication
00:13:00.320 | conversation, on WhatsApp even without a ton of data speed, which is pretty remarkable.
00:13:05.320 | Their engineers are phenomenal.
00:13:08.360 | So I think I've given, talked enough about the technical side of things.
00:13:12.740 | Just to demonstrate that in my view WhatsApp is a superior offering.
00:13:18.520 | It's a better solution than telephones and it's something that has revolutionized the
00:13:25.440 | world and is revolutionizing the world.
00:13:27.880 | That communications revolution is truly phenomenal.
00:13:31.880 | Now what do you see happening though with regard to WhatsApp?
00:13:36.040 | The first observation that I have is regardless of how good a technical solution is, people
00:13:41.200 | are generally comfortable with what they're comfortable with.
00:13:45.840 | I don't know what percentage of US American people who have a telephone have WhatsApp
00:13:51.800 | installed, but if it were a few years ago the percentage would have been extremely low
00:14:00.320 | because it's just not used.
00:14:01.960 | It's not used among "normal people".
00:14:04.440 | Certainly young people use it, but it's just not used among normal people.
00:14:08.680 | But at some point in time somebody gets hooked, right?
00:14:12.080 | Somebody something happens.
00:14:13.080 | They say I want to communicate with you.
00:14:14.720 | You're talking across continents, right?
00:14:16.280 | I neglected to say this earlier when I was talking about the benefits of WhatsApp.
00:14:19.620 | You have the same exact completely free cost of communicating from New York City to Addis
00:14:30.040 | Ababa, Ethiopia as you do communicating from New York City to upstate, right, to Rochester
00:14:37.120 | or something.
00:14:38.280 | So that's phenomenal, right?
00:14:41.920 | If you get in a cab with somebody in the United States with a driver from Ethiopia, there's
00:14:49.780 | a good chance that they're just chatting with their family continually on WhatsApp for no
00:14:54.820 | cost.
00:14:55.940 | That's wonderful and a truly amazing revolution for them.
00:15:00.620 | And so at some point people get hooked.
00:15:03.780 | And then what happens is once they get hooked then they start to communicate in different
00:15:07.580 | platforms and they start to not notice that these different platforms are all doing the
00:15:11.540 | same thing.
00:15:12.960 | For example, I remember when my dad got WhatsApp, right?
00:15:17.660 | My dad's in his mid-70s and he wanted to communicate with people in Africa and in Asia and they
00:15:24.740 | communicate on WhatsApp.
00:15:25.900 | So he downloaded WhatsApp.
00:15:27.460 | And so now though that's his most used communications platform and it works really, really well.
00:15:33.140 | So you'll have even relatively old people like my parents who will communicate without
00:15:39.860 | any problem on WhatsApp and then they've got Facebook Messenger and they've got Telegram
00:15:44.900 | and they've got Signal and they're just kind of now we live in this milieu of applications,
00:15:52.140 | this just world of applications and we basically view them as in some ways totally fungible.
00:15:58.580 | There are people that I communicate with on whatever platform happens to be convenient.
00:16:02.420 | Sometimes Messenger, sometimes iMessaging, sometimes WhatsApp, sometimes Signal, doesn't
00:16:05.780 | really matter.
00:16:06.940 | And it just becomes a utility and we all use this utility.
00:16:11.820 | Now over time the culture and the population can change but it takes more time for a population
00:16:19.380 | that's used to doing something an old way to change than it does for a population that's
00:16:23.860 | embracing the technology for the first new time.
00:16:27.620 | Now there are still people who cannot imagine not having a phone, not imagine not having
00:16:34.620 | a phone number.
00:16:36.160 | But a lot of us, right, I don't even pay any attention to the phone number of a phone,
00:16:41.820 | or at least I didn't used to.
00:16:43.460 | I have found that I've had to reinsert phones into my life in order to deal with SMS, two-factor
00:16:50.340 | authentication properly and deal with banks and credit card companies, etc.
00:16:55.540 | But if you can solve that in another way, which of course there are other ways to solve
00:16:59.020 | it, the need for a phone is diminished.
00:17:01.460 | You just have a communications device.
00:17:03.700 | And yet people don't really notice this.
00:17:05.140 | Now let's turn to money because I want to apply this to money because I think it's a
00:17:08.540 | useful metaphor that more or less touches on what I think is going to happen in the
00:17:14.740 | future with the way that we do money.
00:17:17.400 | At its core, WhatsApp and other platforms, they simply solve one human need, which is
00:17:25.340 | communication.
00:17:28.060 | And they facilitate different and interesting ways to communicate.
00:17:33.060 | Even though video calling, they facilitate different ways and whether you use them or
00:17:40.820 | not is up to you.
00:17:42.660 | Video calling, back in the day, you had this incredible futuristic idea that you would
00:17:48.700 | do a video call with somebody and that was going to be cool.
00:17:53.140 | Then it happened and now almost anybody can do a video call on virtually any of these
00:17:58.220 | platforms.
00:17:59.380 | I personally though almost never use them.
00:18:01.780 | I would just prefer just to talk instead of deal with the video.
00:18:06.940 | But the technology is there and then people choose what they access and what they don't
00:18:10.460 | access.
00:18:11.460 | So money solves a similar function.
00:18:15.020 | Money provides a system of accounting so that people can exchange value for value one with
00:18:22.660 | another.
00:18:24.500 | Just like a telephone or the postal service or any of these facilitate communication,
00:18:32.420 | money facilitates transactions.
00:18:34.540 | It facilitates trade.
00:18:36.220 | It facilitates transfers of value.
00:18:39.820 | Now in many systems, such as the United States of America, you have a large, solid, relatively
00:18:49.700 | well-run money system.
00:18:53.000 | You have the benefit, by way of metaphor, of having the entire country crisscrossed
00:18:58.900 | with cables.
00:19:00.820 | But just because that's the way things are right now doesn't mean that's the way that
00:19:07.720 | things will be in the near future.
00:19:11.460 | Just because that's the way things are right now doesn't mean that's the way things are
00:19:14.400 | in other places in the world.
00:19:16.940 | And just because that's the way things are right now doesn't mean that that's the way
00:19:20.260 | things will be ten years from now.
00:19:25.140 | In the same way that you've had a revolution in communications that's happened right during
00:19:33.020 | your lifetime, over the last ten to twenty years, I think it's very probable that you
00:19:41.100 | will see a similar revolution in the way that we think about money.
00:19:48.260 | And I think that if you don't see that, think a little bit more about my WhatsApp example.
00:19:56.380 | It's hard for me to imagine anybody in my listening audience that doesn't regularly
00:20:01.540 | communicate on some application that's not the telephone.
00:20:07.580 | And the telephone is still there in the background, but most of the communication now happens
00:20:13.460 | in another context.
00:20:14.900 | Well I think in that similar way, that change, that diversity, that changing technology is
00:20:25.420 | going to come to the way that we think about money, to the way that we use money, etc.
00:20:30.340 | Now for early adopters, there are already options.
00:20:34.660 | You can today live in the United States and run your entire life on the British pound.
00:20:42.180 | That would of course be unusual, but you can do that.
00:20:45.420 | And here's where you see this incredible intersection between the communications technology and
00:20:51.820 | the way that we use money.
00:20:54.100 | Right now, you can use other currencies in your life, and I recommend it.
00:20:59.220 | I think it's a good idea.
00:21:00.700 | When I travel around the world, my primary form of payment is a credit card, and most
00:21:07.380 | of the time it's a credit card just simply run through Apple Pay.
00:21:12.420 | The single most convenient way for me to buy something all around the world is by double
00:21:18.180 | tapping the button on the side of my Apple Watch and holding it over the credit card
00:21:22.860 | reader and moving on with my day.
00:21:26.180 | It's a phenomenal system.
00:21:28.780 | And if that particular credit card merchant doesn't have a touchless credit card reader,
00:21:36.220 | then of course I'll use a physical credit card.
00:21:39.900 | But it's a phenomenal system.
00:21:41.500 | That touchless system right on my watch or right on a phone works really, really well.
00:21:46.580 | I can't use that system very much in the United States because the United States is significantly
00:21:50.620 | behind the curve in contactless credit card readers.
00:21:55.300 | But I can use it regularly around the world, even in restaurants and things like that,
00:21:59.980 | where usually they bring out the point of service terminal to your table and they punch
00:22:04.120 | the numbers in, you hold your watch over it and boom, you're done.
00:22:07.180 | Now why do I do that?
00:22:08.500 | Well, because it's annoying to do foreign currency transactions.
00:22:13.820 | I don't know how much money I'm going to need in, right now I'm in Costa Rica, the Costa
00:22:17.220 | Rican Cologne.
00:22:18.220 | I don't know how many colones I'm going to need.
00:22:20.740 | And if I go and take out and I convert US dollars into colones, I have to take my passport
00:22:28.000 | into a bank, they have to register me in a system, they give me a conversion rate.
00:22:32.500 | I don't know what the conversion rate is fair on their buy-sell spread, it's a real hassle.
00:22:37.260 | And what if I'm in Costa Rica one day and Panama the next and Mexico the third, it's
00:22:41.140 | just a hassle to keep all that stuff straight and make sure I'm being treated honestly,
00:22:44.380 | it's expensive.
00:22:46.340 | Even in terms of spending it, right, I can't really relate very well to what the value
00:22:51.500 | of the Costa Rican Cologne is.
00:22:53.700 | But I know that as soon as I, you know, swipe my Amex, then about 10 minutes later there's
00:22:59.540 | going to be a notification pop up on my phone, "Oh Joshua, you spent $13 on such and such
00:23:06.020 | a thing."
00:23:07.020 | Oh great, now I can convert it into something that I have a reference for.
00:23:09.820 | I have no reference for the Costa Rican Cologne, I have a reference for the US dollar though.
00:23:14.540 | And so everything is facilitated and it's cheaper for me and easier for me just to swipe
00:23:19.820 | my credit cards wherever I go around the world.
00:23:25.060 | That's a very different system than there was 20 years ago when you traveled with traveler's
00:23:28.420 | checks and you didn't have credit cards that had, it was hard to find a credit card that
00:23:32.900 | had a no transaction fee, etc.
00:23:35.340 | But today that system is better.
00:23:37.500 | Now I can do exactly the same thing with other currencies.
00:23:40.860 | If I have a, again, a British bank account or a Canadian bank account or a Mongolian
00:23:47.340 | bank account, as long as they offer me that card, I can use the same card and it works
00:23:53.300 | the same.
00:23:54.300 | I know the British is hard because they have a lot of foreign transaction fees, but there
00:23:57.860 | are options in almost any country.
00:23:59.980 | And so in a lot of ways it doesn't really matter what my money is held in.
00:24:04.900 | Now of course dollars work well for me.
00:24:07.340 | I earn in dollars, I spend in dollars, but all I'm doing is just trying to get something.
00:24:12.460 | I'm just trying to buy something.
00:24:14.700 | Now I've been testing a couple of the new offerings that allow you to spend cryptocurrency
00:24:19.220 | directly with a card.
00:24:21.220 | Pretty remarkable, right?
00:24:22.860 | You can have a Bitcoin wallet and a debit card that will simply take from that Bitcoin
00:24:28.580 | wallet and you swipe your debit card, boom, it pays.
00:24:32.700 | It's loaded into my Apple Watch app or on Apple Pay on my phone.
00:24:36.780 | Double click, boom, here we go.
00:24:38.420 | I just used Bitcoin to pay for something at a point of service terminal, anywhere that
00:24:43.040 | a credit card is accepted.
00:24:44.260 | It's remarkable.
00:24:45.620 | And we're living in just the beginning stages of this changing world.
00:24:51.020 | So my point here is that the technology, this technology is superior.
00:24:57.700 | I'm not blind to the benefits of cash.
00:24:59.900 | I'm the guy who in 2018 I tried to conduct an experiment and I tried to move as many
00:25:05.420 | of my personal transactions 100% to cash as possible.
00:25:09.220 | I didn't swipe a card or a debit card or a credit card to pay for anything the entire
00:25:13.460 | year.
00:25:14.460 | And so I've tested that.
00:25:15.460 | But I'm here to tell you as someone who's done that, living on cash is dead, right?
00:25:19.260 | That's the past.
00:25:20.260 | It's so difficult to do in today's world.
00:25:23.100 | It's so difficult.
00:25:24.700 | So the future though is not really even cards.
00:25:29.340 | The future is digital signals and apps.
00:25:32.580 | I don't know many, I don't know what percentage, but many of the messaging apps now as a built-in
00:25:38.780 | feature allow you to use, to transfer money immediately from one person to another.
00:25:45.500 | Sometimes this is with an external app, a Venmo, a PayPal.
00:25:48.800 | Sometimes it's using directly Apple Pay, Apple Cash, and iMessaging or whatever other options
00:25:54.380 | that you have.
00:25:55.580 | But these options are here, they're now, and they're better.
00:26:00.900 | Most of my audience lives in the United States.
00:26:03.660 | My reason for telling you this is just because you don't use this stuff on a daily basis
00:26:09.100 | doesn't mean that this is being used.
00:26:11.300 | This is not being used on a daily basis.
00:26:14.620 | The United States of America is very unlikely to be the determined, the culture of the United
00:26:20.900 | States of America is very unlikely to be the determining factor of what happens in things
00:26:27.780 | like payment technologies, currency use, etc. in the coming years.
00:26:35.180 | Why?
00:26:37.700 | I think largely it comes down to population and the fact that most US Americans don't
00:26:42.460 | see a reason to change.
00:26:44.700 | Now the United States is very good at creating technologists, people who can build something
00:26:49.940 | new.
00:26:50.940 | Many of the technologies that I have described have been built by and created by US Americans.
00:26:57.780 | The United States of America has a very proud history of inventors, creators, etc.
00:27:05.700 | But at this point in time, even the whole system of creation is being democratized globally.
00:27:11.360 | Right now, because for the first time in history you can sit at your house in Bangladesh and
00:27:19.660 | you can learn to code every bit as well using the instructional content that's available
00:27:25.780 | on the internet, using the relevant forums for your coding language, for your application,
00:27:30.780 | etc.
00:27:31.780 | You can be every bit as good of a coder as somebody who's gone to a prestigious US American
00:27:37.420 | university, which means that you can create products, you can create services, and now
00:27:42.340 | all of a sudden you need a system that you're not locked out of.
00:27:48.420 | You need a way to have access to a high quality bank account where you can store your money.
00:27:53.800 | You need a way to process payments for people who want to purchase your services from around
00:27:58.060 | the world.
00:27:59.060 | And you need to do it without one country or a few countries controlling all of your
00:28:05.500 | transactions saying "oh no, we're going to flag you because you're from Bangladesh and
00:28:09.260 | we don't know how to process you".
00:28:11.460 | You need entirely new systems of credit checks and risk profiles.
00:28:16.820 | And the way that things are done in the United States doesn't serve the people of Bangladesh
00:28:21.860 | very well.
00:28:26.180 | I'm not talking this through to try to argue that the United States of America is going
00:28:33.240 | to disappear or in decline, or the US dollar is going to be declared worthless.
00:28:37.700 | What I'm articulating is simply that trends are going to change around the world, and
00:28:43.260 | they're changing faster than ever before, and these trends are going to affect your
00:28:48.500 | money.
00:28:50.380 | These trends are going to be things that are affecting how you do business.
00:28:56.060 | Know it or not, the people who latched onto WhatsApp in Africa, Latin America, Southeast
00:29:03.280 | Asia, those people have transformed your life.
00:29:07.360 | Because there was a kickback effect.
00:29:09.220 | You may have always used iMessaging, and iMessaging is awesome.
00:29:15.260 | But then iMessaging started to incorporate more features that you saw on WhatsApp first.
00:29:20.360 | Then of course Facebook owns WhatsApp, you had Facebook Messenger change, and all these
00:29:23.680 | things are changing.
00:29:25.180 | But it's not the population of the United States that drove these trends, it was the
00:29:30.040 | population of many countries around the world.
00:29:32.520 | I want to talk about population figures for a moment, because this is something that most
00:29:36.780 | people don't pay attention to, because many people don't travel.
00:29:40.320 | But let's talk about the population of some of the largest countries in the world.
00:29:45.440 | The current population, obviously, is China, which currently has a population of 1.4 billion
00:29:55.440 | people.
00:29:56.620 | That is 17.9% of the global population.
00:30:01.060 | The second largest country in the world, according to current estimates, is India, which has
00:30:06.880 | a current population of 1.37 billion people, that is 17.5% of the world's population.
00:30:16.460 | The Chinese population and the Indian populations are going to make a massive impact on your
00:30:25.080 | life, assuming that you're not Chinese or Indian, simply because of their size.
00:30:33.080 | And as so many of our communication technology is connected, you cannot have that many people
00:30:42.400 | who have access to all of the knowledge of the world, who don't then wind up creating
00:30:47.640 | new products, new services, new trends that affect the rest of the world massively.
00:30:53.380 | Between China and India, you have two nations that represent something like 35% of the world's
00:31:00.520 | population.
00:31:03.800 | Again China, 1.41 billion people, 17.9% of the world's population.
00:31:09.120 | India 1.37 billion people, 17.5% of the world's population.
00:31:14.760 | The third largest country in the world, measured by population, is the United States.
00:31:20.760 | The United States has a population of 331 million people, which represents 4.21% of
00:31:28.560 | the world's population.
00:31:31.120 | Obviously, the United States has a massive influence on global legal systems, global
00:31:39.680 | culture, etc.
00:31:41.400 | The United States has punched well above its weight economically for a very, very long
00:31:46.840 | time.
00:31:50.360 | That influence is likely to continue for a significant period of time.
00:31:57.560 | But that influence, and again, much of my audience is US American, that influence is
00:32:05.320 | not guaranteed to continue.
00:32:09.560 | There is this, I don't know if it's a popular saying or just a perception, that it's not
00:32:15.840 | wise to bet against America.
00:32:19.000 | And I think there's a real grain of truth in that.
00:32:23.520 | It's not wise to bet against America.
00:32:25.760 | The United States, throughout its history, has accomplished some incredible things.
00:32:32.560 | However, just because somebody has accomplished incredible things doesn't mean that they're
00:32:38.560 | going to continue to dominate.
00:32:41.680 | And I think that you see very clearly, at least I see very clearly, that the global
00:32:46.200 | dominance of the United States of America is waning.
00:32:52.520 | Whether it's waning quickly or slowly, I don't know, but it is waning.
00:32:56.200 | And I think there are a number of reasons for that.
00:33:00.760 | Whether or not that remains true, time will tell.
00:33:05.600 | But go and think about other empires.
00:33:07.120 | To me, my favorite empire to think about is that of the British Empire.
00:33:14.400 | There was a day when the sun did not set on the British Empire.
00:33:18.040 | You had this huge global empire, absolutely massive.
00:33:25.400 | And yet, very, very quickly, all throughout the 1900s, that empire systematically collapsed.
00:33:31.600 | Now, that collapse was not precipitous and calamitous in the sense that all of a sudden
00:33:37.800 | the United Kingdom just became the worst place in the world to be and people were shooting
00:33:41.760 | each other in the streets necessarily.
00:33:43.200 | It wasn't that kind of thing, but there was a tremendous collapse.
00:33:47.240 | Today, when measured, you have the United Kingdom falling in 21st in terms of the world
00:33:56.240 | population number, 67.1 million people, representing 0.85% of the population.
00:34:03.080 | Now, the economic rankings of countries is different.
00:34:05.840 | We'll come to that in a moment, but I want to finish this population rankings because
00:34:09.200 | when you're looking at trends, you're thinking about trends like I'm alluding to, talking
00:34:13.640 | about finance trends, banking trends, investment trends, currency trends, adoption of cryptocurrencies
00:34:21.640 | or the decentralized finance space, the DeFi space, etc.
00:34:26.400 | My point is population is going to tell a big factor.
00:34:29.760 | Most people in the United States have not been looking for solutions to their financial
00:34:33.360 | problems.
00:34:34.920 | Most people in the United States have been pretty well served with most aspects of their
00:34:40.920 | finances.
00:34:41.920 | It's been relatively easy for US Americans to get a bank account.
00:34:46.800 | Although the United States has very high levels of bank failures compared to some other countries,
00:34:51.320 | generally, the concept of bank failure is not something that US Americans think much
00:34:56.120 | about.
00:34:57.120 | They just assume it's all going to work out and the regulators are going to take care
00:34:59.560 | of it.
00:35:00.560 | The US dollar, while massively inflationary, has been less massively inflationary than
00:35:06.240 | other currencies and with the military power and the economic power of the United States
00:35:10.360 | of America, the US dollar has been king for a very long period of time.
00:35:14.880 | Most US Americans have never earned or banked in anything other than the US dollar.
00:35:22.400 | US Americans have generally had access to pretty convenient ways to spend their money.
00:35:26.120 | They had access to check systems and they could write checks to people and have check
00:35:30.840 | verification and access to credit cards.
00:35:33.520 | Today, still the best market in the world for credit card consumers is the United States
00:35:37.760 | of America.
00:35:38.760 | It's a tremendous option, the benefits, the perks, etc. that you get with your credit
00:35:43.040 | cards.
00:35:44.520 | From an investment perspective, the United States of America has featured robust investment
00:35:49.360 | markets.
00:35:50.360 | Some tremendously powerful and brilliant people have been developing new ways to invest and
00:35:56.600 | great academic researchers and very smart investment managers enabling those things,
00:36:06.120 | people building companies and just really good stuff.
00:36:09.800 | Some of the lowest investment fees that you'll pay anywhere in the world are in the United
00:36:12.880 | States of America.
00:36:14.360 | And so most US Americans look at the world and they say, "Look, everything's working
00:36:18.280 | pretty well.
00:36:19.480 | Everything is good.
00:36:20.480 | I've got all my needs met and so things will probably continue."
00:36:23.320 | And also they'll say, "Well, you know what?
00:36:26.440 | If the rest of the world changes, they're going to change to be just like us."
00:36:31.480 | I don't believe that.
00:36:33.720 | I don't believe that.
00:36:36.720 | If the rest of the world changes, they're not going to try to build the US American
00:36:40.160 | systems because what's the reality of the US American systems?
00:36:43.440 | Realistically, point of service terminals are expensive.
00:36:47.280 | Charge a merchant a few percent.
00:36:48.560 | That's where your credit card rewards come from.
00:36:51.800 | Realistically, bank accounts are very hard to get, especially in the wake since 2001
00:36:57.120 | with the Patriot Act and a few years after.
00:37:00.440 | It's very hard to get a bank account.
00:37:04.800 | Payment transfers are very expensive.
00:37:07.160 | And if you are a Mexican guy working in the United States trying to send money home to
00:37:11.920 | your family in Mexico doing remittances, the fees from Western Union and whatnot are exorbitant,
00:37:20.000 | massive.
00:37:21.200 | Interest rates in the United States can be very, very high.
00:37:24.400 | Credit card interest rates, 19.9%, 29.9%.
00:37:30.480 | And so while on the whole the system is relatively stable, those problems are still there.
00:37:39.040 | If you're on a watch list of some kind, you can't get a bank account or you can't get
00:37:46.960 | a merchant account, it's real problems.
00:37:50.520 | Now pretend that you're trying to run a business in Nigeria.
00:37:55.040 | Nigeria number seven, 211 million people representing 2.69% of the world's population.
00:38:00.800 | Growing population, not a declining population like the United States.
00:38:06.480 | Nigeria is a powerhouse and yet it's tremendously difficult for Nigerians to interact with the
00:38:12.320 | world because of the broad brush of fraud and scams, et cetera, that are drawn over
00:38:20.240 | all Nigerians.
00:38:24.760 | The 331 million people, the 4.21% of the world, those consumers are not going to set the future
00:38:32.920 | of consumption.
00:38:34.320 | There might be some very smart companies, some very smart people that come out of that
00:38:37.440 | 4.2%.
00:38:38.440 | I expect the United States to continue to be extraordinarily influential in the coming
00:38:43.080 | decades.
00:38:44.080 | But the consumer trends, the use of how do we buy and sell with each other?
00:38:47.760 | How do we send money to one another?
00:38:49.560 | Do we do it in a centralized way or do we do it in a decentralized way?
00:38:54.440 | It's going to be the rest of the world's consumers that make those decisions.
00:39:00.560 | Think about this, Indonesia has 271 million people, 3.45%.
00:39:08.280 | That's the fourth largest country in the world.
00:39:11.160 | Do you have any concept of what the major trends are in Indonesia as a US American or
00:39:17.040 | as a Canadian?
00:39:20.480 | From an economic GDP perspective, Indonesia is far less powerful and influential than
00:39:27.040 | the United States of America.
00:39:30.440 | But that's changing and from a population perspective, Indonesia is an extraordinarily
00:39:36.240 | large and powerful country.
00:39:39.400 | Pakistan is number five, 225 million people or 2.86% of the world's population.
00:39:44.360 | Brazil, number six, 213 million people.
00:39:48.000 | Nigeria, 211 million people.
00:39:50.200 | Bangladesh, 170 million people.
00:39:52.520 | Russia, 146 million people.
00:39:55.600 | Mexico, 126 million people.
00:39:59.400 | And the list goes on and on.
00:40:00.960 | Ethiopia, Ethiopia is number 12 with 117 million people.
00:40:06.200 | Here's what's fascinating about Ethiopia.
00:40:08.880 | The median age of the citizens and residents of Ethiopia, the median age, remember median
00:40:16.560 | means 50% are lower and 50% are higher.
00:40:20.680 | The median age of men and women, boys and girls living in Ethiopia is 20.
00:40:29.800 | 50% of everyone in Ethiopia is under the age of 20.
00:40:38.520 | Imagine a culture where 50% of your population is under the age of 20 and yet you have 118
00:40:52.280 | million people.
00:40:56.200 | Do you think that all of those people are going to sit back and say, "You know what?
00:41:01.320 | We're going to just accept the world the way it is."
00:41:04.780 | Think about all of the people that you know who are under 20 and how they view the world
00:41:10.840 | and some of the things that you think are totally normal that they think would be totally
00:41:14.520 | crazy.
00:41:15.520 | "You mean I can't pay with my watch?
00:41:17.440 | Are you kidding me?
00:41:18.440 | Why wouldn't I?
00:41:19.440 | What's the point?"
00:41:21.200 | I am increasingly convinced that for my children, by the time they reach their teenage years,
00:41:27.640 | the concept that they should only earn their money in one currency, the US dollar, will
00:41:36.120 | probably sound as strange to them as the idea does to me that I have to send you a fax.
00:41:43.360 | "I have to send you a fax?
00:41:46.240 | Are you kidding me?
00:41:48.200 | Why would I send you a fax?"
00:41:52.680 | I think that's where the world is going.
00:41:55.000 | I think that these technological changes are changing.
00:41:58.680 | And the beauty of this, you can take this and say, "Oh, it's scary.
00:42:02.920 | I may not understand."
00:42:04.400 | The beauty of this is that the consumers get to decide.
00:42:08.540 | You and I don't get to decide.
00:42:10.400 | The people with all the guns don't necessarily get to decide, at least not in the long term.
00:42:15.160 | The consumers get to decide.
00:42:17.360 | The people who say, "You know what?
00:42:19.280 | I'll take this.
00:42:20.360 | I'll absorb this.
00:42:21.640 | I'll make this happen."
00:42:25.200 | We're living in a time of tremendous change.
00:42:30.120 | But it's change for the good.
00:42:33.280 | Things are getting better.
00:42:36.380 | The trends are towards decentralization, transparency, costs are going down, services going up.
00:42:46.840 | And the competition that we live in, the world of competition, is creating ways for all of
00:42:52.080 | us to win.
00:42:54.960 | As much as I appreciate many of the benefits of cash, I'm one of those who does.
00:43:02.700 | As much as I appreciate the many benefits of being able to spend cash, my life is better
00:43:10.760 | with being able to do everything digitally.
00:43:13.340 | The fact that I can wander around the world and have a very low cost banking system that
00:43:19.480 | allows me to, again, with my phone or with my watch, spend off of up to, I think my limit
00:43:26.560 | is 12, right?
00:43:27.560 | 12 or 10, maybe it's 10.
00:43:29.800 | I can spend off of 10 different credit cards just with one little thing.
00:43:34.520 | And I can spend with any currency that my credit cards are connected to.
00:43:40.160 | I can spend with US dollars off this credit card.
00:43:42.480 | I can spend Canadian dollars off that one.
00:43:44.200 | I can spend British pounds off the third.
00:43:45.920 | I can spend euros off the fourth.
00:43:47.360 | I can spend Bitcoin off the fifth.
00:43:51.800 | This is awesome.
00:43:55.360 | It's really cool.
00:43:57.560 | So in closing, I wanted to try to bring a little bit of perspective to my largely Western
00:44:03.680 | audience.
00:44:06.400 | I want you to think about my little metaphor of WhatsApp and just consider it.
00:44:13.160 | Because if you are living in the United States of America, you're used to working under a
00:44:18.120 | certain system, then it can be hard to see these changes.
00:44:23.080 | But I think if you consider my little parable of WhatsApp, then perhaps it will help you
00:44:27.480 | to see that things are changing.
00:44:29.800 | Today, this WhatsApp parable was probably more powerful two years ago when it wasn't
00:44:34.640 | as popular.
00:44:35.640 | Today, I would guess that most, I don't know, it just seems like so many US Americans
00:44:39.760 | even would use WhatsApp.
00:44:40.760 | If you don't use WhatsApp, you use Facebook Messenger or Signal or some messaging app.
00:44:47.840 | And more and more, more of your communication is there.
00:44:51.520 | If it's not Signal or WhatsApp or Facebook Messenger, it's Basecamp or Asana or blanking
00:44:58.920 | on the other names, Slack.
00:45:00.960 | This is how you're communicating.
00:45:02.660 | It's not with the old legacy systems.
00:45:05.820 | And I'm convinced that's going to affect money and the way that we deal with money.
00:45:10.900 | It's going to affect fiat currencies, the power of fiat currencies versus other things.
00:45:16.480 | It's going to affect all kinds of things.
00:45:19.180 | And it's going to be an exciting ride.
00:45:22.020 | I'm not making any prognostication about the price of Bitcoin, you know, 10 years from
00:45:26.740 | now.
00:45:28.580 | The world is changing.
00:45:29.580 | Bitcoin will be a major factor of that, but the world is changing.
00:45:33.980 | And so, pay attention.
00:45:36.020 | Now whenever there's change, last bit of my closing charge, whenever there is change,
00:45:41.560 | you have opportunity.
00:45:44.520 | The way to get rich is to figure out where money is moving and then put yourself in the
00:45:52.800 | way of it and scoop some up.
00:45:56.780 | That's how you get rich.
00:45:57.780 | Figure out where is money moving and then put yourself in the way of it and scoop some
00:46:01.900 | up.
00:46:03.500 | So when you see trends, when you see changes, that means opportunity.
00:46:08.300 | I don't know what your opportunities are.
00:46:11.600 | Maybe you're going to become a programmer and start building an interesting application
00:46:16.980 | that solves a specific problem for a guy living in Nigeria.
00:46:20.180 | I don't know.
00:46:22.220 | Maybe you're going to invest into Ethereum.
00:46:25.380 | I don't know.
00:46:26.380 | The point is that when you see change, change creates opportunity.
00:46:30.420 | So pay attention to it and try to find a way that you can be involved in the change.
00:46:34.340 | To me, I think the trends at this point are pretty obvious, that the world is changing
00:46:38.860 | because the solutions are better.
00:46:40.980 | I don't want to go back to a system of landline telephones.
00:46:45.500 | I don't want to go back to fax machines.
00:46:47.620 | I don't want to go back to a telegraph machine.
00:46:49.740 | I don't want to go back to counting minutes in text messages on a phone.
00:46:59.660 | I'm excited to go forward into the next thing because your and my lives have been dramatically
00:47:07.260 | improved by these technologies.
00:47:09.780 | So the same thing is going to happen to money in the coming days and it's a trend for the
00:47:15.140 | good.
00:47:16.140 | Don't be surprised by it.
00:47:17.180 | Pay attention to it.
00:47:18.180 | Move wisely.
00:47:19.180 | Don't make any rash changes, but pay attention to these trends.
00:47:24.260 | (pensive music)