Raoul Pal: How crypto, bitcoin, and tech outpace your salary

1. 0:00 – 2:07

   Intro

   1. RPRaoul Pal0:00

      We've got about six years before everything changes, and we thought money in the bank was safe. We thought our house was safe. But none of that's true. And the moment you put your money and your savings in the bank, you don't own anything. And your future self is getting poorer by 11% every year. And that's a problem for financial security and wealth creation. But I know where the opportunities lie and I've got answers.

   2. SBSteven Bartlett0:20

      So could you explain it to me through the context of this?

   3. RPRaoul Pal0:23

      Okay, so-

   4. SBSteven Bartlett0:24

      Raoul Pal is one of the most influential voices in the ever-changing world of modern finance. Unpacking the secrets of crypto.

   5. RPRaoul Pal0:31

      And how to build wealth in an uncertain future. People know their future is (beep) . They can't afford to buy a house. They have less savings. Debts from university. People in their 30s are the first generation that won't be as rich as their parents.

   6. SBSteven Bartlett0:42

      So what advice would you give to set myself up for wealth in the future?

   7. RPRaoul Pal0:45

      You start investing.

   8. SBSteven Bartlett0:46

      But what about the people that no matter how hard they work, they still don't have that excess income to invest?

   9. RPRaoul Pal0:50

      You don't need huge savings. You just need to understand how to look for opportunities. For example, the S&P 500 is not worth your time. Real estate doesn't really make you any money. Those days are gone. Gold actually lost you money. But investing in crypto like bitcoin gives us stupidly high returns in short periods of time, growing at 150% a year, scaling at twice the speed of the internet. So now the guy with $500 can get rich.

   10. SBSteven Bartlett1:14

       A couple of questions here then, so I'm now 30 years old-ish. Have I missed the boat?

   11. RPRaoul Pal1:17

       No.

   12. SBSteven Bartlett1:18

       Much of the reason why I think people don't invest in crypto is they've heard stories where people have put too much in and they've lost it all. So what if you're wrong?

   13. RPRaoul Pal1:23

       We're gonna talk about how not to (beep) it up.

   14. SBSteven Bartlett1:25

       And then how do I invest in crypto?

   15. RPRaoul Pal1:27

       It's really simple. You gotta start somewhere, so... Do that and you'll make money.

   16. SBSteven Bartlett1:34

       This has always blown my mind a little bit. 53% of you that listen to this show regularly haven't yet subscribed to the show. So could I ask you for a favor before we start? If you like this show and you like what we do here and you wanna support us, the free simple way that you can do just that is by hitting the subscribe button. And my commitment to you is if you do that, then I'll do everything in my power, me and my team, to make sure that this show is better for you every single week. We'll listen to your feedback, we'll find the guests that you want me to speak to, and we'll continue to do what we do. Thank you so much. (upbeat music)

2. 2:07 – 5:38

   What Is Raoul's Mission?

   1. SBSteven Bartlett2:07

      Raoul, from a very high level perspective, and I'm being unspecific here so I'm looking for an unspecific answer, what exactly is the mission that you're on in this season of your life? Like who, what are you doing and who are you doing it for?

   2. RPRaoul Pal2:21

      Hmm. So obviously, you do it for yourself, but really I think that I've been armed with tools and knowledge over the years, my 30-year career, that I kind of have a decent sense of where the world is going, where the opportunities lie, and where the risk lies for people. And I can see the problems people are facing, and I think I've got answers. So what I wanna do is help as many people as possible in that journey. And why that happened to me was I was in Spain back in 2012, and also during the financial crisis of 2008. And I was writing macroeconomic research for my research service Global Macro Investor, and I had seen it coming. I predicted it, I knew it was coming, I knew the problems. I warned all of my friends, but nobody listened.

   3. SBSteven Bartlett3:16

      Warned them about what?

   4. RPRaoul Pal3:16

      Nobody understood. About the financial crisis, what was gonna happen. And most of them, 'cause I was living in a beach town in Spain, they were in real estate. They all went bust. But worse than that was that when we got to the European crisis, when basically the governments of Europe ran out of money, the banks also ran out of money. And as opposed to being bailed out, they got what are known as bailed in, which means that they took your savings to pay the debtors. And friends of my parents and friends of friends were wiped out. And they were like, "Why didn't we know?" I'm like, that was a question that sat with me for a while. Why didn't we know? And I saw that everybody had lost total faith in the system. So Occupy Wall Street happened at the same period. And it was people angry. It's like, "We thought money in the bank was safe. We thought our house was safe. We thought the system was there for us." And suddenly they all wake up and realize the system was not there for them.

   5. SBSteven Bartlett4:23

      Mm-hmm.

   6. RPRaoul Pal4:23

      It was actually for other people. You know, people talk about bankers never went to jail. No, there was, there was that sense that it was never concluded. And it sat with me for a long time thinking, "What can I do about this?" Because I was writing super high-end kind of research for hedge funds and, you know, big asset management firms. And so it wasn't accessible to people. Um, and then I wrote a couple of articles. One got leaked in Zero Hedge in its early days and it became super viral. Um, and I thought, "Maybe there's something here that, that I could reach a broader audience, 'cause then I can help these people." And that's when we came up with the idea of Real Vision, which was the idea of interviewing the people at the very heart of the system and kind of sharing the details, 'cause these people weren't hiding it. They wanted to help people as well. Everyone had that sense that we could help people. So I'm still on that journey, and that journey kind of has taken a multitude of paths, starting businesses but also just trying to educate people on why they feel the way they do. You know, why politics is so polarized? Never used to be this bad. You know, what's really going on and who really to blame and what to

3. 5:38 – 6:47

   What Would The Average Person Say About Raoul's Work?

   1. RPRaoul Pal5:38

      do about it.

   2. SBSteven Bartlett5:39

      If I stop the average person on the street that knows you and watches Real Vision and I ask them, "What has Raoul and his channel and his information done for you?" What do you think they would say, the average person?

   3. RPRaoul Pal5:50

      They'd just say thank you. Because we've helped demystify it, the world of finance. And you see, we all have... The root of unhappiness and happiness often comes from does your vision of your future self match where you are today?... can you see that path? Whether that's finances, whether it's health, they're all very similar journeys. And when people can't see the vision of their future self, and they can't see how to get there, they get upset. And what we've tried to do is unfuck people's future, which is an expression we use, which is a way, which is a, a memetic or a meme or just a short phraseology to help people understand we understand that you feel like you can't get to where you want to get to, but there are options to do it. And I think people are immensely grateful for that in general.

4. 6:47 – 11:14

   What Will Fuck My Financial Future?

   1. RPRaoul Pal6:47

   2. SBSteven Bartlett6:47

      If you're on a mission to help people unfuck their future, can you explain to me specifically the things that stand a chance of fucking their future from a macro perspective? And when I say macro, we have to pause and just define what I mean by the word macro. When I think of the word macro, I mean big picture-

   3. RPRaoul Pal7:05

      Yeah.

   4. SBSteven Bartlett7:05

      ... perspective. So from a big picture perspective, what are the things that stand a chance of fucking my future?

   5. RPRaoul Pal7:11

      Okay. So and we can, we can dig into why these things have occurred, but generally speaking, wages in real terms adjusted for inflation haven't gone up for decades. So nobody's getting richer. If you're an American, you have this powerful meme which is the American dream, but that is not a reality for most people. The reality is you grind it out, your savings are not worth what you thought they'd be. This whole promise of your pension and swanning around on a cruise ship around the Caribbean when you're older, living in a nice house, none of that is true, and it's because wages haven't gone up. So okay, so let's cut to somebody who's in their 30s now, because this is the really important cohort I think for this. They can't afford to buy a house. If I go back to when I was 30, I bought a house in London and it was, it was a nice place in a good area and it was three and a half times salary. Yes, I was in finance, I was earning a high salary. You can't buy anything for three and a half times your salary.

   6. SBSteven Bartlett8:25

      Hmm.

   7. RPRaoul Pal8:26

      Now that same place, if I took the same kind of young investment banker salary, is probably eight or ten times. So it's tripled in how expensive it is to just buy your first house. So what is a house? Firstly, it's your quality of life, particularly, you know, in England and the UK, uh, in the UK, sorry, in the US, we're home buyers, you know, we think of our h- home as our castle. It's, it's like the thing that solidifies our security. But, you know, if you're in Germany, for example, they don't, they're rent. But if we think about the mindset of owning a house, it's an asset that you can then pass on or you can sell if you need to. And an asset is really a future savings plan. It's something you save now that in, in the future you can consume, you can buy stuff with. But what you're doing is for the average 35-year-old, the average millennial is 36 years old, they can't afford to buy a house, so therefore their future self is poorer. If they think of how much of the stock market they can buy, they can buy less w- with their money. They have less savings, they, they've got debts from university. So they don't have the ability to get out of this trap, and then what we are finding is because of this, they're having to live with other people into their 30s, they're having to... they don't have kids and they don't get married. And these numbers have collapsed since 1983. You've seen these numbers come down from, um, people living on their own, so i.e. you could get your job, get yourself an apartment, has gone from 80% to 62%. You're seeing the marriage rate halve. You're seeing, um, the home ownership rate go from 50% to 30%. These are all expressions of the same problems, which is people know their future is fucked and they can feel it, they have a sense of desperation. You see then the same cohort of kids in their 30s doing two jobs, three jobs, four jobs.

   8. SBSteven Bartlett10:37

      Hmm.

   9. RPRaoul Pal10:38

      That's not because they want to. Nobody wants to work 12-hour days seven days a week. It's 'cause they have to. And their parents, the Baby Boomers, who are in their 70s and retiring, never had that. They were the richest generation the world had ever seen. So this is the first generation that won't be as rich as their parents. And that's a weird thing because we're all used to human progress, the American dream. If the American dream is, well, you'll never be as wealthy as your parents and they were middle class people and I'm now less well off than them, that's kind of fucked.

5. 11:14 – 12:18

   Stats Today Vs 1980's

   1. RPRaoul Pal11:14

      So look, here's some stats about a 30-year-old today versus a 30-year-old in 1983. So a 30-year-old in 1983, 85% of them lived on their own. They could afford a house or an apartment to rent or to buy. Now it's 64%. So people are living, having to live with other people. Marriage rates, they've gone from 80% of 30-year-olds in 1983 who were married, to 47% now. Kids, having kids has gone from 60% to 32%. Population growth is collapsing because people can't afford it. And home ownership for a 30-year-old has gone from 50% to 32%. It just shows that dramatic change that's happedened- happened over the decades, and why each generation has found it more and more difficult...... to be like their parents.

6. 12:18 – 13:30

   How To Play 'The Game' Of Finance In Your Younger Years?

   1. RPRaoul Pal12:18

   2. SBSteven Bartlett12:18

      So I am 30 years old-ish.

   3. RPRaoul Pal12:20

      Yeah.

   4. SBSteven Bartlett12:21

      I like to hang on to 30-

   5. RPRaoul Pal12:22

      (laughs)

   6. SBSteven Bartlett12:22

      ... for as long as I can. Um, what advice would you give to someone like me that's my age, or maybe even younger, you know, mid-20s, as to how to play the game over the coming years to make sure that I don't find myself in a position where I'm having to work two jobs, I'm poor, I don't have assets, I don't have anything to show for it? Like, if you take it right back to being, like, maybe, let's say a 20-year-old, a 25-year-old, how do you play the game? And- and when I think about this, I'm thinking, like, wealth creation, how to then preserve my wealth. Like, what's the game?

   7. RPRaoul Pal12:53

      So the first part of the game is income.

   8. SBSteven Bartlett12:57

      Okay.

   9. RPRaoul Pal12:58

      Without income, you don't have the cash to do the other things, to invest or to look for opportunities. So first thing is income. But even that's changing in how we earn incomes these days. You know, it used to be you go and work for a big firm, you get paid, you get the benefit. That's all going and nobody wants to do it. So you kind of end up having to be a entrepreneur, work two or three different things. The point being, if you're twenties, do all of that. Work day and night.

   10. SBSteven Bartlett13:27

       Really?

   11. RPRaoul Pal13:27

       Do as many things, learn as much as you can, fail as

7. 13:30 – 13:58

   What About Work Life Balance?

   1. RPRaoul Pal13:30

      often as possible.

   2. SBSteven Bartlett13:30

      What about work/life balance in your 20s?

   3. RPRaoul Pal13:33

      Fuck it. Because that's the time to put in the hard work. Your work/life balance actually comes out later. I'm a big believer in, yes, if you're straight out of university, go traveling for a year or two. You know, that, A ) gets rid of the pent-up need but also gives you a much broader perspective on the world than any other single thing that you can do in your life. After that, you get your head down and you get your head down probably till your mid-30s.

8. 13:58 – 14:57

   What Knowledge Should I Acquire?

   1. RPRaoul Pal13:58

   2. SBSteven Bartlett13:58

      Okay, so what, when you say, "Get my head down," I- I'm guessing one of the most important things in that season of your life is knowledge acquisition.

   3. RPRaoul Pal14:06

      Yeah.

   4. SBSteven Bartlett14:06

      And then if that's true, then the next question is, what type of knowledge should I be acquiring to set myself up for wealth in the future? 'Cause I could go acquire knowledge of, you know, how to clean a toilet or how to, uh, be a gardener, but what- what is the most high-returning knowledge?

   5. RPRaoul Pal14:23

      So for me, it is firstly be an expert on something.

   6. SBSteven Bartlett14:26

      Okay.

   7. RPRaoul Pal14:27

      And then a generalist on as much as possible. Right? Be that expert because somebody will pay you for that, at least for the time being, and we'll talk about how the world may change in the future. But for the time being, if you're an expert in whatever it may be, whether it's driving a taxi or whether it's a computer scientist, doesn't matter. Be an expert. Compete with yourself day and night to be the best that you can. So at least it's gonna give you the chance to earn some money.

9. 14:57 – 16:41

   How To Become An Expert?

   1. RPRaoul Pal14:57

   2. SBSteven Bartlett14:57

      Okay, so just to drill down on that before we continue to move forward, how does one become an expert? Like, what are the qu- like, how do I have to show up to become an expert? You're an expert on many of things.

   3. RPRaoul Pal15:05

      Okay. So this, to me, is... This is a trick that I learned, and it's called manifesting your own destiny. And what you do is what I've always done my whole life, is I envisage myself five or ten years in the future. What do I want to be? And you look around you and say, "Okay, what are the things that I want to have, that future vision of myself?" As opposed to the 30, 40-year path. It's too difficult. Give it five years. Where do I wanna be in five years? Okay, you... And you look around that future world and you think, "Okay, well, how would have I got here?" You know, if I've built a business cleaning windows and I've got 20 people working for me, well, how did I get there? Well, I would have had to have figured out, okay, how do I make this scale? How do I employ people? How do I train them to have the right standards? All of that. You ask yourself your question of what that success looks like.

   4. SBSteven Bartlett16:04

      Mm-hmm.

   5. RPRaoul Pal16:06

      And you kind of deconstruct it and go back and make it happen.

   6. SBSteven Bartlett16:10

      So you reverse engineer it back from that- that five-year reality. So window cleaner with 20 employees, I need to learn management skills. I need to learn how to clean a window.

   7. RPRaoul Pal16:18

      Accounting.

   8. SBSteven Bartlett16:19

      Accounting. I need to learn probably marketing-

   9. RPRaoul Pal16:23

      Yeah.

   10. SBSteven Bartlett16:23

       ... so that I can spread the message of my business. I probably need to learn potentially, like, how to speak, like public speaking because that's sales.

   11. RPRaoul Pal16:31

       Yeah.

   12. SBSteven Bartlett16:31

       So I need to, I need to learn sales.

   13. RPRaoul Pal16:33

       And technology, you know, what- what, um, solvents, detergents are people using, what other ways of doing it more efficiently and faster so I can beat the competitor?

10. 16:41 – 17:16

    Manifesting Your Future

    1. RPRaoul Pal16:41

    2. SBSteven Bartlett16:41

       Ooh, so I might go and work for a big window cleaning company to see how they do it, to try and see the opportunity in what they're not doing.

    3. RPRaoul Pal16:50

       Yeah, or even somebody who manufactures stuff for that sector. It can be anything where you can glean knowledge to give yourself an unfair advantage. Now, on podcasts, it always makes it, like, easy. Everyone becomes an entrepreneur and before you know it, everybody's rich. It doesn't work that way. But all I'm trying to do is stack the odds in your favor of getting closer to that- that image of your future self. And you can reverse engineer it.

11. 17:16 – 19:42

    How To Progress Once You're An Expert

    1. SBSteven Bartlett17:16

       So I'm now an expert in whatever. I'm- I'm 29 and I'm an expert in window cleaning or whatever it might be and I'm a generalist in many things. You're saying that's gonna enable me to start to build wealth in something so that I can go to the next season of my life or...

    2. RPRaoul Pal17:29

       So w- when you become an expert or when you become good at something, if you're careful in your expenditure, you will produce excess income. Right? 'Cause people are gonna pay you for your expertise. So if you manage yourself carefully in those first few years, that excess cash, you can then choose what to do with it. Now, maybe you want to build the real business that you wanted to build in the first place, the crazy idea you've had. And if you're in your 20s, you can take the risk and blow your savings on that crazy idea because you've actually learned how to do build a business already by building the one that you started. Or you start investing. Now, the world of investments was this world of weird financial advisors and they would tell you some things like, "Well, you do this and then..."... you're a 25-year-old, in 45 years time you'll get some money. I mean, fuck that. I mean, wh- what am I gonna get out of it? When I'm 65 years old I suddenly get a lump sum that I've spent my whole life saving for? I don't feel it. It's got- I've got no emotional attachment to my pension plan. And I've got real world problems to solve. I can't buy a house. I can't get married. I can't have kids. So I need to solve these in a shorter time period than my pension. My pension was suitable for a different generation that just needed enough after they stopped working. So I gotta solve that, and the answer is investing. Then most people roll their eyes and go, "Ugh, really? Stocks and bonds? It's boring." Yeah, but the world has changed. The world has changed in many, many ways, but it's offered us opportunities, whether it's investing in technology, investing in crypto, that gives us much higher returns, stupidly higher returns, in shorter periods of time. Okay, that's some magic. That's magic for young people. It may be too risky for their parents, but if you're young and you can take some risk, okay, here's your chance. So now you can build a business, use some excess savings, put them in investments. Now you're on the path.

12. 19:42 – 24:05

    What If You Don't Have Excess Income To Invest?

    1. SBSteven Bartlett19:42

       So let's get on to investing, then, but just before we get on to investing, um, I was playing through the different sort of personas of my audience and I was thinking that some of them are working really, really, really hard at the moment. They're doing, you know, they might be a- a cab driver, they could be, you know, doing s- some sort of manual labor. And it feels to them that no matter how hard they work, they still don't have that excess income to invest. So for those people, and this is a little bit of a- a maybe contentious question, like is there something that they're doing wrong as it relates to the game?

    2. RPRaoul Pal20:14

       No. The game is the game, and you have to play the game. So, okay, so maybe you don't have thousands to invest. I've seen many, many people in markets like crypto go from $500 to $500,000. Now, there's a lot of people who don't either, but w- all I'm saying is the opportunity is there. You don't need to bet your house. You don't need to have huge savings. You just need to focus on what you're doing, understand how to manage risks a bit, and how to look for opportunities. And it's the self- self-teaching. It's how do I become that guy who's got a half a million dollar portfolio considering I've only got $500 today or $1,000 today?

    3. SBSteven Bartlett21:06

       Is that possible still?

    4. RPRaoul Pal21:08

       Yeah. Very much so.

    5. SBSteven Bartlett21:09

       Haven't I missed the boat?

    6. RPRaoul Pal21:10

       No. No. It's happening again right now in meme coins. This is fascinating. People watching this will go, "What a bunch of nonsense." These are coins, tokens, and we'll talk about blockchain and- and this later, but these are investments based on a meme.

    7. SBSteven Bartlett21:30

       A joke.

    8. RPRaoul Pal21:31

       A joke. Something that grabs attention on the internet. And you can bet on those. Well, what is that? That's about betting on attention itself. If you think about a business like Facebook or Google or any of these, th- Twitter, they're all based on attention. And now we can bet on attention. Do people find that funny? Are they gonna find it funny in six months' time or six weeks' time? And we can bet on this stuff. Okay, this is the super speculative end, but it's also very cultural. It's not about investment bankers. It's not about gatekeepers. It's about you pitting yourselves thinking, "Is this gonna catch on viral, and if it is, is it gonna grow bigger?" Now some of those might do 1,000X in six months. Now, 99% go to zero. But all I'm saying is returns are there, and then you've got different levels of return. If we look at Bitcoin... Well, actually let's compare it. The S&P 500, and this is- this will be an important number later-

    9. SBSteven Bartlett22:40

       What's the S&P 500?

    10. RPRaoul Pal22:41

        That's the US stock market. It's the broadest measure of the stock market, and you can buy shares in it. Now that grows at about 10% a year, 11% a year. So let's imagine you've got your $1,000. Well, 11% a year is gonna take you a fucking long time to make any money, right? So it is not worth your time. The financial advisors will say, "Yes, you must do this. Start now." I'm like, "I'm sorry, it's just not gonna change your life." Okay, then we go to technology stocks, NASDAQ. Does about 18% a year. Okay, that's starting to add up because these numbers compound after a while. You know, it goes from 1,000 to 1,200, and then you know, it's another 20% on top of that, 20%. These numbers add up fast. Bitcoin, since 2011, been 145% a year. Even with it falling 80% three times in the middle of that. So 145% a year, as long as you're in it long enough, okay, now that's really starting to pay off. And then as you get slightly more speculative, i.e. take a bit more risk in things, well the returns go up but they become riskier. So once you start moving into that world, okay, this is a whole different world now. Now the guy with $1,000 can get

13. 24:05 – 26:28

    What About Buying A House?

    1. RPRaoul Pal24:05

       rich.

    2. SBSteven Bartlett24:05

       What about buying a house? Because I think most people think the minute they get some excess income, and I know for sure when I say most people, it's like 95% of people that walk the streets think that the minute you get some excess income you should take it and put it in a savings account and buy your first house, get your first mortgage. Now as a strategy for wealth creation and unfucking your life, is that a good approach?

    3. RPRaoul Pal24:29

       No, 'cause it's not wealth creation.People think of houses as like an asset, but in the end, you barely ever will sell your house to take the money out. You might downsize later in life. If absolutely needed, you might sell it. But generally speaking, your house is the lifestyle bank. Now, that is super important, and, uh, I think it is the most important trait of all, is the lifestyle bank. So what do you do this all for? You want lifestyle. So do you sacrifice your future self having more money by having a house and having security earlier? I would argue those days are gone.

    4. SBSteven Bartlett25:13

       What do you mean?

    5. RPRaoul Pal25:15

       So, I could do it because it's three times income.

    6. SBSteven Bartlett25:18

       Yeah.

    7. RPRaoul Pal25:18

       So a house was not expensive for me, so I can start paying it off a bit sooner and it became not a big deal. But now, your mortgage is likely a huge amount versus your income, you'll spend the rest of your life paying it off, and most of the time, you're just paying off the interest. So you don't actually, you're not getting anywhere. You don't own that house. Anything goes wrong, the bank takes it away from you. So you've got to get more control of your life, and that is by having savings that are growing. Then you can make the choice. You know, let's say that example of the person gone from $1,000 to $500,000. Maybe on route they say, "Well, I'm gonna take some money off the table and put it in my lifestyle bank and I'm gonna buy a house." That's what I've done my whole career, and I find the lifestyle bank, th- that's the reward because now it's like, "Okay, nobody can take my house away."

    8. SBSteven Bartlett26:17

       So if I'm trying to build wealth, buying a house is not a good idea. It's not the best approach to take to build wealth. You're telling me that it's actually-

14. 26:28 – 30:07

    Viewers Comments

    1. SBSteven Bartlett26:28

    2. RPRaoul Pal26:28

       Not wealth.

    3. SBSteven Bartlett26:28

       ... about psychology and about emotion, the house, and it's not about making myself wealthy. Um, I- I wanted to read some of the comments that people often post-

    4. RPRaoul Pal26:42

       Yeah.

    5. SBSteven Bartlett26:42

       ... when we talk about these subjects, because I think you're probably the guy to address some of them. "I bought a house and it's the best thing I ever did. It launched my mindset in new directions. Remember that having your own space has profound psychological impact and can be life changing for some that don't live in a healthy environment." I guess that speaks to your point about, um, it being psychological.

    6. RPRaoul Pal27:05

       But you would also get the same feeling if you rented that was in a nice place and you knew that, you know, your rent was secure, it wasn't gonna go up. Whatever it was, I don't think there's any difference in that. As long as you can feel that you've got security, you can take risks and do other things.

    7. SBSteven Bartlett27:20

       "I purchased a house in 2014 and I sold it seven years later for 66K profit. Um, I've put a large amount of the equity into a financial investment portfolio with my bank and it's been down 2% since. I also put some money into different shares based on Warren Buffett's strategy and that's now up 18%. A friend of mine also lost about 30 to 40K on investing in the stock market. You have to be careful. I don't think there's a correct solution. Some house purchases do amazing." This idea that some house purchases do amazing and some people make returns is a, is a sentiment I often see about buying a house.

    8. RPRaoul Pal27:55

       Yes. And, you know, we're here today in the UK, there's a big idea about buying two or three houses, getting a mortgage, renting them out, using the cashflow to pay for the other one. Right, that's a lot of people's dream portfolio idea. You know, I've rented out houses in the past. Generally it's... If you're not in a big city like London, it's generally often a terrible business because you've got to repair them. There's a lot goes on.

    9. SBSteven Bartlett28:23

       Headache.

    10. RPRaoul Pal28:24

        Headache.

    11. SBSteven Bartlett28:25

        Tenants.

    12. RPRaoul Pal28:26

        Yeah.

    13. SBSteven Bartlett28:26

        Yeah.

    14. RPRaoul Pal28:26

        It's n- You know, pe- People think it's easy money, "I just, I just do nothing and it all makes money." It- it- There is no easy money in this world, and there's risk, right? Because that little pyramid of mortgages are all backed by your income being able to per- pay the mortgage on the first house. If you lose your job, what happens? Then it becomes problematic because if you're losing your job, maybe the economy's slow and other people are losing their job, and suddenly before you know it, none of these mortgages are getting paid, and guess what? You don't own any of this stuff. Houses are not a safe investment. They feel safe because the price doesn't go up and down every day. It's not on the screen, it's not on CNBC. But they're illiquid, which means they don't often trade, but sometimes something happens in that equation, either the price goes down or your ability to pay that mortgage goes, and then the whole thing collapses in seconds. And 2008 was that double. Everyone lost their jobs so they couldn't pay the mortgage and the house prices collapsed. And so I don't think houses are the panacea. They're not the perfect answer. Yes, they can be. Real estate is a decent opportunity, and we'll talk about debasement of currency and how that all works. And real estate is okay. It's certainly not the best, but- but, you know, yes, if you're rich and you can own these things without mortgages and you can be the Duke of Westminster and own half of London and just collect rent, you can do that for next generations and be rich forever. I get it. But most of us don't get into that situation.

15. 30:07 – 31:58

    Advice From Steven's Brother About Being An Expert

    1. RPRaoul Pal30:07

    2. SBSteven Bartlett30:07

       My brother who has been an investment banker for about 10 years now, works in my company, in my fund, he said to me when I was young, "When it comes to creating wealth, what you want to do is focus on games that very few people can play, but you have a unique advantage in." Because he goes, "Everyone can buy a house, so the r- You can, you should assume that the returns from doing it aren't gonna be amazing." So he was like, "Go find a game that you have high leverage, you have a unfair advantage in."

    3. RPRaoul Pal30:30

       Be the expert in something.

    4. SBSteven Bartlett30:31

       It- Yeah. Be the expert in something where you, because of your knowledge, your expertise, your experience, your contacts, you can play that game, but very few other people can-

    5. RPRaoul Pal30:38

       Yeah.

    6. SBSteven Bartlett30:38

       ... and he goes, "That's where you'll yield your highest returns." And I always thought about that, just very logically thinking if everyone can play the game...... don't play that game if you're expecting high returns because the returns are gonna be very low. And I'll tell you, the first game everyone plays when they get a bit, a b- a bit of income is buy a house. So logically, you can go, "Okay, that's not gonna yield me the best returns unless I get lucky, unless I get exceptionally lucky and I buy some barn in the area and then they build a bloody Whole Foods next door and it becomes the, the center of the world," um, which isn't, again, the probability is still not great. So what do you think of that as a theory?

    7. RPRaoul Pal31:11

       Well, it's the same theory as I said-

    8. SBSteven Bartlett31:13

       Yeah.

    9. RPRaoul Pal31:14

       ... is be an expert in something and you can find more opportunity. If you're just a generalist, it's really hard because you're competing against average people doing average things, right? If you just work in an insurance office, I mean, there's thousands of people, uh, plus you're competing with AI. You know, h- how are you ever gonna be something within that? How do you become an expert? Now, you could teach yourself, okay, if I don't mind this industry and I think I know it, maybe I need to learn management skills. Maybe I spend all the time listening to podcasts and learning management. Maybe it's- and that's- I can then manifest my destiny. But as you say, doing something s- other people aren't doing is a superpower.

16. 31:58 – 39:01

    Applying Your Knowledge To Get The Highest Return

    1. RPRaoul Pal31:58

    2. SBSteven Bartlett31:58

       Do you know what's really interesting with that is this idea of becoming an expert, um, I think is critically important. But then there's this other step I've found which is knowing what market to apply your expertise to to yield the greatest return. And the very simple analogy I'll give you is for the first portion of my career, I was, I became an expert in social media. Now, with that skill set and expertise, you can do a number of things. You can help a fashion company sell more dresses, and that will yield X return, a smaller return. Then in the second portion of my career, I realized that, uh, that expertise was highest value and most rare if I applied it to helping public companies tell their story before their IPO. Because the variance in outcome for the public company that I was applying my social media expertise to was billions. So in the second sort of, sort of era of my career, I worked with companies that were about to IPO, about to go to the public markets, where their s- performance could be, you know, their market cap could be one billion, or if they were really good at telling their story in a world where retail investors are now so interesting to everyone because of WallStreetBets, their market cap could be three billion. Then that means they would pay me seven figures for my skill set. And I often think about it, you think about the, the stock market, if you put a company on the stock market in London, it's valued at, let's say, one million. If you put it on the stock market in America, you, the same company is valued at four million, the same company. And if you think of your skills like that, where are you applying your skills to reach, re- reap the highest return?

    3. RPRaoul Pal33:24

       Let's go back to the window cleaner-

    4. SBSteven Bartlett33:26

       Mm-hmm.

    5. RPRaoul Pal33:26

       ... who's now decided to build his business and he's got 20 people.

    6. SBSteven Bartlett33:29

       Yeah.

    7. RPRaoul Pal33:30

       Okay, so he's now got the hassle of managing all these people. They turn out sick and then this happens and, uh, the customers are unhappy. So maybe the right answer is to create a program to train other people to build their own window cleaning companies. Free yourself from the rat race and build this business. You'll make more money doing that than you will from actually cleaning the windows.

    8. SBSteven Bartlett33:52

       100%.

    9. RPRaoul Pal33:53

       Because you're going up the knowledge curve. The further up, the more of an expert you are. And there's two things that people need to think about. You either have a very broad market for something, candy bars, well, then you've got to sell massive scale and it's really hard. Or you go through an area that has a very specific group of users, buyers, whatever, and particularly ones that have a lot of money. So let's go back to the house idea again, the guy speculating on houses. So there's two house speculators. There's the guy or girl who's hustling and renting them out, finding the cheap bargain, doing them up, renting, getting the cash flow, doing that. And then there's the guy who's buying a place for ten million, making it ultra-luxury, and selling it to the billionaires and flipping it for 50. The, the difference in the returns is staggering. Why? Because one group is price insensitive. In fact, the more expensive it is, the more they want it. The other group is trying to compete with everybody else.

    10. SBSteven Bartlett35:09

        Mm-hmm.

    11. RPRaoul Pal35:09

        You know, the two, the two bedroom apartment in the city, right? There's thousands of those being done up and sold and everything else. So to your point earlier, the returns are less. But, no, if you're doing super high end, then there is a defined group of buyers, of which you probably know them all-

    12. SBSteven Bartlett35:29

        Yeah.

    13. RPRaoul Pal35:29

        ... personally. You can counter to their tastes and they have unlimited money.

    14. SBSteven Bartlett35:35

        And, uh, that's the big thing, isn't it? It's like who you're solving the problem for. Because you can clean, like, Dorothy's windows, lives in a bungalow in Plymouth, or you can clean Google's windows and therefore you get a bigger contract, you get guaranteed work, probably get a retainer, you get more windows to clean. It's still one contract, it's still one sell.

    15. RPRaoul Pal35:51

        It's the same skill set.

    16. SBSteven Bartlett35:52

        Same skill set. They're gonna pay you a lot more. And, and, and so I just don't think... I always find that bit missing when we talk about, like, become an expert. But then, like, who do you sell to? And your idea of selling to people that are more price insensitive and that aren't gonna, and that less people are trying to sell to.

    17. RPRaoul Pal36:07

        Or they're super defined.

    18. SBSteven Bartlett36:10

        Mm-hmm. Mm-hmm. Oh, yeah.

    19. RPRaoul Pal36:11

        Right? Like, like, Tom Bilyeu, who we both know, and Tom's a good friend. You know, he made his money because there was a rise in high pre- protein ketogenic foods. And it was difficult to have that snack bar because people still have a sweet tooth but they can't have sugar. So him and his partners built Quest, which is now everywhere. So what you found is a trend. And this is really, really, really important, is you find a trending market where people are underserved-

    20. SBSteven Bartlett36:43

        Mm-hmm.

    21. RPRaoul Pal36:44

        ... and they'll pay lots of money because it's health, it's like wealth and health. People pay fortunes in that industry.... and so you make a fortune very quickly. Now, now it's a saturated market, so it's not that easy.

    22. SBSteven Bartlett36:55

        Mm-hmm.

    23. RPRaoul Pal36:55

        But this is the other key, key thing, is if you've got a clean slate, do one thing, follow a trend, a secular trend. A secular trend is a long-term trend, something that's happening, right? So everything is being digitized, you rode that trend, right? Social media was new from about 2010, right? Now it's a saturated market and we've got AI coming in. But you rode a secular trend in the hyper-acceleration phase.

    24. SBSteven Bartlett37:28

        Yeah.

    25. RPRaoul Pal37:28

        That's why you did well.

    26. SBSteven Bartlett37:30

        Mm-hmm.

    27. RPRaoul Pal37:31

        So you look for a trend that's big, meaningful, and provable, and use your skillset in that. We've seen something in America, I don't know if yous just saw the trend. Finally, the obesity numbers ticked down.

    28. SBSteven Bartlett37:44

        I didn't know that.

    29. RPRaoul Pal37:44

        Yeah. First time in 50 years, obesity starts to fall in the US. Right? This is a Ozempic effect.

    30. SBSteven Bartlett37:53

        Ah.
17. 39:02 – 42:53

    AI Will Free So Much Our Time That We Won't Know What To Do With It

    1. RPRaoul Pal39:02

    2. SBSteven Bartlett39:02

       Okay. What I'm about to say is a mishmash of ideas that came to mind as you were speaking. The first one was, how do I spot a trend? And when I say that, I mean, how does it feel in the moment? Because the trends that you capitalized on and the trends that I capitalized on, they feel a certain way at the time. And, uh, here I'm talking about, like, how disruptive they are, contrarian, what people will say to you, they'll tell you're an idiot.

    3. RPRaoul Pal39:25

       Mm-hmm.

    4. SBSteven Bartlett39:25

       And then with that as well, you talked about, um, how right now in the world we live in, betting on things like nature is a good idea. And I actually did a post on my LinkedIn about exactly this, I said my investment fund is backing two things at the moment, AI and automation, and the exact opposite. Because I saw this viral video of people, in, I think it was like a cafe in Amsterdam, who come now every week, no phones allowed, they read books and they knit. And this cafe in Amsterdam is, like, exploding. I'll put the video of these people on the screen for everyone to see. And it made me realize, a- and that, that overlaps with what a, two billionaire friends of mine said to me in private, they said... These are billionaires that invest in AI, they invest in crypto, you probably know one of them. Um, they inv- invest in psychedelics. They said to me, "If you want to invest right now, invest in AI if you can. But if you can't, invest in entertainment and community." Because in a world of AI where productivity's so high and we maybe move towards some form of universal basic income where the government just hands people money, people are gonna have so much free time on their hands that they're gonna need something to do with it. So they, he said to me, "This is why you're seeing this rise in people buying football clubs, uh, and these sporting franchises, because that's one of the s- that's community and it's entertainment at the same time." So I've thrown all of that at you.

    5. RPRaoul Pal40:37

       Yes, the equal and opposite idea is, I think, very important. I just came back from three weeks off-roading in Zambia, living on a tent on the roof of a Toyota Land Cruiser that is off-road prepared, and going out into the total wilds. And I can't express how in the present you become, how it cleanses your mind from all of the clutter, all of the things you worry about, the broken car or the whatever's going on online, the politics, all those, and it all becomes about you wake up, who's gonna make the coffee, who's gonna put the fire on, who's gonna d- you know? And so the more time we spend online, the more we desperately crave. I saw it in the Cayman Islands where I live. So it's a Caribbean island, and it was 2022 and the world hadn't really recovered, you know, there was the high inflation, people were losing jobs, everyone was really uncomfortable with the economic situation, it was painful for a lot of people. We had a record tourist season. And I'm like, "What the hell's going on here?" Normally, discretionary spending goes down in times like that, and I realized holidays had not become discretionary spend, they'd become a necessity as a reaction to work from home. If you're on your own at home working for a startup or a company or doing whatever, it kind of feels a bit lonely, and so you start seeking out like-minded people who have like-minded pursuits. Now, that could be sporting teams. It could also be chihuahua lovers because you happen to have a chihuahua and you love it, and you will talk to other people around the world, you now have no borders. This is this Balaji idea of the network states where you can create large groups of interest. So if you look at the largest group of interest in all of social media, it's actually crypto. Why? Because we feel like outcasts, we're new to something, where something's happening, and you want to get together 'cause you speak to 90% of your friends that don't care and they don't know what you're talking about, but you think this is the most exciting

18. 42:53 – 47:24

    The AI Component

    1. RPRaoul Pal42:53

       thing you've ever seen, so you will aggregate online with others.And this whole rise of people thinking they need to... Th- th- the, the security of working for a large insurance company, whatever it may be, your whole life, getting paid and retiring, has gone. Which is why the rise of your podcast's success, because people are searching for answers, new solutions to their way. And they film, they form communities around it. They wanna share their ideas, stre- share their stresses and strains. This is becoming bigger and bigger and more solidified. And the more we go into AI, the more we'll see that. Now, there's another player in this game, which is the AI itself. We're already seeing the rise of AI. I follow several on, on X, where it's an AI posting. But it's, they're forcing it to try to break free. But it's, it's got character. Marc Andreessen actually backed it by sending it a Bitcoin to develop its business plan. I mean, there's some crazy stuff going on with AI. Um, but soon, if you think what you and I do is communicate with people in a, to an audience, one to many, right? That's a very old business model. It's from town squares or the, the souk in Marrakech. It's the same thing, it's a storyteller telling to a group of people and you have a shared experience. Where we're going is one-to-one. And, you know, I'm developing a, uh, a Raoul video bot where you can just have conversations like this with me, one-to-one. And it's trained on all of my information. My, all my YouTube, all of my writings, all of my Twitter, all the books I've read, everything. And so it's essentially a replacement way of speaking to me.

    2. SBSteven Bartlett44:48

       Uh, just on that Raoul bot thing, we'll keep moving forward, but, um-

    3. RPRaoul Pal44:51

       Yeah.

    4. SBSteven Bartlett44:51

       ... the reason why I haven't trained a Steven bot, even though my team have said, "Oh, this is a good idea." Is because I wonder if people care about Steven or they just want the information. And in a world where you can get the information from a very advanced large language model like the ChatGPT 1.0 or whatever, like, why would they want it from me when you can get it from the entirety of the world's like-

    5. RPRaoul Pal45:16

       Trust.

    6. SBSteven Bartlett45:17

       ... okay.

    7. RPRaoul Pal45:18

       You've built trust. That's what you've built. People come to watch you and your interviews because they trust you.

    8. SBSteven Bartlett45:26

       So, people know me as an entrepreneur, um, in one area of my life, and they come to me for, for say, like, business advice, let's say. But if you could get business advice from Steven or you can get it from Steven Elon, Steve Jobs, every business person in the world, to suit your s- specific problem, why would you just want Steven's point of view?

    9. RPRaoul Pal45:45

       Because we're humans and I just wanna ask you that question. And you won't believe it if it's Steve Jobs, 'cause he's dead, but yes, that's all coming.

    10. SBSteven Bartlett45:53

        Okay, maybe-

    11. RPRaoul Pal45:53

        How long is that window gonna last where people will use a Steven bot versus the world's greatest expert on everything? It takes a bit of time for people to adjust to that. But within 10 years, maybe that's not there. But let me go a little bit further on this. Have you seen Character.AI?

    12. SBSteven Bartlett46:12

        No.

    13. RPRaoul Pal46:13

        Nobody has. Character.AI builds bots which are characters, like anime characters, and they're really specific, like the cool kid who's the bully at school that I fancy sort of thing. 150 million conversations. There's some of these anime ones like, you know, hero figures, 450 million conversations. And it's young people. If you go onto Reddit, uh, I think it's r/Character.AI, they changed the model and there was uproar, "It doesn't love me like it used to." People are building personal relationships with these things at scale. This is TikTok happening all over again, but you're too old to see it and I'm too old to see it. I stumbled across it, and I'm like, "Holy shit. This is happening all over again." It's something that we will just think is the most ridiculous, awful, societally toxic thing in the world is about to scale to the billions in front of our eyes. And we're all talking about ChatGPT and how we can get knowledge out of it, when actually the big problem to solve is teenage loneliness.

19. 47:24 – 51:18

    How Disruptive Will AI Be?

    1. RPRaoul Pal47:24

    2. SBSteven Bartlett47:24

       How disruptive do you think AI is going to be?

    3. RPRaoul Pal47:27

       (laughs) It's the s- it's... How do I put this? It is the single greatest innovation of humanity ever. The only thing that comes close is probably the splitting of the atom. This is so big. Everything we've talked about is based on scarcity of knowledge. Why do lawyers get paid a lot? Scarcity of knowledge. L- either scarcity of knowledge, scarcity of capital, those two things. What you've created is infinite knowledge. Right? Knowledge is now worth zero. Not, people that can't see it yet, but it's going to be worth zero. This is like water. Wha- what the hell does that mean? And it's something, you know, a topic we'll come onto later. But this is happening really fast. It's gonna break the entire economic model, for good and for bad. It's gonna change our understanding of how society functions, what humans do. It's gonna change our understanding of what humans are and will be. Because you can either have the choice, and society will take the two paths, you either merge with the machines or you reject the machines. We are going towards two different species. One group, like we had for a- about 100,000 years, I think, 50,000 years, we had Neanderthal man and Homo sapien.... and one died out. We will have people who will utterly reject this and we'll have other people who will be embedding Neuralinks into their brains and using every part of this to enhance themselves, wearing the goggles so they get the information. Well, as soon as you embed it into your brains, you've now merged with the machines entirely and you are now a super creature. And I know this sounds like science fiction, but this is happening faster than anybody can imagine. So to understand the issues we have even dealing with some of these things, is humans think in a linear fashion. We kind of understand the passage of time, right? That's how we think about things. Every year is the same amount of time, it goes forwards. It never accelerates. May perceive that it accelerates or slows down occasionally but it's not. It's, it's a constant. The problem is with things that go exponential, is they keep doubling every year or tripling every year, and before you know it, every graph looks like this.

    4. SBSteven Bartlett50:02

       Go straight up.

    5. RPRaoul Pal50:03

       Just go straight up vertically. Now, the issue is with this technology, is it's kind of an exponential square. It's, it's happening so fast, and the faster AI becomes powerful, is the more it's used to create AI, which creates more A... It solves its own problems. Right? We're not prepared for a super being that solves its own energy problems, compute problems, and how to improve its model at an exponential rate. If you look at the speed of innovation coming out of OpenAI and that whole space, Perplexity, everybody, it's ludicrous. Every three months everything changes. Completely changes. Whether it's video models or whether it's spoken models or whether it's the models themselves and what they do, I mean, they're nuking every startup that tries to build a business. No company, you're a big giant pharmaceutical company and you're trying to use AI, you can't plant a flag, because you can't see past six months. I mean, we're going into a world that is incomprehensible.

20. 51:18 – 54:37

    Should We Be Scared Of AI?

    1. RPRaoul Pal51:18

    2. SBSteven Bartlett51:18

       When you said that much of our society sort of functions and is based on the scarcity of knowledge, I really think we should just pause to make that real for people, 'cause we all get it. Okay, lawyers, yeah, they, they rely on knowledge. But dr- like, I was thinking about how I got here in the morning. So if you think about my whole day today, I woke up this morning and my, my executives, some of the CEOs of my companies had asked me a couple of simple business decisions and I'd replied to them. Then I got in a car and I drove here. That's knowledge, at the end of the day. It's someone seeing with two eyes. My driver outside sees with two eyes and drives me here. The biggest employ- employer, I think, in the world, the biggest sort of profession in the world is driving. And that's knowledge based and the, if you go to San Francisco now, the Waymo cars are driving themselves. There's no driver in them. You can get, you can book a car that takes you from A to B in San Francisco right now that has no driver. I then got here, and what am I doing? I'm, I'm sharing, I guess, we're probing to find knowledge and to share knowledge. I think about my whole day today, I'm like, and then after this I'm going and speaking on stage to share knowledge. I'm like, I don't understand if in... That's all knowledge.

    3. RPRaoul Pal52:20

       Okay, so then do that. The next time you're going around London or any city, look out the window. Myself and Julian Bettel who works with me do this all the time, is go round and say, "What job is gonna be replaced by a robot or the AI?" Right, one thing, I was in, I was in Manhattan and I just looked out. I was in an Uber, bored, you know, driving uptown to downtown. I looked around and I was like, "Holy shit, every car here is a professional driver." There's virtually no people who drive into the city to go to the office or whatever, right? So it's all Uber drivers, limo drivers, yellow cab drivers, delivery drivers, truck drivers. All gone. And this stacks up in pretty much everything you do. Uh, and that's how disruptive it is. And when the things that created value, the services economy and the manufacturing economy don't need humans, okay, what does that mean? Amazon already employs more robots than humans. Now, the robots work 24 hours a day, seven days a week, never take a break, never complain, never ask for a pay rise. In fact, they get cheaper every year. Who's not gonna do that?

    4. SBSteven Bartlett53:36

       So for the four and a half million people shitting themselves as they listen to this-

    5. RPRaoul Pal53:40

       Yeah.

    6. SBSteven Bartlett53:42

       (laughs) What, what advice can we... Including myself. Um, I'm not actually shitting myself, I've got to be honest, because I just, I see opportunity in all these things and I think that's... You kind of have a choice when you hear information like this. You can either let the cognitive dissonance get over, overwhelm you and then reject it, which a lot of people will be doing now. They'll be saying, "Raoul, you're wrong."

    7. RPRaoul Pal54:01

       Yeah.

    8. SBSteven Bartlett54:01

       "This is not gonna happen, you're wrong. You're scaremongering." That's what one group of people will be doing.

    9. RPRaoul Pal54:04

       Yeah.

    10. SBSteven Bartlett54:05

        The other group of people will be, I guess, open minded. And the third group of people will be leaning in to see where the opportunity here lies. And it all comes down to your, like, disposition as a human. Are you scared? Are you excited? Or are you paralyzed?

    11. RPRaoul Pal54:20

        If something is so clearly going to be your demise, not demise as in you're gonna die, but your current way of doing things is going to be forced to change. Well, you can either fight it, as you say, be indifferent to it, or you can invest in it.

21. 54:37 – 57:53

    How To Know If A Trend Will Be Persistent

    1. RPRaoul Pal54:37

    2. SBSteven Bartlett54:37

       This goes back to the question I asked you earlier which is, how does it feel in the moment when a trend is coming in?

    3. RPRaoul Pal54:43

       Usually there is culture around it. So if you remember I talked about when I got into finance, there was Gordon Gekko, the film Wall Street. There, there were books coming, right? There was Barbarians at the Gate. It was famous stuff happening. It became cultural. And that usually tells you it has now become a trend that's going to be per- persistent. If we think about-... the rise of software and technology, the culture of Silicon Valley and the mythology around it becomes something that everybody wants a part of. Cryptocurrency's another one that has a mythology, you see people getting rich, it has this feeling of being outsiders. But, you know, you see it, AI is another one, you see it online, people experimenting. You can see what's going on, you can see everybody is starting to talk about it. Doesn't mean you can just buy some share that- that's exposed to it and you'll all be hilariously rich, doesn't work that way, but you know something really big. When you're, when you're trying to acquire knowledge, you know, people watch you and I to try and glean knowledge, you know, build their world view. You'll hear that every single person is talking about this and trying to figure out what it means. The issue is, is AI will build businesses, right? So, we're lo- six months away of agentic AI. And agentic AI means, it's like having Fiverr, a website of experts that you can ask any question and it will go away and do the task. And by using a number of Fiverr experts, you can build a online business. Well, the agentic AI will do that very, very soon.

    4. SBSteven Bartlett56:35

       It will build, design the website, code it, register the domain name, pay the-

    5. RPRaoul Pal56:39

       Figure out the branding, figure out the marketing, figure out the email list, figure out what the copy is-

    6. SBSteven Bartlett56:44

       Suppliers.

    7. RPRaoul Pal56:44

       ... the whole thing.

    8. SBSteven Bartlett56:45

       Mm-hmm.

    9. RPRaoul Pal56:45

       So then, you and I are in competition now. You've built this incredible new website and it's a new supplements formula, um, thing, but it's a cool website, new experience, kind of 3D, whatever it is, right?

    10. SBSteven Bartlett56:56

        Thank you.

    11. RPRaoul Pal56:57

        It's got AI in it. I just go to my AI and say, "Love Stephen's website. Can you just build it better and make it in Hindi as well?" Because I think there's a big market there. "What do you think?" It'll come back and say, "Not Hindi. I think there's an undersaturated market in, in Indonesia." Boom. Three minutes. What? How do, how can we be entrepreneurs in software? So now, there's this th- theory going around that AI's gonna eat software. And I kinda get it, 'cause it can build anything in seconds. So, and again, whether it could do it in six months or 12 months, it's, it's of that magnitude that what the hell does that mean? But yet the 23-year-old who's learnt guiding in the jungles of Latin America and is building a luxury lodge for people and, uh, you know, some ecotourism, I don't give a shit about any of this.

22. 57:53 – 59:06

    Are We At The Collapse Of The Digital Industry?

    1. SBSteven Bartlett57:53

       It's so interesting, this idea that we might be at the, the collapse of the digital opportunity, in, in a sense. Because when I say the digital opportunity, I'm talking about content creators, I'm talking about entrepreneurs that built, you know, after the dot-com era, I'm talking about stock traders, you know, people that trade, trading stock markets. And if we're at the collapse of the digital opportunity and that the value is all gonna recruit to these big sort of tech giants or the AIs, imagine if this is the moment in history where actually the best play was to go be, build the backpacking company in, I don't know, the Himalayas or whatever. Maybe, like, that's the opportunity.

    2. RPRaoul Pal58:30

       But it, it's not scalable. Yes, you can do it and find people will spend more on it, to go back to our earlier conversations. People spend a lot of money on it, so it's quality attention, 'cause everything in the world is attention. Attention's upstream of everything. So, you get the attention of these people in a rainforest, they wanna spend money on doing this particular thing. Fantastic. Um, how scalable is it? Difficult, because then there's people, management-

    3. SBSteven Bartlett58:58

       You have to hire people.

    4. RPRaoul Pal58:59

       It's not like software, right? So they're not sca- But you can do very well and not be concerned about this other world.

23. 59:06 – 1:00:51

    How Do You Invest In AI?

    1. SBSteven Bartlett59:06

       How does one invest in AI? Something that I think about a lot, because I believe the things you say, I believe many of your predictions around, uh, ar- around the impact that AI's gonna have on the world, the economy, on all of us. And as someone that's an investor, I wanna, like, take part in that, I wanna take part in the upside. So I'm wondering, do I just go buy Microsoft stock because they own a bit of ChatGPT? Do I buy Meta stock 'cause they own a bit of, uh, because they own LaMDA? Do I buy Google stock 'cause they have Gemini and their models?

    2. RPRaoul Pal59:33

       So, here's the problem with the financial system. The average person watching this has no chance of making the money. They'll make normal returns, not supernormal returns. So, Microsoft is, whatever it is, two, three trillion dollar company. What, what could it be worth? Who knows? 10 trillion, 15 trillion, doesn't really matter, right? That's a 5X. What, for the most revolutionary technology the world has ever seen, you make five times your money? That's not... But somebody else in VC or earlier, in some way, shape, or form, or the entrepreneur, will make all of the money. And this is the thing I don't like about the system as it is, it's kind of rigged against the ordinary person. So, we're gonna have your jobs replaced, you're gonna have this societal change, and yet they don't get a chance. So yes, invest in technology. Don't own any, any other stocks. Own technology, and you will capture some of this. You're investing in your own demise. At least you'll get some high quality returns. But otherwise, the only way I can come up with, again, and we keep referring to it, i- is

24. 1:00:51 – 1:01:18

    What Is Crypto

    1. RPRaoul Pal1:00:51

       crypto.

    2. SBSteven Bartlett1:00:51

       What is crypto?

    3. RPRaoul Pal1:00:54

       Crypto's just a technology. You know, it's a lot of things to many people, but it's just a database that's better than databases in the past. So right now, your database might be in your spreadsheet, and let's say you and I have a bet. You put it, you write it down there and we get a third person to say, "Yeah, that was the bet they had and this is what's happened."

25. 1:01:18 – 1:06:32

    Productivity And AI

    1. RPRaoul Pal1:01:18

       Okay.That is how databases, that's banks, that's pretty much everything we do in society, is in this ledger system, it's called.

    2. SBSteven Bartlett1:01:27

       I've got a suitcase here which is maybe, maybe a good way to kind of explain this. This is a bank... and inside the bank, which is, I guess, the middleman, you've got money.

    3. RPRaoul Pal1:01:42

       Yeah.

    4. SBSteven Bartlett1:01:43

       So could you explain it to me through the context of this... we'll call it the central bank. How the system currently works as it relates to transactions, the public ledger, et cetera.

    5. RPRaoul Pal1:01:53

       So, okay. In the old world... we both had our gold.

    6. SBSteven Bartlett1:02:00

       Yeah.

    7. RPRaoul Pal1:02:00

       And we'd stick it in our safe or bury it in the ground. That gold was your gold, this was my gold, and I might try and fight you for it. That's what pirates did. Okay. And then we invent banks.

    8. SBSteven Bartlett1:02:10

       Mm-hmm.

    9. RPRaoul Pal1:02:11

       And banks, we put it in there, and they give you a note to say, "Steven, you've got one of those coins. Raoul, you've got one of those coins."

    10. SBSteven Bartlett1:02:21

        Okay, so we've both got a, a note now saying that.

    11. RPRaoul Pal1:02:23

        Yeah. And now we trust this bank to give us our coins when we want them, because they're our coins.

    12. SBSteven Bartlett1:02:30

        Mm-hmm.

    13. RPRaoul Pal1:02:31

        Okay, that makes sense. Safe as, safe as a bank, as people would say. The issue is, is in this world of smoke and mirrors, what's known as fraction reserve banking, they have taken those coins and given them to somebody else.

    14. SBSteven Bartlett1:02:49

        They've given my coins to someone else?

    15. RPRaoul Pal1:02:50

        Yeah, they've lent it for money. So now that coin is not in there. But they've been given the money, so usually when you all just... y- you know, n- if everybody pulls all the money out, there's not enough money. It's called a bank run. We've seen those recently, but that's a classic thing. So it's not your money, because you don't actually own your money. The moment you put it in the bank, what you've become is, in fact, a debtor to the bank, or a credit, sorry, creditor to the bank. So you've lent them money and you get some legal redress that if you've got less than 100,000 euros, pounds, whatever the currency is, generally that's protected by the government, that if the bank goes bust, then you get your money back. But anything beyond that, you don't get anything.

    16. SBSteven Bartlett1:03:41

        But I've got a piece of paper.

    17. RPRaoul Pal1:03:42

        Yeah, means shit. You don't own anything. Now, it's so big as a problem that 2000, so that was 2012 European crisis, exactly this. People didn't own their money. That person walked off with it, asked the bank for it, the bank didn't have it, nobody's got any money, where has it all gone? That was the same Ponzi scheme we c- talked about when you've got, you buy a house and use the cash fund to buy another house and another house, right? Somebody takes away what's known as the collateral, suddenly it's all gone. But the issue is actually bigger, because 2008 proved another thing, is that nobody owns anything. So the whole system itself is leveraged. So, for example, back in that time, the average US government bond, which is the safest thing in the world, was leveraged up to 30 times.

    18. SBSteven Bartlett1:04:40

        What does that mean?

    19. RPRaoul Pal1:04:42

        That means 30 people felt that that was theirs.

    20. SBSteven Bartlett1:04:47

        Oh, so I... Say that this is the bank in front of us, the suitcase, and it had one coin in it. When we put that one coin in, it created 30 more coins and gave out 30 pieces of paper.

    21. RPRaoul Pal1:05:02

        Yeah.

    22. SBSteven Bartlett1:05:02

        So there was actually only one coin in the bank.

    23. RPRaoul Pal1:05:04

        Yeah.

    24. SBSteven Bartlett1:05:04

        But they made 30 pieces of paper.

    25. RPRaoul Pal1:05:05

        And, and that's all well and good if the collateral, the thing that it's secured on-

    26. SBSteven Bartlett1:05:12

        The coin.

    27. RPRaoul Pal1:05:14

        ... maintains value.

    28. SBSteven Bartlett1:05:17

        Ah, okay.

    29. RPRaoul Pal1:05:17

        Or isn't pulled by one person. If you were the lender and you're original lender and you get it out and something happens, then all of these 29 other people are like, "I want my coin back." And they're like, "It doesn't exist."

    30. SBSteven Bartlett1:05:33

        It doesn't exist? So we just made it, we just created the coin.
26. 1:06:32 – 1:08:04

    Blockchain Explained

    1. RPRaoul Pal1:06:32

       is no way of making sure that that person tells you exactly what I told them and no way of you approving it. And that's what a three-party system does. I may go to a notary, but how do you know I haven't bribed the notary to lie? I see that all the time.

    2. SBSteven Bartlett1:06:45

       Mm-hmm.

    3. RPRaoul Pal1:06:46

       We see it with accounting firms and audits. We see this in everything. There's always one of these trusted parties that is not trusted. The bank, classical trusted counterparty that suddenly may not be trusted. We saw it with Silicon Valley Bank recently in the US.

    4. SBSteven Bartlett1:07:02

       Mm-hmm.

    5. RPRaoul Pal1:07:03

       So what blockchain did, really cleverly, we said, "Okay, well the way of solving this is to get thousands, tens of thousands, hundreds of thousands, millions of people to confirm it."

    6. SBSteven Bartlett1:07:16

       Okay, so let's throw away the bank. Take my paper back, because that's worth zero. Um...

    7. RPRaoul Pal1:07:23

       (laughs)

    8. SBSteven Bartlett1:07:23

       If you pick up this chain here...... on the floor.

    9. RPRaoul Pal1:07:26

       Yeah.

    10. SBSteven Bartlett1:07:26

        This is our hypothetical, uh, blockchain.

    11. RPRaoul Pal1:07:30

        Yeah.

    12. SBSteven Bartlett1:07:31

        Now explain to me the difference between the bank we just saw and this blockchain.

    13. RPRaoul Pal1:07:36

        So, this blockchain, so this, let's say, is a Bitcoin.

    14. SBSteven Bartlett1:07:40

        Mm-hmm.

    15. RPRaoul Pal1:07:41

        This slot on the blockchain is confirmed by every other part of the blockchain, which is all the computers that, that solve this mathematical problem. We don't need to worry about that. But what it is, is tens of thousands of people reporting on all of the activity. So, if I transfer this ownership to you-

    16. SBSteven Bartlett1:08:03

        Yeah.

27. 1:08:04 – 1:10:54

    Contracts On The Blockchain

    1. SBSteven Bartlett1:08:04

    2. RPRaoul Pal1:08:04

       ... it will know that you are the owner. You can either hold it yourself, like the gold coin-

    3. SBSteven Bartlett1:08:09

       Mm-hmm.

    4. RPRaoul Pal1:08:09

       ... as a bearer asset, or you can ask somebody to custody it for you. But still your name.

    5. SBSteven Bartlett1:08:17

       So, if I want to send you a Bitcoin, how is, how are tens of thousands of people, or hundreds of thousands of people confirming that that transaction is legitimate-

    6. RPRaoul Pal1:08:27

       So-

    7. SBSteven Bartlett1:08:28

       ... without a middle man checking?

    8. RPRaoul Pal1:08:29

       So, they're essentially taking a snapshot of the blockchain and they all have to agree.

    9. SBSteven Bartlett1:08:37

       And they're not actually-

    10. RPRaoul Pal1:08:38

        So, it's called a, it's called a consensus mechanism.

    11. SBSteven Bartlett1:08:39

        They're not actually at their computer saying, "Yes, I agree."

    12. RPRaoul Pal1:08:42

        Well, the computers agree.

    13. SBSteven Bartlett1:08:44

        Okay, so the computers are checking.

    14. RPRaoul Pal1:08:45

        Yeah, or the, the blockchain itself will say, "Well, that doesn't agree with all the others." And it gets rejected, and that whole block will get rejected until resolved, like, "There's a problem here." And that's called consensus. So, what you're doing is a multi-party consensus that this is truth.

    15. SBSteven Bartlett1:09:03

        Mm-hmm.

    16. RPRaoul Pal1:09:03

        So, now what you've created is what a friend of mine calls the security truth machine. So, at first, we all know it for Bitcoin, I can own a Bitcoin, it's proven that I own the Bitcoin. I don't need anybody to tell me that I own the Bitcoin because it's publicly acknowledgeable and verifiable on the blockchain. It's immutable, which means it can't be broken.

    17. SBSteven Bartlett1:09:27

        Mm-hmm.

    18. RPRaoul Pal1:09:28

        Okay. But this is where it gets really interesting, is we suddenly find that after the invention of the smart contract... So, right now, let's say we're two thousand and...

    19. SBSteven Bartlett1:09:43

        There's a contract in here.

    20. RPRaoul Pal1:09:44

        Yes.

    21. SBSteven Bartlett1:09:45

        It says, "I've sent one Bitcoin to Raoul."

    22. RPRaoul Pal1:09:48

        Okay. So, this is the world pre-Ethereum.

    23. SBSteven Bartlett1:09:51

        Okay.

    24. RPRaoul Pal1:09:52

        The world post-Ethereum would say, "I'm gonna send Raoul one Bitcoin if the sun shines 13 days in a row in London and something else happens." Whatever it is. And it will automatically settle, verified on the chain.

    25. SBSteven Bartlett1:10:10

        Because there's h- ten thousand computers...

    26. RPRaoul Pal1:10:12

        And there's code in that to make the settlement.

    27. SBSteven Bartlett1:10:15

        Okay.

    28. RPRaoul Pal1:10:16

        Okay. So, all well and good. Nobody really knows what that means yet. What it means is that everything we do as humans is actually contracts. Me turning up here today, a contract. Literally everything we do is a contract. Every ticket you buy, every purchase you make, everything is a contract. It's how our society functions.

    29. SBSteven Bartlett1:10:38

        Money's a contract, isn't it?

    30. RPRaoul Pal1:10:39

        Money's a contract. Government's a contract. Religion's a contract. Everything is a contract. It's how we create a social construct and social order. Now, what we can start doing is using this very powerful chain

28. 1:10:54 – 1:12:12

    NFTs

    1. RPRaoul Pal1:10:54

       and putting other stuff on it. The first random thing that came on it was actually art, 'cause it's valuable, called NFTs, non-fungible tokens. They're single pieces of art that were stored there and we can have ownership. But that's really experimentation. Really, your Taylor Swift concert tickets can be on chain. Why would you do that? Because now this has solved another big thing that didn't exist. We talked about before, in a digital world, everything goes to zero in value. "So, Raoul, what's the point of this? This is just like cloud, cloud storage. Just goes to zero in cost." No, 'cause what we've created is digital scarcity. You can only create a certain amount and we can make that one asset be that one asset.

    2. SBSteven Bartlett1:11:44

       Mm-hmm.

    3. RPRaoul Pal1:11:45

       And so therefore, it can't be replicated at all. So, now in this digital world where every day is more digital than the next, we've created scarcity. And scarcity is what gives value. It's what humans assign value to.

    4. SBSteven Bartlett1:12:01

       And that means that...

    5. RPRaoul Pal1:12:02

       Scarcity of knowledge-

    6. SBSteven Bartlett1:12:04

       Mm-hmm.

    7. RPRaoul Pal1:12:04

       ... means that knowledge was valuable. Lawyers. 'Cause not that many people come out of law school and then... Now, with AI, not valuable.

29. 1:12:12 – 1:21:43

    Should You Invest In Blockchain?

    1. RPRaoul Pal1:12:12

    2. SBSteven Bartlett1:12:12

       So, to make sure I, I and everyone listening understands what a, what the blockchain is, it's this public... Can think of it as this database in the sky. And the database in the sky is checked by everybody who has their computer on and is interacting with the database in the sky. So, you no longer need a government or a bank checking the transactions and the, and the contracts in the database in the sky, because now all of our computers that are on, interacting with it, are in the background checking that if I send you one Bitcoin, or if I do something on this database in the sky, it is, um, in accordance with the history of the database and, um, it is in line with that database?

    3. RPRaoul Pal1:12:57

       Yeah. What, and to, to make it less complicated, it just makes it a source of truth.

    4. SBSteven Bartlett1:13:02

       Okay.

    5. RPRaoul Pal1:13:03

       In a world where we don't even know who is who online, who owes each other what, any of these things, we now have a source of truth that everybody can agree on.

    6. SBSteven Bartlett1:13:14

       And everyone can see.

    7. RPRaoul Pal1:13:15

       And everybody can see.

    8. SBSteven Bartlett1:13:16

       And you don't need to trust anybody.

    9. RPRaoul Pal1:13:19

       And so that, as a technology, solves many things, problems that we don't even know we've got because they're so part of how we exist. So, the technology is not about money.... the technology is about truth and exchanging value and creating value in a digital age. Now, what is interesting and powerful about this technology is we've seen technology similar before. The internet. We've seen broadband. We've seen these big global infrastructure things. Most of those, the internet was a public service good. Broadband was all built private sector. We didn't get to make money out of these things, really. Amazon made the money, or- or whoever it was building the broadband, they all went bust as well. What we've got here is this very clever thing that everybody in this blockchain gets rewarded for the role that they play.

    10. SBSteven Bartlett1:14:34

        In maintaining the blockchain?

    11. RPRaoul Pal1:14:35

        In maintaining the blockchain. And because these things are scarce, and let's say Bitcoin being the most classic example, there's only 21 million that will ever exist, you've created this scarce asset that is a reward system. So, the people who mine the Bitcoin, they use the electricity to solve the algorithm to get the Bitcoins to make sure there's only 21 million, well, they get rewarded. The people who verify the chain get rewarded. And then we can buy the asset, which is actually us investing in the future use cases of this thing. Are people gonna use it for storing wealth or building stuff? So, now you get this global infrastructure layer of which people can invest. Now, let's go back to the example of AI. AI, 99% of people listening to this will not be able to invest in it, apart from buying some of those big public companies, because they're not accredited investors, they're not allowed, they don't get to see it, it's an insider, all of this stuff. This is the inverse. It is fractionalizable. So, a Bitcoin, you don't have to buy one at 60 whatever thousand, what it is today. You can buy a fraction. So, remember we talked about property and the guys who own the big high-end property make all the money. None of us can buy the $50 million apartment in Manhattan and then do it up and flip it for $250 million. Now, blockchain, we can all put 10% of our paycheck in it.

    12. SBSteven Bartlett1:16:15

        Do you think people should?

    13. RPRaoul Pal1:16:16

        Yeah, and more. But the point being is this is the only globally homogenous asset on Earth. It's the same in Nigeria as it is in Brazil, as it is in London, as it is in Silicon Valley, as it is in India, as it is in Papua New Guinea. And everybody is on an equal footing. You can put the same percentage of your worth in it. Okay, that is mind-blowing, and it bypasses the banking system, the brokerage system, and all the other incumbent things that get in the way of a Nigerian buying an international investment. So, we've got a playing field that's leveled in the fastest-growing technology of all time, in the fastest appreciating asset in price terms of all time, in the shortest period of time, that is globally available to anybody. And then you realize, "Holy shit. Okay, this is important." Now, why that's important is because having more investors in it means the asset becomes more valuable, which means you're more likely to secure it. People want to join the network to earn some of these tokens to secure it. The more use cases get built upon it because people are making money, and it bootstraps its behavioral economics. It's an incentive-based system to bootstrap the most ridiculous startup idea of all time, which is, "I'm going to entirely disrupt money and create a new internet." I mean, that's laughably stupid, and that's what's happening.

    14. SBSteven Bartlett1:17:56

        One of the... I run a company called, um, Third Web, which is a Web3 infrastructure business. We- we've raised quite a lot of money for the company, about $30 million now, and we have a big team. And it's interesting for me to observe the use cases, because people come to Third Web to build on the blockchain. And one of the really interesting use cases we've seen over the last, I'd say 12 months, that's really exploded is, is gaming. People building-

    15. RPRaoul Pal1:18:21

        Mm.

    16. SBSteven Bartlett1:18:22

        ... uh, Web3 blockchain-based games, because if you think about games like FIFA, which is a huge game, obviously, in the UK where we're big soccer fans, or other games like, you know, um, RuneScape back in the day, where you have assets in the game. In FIFA, you have a Messi card. In RuneScape, you might have a sword. The thing that the blockchain now enables us to do is to take those assets from the game and actually trade them outside the game. So, I can... If the, if the sword was on the Ethereum blockchain, even though I'm not inside the game, I can trade that sword on the Ethereum blockchain. And so one of the most exceptional use cases we've seen at Third Web is people building AI games. Uh, sorry, people building Web3 games, because these assets are now valuable. It's great for the game developer. They've now got this brand new economy for their, for their company, and it's great for the people that own those assets in the game 'cause they've now... those assets are now more valuable 'cause more people can access them. And I don't think people realize the extent to which this disruption is already taking place. People think of crypto and Web3 and they think of buying coins and hoping the price goes up. But it was interesting, you know, everyone knows, like, DocuSign and Adobe, like, eSign and those things. And I went on one of their websites, I think it was DocuSign, 'cause I just- I thought, "Surely, physical contracts should be on the Ethereum blockchain now." And there was this little paragraph on the DocuSign website which says, "Every time, like, a, a contract is signed on DocuSign, we do, like, there's a hash on the blockchain."... so it's, like, recorded on the blockchain. And I thought, "People don't even know that the blockchain has now penetrated the world."

    17. RPRaoul Pal1:19:50

        I went to... I was, um... I've got an asset management company, Exponential Age Asset Management. We invest in hedge funds that just invest in crypto to capture this trend of going from $2 trillion, where it is today in value. I think it's going to $100 trillion in, let's say, 2032, 2034. Okay, that's stupid. That's, that's more wealth from the... than has ever been created in that period of time on Earth by... Well, it's twice the amount of value of the S&P 500, the entire S- US stock market took to build in a 100 years. I think we'll do it in 20. So this is staggering, that wealth, which is why we'll talk about why people should be involved and how they should be involved later, 'cause it... I'm passionate about that. But I was... One of our investors... I was in Switzerland, and she is the head of trading at one of the soft commodity companies, so soft commodities like cocoa, sugar, corn, all of this stuff, agricultural commodities. And, um, I'm like, "Surely you guys should be thinking about building on blockchain, you know, because there's a lot of letters of credit and stuff that happen, shipments." She goes, "Uh, we all... All the commodity trading houses built on Ethereum in 2020."

    18. SBSteven Bartlett1:21:11

        Mm.

    19. RPRaoul Pal1:21:12

        She goes, "So every shipment we make, the shipping contracts, the quality of goods contract, the letters of credit, everything is on chain so we don't have to trust these others." Because commodity industry is full of sharks and you're dealing with countries that are not easy to deal with. Just like we've got this verifiable source of truth. It's completely revolutionized our industry, and nobody knows about it.

    20. SBSteven Bartlett1:21:38

        And if, if I own Ethereum-

    21. RPRaoul Pal1:21:40

        Yeah.

    22. SBSteven Bartlett1:21:40

        ... if I own an Ethereum token-

    23. RPRaoul Pal1:21:42

        Yeah.

30. 1:21:43 – 1:23:01

    How Do I Benefit From Buying Crypto?

    1. RPRaoul Pal1:21:43

    2. SBSteven Bartlett1:21:43

       ... which I do by the way-

    3. RPRaoul Pal1:21:44

       Yeah.

    4. SBSteven Bartlett1:21:44

       ... I've been stacking it and refusing to sell.

    5. RPRaoul Pal1:21:46

       (laughs) Good.

    6. SBSteven Bartlett1:21:47

       Um, much to my brother's dismay, he's like, "Steve, you're a bit too emotional about this stuff." And I was like, "Bro," I was like,"If there's any asset that I own that I think is-"

    7. RPRaoul Pal1:21:54

       Well, we're gonna talk about how not to fuck it up later.

    8. SBSteven Bartlett1:21:56

       Yeah. (laughs)

    9. RPRaoul Pal1:21:56

       That's another thesis.

    10. SBSteven Bartlett1:21:57

        But how do I benefit from the fact that games are now being built on Ethereum and-

    11. RPRaoul Pal1:22:01

        So, it's really simple. If we'd all been given shares in Facebook when it started, we'd have all been hilariously rich, but we didn't. The VCs got it, and then it went to the public market, and then you have to have a brokerage account and you have to be approved, right? What this is happening, you buy an Ethereum token today. If Ethereum ends up becoming bigger and more uses, your token value goes up. It's as simple as that. So you get to participate in an entire technological revolution really simply from your mobile phone, and you don't need anybody to approve it or do anything. Yes, there's regulation stuff, but simple stuff like that, it's pretty straightforward for almost everybody in the world. So therefore, we talked about, "How do you invest in your disruption in the future of technology?" Okay, here's one where you can really do it, and it's easy to do.

31. 1:23:01 – 1:24:27

    How To Invest In Crypto

    1. SBSteven Bartlett1:23:01

       A couple of questions here, then. So you said it's easy to do.

    2. RPRaoul Pal1:23:04

       Yeah.

    3. SBSteven Bartlett1:23:04

       Let's talk the practicalities. How do, does one do it? I can do it on my phone? Do I have to call someone? How do I invest in crypto?

    4. RPRaoul Pal1:23:12

       You just open a crypto account-

    5. SBSteven Bartlett1:23:14

       Yeah.

    6. RPRaoul Pal1:23:15

       ... um, with one of the big crypto providers, Coinbase, Kraken, crypto.com, whoever ............................

    7. SBSteven Bartlett1:23:22

       What about this, though? My bank, my digital bank is offering me to buy crypto on there. Should I do that?

    8. RPRaoul Pal1:23:27

       Yes, you can. And you could do it via PayPal. Start somewhere. I'm not gonna say no. But you will go down the journey that everybody goes down, which is the easiest on-ramp is the best, Revolut, whatever. I don't care. Just do it. Get a feel for what it's like to own an asset that goes up and down a lot. (laughs)

    9. SBSteven Bartlett1:23:48

       Mm.

    10. RPRaoul Pal1:23:48

        Particularly down. When it goes down, it makes you feel terrible, and you gotta learn about how to deal with it. And then, because it goes up over time, if you don't do anything and you've chosen a good quality asset that's provable as a, as an asset in itself, it'll probably go up over time. In fact, highly likely to go up a lot. And then you'll start thinking, "Do you remember Raoul saying that the bank owns this stuff and I don't own it?" And then you might say, "Oh, but the magic here is, unlike the bank where I can't take more than 10 grand out, I can put it all on my little Ledger device," because-

32. 1:24:27 – 1:25:41

    What Is A Ledger Device?

    1. RPRaoul Pal1:24:27

    2. SBSteven Bartlett1:24:27

       What's a Ledger device?

    3. RPRaoul Pal1:24:28

       ... a Ledger device is... It's actually a, it's a company who provides it. But what it is, because this is just an address on a blockchain... And think of it, it's like your mailbox. You can send stuff to it, but you can't actually take it out. Like your email, somebody can't read all your emails but they can send you emails. Well, that, that part that's private, that secure passkey essentially, well, you keep that to yourself and it's stored on a device. And there's a complicated way of doing it, and you'll have to go through that which is, you have to have this seed phrase that does it. This technology will change quite soon, you know, fingerprints, faceprints, and a bunch of other stuff. But basically, a little USB stick will secure, that you can go and put it in a safe or go and take it to your nan's house, or whatever it is, can secure your money, that it's only yours and nobody can take it out.

    4. SBSteven Bartlett1:25:31

       I have mine on a Ledger. So I have my Ethereum on a small... it's kind of like a small USB stick, and then that USB stick is protected by, like, 24 words or whatever it is.

33. 1:25:41 – 1:32:14

    What Coin Should You Invest In?

    1. SBSteven Bartlett1:25:41

    2. RPRaoul Pal1:25:41

       That's right.

    3. SBSteven Bartlett1:25:41

       And those words are on pieces of paper in different countries at the moment.

Episode duration: 2:13:04