July 6, 2025 • 43 mins
Alternative investments are no longer just for institutional players and ultra-wealthy individuals. As Henry Yoshida reveals in this eye-opening conversation, everyday investors are increasingly allocating portions of their retirement accounts toward private investments outside the traditional stock and bond markets.
Yoshida, a 23-year CFP veteran who built and sold both a financial advisory firm and a robo-advisor before founding Rocket Dollar, has created a platform that now manages $12 billion in alternative assets within tax-advantaged accounts. His company provides the infrastructure for investors to use their IRAs and 401(k)s to invest in private equity, real estate, cryptocurrency, and even unusual assets like cattle and racehorses.
What makes this approach particularly interesting is the psychological benefit that comes with these investments. Unlike public markets where constant price fluctuations can trigger emotional selling, alternatives typically lack minute-by-minute valuations. This reduced transparency often helps investors maintain long-term positions without succumbing to short-term market noise – something Yoshida's customers have repeatedly confirmed.
The platform primarily serves "mass affluent" retail investors with $250,000-$5 million in investable assets, who typically allocate 10-20% of their retirement funds to alternatives after experiencing significant gains in public markets. Rather than sourcing investments directly, Rocket Dollar solves the "demand side" by giving investors access to their retirement funds for private investments they've identified elsewhere.
This democratization of alternative investments comes at a crucial time. As Yoshida points out, the traditional pathway for companies growing from small caps into large ones has fundamentally changed. Companies like OpenAI and SpaceX enter public markets at already massive valuations, meaning retail investors miss the substantial growth phase that historically occurred in public markets. Through alternative investments, individuals have potential access to these opportunities earlier in their lifecycle.
Whether you're considering diversifying your retirement portfolio or simply curious about the expanding world of investment options, this conversation offers valuable insights into how the investment landscape is evolving beyond traditional asset classes.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
You're building up this platform.
You've got these multiple sites.
You mentioned $12 billion.
How do you grow?
Speaker 2 (00:05):
a company like this.
We've been largelydirect-to-consumer.
I just saw that we made anotherlist of top alternative
investment IRA platforms.
People search these things.
They're looking for how to domore innovative things with
their 401ks or IRA monies.
We know that there's an uptickin interest in private and
alternative investments, thatthere's an uptick in interest in
private and alternativeinvestments.
(00:25):
And then even some of thethings I just talked about in
the article just maybe threeweeks ago was that even some of
the large brokerage houses arestarting to really develop
relationships to deliveralternative investments, like
Vanguard working with Blackstone, Edward Jones talking about
offering an alternativeinvestments platform.
So we're just in that ecosystem.
We've been there, We've beendirect to consumer, but I think
(00:45):
this year and going forwardit'll it'll serve us well to get
maybe like a little morefriendly, a little more known by
the investment advisorcommunity.
And that's the world I comefrom.
Speaker 1 (01:02):
I look forward to this conversation with Henry
Yoshida.
We're going to be talking abouta favorite topic of mine, which
is alternatives, which a lot ofpeople used to think are clear
alternatives to making money,but now may not be the case.
From a cycle perspective, we'lltalk to you on that and,
spoiler alert, there might be anew person joining me to help
host some of these interviews.
I'm expanding and growing theteam, so you'll see some news
(01:24):
from me soon enough on that.
With all that said, my name isMichael Guy, a publisher of the
Lead Lager Board.
Joining me here is HenryYoshida.
Henry, first time you and I arechatting, you had reached out.
I think you have an interestingbackground, but introduce
yourself to the audience.
Who are you?
What's your background?
Have you done throughout yourcareer?
Speaker 2 (01:39):
And what are you doing currently?
Yeah, I'm maybe like a lot ofpeople that you kind of talk
about.
I started my career as afinancial advisor.
I did that for 10 years on thewire house broker's side from
Merrill Lynch 2000-2010.
So a real interesting time tobe there.
I joke around.
I made it through two crises.
The company only made itthrough one of them before
(02:00):
getting acquired by B of A ofthem.
Before getting acquired by B ofA, split off to do an RA, grew
and sold that and then sincethen I've been doing fintech
products.
So all kind of focused in myniche, which is retirement plans
.
So built a robo-advisor forRoth IRAs.
That got acquired.
And now I built a digitalplatform that does alternative
investments inside of IRAs sothink outside of stocks, bonds
(02:21):
and mutual funds.
You could do private and altinvestments everything from
crypto, real estate andeverything in between in the
alternative private space in anIRA called rocketdollarcom and
we go under the moniker ofretiredcom.
So that's a little bit about me, and I've been a CFP for 23 and
a half years now.
I just realized that I'm wayover the 20-year mark on that.
So I just love personal finance, retirement accounts it's kind
(02:45):
of my thing and buildingproducts in that space.
Speaker 1 (02:48):
So my mind goes to a lot of different areas on the
platform.
I want to learn more about it,but let's first define properly
for the audience what analternative is, because I
personally believe that a lot ofthings claim to be alternative,
but they're just variations ofbeta.
Speaker 2 (03:02):
Yeah, so the way I refer to alternative and it's
changed a lot.
When I started my career, Iremember alternative investments
were just things that maybewere mutual funds that might've
invested in certain countriesoutside of maybe the top 20.
But the way we definealternatives are investments
that are private andnon-registered, so they can be
quasi-registered.
So I think you got a lot thatare sort of a hybrid, just like
(03:24):
maybe how an ETF is a hybrid toa mutual fund or an individual
stock.
Private investments I'm talkingabout non-registered LP
investments into private equity,private venture funds, real
estate syndications, real estateoutright or cryptocurrency
Something that's just notpublicly registered in your
quote-unquote, normal Q-subdriven investments.
(03:44):
That's probably what we defineas private and alternative.
Speaker 1 (03:47):
And of course there's liquid aspects and illiquid
aspects to alternatives.
I think you know, when youthink about sort of a Swenson
endowment model, when you thinkabout the alternative framework,
there there's this illiquiditysort of premium right that
happens over time.
But let's talk about sort ofthe idea that an alternative
maybe needs to be more on theilliquid side than liquid to be
considered alternative.
Speaker 2 (04:08):
That's a good point.
I didn't touch on that part soit would be a liquid and I don't
know the way we do it now.
It might actually help peoplefrom.
All of our customers are retailindividual investors and I've
dealt with those retailindividual investors.
I've never been aninstitutional guy my entire
career those retail individualinvestors I've never been an
institutional guy in my entirecareer.
And the illiquidity premium.
(04:29):
Now there's moredemocratization and access to
alternative investments.
But I think that actuallyhaving this sort of situation
where you might not have aconstant mark to market has been
psychologically better for thatretail individual investor and
allow them to sort of hold onstomach being an investment.
So you know information justtoo readily available sometimes
in the public market.
So we found it's a little bitbetter to both have an
illiquidity premium for privatealternative investments but
(04:51):
maybe also not knowing on amoment-by-moment or a
minute-by-minute basis or aday-by-day basis what the actual
value of that investment is.
It's been kind ofpsychologically better.
We've talked to thousands ofour customers about that too.
Speaker 1 (05:05):
It's kind of interesting caveat, yeah, which,
which is actually I think, why,uh, private credit has been so
popular?
Argue right, it's like there'sno mark to market.
So you know, there's theillusion of stability when
you're not marked to marketright.
And actually there's a lot ofgood studies around that.
There's a study that shows that.
You know people that, forexample, look at at their 401k
statements monthly versusquarterly.
(05:26):
If they look at it monthly,they tend to have worse
performance because they end upseeing too many data points and
that causes them to sell at thewrong time versus quarterly.
In some ways, the lesstransparency maybe the better.
Speaker 2 (05:38):
Exactly right.
I'm guessing a lot of yourlisteners too, those of us we
would have been pretty wellserved maybe going on a vacation
in April, a little bit earlierthis year, and coming back not
paying so much attention to ourinvestment accounts and coming
back in early May, late April.
Speaker 1 (05:51):
Yeah, literally just blink your eyes.
That's all you needed rightFrom that standpoint.
Okay, so talk to me about theplatform itself, and how do you
even go about sourcingalternative investments?
Speaker 2 (06:05):
even go about sourcing alternative investments
.
Well, the way we started,actually, what we found was
there was a lot of demand foractually not sourcing those
alternative investments for thecustomers.
What we found is the customerskind of had written a lot of
gains.
These are IRA and 401kcustomers, so the only accounts
we offer are tax advantage.
They tend to be long-term, theytend to be accumulated by just
consistent and sort of largepercent of salary contributions
(06:25):
into a 401k and as people changejobs you know, Michael, I think
you told me that you know atany one time you have like three
or four different ones and soforth.
So you accumulate 401ks, youput them into an IRA.
People have gotten prettytremendous gains in the public
equities markets and theseaccounts and they're actually
looking to diversify.
The issue that we actually solveis not so much trying to give
(06:46):
them those alternativeinvestments to go into, but
giving them access to theirmonies and tax advantage
accounts and then go doalternative investments that
they may actually source ontheir own through, let's say,
shows like yours, for example.
So we've more facilitated, Ithink, the access, and one of
the ways I talk about it is thatthere's plenty of people doing
the supply, people creatinginvestment vehicles,
(07:08):
syndications, ETFs, you knowprivate fund structures and so
forth.
You know I'm not as creative asthose people coming up with
innovative investment strategiesand new funds.
I focused on the demand side.
There's, there's, there aretens of trillions of dollars in
retirement accounts right nowand the large, large majority
we're talking high ninety ninepercentile range of it is
(07:29):
sitting in public stocks.
So these monies actually can'tbe used for any purposes other
than investments without taxpenalties, until after fifty,
nine and a half for most people.
And you know, my sort ofepiphany was to say that, hey, I
think people want access tothat money to go into private
investments that they mayalready know about or feel
comfortable or feel like theyhave an edge to research on
their own.
Speaker 1 (07:47):
So, of course, the natural question, I think, by a
retail investor would be why doit?
I mean, hey, my NVIDIA is doinggreat, my Mac 7Qs are doing
great, why be an alternative?
Speaker 2 (08:25):
no-transcript.
First, to say that ourparticular account structure is
usually not the primary forsomeone, unless they happen to
be, let's say, just a pure realestate person or just a pure
crypto person.
Then they have a majority ofthose tax-advantaged account
monies with us.
But the average person usuallyonly holds between 10 to 20, and
(08:47):
it's a diversification strategyafter just getting tremendous
gains.
So they're usually just kind oftaking some chips off the table
and redeploying those intoother investments they think
would benefit from long-termhigh growth potential and would
be better held in a non-taxableaccount with no capital gains.
So that's kind of the personthat we cater to.
So I do say retail individualinvestor but I think, like maybe
(09:08):
a lot of the clients of yourlisteners, these are not people
with, let's say, your 20, 50,100, 150, 250,000 investable
assets, but maybe 250,000 up to5 million.
So that massive, fluent retailindividual investor.
Speaker 1 (09:22):
Okay, so I'm looking at the website as we're chatting
.
I'm trying to understand sortof the way things work here.
So you've got the differentcategories.
Crypto, obviously, is the onethat most I think of the younger
generation would obviously gotowards.
Gold skews older A lot of waysto get gold in an IRA just by
using ETFs as an example.
Use a GLD or some of those.
(09:43):
What's the advantage of the waythat?
When it comes to gold inparticular, why do gold through
you?
Speaker 2 (09:49):
Well, it's the same.
So there's actually ETFs nowthat are distributed by the
largest players in the game oncryptocurrency, in terms of
Bitcoin as well but the peoplethat choose to do it with us,
they just like to have that sortof direct contact so they would
hold their gold, their goldwould be allocated to them
inside of a depository that wework with and they own it.
So there's no ETF layer.
(10:10):
So some people just choose toown individual stocks versus
owning them in an ETF.
Some people choose to ownBitcoin versus owning an ETF.
That's tracking Bitcoin and thesame thing with gold for us.
So, again, it's people'schoices, but we obviously end up
getting the people who want tohave an account and hold that
asset in its pure, direct form,without any sort of in-between
(10:31):
person or fund structure.
Speaker 1 (10:34):
And I guess, the same kind of question when I think
about crypto, I think aboutCoinbase, right.
So from a custody perspective,how does that work?
Speaker 2 (10:40):
Well, so we actually custody the IRA.
So in the IRA space, youcustody the individual
retirement account structure.
It's a trust, and some of thoseassets might be custodied
somewhere else.
So Coinbase actually happens tobe our largest partner.
So we have an institutionalrelationship with Coinbase, who
then holds an aggregatedportfolio of assets for us on
(11:01):
behalf of our customers.
So that's a sister company ofours.
So actually, the Bitcoin parthas become so big that we have a
company, we have a sister brandto Rocket Dollar that is
specific to the cryptocurrencyspace, and you asked the
question earlier about the ETFand maybe someone might own it
in Bitcoin, but we actually have85 to 87 different coins that
trade 24-7 inside of a, a mobileapp, inside of an IRA, all the
(11:24):
time on that platform.
So, again, these are peoplethat want to either have pure
exposure to the Bitcoin and orgo obviously well beyond maybe
the top two, three, four largestcryptocurrency assets right now
to trade inside of an IRAaccount.
Speaker 1 (11:38):
Is that?
Is that your most popularcategory?
Speaker 2 (11:42):
It is right now by the number of customers, but
actually by dollar amount, sincereal estate tends to be just
chunkier.
In terms of dollars.
We have about $12 billionoverall, but crypto makes up the
largest majority by the numberof the customers, but by the
size of assets.
It's actually LP investmentsinto private funds and real
estate.
Number one and two.
Speaker 1 (12:02):
All right, so again now, since we're talking about
real estate, let's touch on realestate.
I have seen plenty of firmsthat democratize real estate,
either in terms of owning a partof a deed or part of the land,
or whatever it would be.
Talk me through how real estateis done through you.
Speaker 2 (12:16):
Yeah.
So real estate done through us,you can invest in a private
syndication, so that's yourchoice.
I would actually probably arguethat that's probably a little
more akin to own or making aninvestment into a private fund
that just happens to bestructured around a real estate
asset or project or portfolio ofreal estate and so forth.
But the way people do itthrough us and that's one of the
(12:37):
things about doing IRA accountsthe accounts tend to have
larger amounts.
So we have people that haveaccumulated, let's say, $500,000
total in an IRA and that IRAwas largely due to a rollover of
a 401k that maybe concentratedbet on a couple of mag seven
tech stocks, and now they're way, way up.
(12:58):
So they decided that, hey, Iwant to take 200,000 of it and I
know this isn't in yourlocality, but this still exists
here in, even in the outskirtsof Austin.
But they may say that, hey, Iwant to actually own a rental
property, um, but use it in myIRA, so they will actually open
an account with us and then gopurchase a $250,000 property
using that IRA account.
(13:18):
So now they just have thistangible asset, something that
they know and control.
There's no debt involved,there's no syndication, so they
don't.
Instead of owning a piece of it,it's actually easier to own the
whole real estate propertyinside of an IRA and the people
do it through us.
I mean, the more practical wayand I think what you're asking,
michael, is that theyessentially we give them access
(13:38):
to their IRA dollars and we havean IRA structure allows them to
access that and they get tooperate and use the monies
inside of their IRA, similar tofor disbursement purposes,
similar to a bank account.
They can actually go and makethat purchase in the name of the
IRA for that property.
So we allow them to get accessto their money, so they can use
it as if they had that money ina bank.
It's just they have to followthe rules of an IRA and
(14:01):
distribute everything.
Everything has to come in andout, whether that's rental
payments, maintenance costs.
Purchase of the propertyinitially has to be done in the
name of the IRA for the benefitof Michael.
Speaker 1 (14:10):
Guyette, and as I'm looking at it, it's fair to say
that through Retiredcom you'remore ofa kind of intermediary
connector firm right from thatperspective.
Speaker 2 (14:22):
Yeah, so Retiredcom is our parent company name, so
it owns both brands the BitcoinIRA and then the Rocket Dollars.
So the Bitcoin IRA isspecifically designed for people
who want to just do.
They could either be active orpassive, long-term holders of
cryptocurrencies inside of anIRA structure, but again, no
capital gains.
So we do have quite a largenumber of customers who are
(14:43):
pretty active in terms oftrading in and out because they
can inside the IRA structures.
That's on the Bitcoin IRA side,and then the Rocket Dollars,
just generally private andalternative investments, for the
most part exclusive of digitalassets.
That makes sense.
Speaker 1 (14:58):
Talk to me.
How do you get the word out?
I mean, it's hard to getattention in a world where
you've got some of the bigplayers like Coinbase, obviously
doing directly a lot of thebusiness development on their
end.
But you're building up thisplatform, You've got these
multiple sites.
You mentioned $12 billion.
Speaker 2 (15:15):
How do you grow a company like this?
Mostly, we've been getting theword out.
We've been around for quite awhile, so we get a lot of
customer referrals.
So we do your typicaladvertising, affiliate marketing
.
We've actually just begun thebeginnings of communicating
through the investment advisorand RIA channel as well, because
, as their clients are probablytalking to them about more
(15:38):
exposure into alternativeinvestments, one of the things
for us is that we can tell thisadvisor or this advisory firm
that, hey, dollar for dollar,your client can do the same
alternative investments withmonies that you have a reason to
help them capture and bringmore assets to you.
Let's say, an old 401k thatthey never brought over from one
of their jobs they were at for10 years.
For some reason or other,they've just never brought that
(15:58):
over to you and so forth.
But we're starting to expand tothose channels.
But we've been largely directto consumers.
So I just saw that we madeanother list of top alternative
investment IRA platforms andpeople search these things.
They're looking for how to domore innovative things with
their 401ks or IRA monies and weknow that there's an uptick in
(16:18):
interest in private andalternative investments and then
even some of the things I justtalked about in the article just
maybe three weeks ago, was thateven some of the large
brokerage houses are starting toreally develop relationships to
deliver alternative investments, like Vanguard working with
Blackstone, uh, edward Jonestalking about offering an
alternative investments platform.
(16:39):
So we're just in that ecosystem.
We've been there, we've beendirect to consumer.
But I think this year and goingforward it'll, it'll serve us
well to get maybe like a littlemore friendly, a little more
known by the investment advisorcommunity.
And that's the world I comefrom, so I feel pretty
comfortable navigating that.
Speaker 1 (16:54):
I know that community very well because that's why my
calendar is always so jammed.
Okay, so that's an interestingplace to kind of get into.
So, obviously, financialadvisors tend to think in terms
of asset allocation percentages,risk profile.
Oftentimes since you mentionedbeing in a wire house bonds used
to be considered the uh, thequotes.
Conservative investment endedbeing the most aggressive, given
(17:16):
the drawdown that happened induration, right?
How did one think about in the?
When you think of the categoryof alternatives, there are going
to be some alternatives thatare riskier than others, right?
So I'm going to assume that youhave to kind of make a
distinction among that, also forthe advisors.
But how should advisors thinkabout the alternatives category,
weight weightings and then howto mix alternatives?
Speaker 2 (17:37):
Well, so the alternatives that a lot of
advisors have access to arethese ones that I would consider
the hybrid.
So you're talking about yourBDCs, your interval funds,
things that are sort of QSIPdriven and registered with
partial liquidity, so they maynot have full liquidity but that
partial liquidity.
That's probably why theirparent firms are allowing them
to offer or research them orallow their customers or clients
(17:59):
to actually purchase those.
So I know that we had talkedabout that in my space.
It's probably the more pureprivate alternative investments.
And I would add a dimension tothe asset allocation.
I worked as a financial advisorfor a really long time through
RIA and Wirehouse.
So that was 15 years of myworking career, which right now
is at 24 years.
So I've still spent themajority of my time in that
(18:20):
space.
The dimension that I used toalways add was asset location as
well.
So these alternativeinvestments they have less
liquidity.
They obviously are not mark tomarket all the time, so you
don't know the return.
So they're actually bettersuited to be inside of these tax
advantage accounts.
I think if you're an advisor andyou're getting clients asking
you about them or you'rethinking about getting smart on
(18:42):
to talk to your clients about it.
You might want to considerthinking about adding that
dimension, because thatdimension allows you to
essentially somewhat neutralizethat illiquidity.
Part of it because investmentsinside of there need to be held
for a long time.
So of course you can't get inand get out of that investment
inside of the IRA.
But the point I'm trying to getto is they can't actually
(19:04):
access that money for personalconsumption use, so it can't be
used for spending.
The advisor always gets thecall to say, hey, I want to go
purchase this new vacation homefor my family, or I got a major
purchase coming up so I need towithdraw funds from my account.
What's the best place to takeit from?
I mean, obviously the IRA typemonies are never even on the
table for consideration unlessthey're over $1,500 and a half.
Speaker 1 (19:27):
You mentioned the in and out part.
I think we're in an environmentwhere people just want to trade
and they just want to be in andout, they want to feel like
they're in control, commissioncosts are low and obviously the
alternative side.
You really can't do that, whichis a benefit, I'd argue, but
how should the investors thatlike, or traders who like to
think in those terms or act inthose terms, how should they
(19:49):
think of alternatives?
I mean, I think it's hard toget anybody to be a long-term
investor now.
Speaker 2 (19:53):
Yeah, it might be and it's a part of the spectrum.
So I would say that, eventhough people like to trade and
even retail investors, evenpeople like myself they like to
trade and maybe even yourself.
You do it professionally as aportfolio manager.
But I would argue that theretail investor doesn't trade
(20:14):
everything, a hundred percent ofall their investable assets so
you even mentioned thatsometimes to their benefit, it
might be good to not have theability to go in and out and
just hold on to things.
I mean, at the end of the day,everyone I know that made a lot
of money on the MAG7 stocksdidn't do it because they were
trading in and out as they weregoing up.
They actually have one periodof sustained holding they kind
(20:37):
of did.
Now they may be in more of atrading mode, kind of playing
the ebbs and flows of thatmarket, but you know they didn't
.
They didn't just kind of tradetheir way in and out of Netflix
on the way up.
They typically just held it,kind of believed in that space
and understood it.
And maybe now AI is the nextone and again, that's another
part of the private alternativeinvestments too is that it's a
little bit hard to access someof what might be the next great
technologies, the next greatinfrastructure, the next great
(21:01):
investments, if you're a retailinvestor, because these
investments aren't actually evenavailable publicly until it's
already very, very large, andthat's something we were talking
about too in an emaildiscussion yeah, I mean the
access is obviously a big partof that.
Speaker 1 (21:13):
When we talk about retail, are we talking about
high net worth retail?
Are we talking about mom andpop, you know 50,000 net worth.
Speaker 2 (21:19):
I'm always talking, you know.
So that's a good clarificationquestion.
I think I'm talking about itfrom the perspective of our
customers.
So I'm not talking about themom and pop like 50,000.
I'm probably talking more likethe massive, fluent retail
investors.
So I age adjust that.
So if you have clients thatmaybe are on the younger side
right, and younger clients thathave pretty good assets let's
(21:40):
say, 300,000 to 500,000, butthey're only, let's say, 30
years old, working in a greattech job, for example, even they
not all of them actually wantto do everything on their own.
They actually want to employthe services of an advisor, to
have a good base and a goodfoundation, a good plan to work
off.
But they may reserve a portionof that, a percentage of it, to
(22:01):
invest in trade as we talk aboutor explore alternatives through
us.
Now we satisfied the highactive trader side on our
Bitcoin IRA platform.
I mean, people are very, veryactive there because you're
talking about assets thatoverall are 85, 87 coins that
are available right now movemore than the overall stocks
(22:22):
right now on an in and out basisfor our customers.
Speaker 1 (22:25):
I'm curious for you with your own personal asset
allocation?
How much you put inalternatives?
What kind of alternatives doyou have?
Speaker 2 (22:31):
Yeah, so I do a lot of alternatives directly.
So I've made a lot of angelinvestments.
I'm an LP in a couple ofprivate funds, but then again I
have my own sort of like what dothey call it?
I haven't heard this in a longtime but maybe you still hear it
in your world.
I'm just a little bit somewhatmore far removed from the
advisor side but that core andsatellite strategy.
(22:51):
So my foundational stuff isactually still broad market ETFs
and that's a large percentage,over 50%.
But then I allocate a percentthat goes into crypto and then I
have a lot of, to be fair, veryilliquid right now, not certain
of the outcome.
I tend not to do ones that payout in an income stream, so I'm
not doing the real estate ones.
(23:11):
I'm doing like the directinvestments as an angel into
technology companies or venturefunds and private equity funds
right now that are not kickingoff income.
But that's kind of my mix rightnow.
I mean I live, breathe and eatthe alternative investments from
a work standpoint.
So it's not 100% of my personalinvestment standpoint, but you
know I do like a 65 into afoundational broad market ETF
(23:32):
strategy, A lot of buy and hold.
Take advantage of all of mytaxable and tax advantaged
accounts that I have access to,some of which I phase out of.
But that's just been my thing.
I've been a big asset location,overlaid on top of asset
allocation, and I think that'swhat made me successful as an
advisor, made me successful asan RIA and made me think through
, like maybe like why there's aspace right now for a rocket
(23:54):
dollar as a platform, not as aprovider or issue of investments
directly.
Speaker 1 (23:59):
I think.
The other big challenge ofcourse there is, when it comes
to alternatives lack ofinformation around the
alternative itself.
Now, obviously, you havemanagers that are supposed to do
the due diligence, but Sure,yeah, you might have
democratization of access butyou may not have democratization
of information.
So how does that get resolved?
Well, again.
Speaker 2 (24:19):
That's another reason why we've chosen to be the
platform.
So I describe in the early daysof our business that we're a
little bit like thedo-it-yourself side of Schwab.
Now I know that the people whosubscribe and watch the LeadLag
report we kind of know Schwabmore as a dominant provider, as
the backbone of the majoritymore than 50% of America's RIAs.
But the average American personwho doesn't work in financial
(24:43):
services knows them as adiscount brokerage shop where
you kind of go do your own thing.
So that's where we function.
So we're not the ones doing thediligence on the managers and
although probably 85% or more ofour customers are tagged as
accredited investors, we don'tactually have to get them to
attest that with us becausethey're making those investment
decisions independently.
We're just giving them accessto their money.
(25:04):
So that's one of the ways thatwe have done.
It is by virtually being in aspot where we're not there doing
the diligence.
So we don't function as an RA.
We don't function as anadvisory group recommending
investments.
We have no commissionstructures for any of the people
that are featured on ourpartner page.
So there's no money that goesback and forth.
It's for the customerthemselves to evaluate whether
(25:26):
to make that investment or not,and that's what we've done,
quite frankly, and I would saythat you know you talked about
the lack of information.
When some people go and look at,in particular, single family
rental real estate, you knowthey're buying these things
somewhere in a location wherethey know about or they have
knowledge.
So they themselves bring theirown particular localized
(25:50):
knowledge that not some outsideinvestment advisor, not some
fund issuer, is going to give tothem.
So they're looking forsomething that is close to them
and tangible.
I mean, I just heard this inthe Wall Street Journal that the
stocks themselves, they becomea little bit intangible, right,
like all money is very like youdon't touch it, touch it or feel
it.
You don't really touch orconnect with these stocks
anymore.
(26:10):
You said you could trade in andout in an instant, right now.
Speaker 1 (26:13):
Yeah, Very, uh, very good.
Good point and interesting.
With that perspective, talk methrough, um, building a business
like this a lot of regulationsconceivably that you have to
kind of at least consider right,even though you're not an RIA
and you're, you know you'reacting as a kind of a with the
affiliate relationships, butit's, I got to imagine it's not
easy to find the right team.
I'm kind of going through thisstruggle myself as an
(26:35):
entrepreneur, as I'm buildingout lead lag media, trying to
get the right people involved.
How did you find the rightpeople to work with you on this?
Speaker 2 (26:47):
And do you have outside investors that got you
to this place?
So, the Rocket Dollar side whenI started that, before we
joined the Retiredcom family, wewere venture-backed, so we had
venture capitalists.
I had venture capitalists fromSilicon Valley that had backed
my last startup and actually itwas their contacts that helped
us get that company acquired bya large major financial services
firm.
So it was the consumer divisionat Goldman Sachs that acquired
that one and so we did venturefunding.
(27:09):
But you know, the person Iteamed up with was actually a
guy that I knew who was atechnologist and this is on the
Rockefeller side but he actuallyran his own sort of mini
robo-advisor.
So we had actually used to gettogether in meetup groups.
So my prior startup was a, was arobo-advisor and of course I
had started a physical RAA.
I had been a 10-year advisor.
(27:29):
So in addition to having theCFP, I've actually still
maintained FINRA licenses, so 7,66, or 65, 63.
So that's when you know you'reold school, when you have both
of those separate and a Series24 prior.
Then I did that went into theRAA space.
I kept those licenses in arelationship that we had with a
(27:49):
major brokerage firm, so thatallowed me to hold those
licenses and through the courseof that, when I was thinking
about getting into the digitalfintech space, I just met people
that were this real good mix oftechnology and interested and
qualified and knowledgeableabout financial services as well
, and he was a technologist whoran this mini robo-advisor
through interactive brokers andwe kind of noodled on things,
(28:11):
talked about this idea and,oddly enough, when you do
self-directed IRAs, you actuallydon't have to register as an RA
.
You don't have to have a Series65 to do that, and all you
needed was actually anintegration partnership with a
trust company that was capableand comfortable holding IRAs
that held alternative andprivate investments inside.
(28:32):
So the joke for me was thatthat was the first time in my
career that I technically didn'tneed to have a Series 7 or an
RA from the SEC.
Speaker 1 (28:39):
Isn't that nice.
Speaker 2 (28:42):
It's not easy to deal with the part of the world, but
we have a trust company, soI've learned to realize that
that that's just a wholedifferent kind of pain, and at
least the other kind of pain Iwas aware of what it was like
before.
This is like all new stuff forme, going from like 2020 on.
So, uh.
So owning a trust businessinside of the retiredcom
platform is a whole nother beastin and of itself.
(29:03):
And again, we have customersall over the place, and the
issue we have, too, is that ourreport of our asset holdings is
very, very dispersed.
So it's not your typical bellcurve with the mag seven stocks
with the largest holdings wehave.
This widespread of people canhold anything and we have some
unusual investments.
So, if you're interested inknowing, I always kind of think
(29:25):
about the most crazy ones we own.
I live in Texas.
Maybe it's not so crazy, butpeople own cattle in their IRAs.
We have people that own Arabianracehorses, um.
And then we have people thatjust own, you know, rental
property around the corner fromthem, in their suburb as well,
and they were buying propertieswith cash outright.
That was one way to do it.
Again, asset location right.
They were doing thedepreciation there.
(29:46):
They were getting the incomeand paying their taxes on that.
Now they have a couple ofproperties to diversify.
So their last two propertiesout of 10 are owned inside of an
IRA.
So now there's no more incometaxes on the rental that comes
in, but they have to put thatback into the IRA.
They accumulate cash.
They accumulate enough, they goout and do another private
(30:07):
investment and so forth.
So it's just a different way ofowning.
Just like when you own adividend paying stock inside of
an IRA versus a brokerageaccount, you could choose to
have them paid out to you In anIRA.
You could accumulate them incash, but you can't really spend
it.
Speaker 1 (30:21):
What's the next iteration for you, for the
company Meaning?
Are there other categories ofalts that you want to kind of
make more at the forefront?
Are there new products,services?
Talk me through that.
Speaker 2 (30:33):
Actually, the next iteration for us so I'll speak
first on the Bitcoin side isthat you know we're developing
products.
So we had gone through a periodwhere we added a lot of coins.
So at some point you getdiminishing returns because
people aren't really trading thenext 20 coins after 85 and so
forth.
So we're looking at just addingadditional features inside of
(30:56):
there.
So that might be ways toactually have a crypto portfolio
inside.
So we'll be unveiling some ofthose later this year.
And then on the Rocket Dollarside, oddly enough, we talked a
lot about the privateinvestments, but we've had a lot
of customer demand and requestsfor allowing the holding of
public investments inside of thesame account.
So you're going to now have thispublic private account and the
(31:18):
way that the feedback we'vegotten that people want to do
this is that they actually wantto have this large IRA holding
in a broad market index or amoney market fund and be ready
to deploy it into a private dealwhen it comes up, when
something they see that theywant to go into or a capital
call.
If they've made an LPcommitment into a private fund,
(31:38):
they just want to be able to doit inside of the same account,
because right now people alwayshave to bring funds from an
outside, more traditionalfinancial services incumbent
brokerage account.
So we actually are licensed andwe have a broker dealer, so and
the idea would be to offeradditional capabilities in the
public space, not to become thisend all be all account, but
(31:58):
actually just to facilitate theability for our customers to go
between public investments andprivate investments easier by
keeping it all in one houseversus having to go from one
house to another.
So that's the big thing for us.
Speaker 1 (32:09):
Yeah, I got to give you credit, that's not easy to
pull off.
A lot of moving parts, a lot ofinteresting dynamics, also just
market-wise, demand-wise,legislation-wise.
Speaking about legislation andcrypto, let's talk about that a
little bit.
It seems clear we have apro-crypto president because he
loves having his own meme coin,right, right, I wonder, is there
(32:30):
anything on the legislative end, on the government end, that
maybe makes the case foralternatives more appealing,
anything that, evenderegulation-wise, might cause
more alpha potential there, Ithink so.
Speaker 2 (32:43):
So I think it's less about maybe new rules and
regulations that are beingproposed that might make it
easier, but more of theelimination and now never
talking about the ones that didexist towards the end of the
prior administration, so aroundthe middle of the prior
administration.
So let's say, like 21, 22,there were some rules that came
(33:03):
out about potentially looking atadding additional sort of
penalties, taxes and so forth toprivate investments and it was
pretty scary for the world thatI operate in and so forth.
So maybe potential changes toRoth IRAs, potential changes to
how, like, carry is taxed, but Idon't know that there's been
(33:25):
like new regulations on the true, pure private and alternative
investment space, but less that,there's just been no mention of
that.
And then allowing the marketsto sort of function on their own
, like me, for example, one ofthe things that this is a very,
very ancillary thing in thecurrent administration's books,
but just their attitudes about,maybe like sort of releasing out
(33:45):
to the public the Fannie Maeand the Freddie Mac type of
thing, I think.
I think that's just a broaderharbinger to explain, like what
the attitude of theadministration might be, which
is just to allow the markets tobe the markets.
And yes, he's a pro cryptopresident because he's got his
own meme coin and that's helpedus out on that particular side
of it.
Helped us out on thatparticular side of it.
(34:08):
He's implemented and positionedpeople at the heads of
regulatory organizations thatare making it easier and
potentially give comfort toallowing a company that operates
in the crypto space, withinIRAs, to launch new features.
These are things that we talkedabout two years ago, that we
might have been a little bithesitant to do.
That we're willing to do nowand try, which includes why we
would think about combining thepublic and private inside of the
accounts for the purpose ofjust making it more flexible and
(34:30):
easier for the customers.
Speaker 1 (34:32):
Of course, one of the big advantages of doing
alternatives in IRA is the taxdeferral Anything as it relates
to tax policy.
That maybe changes the calculuswhen it comes to using
alternatives in a retirementaccount versus a taxable account
.
Speaker 2 (34:48):
Well, the calculus that would change for us is if,
actually, they made the taximplications more friendly for
owning private investments andthen to be less inclined to do
it inside of an IRA.
The reason why we think thatthere's a big market to do in
IRAs is not always the taxes orthe illiquidity and it's a
long-term account.
(35:09):
It's just that that's where themoney's at.
So we talked about this offlinethat right now the US holds $35
trillion of retirement assets.
$18 trillion of it is in IRAs.
Right now, iras can be opened,moved anywhere.
The ironic thing is that peoplethat are investors actually
usually have multiple IRAs.
Right, they have a Roth IRAthat they could contribute to
(35:31):
until they income phased out ofit.
Now they have a traditional IRA.
Then they didn't know, so theymay have opened up another IRA
and so forth.
So people roll old 401ks,create different IRAs, so you
have individuals.
That that's just where themoney's at.
So when I was thinking aboutcreating the product in the
first place, it was that hey,I'm hearing a lot of chatter
from the people that I work within the industry that these
(35:52):
alternatives are here to stay.
There's really no more microcap or small cap investment
market to speak of, becauseprivate equity allows the
companies like an open AI, whichopen AI and SpaceX were the
debut in the S&P 500.
They're not starting at 499,clawing their way up from the
Russell 2000.
I mean, they're going to startin the top 50, 25 at this point
if and when they go public.
(36:13):
So there's just no opportunityfor investors to get into that
right now.
So for me, I just thought thatproviding an IRA platform that
could go into alternatives wasactually just tapping into this
giant bubble of money that mightbe looking to go some other
places besides the 3,776publicly traded stocks of which
the market is dominated by maybeseven or eight of them.
Speaker 1 (36:33):
Yeah, no very well articulated on that end.
What are we not talking about?
You think that's important.
When it comes to alts, Again Igo back to I think a lot of
people don't quite understandthe value of alts, especially
when you are towards the tailend of an extended bull market
for passive equities.
What's missed by the retailcommunity, I think?
Speaker 2 (36:53):
what's missed is that you know right now, the
industry itself and I'm talkingabout the traditional industry,
not the part that we function inhere at Retiredcom and Rocket
Dollar and Bitcoin IRA but theindustry is working really,
really hard to catch up.
So we've heard for years aboutthis democratization to create
broader access to go intoprivate and alternative
(37:15):
investments, and we haven't madea lot of progress in that.
So if this industry catches upthey create more accessible
platforms that are thenunderstood and the advisors who
can talk to clients about thisare knowledgeable then you're
going to get just a broaderdisbursement of retail or
(37:36):
individual investor money that'sable to go into these private
and alternative investments, atwhich point that's going to spur
the need for better reporting,better oversight, and it
wouldn't make these alternativeand private investments less.
I think it actually improvesthe market when information
becomes more and more available.
So I think the industry isworking really really hard to
catch up right now.
(37:56):
I think there's a big space.
If someone really were able tocrack the nut finally and do
like an actual, true, like sortof data layer that you could
really report on thealternatives right now, because
that's the part that's missing.
That's hard for us.
So you know, right now peoplethat are doing purely
off-platform, one-offinvestments, they actually kind
(38:19):
of have to like just show ussome sort of self-reporting way
so we can value that IRA forthem.
So a property, so that might befrom the tax records of the
municipality the property existsin.
You know, that's not somethingthat we could just scrape into
the IRA right now.
Speaker 1 (38:33):
For those who want to learn more about retiredcom.
You want to, just in general,get more information.
Where would you point them to?
Speaker 2 (38:40):
Yeah, so I'd tell them that the retiredcom is more
of an informational site.
But as far as learning aboutand opening the accounts,
talking to your clients orlooking at it for yourself I
mean, we have tons of advisorsor clients as well, myself
included just people in thefinancial service space go to
rocketdollarcom or bitcoiniracomand just see and know that
(39:03):
overall we're at $12 billionoverall across both brands.
We have an integrated trustcompany.
So I mentioned earlier about anoutside trust.
We're not doing that.
We actually own the trustcompany.
So we custody all of the IRAsin-house within our platform and
you can learn a lot.
There's a lot of information,there's investments you can go
into, you can open the accounts,you can monitor.
On the Bitcoin IRA side, it'sactually available on Android
(39:27):
and iOS apps as well, so that'sobviously our more active trader
part of it.
And then my team.
If people are interested too,there's a phone number on there
on the upper right, so we have a1-866-ROCKET-D phone number and
we answer that during normalbusiness hours, central standard
time.
We're based in Texas.
On that side of our business.
We can answer your questionsabout alternative investments,
(39:48):
iras and so forth and just howthese accounts work, and we even
created a coupon code as well.
So if people decide to go dothat, you can put it in the show
notes.
But we created one called LeadLag 25, and we'll give you the
information as well, michael.
So it's there to give thosepeople $100 off of the signup
for the account.
Speaker 1 (40:05):
I will definitely put that in the show notes.
Now that you told me that, Iappreciate that you watched this
live, learned more about HenryUshita's various businesses,
retirecom and again, I'm a bigfan of alts.
I just think we're likely in acycle now that favors them.
There's a tailwind for thingsoutside of passive beta, because
everybody's bet on passive betaand alternatives have been
(40:27):
right, increasingly kind of the,the underinvested, uh, asset
class right.
It's the satellite, I think,which should be a bigger
satellite than than other timesin history.
Speaker 2 (40:35):
Well, there's a lot of satellites that physically
actually go over us now.
So satellite you've heard likeyou know, a small part, but now
there's like it'd be hard tolike start flying rockets in
about 20 years about actuallyhitting a satellite that is true
.
Speaker 1 (40:46):
That that is true.
Appreciate those that watchthis live.
Again, this will be an editedpodcast under LeadLag Live and
I'll see you all on the nextepisode.
Thank you, henry, appreciate itAll, right.
Speaker 2 (40:54):
Thank you, Michael Cheers, everybody.
You're building up this platform.
You've got these multiple sites.
You mentioned $12 billion.
How do you grow?
Speaker 2 (00:05):
a company like this.
We've been largelydirect-to-consumer.
I just saw that we made anotherlist of top alternative
investment IRA platforms.
People search these things.
They're looking for how to domore innovative things with
their 401ks or IRA monies.
We know that there's an uptickin interest in private and
alternative investments, thatthere's an uptick in interest in
private and alternativeinvestments.
(00:25):
And then even some of thethings I just talked about in
the article just maybe threeweeks ago was that even some of
the large brokerage houses arestarting to really develop
relationships to deliveralternative investments, like
Vanguard working with Blackstone, Edward Jones talking about
offering an alternativeinvestments platform.
So we're just in that ecosystem.
We've been there, We've beendirect to consumer, but I think
(00:45):
this year and going forwardit'll it'll serve us well to get
maybe like a little morefriendly, a little more known by
the investment advisorcommunity.
And that's the world I comefrom.
Speaker 1 (01:02):
I look forward to this conversation with Henry
Yoshida.
We're going to be talking abouta favorite topic of mine, which
is alternatives, which a lot ofpeople used to think are clear
alternatives to making money,but now may not be the case.
From a cycle perspective, we'lltalk to you on that and,
spoiler alert, there might be anew person joining me to help
host some of these interviews.
I'm expanding and growing theteam, so you'll see some news
(01:24):
from me soon enough on that.
With all that said, my name isMichael Guy, a publisher of the
Lead Lager Board.
Joining me here is HenryYoshida.
Henry, first time you and I arechatting, you had reached out.
I think you have an interestingbackground, but introduce
yourself to the audience.
Who are you?
What's your background?
Have you done throughout yourcareer?
Speaker 2 (01:39):
And what are you doing currently?
Yeah, I'm maybe like a lot ofpeople that you kind of talk
about.
I started my career as afinancial advisor.
I did that for 10 years on thewire house broker's side from
Merrill Lynch 2000-2010.
So a real interesting time tobe there.
I joke around.
I made it through two crises.
The company only made itthrough one of them before
(02:00):
getting acquired by B of A ofthem.
Before getting acquired by B ofA, split off to do an RA, grew
and sold that and then sincethen I've been doing fintech
products.
So all kind of focused in myniche, which is retirement plans
.
So built a robo-advisor forRoth IRAs.
That got acquired.
And now I built a digitalplatform that does alternative
investments inside of IRAs sothink outside of stocks, bonds
(02:21):
and mutual funds.
You could do private and altinvestments everything from
crypto, real estate andeverything in between in the
alternative private space in anIRA called rocketdollarcom and
we go under the moniker ofretiredcom.
So that's a little bit about me, and I've been a CFP for 23 and
a half years now.
I just realized that I'm wayover the 20-year mark on that.
So I just love personal finance, retirement accounts it's kind
(02:45):
of my thing and buildingproducts in that space.
Speaker 1 (02:48):
So my mind goes to a lot of different areas on the
platform.
I want to learn more about it,but let's first define properly
for the audience what analternative is, because I
personally believe that a lot ofthings claim to be alternative,
but they're just variations ofbeta.
Speaker 2 (03:02):
Yeah, so the way I refer to alternative and it's
changed a lot.
When I started my career, Iremember alternative investments
were just things that maybewere mutual funds that might've
invested in certain countriesoutside of maybe the top 20.
But the way we definealternatives are investments
that are private andnon-registered, so they can be
quasi-registered.
So I think you got a lot thatare sort of a hybrid, just like
(03:24):
maybe how an ETF is a hybrid toa mutual fund or an individual
stock.
Private investments I'm talkingabout non-registered LP
investments into private equity,private venture funds, real
estate syndications, real estateoutright or cryptocurrency
Something that's just notpublicly registered in your
quote-unquote, normal Q-subdriven investments.
(03:44):
That's probably what we defineas private and alternative.
Speaker 1 (03:47):
And of course there's liquid aspects and illiquid
aspects to alternatives.
I think you know, when youthink about sort of a Swenson
endowment model, when you thinkabout the alternative framework,
there there's this illiquiditysort of premium right that
happens over time.
But let's talk about sort ofthe idea that an alternative
maybe needs to be more on theilliquid side than liquid to be
considered alternative.
Speaker 2 (04:08):
That's a good point.
I didn't touch on that part soit would be a liquid and I don't
know the way we do it now.
It might actually help peoplefrom.
All of our customers are retailindividual investors and I've
dealt with those retailindividual investors.
I've never been aninstitutional guy my entire
career those retail individualinvestors I've never been an
institutional guy in my entirecareer.
And the illiquidity premium.
(04:29):
Now there's moredemocratization and access to
alternative investments.
But I think that actuallyhaving this sort of situation
where you might not have aconstant mark to market has been
psychologically better for thatretail individual investor and
allow them to sort of hold onstomach being an investment.
So you know information justtoo readily available sometimes
in the public market.
So we found it's a little bitbetter to both have an
illiquidity premium for privatealternative investments but
(04:51):
maybe also not knowing on amoment-by-moment or a
minute-by-minute basis or aday-by-day basis what the actual
value of that investment is.
It's been kind ofpsychologically better.
We've talked to thousands ofour customers about that too.
Speaker 1 (05:05):
It's kind of interesting caveat, yeah, which,
which is actually I think, why,uh, private credit has been so
popular?
Argue right, it's like there'sno mark to market.
So you know, there's theillusion of stability when
you're not marked to marketright.
And actually there's a lot ofgood studies around that.
There's a study that shows that.
You know people that, forexample, look at at their 401k
statements monthly versusquarterly.
(05:26):
If they look at it monthly,they tend to have worse
performance because they end upseeing too many data points and
that causes them to sell at thewrong time versus quarterly.
In some ways, the lesstransparency maybe the better.
Speaker 2 (05:38):
Exactly right.
I'm guessing a lot of yourlisteners too, those of us we
would have been pretty wellserved maybe going on a vacation
in April, a little bit earlierthis year, and coming back not
paying so much attention to ourinvestment accounts and coming
back in early May, late April.
Speaker 1 (05:51):
Yeah, literally just blink your eyes.
That's all you needed rightFrom that standpoint.
Okay, so talk to me about theplatform itself, and how do you
even go about sourcingalternative investments?
Speaker 2 (06:05):
even go about sourcing alternative investments
.
Well, the way we started,actually, what we found was
there was a lot of demand foractually not sourcing those
alternative investments for thecustomers.
What we found is the customerskind of had written a lot of
gains.
These are IRA and 401kcustomers, so the only accounts
we offer are tax advantage.
They tend to be long-term, theytend to be accumulated by just
consistent and sort of largepercent of salary contributions
(06:25):
into a 401k and as people changejobs you know, Michael, I think
you told me that you know atany one time you have like three
or four different ones and soforth.
So you accumulate 401ks, youput them into an IRA.
People have gotten prettytremendous gains in the public
equities markets and theseaccounts and they're actually
looking to diversify.
The issue that we actually solveis not so much trying to give
(06:46):
them those alternativeinvestments to go into, but
giving them access to theirmonies and tax advantage
accounts and then go doalternative investments that
they may actually source ontheir own through, let's say,
shows like yours, for example.
So we've more facilitated, Ithink, the access, and one of
the ways I talk about it is thatthere's plenty of people doing
the supply, people creatinginvestment vehicles,
(07:08):
syndications, ETFs, you knowprivate fund structures and so
forth.
You know I'm not as creative asthose people coming up with
innovative investment strategiesand new funds.
I focused on the demand side.
There's, there's, there aretens of trillions of dollars in
retirement accounts right nowand the large, large majority
we're talking high ninety ninepercentile range of it is
(07:29):
sitting in public stocks.
So these monies actually can'tbe used for any purposes other
than investments without taxpenalties, until after fifty,
nine and a half for most people.
And you know, my sort ofepiphany was to say that, hey, I
think people want access tothat money to go into private
investments that they mayalready know about or feel
comfortable or feel like theyhave an edge to research on
their own.
Speaker 1 (07:47):
So, of course, the natural question, I think, by a
retail investor would be why doit?
I mean, hey, my NVIDIA is doinggreat, my Mac 7Qs are doing
great, why be an alternative?
Speaker 2 (08:25):
no-transcript.
First, to say that ourparticular account structure is
usually not the primary forsomeone, unless they happen to
be, let's say, just a pure realestate person or just a pure
crypto person.
Then they have a majority ofthose tax-advantaged account
monies with us.
But the average person usuallyonly holds between 10 to 20, and
(08:47):
it's a diversification strategyafter just getting tremendous
gains.
So they're usually just kind oftaking some chips off the table
and redeploying those intoother investments they think
would benefit from long-termhigh growth potential and would
be better held in a non-taxableaccount with no capital gains.
So that's kind of the personthat we cater to.
So I do say retail individualinvestor but I think, like maybe
(09:08):
a lot of the clients of yourlisteners, these are not people
with, let's say, your 20, 50,100, 150, 250,000 investable
assets, but maybe 250,000 up to5 million.
So that massive, fluent retailindividual investor.
Speaker 1 (09:22):
Okay, so I'm looking at the website as we're chatting
.
I'm trying to understand sortof the way things work here.
So you've got the differentcategories.
Crypto, obviously, is the onethat most I think of the younger
generation would obviously gotowards.
Gold skews older A lot of waysto get gold in an IRA just by
using ETFs as an example.
Use a GLD or some of those.
(09:43):
What's the advantage of the waythat?
When it comes to gold inparticular, why do gold through
you?
Speaker 2 (09:49):
Well, it's the same.
So there's actually ETFs nowthat are distributed by the
largest players in the game oncryptocurrency, in terms of
Bitcoin as well but the peoplethat choose to do it with us,
they just like to have that sortof direct contact so they would
hold their gold, their goldwould be allocated to them
inside of a depository that wework with and they own it.
So there's no ETF layer.
(10:10):
So some people just choose toown individual stocks versus
owning them in an ETF.
Some people choose to ownBitcoin versus owning an ETF.
That's tracking Bitcoin and thesame thing with gold for us.
So, again, it's people'schoices, but we obviously end up
getting the people who want tohave an account and hold that
asset in its pure, direct form,without any sort of in-between
(10:31):
person or fund structure.
Speaker 1 (10:34):
And I guess, the same kind of question when I think
about crypto, I think aboutCoinbase, right.
So from a custody perspective,how does that work?
Speaker 2 (10:40):
Well, so we actually custody the IRA.
So in the IRA space, youcustody the individual
retirement account structure.
It's a trust, and some of thoseassets might be custodied
somewhere else.
So Coinbase actually happens tobe our largest partner.
So we have an institutionalrelationship with Coinbase, who
then holds an aggregatedportfolio of assets for us on
(11:01):
behalf of our customers.
So that's a sister company ofours.
So actually, the Bitcoin parthas become so big that we have a
company, we have a sister brandto Rocket Dollar that is
specific to the cryptocurrencyspace, and you asked the
question earlier about the ETFand maybe someone might own it
in Bitcoin, but we actually have85 to 87 different coins that
trade 24-7 inside of a, a mobileapp, inside of an IRA, all the
(11:24):
time on that platform.
So, again, these are peoplethat want to either have pure
exposure to the Bitcoin and orgo obviously well beyond maybe
the top two, three, four largestcryptocurrency assets right now
to trade inside of an IRAaccount.
Speaker 1 (11:38):
Is that?
Is that your most popularcategory?
Speaker 2 (11:42):
It is right now by the number of customers, but
actually by dollar amount, sincereal estate tends to be just
chunkier.
In terms of dollars.
We have about $12 billionoverall, but crypto makes up the
largest majority by the numberof the customers, but by the
size of assets.
It's actually LP investmentsinto private funds and real
estate.
Number one and two.
Speaker 1 (12:02):
All right, so again now, since we're talking about
real estate, let's touch on realestate.
I have seen plenty of firmsthat democratize real estate,
either in terms of owning a partof a deed or part of the land,
or whatever it would be.
Talk me through how real estateis done through you.
Speaker 2 (12:16):
Yeah.
So real estate done through us,you can invest in a private
syndication, so that's yourchoice.
I would actually probably arguethat that's probably a little
more akin to own or making aninvestment into a private fund
that just happens to bestructured around a real estate
asset or project or portfolio ofreal estate and so forth.
But the way people do itthrough us and that's one of the
(12:37):
things about doing IRA accountsthe accounts tend to have
larger amounts.
So we have people that haveaccumulated, let's say, $500,000
total in an IRA and that IRAwas largely due to a rollover of
a 401k that maybe concentratedbet on a couple of mag seven
tech stocks, and now they're way, way up.
(12:58):
So they decided that, hey, Iwant to take 200,000 of it and I
know this isn't in yourlocality, but this still exists
here in, even in the outskirtsof Austin.
But they may say that, hey, Iwant to actually own a rental
property, um, but use it in myIRA, so they will actually open
an account with us and then gopurchase a $250,000 property
using that IRA account.
(13:18):
So now they just have thistangible asset, something that
they know and control.
There's no debt involved,there's no syndication, so they
don't.
Instead of owning a piece of it,it's actually easier to own the
whole real estate propertyinside of an IRA and the people
do it through us.
I mean, the more practical wayand I think what you're asking,
michael, is that theyessentially we give them access
(13:38):
to their IRA dollars and we havean IRA structure allows them to
access that and they get tooperate and use the monies
inside of their IRA, similar tofor disbursement purposes,
similar to a bank account.
They can actually go and makethat purchase in the name of the
IRA for that property.
So we allow them to get accessto their money, so they can use
it as if they had that money ina bank.
It's just they have to followthe rules of an IRA and
(14:01):
distribute everything.
Everything has to come in andout, whether that's rental
payments, maintenance costs.
Purchase of the propertyinitially has to be done in the
name of the IRA for the benefitof Michael.
Speaker 1 (14:10):
Guyette, and as I'm looking at it, it's fair to say
that through Retiredcom you'remore ofa kind of intermediary
connector firm right from thatperspective.
Speaker 2 (14:22):
Yeah, so Retiredcom is our parent company name, so
it owns both brands the BitcoinIRA and then the Rocket Dollars.
So the Bitcoin IRA isspecifically designed for people
who want to just do.
They could either be active orpassive, long-term holders of
cryptocurrencies inside of anIRA structure, but again, no
capital gains.
So we do have quite a largenumber of customers who are
(14:43):
pretty active in terms oftrading in and out because they
can inside the IRA structures.
That's on the Bitcoin IRA side,and then the Rocket Dollars,
just generally private andalternative investments, for the
most part exclusive of digitalassets.
That makes sense.
Speaker 1 (14:58):
Talk to me.
How do you get the word out?
I mean, it's hard to getattention in a world where
you've got some of the bigplayers like Coinbase, obviously
doing directly a lot of thebusiness development on their
end.
But you're building up thisplatform, You've got these
multiple sites.
You mentioned $12 billion.
Speaker 2 (15:15):
How do you grow a company like this?
Mostly, we've been getting theword out.
We've been around for quite awhile, so we get a lot of
customer referrals.
So we do your typicaladvertising, affiliate marketing
.
We've actually just begun thebeginnings of communicating
through the investment advisorand RIA channel as well, because
, as their clients are probablytalking to them about more
(15:38):
exposure into alternativeinvestments, one of the things
for us is that we can tell thisadvisor or this advisory firm
that, hey, dollar for dollar,your client can do the same
alternative investments withmonies that you have a reason to
help them capture and bringmore assets to you.
Let's say, an old 401k thatthey never brought over from one
of their jobs they were at for10 years.
For some reason or other,they've just never brought that
(15:58):
over to you and so forth.
But we're starting to expand tothose channels.
But we've been largely directto consumers.
So I just saw that we madeanother list of top alternative
investment IRA platforms andpeople search these things.
They're looking for how to domore innovative things with
their 401ks or IRA monies and weknow that there's an uptick in
(16:18):
interest in private andalternative investments and then
even some of the things I justtalked about in the article just
maybe three weeks ago, was thateven some of the large
brokerage houses are starting toreally develop relationships to
deliver alternative investments, like Vanguard working with
Blackstone, uh, edward Jonestalking about offering an
alternative investments platform.
(16:39):
So we're just in that ecosystem.
We've been there, we've beendirect to consumer.
But I think this year and goingforward it'll, it'll serve us
well to get maybe like a littlemore friendly, a little more
known by the investment advisorcommunity.
And that's the world I comefrom, so I feel pretty
comfortable navigating that.
Speaker 1 (16:54):
I know that community very well because that's why my
calendar is always so jammed.
Okay, so that's an interestingplace to kind of get into.
So, obviously, financialadvisors tend to think in terms
of asset allocation percentages,risk profile.
Oftentimes since you mentionedbeing in a wire house bonds used
to be considered the uh, thequotes.
Conservative investment endedbeing the most aggressive, given
(17:16):
the drawdown that happened induration, right?
How did one think about in the?
When you think of the categoryof alternatives, there are going
to be some alternatives thatare riskier than others, right?
So I'm going to assume that youhave to kind of make a
distinction among that, also forthe advisors.
But how should advisors thinkabout the alternatives category,
weight weightings and then howto mix alternatives?
Speaker 2 (17:37):
Well, so the alternatives that a lot of
advisors have access to arethese ones that I would consider
the hybrid.
So you're talking about yourBDCs, your interval funds,
things that are sort of QSIPdriven and registered with
partial liquidity, so they maynot have full liquidity but that
partial liquidity.
That's probably why theirparent firms are allowing them
to offer or research them orallow their customers or clients
(17:59):
to actually purchase those.
So I know that we had talkedabout that in my space.
It's probably the more pureprivate alternative investments.
And I would add a dimension tothe asset allocation.
I worked as a financial advisorfor a really long time through
RIA and Wirehouse.
So that was 15 years of myworking career, which right now
is at 24 years.
So I've still spent themajority of my time in that
(18:20):
space.
The dimension that I used toalways add was asset location as
well.
So these alternativeinvestments they have less
liquidity.
They obviously are not mark tomarket all the time, so you
don't know the return.
So they're actually bettersuited to be inside of these tax
advantage accounts.
I think if you're an advisor andyou're getting clients asking
you about them or you'rethinking about getting smart on
(18:42):
to talk to your clients about it.
You might want to considerthinking about adding that
dimension, because thatdimension allows you to
essentially somewhat neutralizethat illiquidity.
Part of it because investmentsinside of there need to be held
for a long time.
So of course you can't get inand get out of that investment
inside of the IRA.
But the point I'm trying to getto is they can't actually
(19:04):
access that money for personalconsumption use, so it can't be
used for spending.
The advisor always gets thecall to say, hey, I want to go
purchase this new vacation homefor my family, or I got a major
purchase coming up so I need towithdraw funds from my account.
What's the best place to takeit from?
I mean, obviously the IRA typemonies are never even on the
table for consideration unlessthey're over $1,500 and a half.
Speaker 1 (19:27):
You mentioned the in and out part.
I think we're in an environmentwhere people just want to trade
and they just want to be in andout, they want to feel like
they're in control, commissioncosts are low and obviously the
alternative side.
You really can't do that, whichis a benefit, I'd argue, but
how should the investors thatlike, or traders who like to
think in those terms or act inthose terms, how should they
(19:49):
think of alternatives?
I mean, I think it's hard toget anybody to be a long-term
investor now.
Speaker 2 (19:53):
Yeah, it might be and it's a part of the spectrum.
So I would say that, eventhough people like to trade and
even retail investors, evenpeople like myself they like to
trade and maybe even yourself.
You do it professionally as aportfolio manager.
But I would argue that theretail investor doesn't trade
(20:14):
everything, a hundred percent ofall their investable assets so
you even mentioned thatsometimes to their benefit, it
might be good to not have theability to go in and out and
just hold on to things.
I mean, at the end of the day,everyone I know that made a lot
of money on the MAG7 stocksdidn't do it because they were
trading in and out as they weregoing up.
They actually have one periodof sustained holding they kind
(20:37):
of did.
Now they may be in more of atrading mode, kind of playing
the ebbs and flows of thatmarket, but you know they didn't
.
They didn't just kind of tradetheir way in and out of Netflix
on the way up.
They typically just held it,kind of believed in that space
and understood it.
And maybe now AI is the nextone and again, that's another
part of the private alternativeinvestments too is that it's a
little bit hard to access someof what might be the next great
technologies, the next greatinfrastructure, the next great
(21:01):
investments, if you're a retailinvestor, because these
investments aren't actually evenavailable publicly until it's
already very, very large, andthat's something we were talking
about too in an emaildiscussion yeah, I mean the
access is obviously a big partof that.
Speaker 1 (21:13):
When we talk about retail, are we talking about
high net worth retail?
Are we talking about mom andpop, you know 50,000 net worth.
Speaker 2 (21:19):
I'm always talking, you know.
So that's a good clarificationquestion.
I think I'm talking about itfrom the perspective of our
customers.
So I'm not talking about themom and pop like 50,000.
I'm probably talking more likethe massive, fluent retail
investors.
So I age adjust that.
So if you have clients thatmaybe are on the younger side
right, and younger clients thathave pretty good assets let's
(21:40):
say, 300,000 to 500,000, butthey're only, let's say, 30
years old, working in a greattech job, for example, even they
not all of them actually wantto do everything on their own.
They actually want to employthe services of an advisor, to
have a good base and a goodfoundation, a good plan to work
off.
But they may reserve a portionof that, a percentage of it, to
(22:01):
invest in trade as we talk aboutor explore alternatives through
us.
Now we satisfied the highactive trader side on our
Bitcoin IRA platform.
I mean, people are very, veryactive there because you're
talking about assets thatoverall are 85, 87 coins that
are available right now movemore than the overall stocks
(22:22):
right now on an in and out basisfor our customers.
Speaker 1 (22:25):
I'm curious for you with your own personal asset
allocation?
How much you put inalternatives?
What kind of alternatives doyou have?
Speaker 2 (22:31):
Yeah, so I do a lot of alternatives directly.
So I've made a lot of angelinvestments.
I'm an LP in a couple ofprivate funds, but then again I
have my own sort of like what dothey call it?
I haven't heard this in a longtime but maybe you still hear it
in your world.
I'm just a little bit somewhatmore far removed from the
advisor side but that core andsatellite strategy.
(22:51):
So my foundational stuff isactually still broad market ETFs
and that's a large percentage,over 50%.
But then I allocate a percentthat goes into crypto and then I
have a lot of, to be fair, veryilliquid right now, not certain
of the outcome.
I tend not to do ones that payout in an income stream, so I'm
not doing the real estate ones.
(23:11):
I'm doing like the directinvestments as an angel into
technology companies or venturefunds and private equity funds
right now that are not kickingoff income.
But that's kind of my mix rightnow.
I mean I live, breathe and eatthe alternative investments from
a work standpoint.
So it's not 100% of my personalinvestment standpoint, but you
know I do like a 65 into afoundational broad market ETF
(23:32):
strategy, A lot of buy and hold.
Take advantage of all of mytaxable and tax advantaged
accounts that I have access to,some of which I phase out of.
But that's just been my thing.
I've been a big asset location,overlaid on top of asset
allocation, and I think that'swhat made me successful as an
advisor, made me successful asan RIA and made me think through
, like maybe like why there's aspace right now for a rocket
(23:54):
dollar as a platform, not as aprovider or issue of investments
directly.
Speaker 1 (23:59):
I think.
The other big challenge ofcourse there is, when it comes
to alternatives lack ofinformation around the
alternative itself.
Now, obviously, you havemanagers that are supposed to do
the due diligence, but Sure,yeah, you might have
democratization of access butyou may not have democratization
of information.
So how does that get resolved?
Well, again.
Speaker 2 (24:19):
That's another reason why we've chosen to be the
platform.
So I describe in the early daysof our business that we're a
little bit like thedo-it-yourself side of Schwab.
Now I know that the people whosubscribe and watch the LeadLag
report we kind of know Schwabmore as a dominant provider, as
the backbone of the majoritymore than 50% of America's RIAs.
But the average American personwho doesn't work in financial
(24:43):
services knows them as adiscount brokerage shop where
you kind of go do your own thing.
So that's where we function.
So we're not the ones doing thediligence on the managers and
although probably 85% or more ofour customers are tagged as
accredited investors, we don'tactually have to get them to
attest that with us becausethey're making those investment
decisions independently.
We're just giving them accessto their money.
(25:04):
So that's one of the ways thatwe have done.
It is by virtually being in aspot where we're not there doing
the diligence.
So we don't function as an RA.
We don't function as anadvisory group recommending
investments.
We have no commissionstructures for any of the people
that are featured on ourpartner page.
So there's no money that goesback and forth.
It's for the customerthemselves to evaluate whether
(25:26):
to make that investment or not,and that's what we've done,
quite frankly, and I would saythat you know you talked about
the lack of information.
When some people go and look at,in particular, single family
rental real estate, you knowthey're buying these things
somewhere in a location wherethey know about or they have
knowledge.
So they themselves bring theirown particular localized
(25:50):
knowledge that not some outsideinvestment advisor, not some
fund issuer, is going to give tothem.
So they're looking forsomething that is close to them
and tangible.
I mean, I just heard this inthe Wall Street Journal that the
stocks themselves, they becomea little bit intangible, right,
like all money is very like youdon't touch it, touch it or feel
it.
You don't really touch orconnect with these stocks
anymore.
(26:10):
You said you could trade in andout in an instant, right now.
Speaker 1 (26:13):
Yeah, Very, uh, very good.
Good point and interesting.
With that perspective, talk methrough, um, building a business
like this a lot of regulationsconceivably that you have to
kind of at least consider right,even though you're not an RIA
and you're, you know you'reacting as a kind of a with the
affiliate relationships, butit's, I got to imagine it's not
easy to find the right team.
I'm kind of going through thisstruggle myself as an
(26:35):
entrepreneur, as I'm buildingout lead lag media, trying to
get the right people involved.
How did you find the rightpeople to work with you on this?
Speaker 2 (26:47):
And do you have outside investors that got you
to this place?
So, the Rocket Dollar side whenI started that, before we
joined the Retiredcom family, wewere venture-backed, so we had
venture capitalists.
I had venture capitalists fromSilicon Valley that had backed
my last startup and actually itwas their contacts that helped
us get that company acquired bya large major financial services
firm.
So it was the consumer divisionat Goldman Sachs that acquired
that one and so we did venturefunding.
(27:09):
But you know, the person Iteamed up with was actually a
guy that I knew who was atechnologist and this is on the
Rockefeller side but he actuallyran his own sort of mini
robo-advisor.
So we had actually used to gettogether in meetup groups.
So my prior startup was a, was arobo-advisor and of course I
had started a physical RAA.
I had been a 10-year advisor.
(27:29):
So in addition to having theCFP, I've actually still
maintained FINRA licenses, so 7,66, or 65, 63.
So that's when you know you'reold school, when you have both
of those separate and a Series24 prior.
Then I did that went into theRAA space.
I kept those licenses in arelationship that we had with a
(27:49):
major brokerage firm, so thatallowed me to hold those
licenses and through the courseof that, when I was thinking
about getting into the digitalfintech space, I just met people
that were this real good mix oftechnology and interested and
qualified and knowledgeableabout financial services as well
, and he was a technologist whoran this mini robo-advisor
through interactive brokers andwe kind of noodled on things,
(28:11):
talked about this idea and,oddly enough, when you do
self-directed IRAs, you actuallydon't have to register as an RA
.
You don't have to have a Series65 to do that, and all you
needed was actually anintegration partnership with a
trust company that was capableand comfortable holding IRAs
that held alternative andprivate investments inside.
(28:32):
So the joke for me was thatthat was the first time in my
career that I technically didn'tneed to have a Series 7 or an
RA from the SEC.
Speaker 1 (28:39):
Isn't that nice.
Speaker 2 (28:42):
It's not easy to deal with the part of the world, but
we have a trust company, soI've learned to realize that
that that's just a wholedifferent kind of pain, and at
least the other kind of pain Iwas aware of what it was like
before.
This is like all new stuff forme, going from like 2020 on.
So, uh.
So owning a trust businessinside of the retiredcom
platform is a whole nother beastin and of itself.
(29:03):
And again, we have customersall over the place, and the
issue we have, too, is that ourreport of our asset holdings is
very, very dispersed.
So it's not your typical bellcurve with the mag seven stocks
with the largest holdings wehave.
This widespread of people canhold anything and we have some
unusual investments.
So, if you're interested inknowing, I always kind of think
(29:25):
about the most crazy ones we own.
I live in Texas.
Maybe it's not so crazy, butpeople own cattle in their IRAs.
We have people that own Arabianracehorses, um.
And then we have people thatjust own, you know, rental
property around the corner fromthem, in their suburb as well,
and they were buying propertieswith cash outright.
That was one way to do it.
Again, asset location right.
They were doing thedepreciation there.
(29:46):
They were getting the incomeand paying their taxes on that.
Now they have a couple ofproperties to diversify.
So their last two propertiesout of 10 are owned inside of an
IRA.
So now there's no more incometaxes on the rental that comes
in, but they have to put thatback into the IRA.
They accumulate cash.
They accumulate enough, they goout and do another private
(30:07):
investment and so forth.
So it's just a different way ofowning.
Just like when you own adividend paying stock inside of
an IRA versus a brokerageaccount, you could choose to
have them paid out to you In anIRA.
You could accumulate them incash, but you can't really spend
it.
Speaker 1 (30:21):
What's the next iteration for you, for the
company Meaning?
Are there other categories ofalts that you want to kind of
make more at the forefront?
Are there new products,services?
Talk me through that.
Speaker 2 (30:33):
Actually, the next iteration for us so I'll speak
first on the Bitcoin side isthat you know we're developing
products.
So we had gone through a periodwhere we added a lot of coins.
So at some point you getdiminishing returns because
people aren't really trading thenext 20 coins after 85 and so
forth.
So we're looking at just addingadditional features inside of
(30:56):
there.
So that might be ways toactually have a crypto portfolio
inside.
So we'll be unveiling some ofthose later this year.
And then on the Rocket Dollarside, oddly enough, we talked a
lot about the privateinvestments, but we've had a lot
of customer demand and requestsfor allowing the holding of
public investments inside of thesame account.
So you're going to now have thispublic private account and the
(31:18):
way that the feedback we'vegotten that people want to do
this is that they actually wantto have this large IRA holding
in a broad market index or amoney market fund and be ready
to deploy it into a private dealwhen it comes up, when
something they see that theywant to go into or a capital
call.
If they've made an LPcommitment into a private fund,
(31:38):
they just want to be able to doit inside of the same account,
because right now people alwayshave to bring funds from an
outside, more traditionalfinancial services incumbent
brokerage account.
So we actually are licensed andwe have a broker dealer, so and
the idea would be to offeradditional capabilities in the
public space, not to become thisend all be all account, but
(31:58):
actually just to facilitate theability for our customers to go
between public investments andprivate investments easier by
keeping it all in one houseversus having to go from one
house to another.
So that's the big thing for us.
Speaker 1 (32:09):
Yeah, I got to give you credit, that's not easy to
pull off.
A lot of moving parts, a lot ofinteresting dynamics, also just
market-wise, demand-wise,legislation-wise.
Speaking about legislation andcrypto, let's talk about that a
little bit.
It seems clear we have apro-crypto president because he
loves having his own meme coin,right, right, I wonder, is there
(32:30):
anything on the legislative end, on the government end, that
maybe makes the case foralternatives more appealing,
anything that, evenderegulation-wise, might cause
more alpha potential there, Ithink so.
Speaker 2 (32:43):
So I think it's less about maybe new rules and
regulations that are beingproposed that might make it
easier, but more of theelimination and now never
talking about the ones that didexist towards the end of the
prior administration, so aroundthe middle of the prior
administration.
So let's say, like 21, 22,there were some rules that came
(33:03):
out about potentially looking atadding additional sort of
penalties, taxes and so forth toprivate investments and it was
pretty scary for the world thatI operate in and so forth.
So maybe potential changes toRoth IRAs, potential changes to
how, like, carry is taxed, but Idon't know that there's been
(33:25):
like new regulations on the true, pure private and alternative
investment space, but less that,there's just been no mention of
that.
And then allowing the marketsto sort of function on their own
, like me, for example, one ofthe things that this is a very,
very ancillary thing in thecurrent administration's books,
but just their attitudes about,maybe like sort of releasing out
(33:45):
to the public the Fannie Maeand the Freddie Mac type of
thing, I think.
I think that's just a broaderharbinger to explain, like what
the attitude of theadministration might be, which
is just to allow the markets tobe the markets.
And yes, he's a pro cryptopresident because he's got his
own meme coin and that's helpedus out on that particular side
of it.
Helped us out on thatparticular side of it.
(34:08):
He's implemented and positionedpeople at the heads of
regulatory organizations thatare making it easier and
potentially give comfort toallowing a company that operates
in the crypto space, withinIRAs, to launch new features.
These are things that we talkedabout two years ago, that we
might have been a little bithesitant to do.
That we're willing to do nowand try, which includes why we
would think about combining thepublic and private inside of the
accounts for the purpose ofjust making it more flexible and
(34:30):
easier for the customers.
Speaker 1 (34:32):
Of course, one of the big advantages of doing
alternatives in IRA is the taxdeferral Anything as it relates
to tax policy.
That maybe changes the calculuswhen it comes to using
alternatives in a retirementaccount versus a taxable account
.
Speaker 2 (34:48):
Well, the calculus that would change for us is if,
actually, they made the taximplications more friendly for
owning private investments andthen to be less inclined to do
it inside of an IRA.
The reason why we think thatthere's a big market to do in
IRAs is not always the taxes orthe illiquidity and it's a
long-term account.
(35:09):
It's just that that's where themoney's at.
So we talked about this offlinethat right now the US holds $35
trillion of retirement assets.
$18 trillion of it is in IRAs.
Right now, iras can be opened,moved anywhere.
The ironic thing is that peoplethat are investors actually
usually have multiple IRAs.
Right, they have a Roth IRAthat they could contribute to
(35:31):
until they income phased out ofit.
Now they have a traditional IRA.
Then they didn't know, so theymay have opened up another IRA
and so forth.
So people roll old 401ks,create different IRAs, so you
have individuals.
That that's just where themoney's at.
So when I was thinking aboutcreating the product in the
first place, it was that hey,I'm hearing a lot of chatter
from the people that I work within the industry that these
(35:52):
alternatives are here to stay.
There's really no more microcap or small cap investment
market to speak of, becauseprivate equity allows the
companies like an open AI, whichopen AI and SpaceX were the
debut in the S&P 500.
They're not starting at 499,clawing their way up from the
Russell 2000.
I mean, they're going to startin the top 50, 25 at this point
if and when they go public.
(36:13):
So there's just no opportunityfor investors to get into that
right now.
So for me, I just thought thatproviding an IRA platform that
could go into alternatives wasactually just tapping into this
giant bubble of money that mightbe looking to go some other
places besides the 3,776publicly traded stocks of which
the market is dominated by maybeseven or eight of them.
Speaker 1 (36:33):
Yeah, no very well articulated on that end.
What are we not talking about?
You think that's important.
When it comes to alts, Again Igo back to I think a lot of
people don't quite understandthe value of alts, especially
when you are towards the tailend of an extended bull market
for passive equities.
What's missed by the retailcommunity, I think?
Speaker 2 (36:53):
what's missed is that you know right now, the
industry itself and I'm talkingabout the traditional industry,
not the part that we function inhere at Retiredcom and Rocket
Dollar and Bitcoin IRA but theindustry is working really,
really hard to catch up.
So we've heard for years aboutthis democratization to create
broader access to go intoprivate and alternative
(37:15):
investments, and we haven't madea lot of progress in that.
So if this industry catches upthey create more accessible
platforms that are thenunderstood and the advisors who
can talk to clients about thisare knowledgeable then you're
going to get just a broaderdisbursement of retail or
(37:36):
individual investor money that'sable to go into these private
and alternative investments, atwhich point that's going to spur
the need for better reporting,better oversight, and it
wouldn't make these alternativeand private investments less.
I think it actually improvesthe market when information
becomes more and more available.
So I think the industry isworking really really hard to
catch up right now.
(37:56):
I think there's a big space.
If someone really were able tocrack the nut finally and do
like an actual, true, like sortof data layer that you could
really report on thealternatives right now, because
that's the part that's missing.
That's hard for us.
So you know, right now peoplethat are doing purely
off-platform, one-offinvestments, they actually kind
(38:19):
of have to like just show ussome sort of self-reporting way
so we can value that IRA forthem.
So a property, so that might befrom the tax records of the
municipality the property existsin.
You know, that's not somethingthat we could just scrape into
the IRA right now.
Speaker 1 (38:33):
For those who want to learn more about retiredcom.
You want to, just in general,get more information.
Where would you point them to?
Speaker 2 (38:40):
Yeah, so I'd tell them that the retiredcom is more
of an informational site.
But as far as learning aboutand opening the accounts,
talking to your clients orlooking at it for yourself I
mean, we have tons of advisorsor clients as well, myself
included just people in thefinancial service space go to
rocketdollarcom or bitcoiniracomand just see and know that
(39:03):
overall we're at $12 billionoverall across both brands.
We have an integrated trustcompany.
So I mentioned earlier about anoutside trust.
We're not doing that.
We actually own the trustcompany.
So we custody all of the IRAsin-house within our platform and
you can learn a lot.
There's a lot of information,there's investments you can go
into, you can open the accounts,you can monitor.
On the Bitcoin IRA side, it'sactually available on Android
(39:27):
and iOS apps as well, so that'sobviously our more active trader
part of it.
And then my team.
If people are interested too,there's a phone number on there
on the upper right, so we have a1-866-ROCKET-D phone number and
we answer that during normalbusiness hours, central standard
time.
We're based in Texas.
On that side of our business.
We can answer your questionsabout alternative investments,
(39:48):
iras and so forth and just howthese accounts work, and we even
created a coupon code as well.
So if people decide to go dothat, you can put it in the show
notes.
But we created one called LeadLag 25, and we'll give you the
information as well, michael.
So it's there to give thosepeople $100 off of the signup
for the account.
Speaker 1 (40:05):
I will definitely put that in the show notes.
Now that you told me that, Iappreciate that you watched this
live, learned more about HenryUshita's various businesses,
retirecom and again, I'm a bigfan of alts.
I just think we're likely in acycle now that favors them.
There's a tailwind for thingsoutside of passive beta, because
everybody's bet on passive betaand alternatives have been
(40:27):
right, increasingly kind of the,the underinvested, uh, asset
class right.
It's the satellite, I think,which should be a bigger
satellite than than other timesin history.
Speaker 2 (40:35):
Well, there's a lot of satellites that physically
actually go over us now.
So satellite you've heard likeyou know, a small part, but now
there's like it'd be hard tolike start flying rockets in
about 20 years about actuallyhitting a satellite that is true
.
Speaker 1 (40:46):
That that is true.
Appreciate those that watchthis live.
Again, this will be an editedpodcast under LeadLag Live and
I'll see you all on the nextepisode.
Thank you, henry, appreciate itAll, right.
Speaker 2 (40:54):
Thank you, Michael Cheers, everybody.
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