October 24, 2025 • 19 mins
What happens when $9 trillion in boring 401k money gets permission to chase yield? Because that's about to happen. Trump signing the order. The game is about to change forever. I'm talking about trillions of dollars that have been stuck in losing or low yield in retirement accounts. Now being able to go buy bitcoin or private equity or real estate.
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Speaker 1 (00:00):
What happens when nine trillion dollars in boring four to
oh one k money gets permission to chase yield.
Speaker 2 (00:05):
Because that's about to happen. Trump's signing the order. The
game is.
Speaker 1 (00:09):
About to change forever. I'm talking about trillions of dollars
that have been stuck in losing or low yielding retirement
accounts now being able to go by bitcoin or private
equity or real estate. And for the first time in history.
Now this isn't speculation.
Speaker 2 (00:24):
It's happening. And here's what everybody's missing.
Speaker 1 (00:27):
This is about the entire financial system reorganizing. When the safest,
most conservative money in America, retirement accounts, starts chasing alternative assets,
you get what's called an asset supercycle, now, the kind
that creates generational wealth. So in this video, I'm going
to show you exactly which assets explode first, the timeline
that Wall Street doesn't want you to see, and how
(00:49):
to position yourself before.
Speaker 2 (00:51):
The herd arrives.
Speaker 1 (00:52):
So let's go all right, So we are talking about
one of the biggest moves in the financial system that
we've seen today. Of course, it all comes on the
back of Trump's executive order. Another one, now, He's racked
up quite a bit of executive orders. Not something I'm
super fond of. But anyway, that's beside the point. That's
a whole another topic front of the video. What we're
(01:13):
talking about is his executive order that's unlocking about nine
trillion dollars and a massive amount of money, about forty
three trillion dollars total are in these retirement accounts in
the financial system. But this is affecting about nine trillion dollars. Now,
the big move is that it can now take money
the nine trillion in four one ks and can it
(01:33):
push them into what we call alternative assets. Now, alternative
assets is where I've basically made my entire career. Forget
the stock, the S and P five hundred, We're talking
about alternative assets. I'm going to break that down for
you now. Part of the reason why is because, of
course the S and P. Five hundred hasn't really been
getting people where they need to be. We know that
about half of all baby boomers are broke. They have
(01:56):
no money, number one, Number two. Of the half that
do have money average about two hundred and forty thousand dollars.
So we need to get the returns to improve We
need to get them to make more money if they're
going to have any success or any hope of retirement.
Speaker 2 (02:11):
Now.
Speaker 1 (02:11):
Part of the reason why they've not been able to
do this so far is because apparently it's too risky.
People aren't smart enough to know what they're doing. It's
too volatile. So we must protect them. At least that's
what the government thinks, and Trump says, no more, no
more of that, So he signed this executive order to
specifically allow people to take their own money in their
four oh one K that they was holding the back
(02:32):
from what they want to invest into, and now they
could direct it.
Speaker 2 (02:34):
Now.
Speaker 1 (02:35):
A couple things that I think are worth noting in
this specifically is we can see that this order unlocks
a massive opportunity for PE firms.
Speaker 2 (02:43):
Private equity, and crypto investments.
Speaker 1 (02:46):
So bitcoin and cryptocurrencies, Like I said, about nine trillion dollars.
The White House officials said, alternative assets again, not the
SMP five hundred. They offer competitive returns. We need them
to get their returns. It offers diversification benefits and will
improve americans retirements prospects.
Speaker 2 (03:03):
That's the key piece. We need to get them a
little bit more money.
Speaker 1 (03:05):
If they're going to have success, because surprise, surprise, social
Security is not going to be there.
Speaker 2 (03:09):
Okay.
Speaker 1 (03:09):
It says that typically they have a fiduciary responsibility to
plan participants people in the four one K to select
appropriate investments, and alternative investments often are more volatile than
typical funds.
Speaker 2 (03:23):
Okay, so they're trying to protect them.
Speaker 1 (03:25):
They don't want them to diversify out too much because
typically alternative investment investments are more volatile.
Speaker 2 (03:32):
Okay. I'm going to show you some of the data
around that.
Speaker 1 (03:34):
So this is a chart right here of the treasury bonds.
This is represented by the TLT, which is an ETF
of the long US Treasury bond, which is supposed to
be the risk free rate. It's the bedrock of the
global financial system. And what this shows us is that
over the last five years, you've lost about fifty percent
of your money. Now, most financial plans in a four
(03:55):
one K your financial advisor put you into is something
what's called a sixty forty portfolio, meaning sixty percent of
your money is in stocks, forty percent of it is
in bonds.
Speaker 2 (04:05):
And look at what's happened.
Speaker 1 (04:06):
You've lost fifty percent of your money so rather than
your money being stuck and your plan advisor putting you
into plans like this that lose money, I think it's
a good idea to let you choose where you want
to put your money. But let's explore the alternative investments. Okay,
the three horsemen of these alternative investments. We're talking about
real estate. We're going to dig into that private equity.
We'll take a look at that, and of course my
(04:27):
favorite bitcoin will take a look at that. So let's
go through these one at a time. Let's start with real estate.
Of course, if you've been following me for any time,
you know that I started my career in real estate.
I still own real estate. I like real estate. But
there's a couple things that we should know, specifically around
in your four to one K in your retirement account.
They talk about liquidity, they talk about volatility, and in
real estate is certainly ill liquid You can't sell it quickly.
(04:50):
At best case scenario, it's probably a couple months. Sometimes
it could be even worse, depending on the market cycle
where you're located.
Speaker 2 (04:56):
Things like that. The other thing with.
Speaker 1 (04:57):
Real estate is that there's high transaction costs. It's very
expensive to sell a piece of real estate. It's also big,
big sales, big purchases, big amount. So let's just say
you needed five thousand dollars for a purchase or ten
thousand dollars fortification. You can't just get five or ten
thousand dollars out of your house, so it's i liquid.
There's high transaction costs to move them. And so most
(05:17):
likely if people were going to use this in a
retirement account, they'd probably use something like a rate, a
real estate investment trust, something like that. They wouldn't want
to own it directly. They wouldn't want the maintenance headache.
They wouldn't want the property managers getting calls late at
night when your toilet's breaking down.
Speaker 2 (05:30):
Things like that.
Speaker 1 (05:31):
Some other things with real estate in a retirement account
that can be problem matic is a geographic concentration risk.
But if we take a look at the case Shiller
index for real estate, we can see a couple things.
Number one, this goes back to nineteen eighty eight. Real
estate had been pretty much flat here until the dot
com bubble blew up. When the dot com bubble blew up,
(05:52):
rates went down, real estate went up into a bubble.
Two thousand and eight we had the real estate crash,
and we've been basically on an upward trend ever since.
So the last couple decades real estate has been a
pretty good investment. Now, let's stack this up and take
a look at it in a chart here. So what
we have here is reates versus direct So how should
we own real estate, especially if we can get money
(06:13):
from our retirement account into real estate specifically, So the
investment type here is an equity rate. Here is a
private sire commercial real estate, and here we.
Speaker 2 (06:23):
Have us home prices.
Speaker 1 (06:25):
And what this shows over one year, the rates have
performed better in a one year period eight point seven
versus two six and two seven. Over three years they
didn't do too well. However, they lost less. Let's just
stay in commercial real estate and over five years and
over ten years they outperformed. So if I was going
to move some of my money in my four one
(06:46):
k into one of these horsemen's into the real estate bucket,
the equity rates are probably the best option for me
in this scenario.
Speaker 2 (06:54):
Now, of course, there's more advanced options. We're not talking
about that. We're just talking about in your retirement account specifically.
Speaker 1 (06:59):
It looks like it's when there. Okay, remember those numbers.
We're going to stack all these up at the end.
Speaker 2 (07:04):
Okay.
Speaker 1 (07:04):
The second horseman would be in my alternative investments is
private equity. Now Tony Robbins recently wrote I Believe, his
third book on money, part of the trilogy, where we
talked about private equity being one of the best investments
that you can get into, and he talks about wre
Typically you're going to make twenty to thirty percent on
your money versus you know, sp five hundred and six
(07:24):
or eight percent return. A couple things they know about
private equity. Typically they have pretty high minimum investments, so
typically you probably need to be an a credit investor.
Means you're making over two hundred fifty thousand or a
million dollars of assets, and.
Speaker 2 (07:36):
Typically you need to put two hundred and fifty thousand.
Speaker 1 (07:38):
Up to one million dollars into private equity. Also, the
thing with them is they're not very liquid. Typically you
have to lock up about five to ten years. When
you put your money into the fund, it's stuck there.
You can't get it back for like a five to
ten year period. Not ideal if you're towards the end
a nearing your retirement. Obviously, if you're just starting out,
maybe that works.
Speaker 2 (07:57):
Okay.
Speaker 1 (07:58):
As I said, typically you have to have an accredit
investor requirement.
Speaker 2 (08:01):
Of course, liquidity issues.
Speaker 1 (08:02):
If you're within that lock up period, you can't get
any of your money out. And then typically they have
very high fees, so you're typically going to pay two
or twenty What that means is of the money that
you have in the fund, they're going to take two
percent as management fees, So every year, two percent of
the money of in goes to management. And then on
the upside, they're going to take twenty percent of the
(08:23):
gains that they get you.
Speaker 2 (08:24):
Okay, let's take a look at how this is working out.
Speaker 1 (08:26):
What we can see here is that we are currently
getting more and more allocations going to private equity from
large institutions. And the reason why is again because of
their performance, right, because they're beating regular funds. And what
we can see here is the allocations we see for
endowments and foundations. They're the leader in allocating to private equity.
(08:47):
Endowments being like Yale, Harvard, things like that. We can
see they're allocating about twenty five to thirty two percent
of their entire fund towards private equity, just so you
can see how they're allocating this. Again, most people, most
individuals don't have any, but the endow onents they do
twenty five to thirty two percent. Okay, what we can
see is since they've been doing this and sort of
(09:08):
going back to Tony Robbins book, we can see the growth.
Here's the year two thousand and look at the amount
of growth.
Speaker 2 (09:13):
Here we are. This is only to twenty twenty two.
Speaker 1 (09:15):
You can see the enormous move for money going into
private equity, chasing yield. The S and P five hundred
hasn't been performing well, the mag seven have four hundred
and ninety three, other companies not doing so well, and
so they're chasing yield. Where do we get it, Well,
they move to private equity. Well, let's stack these up
and take a look at what we've got so far
and what we can see. Here's the assets we have
(09:38):
private equity right here, here's the S and P five hundred, NASDAK,
the Russell two thousand and then the Treasury bond. What
we can see over one year, three year, five years,
and ten years. And what we can see is that
while private equity looks really good.
Speaker 2 (09:53):
Actually, the winner has been the NASDAK.
Speaker 1 (09:55):
What we can see over one year, three years, five years,
and ten is we have seven point one percent. One
P five hundred did better over one year. The Nasdaq
did even better in the one year period. Over five years,
we got seven percent here in private equity, almost eleven
percent in the.
Speaker 2 (10:10):
S and P five hundred, eight and a half in Nasdaq.
Speaker 1 (10:12):
Five years, sixteen percent in private equity, about sixteen percent
SP five hundred, but almost nineteen.
Speaker 2 (10:18):
Percent in the Nasdaq.
Speaker 1 (10:19):
And over ten years we have fifteen percent in private equity,
thirteen percent in five hundred and sixteen percent in Nasdaq.
Speaker 2 (10:26):
So all of them are actually pretty close. Now.
Speaker 1 (10:28):
Of course, this is a private equity index. Some have
done way better, some have done way worse. What we
can see somewhat pretty close now. The Russell index has
done pretty poorly overall, hasn't kept up about half of that.
Speaker 2 (10:40):
I did put.
Speaker 1 (10:41):
The US Treasury bonds on here just so you could
see over one year, lost five percent, over three years,
lost ten percent over five years. They've done pretty terrible.
We also have real estate down here at the bottom
ten percent, four percent, six and a half percent, and
six percent So what we can see here is that
the Nasdaq has been better performing than real estate and
(11:03):
private equity.
Speaker 2 (11:04):
And of course most of you.
Speaker 1 (11:05):
Can buy the Nasdaq and this and P five hundred
in your four to one ks right now. You don't
need alternative investments to do that. Okay, let's go to
the third horsemen of alternative investments, my favorite, of course, Bitcoin.
Speaker 2 (11:17):
Now, part of the reason why I love bitcoin.
Speaker 1 (11:18):
Is it's brand new, it's technology, it's changing the world
as we know it.
Speaker 2 (11:23):
But it's also had the best performance.
Speaker 1 (11:25):
It has been the best performing asset over pretty much
any period in time fifteen years, ten years, five years,
three years, and one year. Let's take a look at
it when we stack it all up. So if we
have private equity, sm P five hundred, NASDAK Russell Treasury,
and now we have Bitcoin here. So instead of seven percent,
twenty four percent or twenty nine percent, the Nasdaq looked
really good. Bitcoin did seventy, not twenty nine, seventy.
Speaker 2 (11:49):
Over three years.
Speaker 1 (11:51):
We had the winner here the s and P five
hundred at ten point nine, but Bitcoin did sixty three percent.
Speaker 2 (11:56):
Over five years.
Speaker 1 (11:57):
We had the winner right here at nas eighteen percent,
but Bitcoin did eighty two percent over ten years, we
had the winner right here again back to the NASDAK
at sixteen percent, but Bitcoin did one hundred and thirty
nine percent. So pretty much, over any time period you
want to look at, bitcoin has outperformed. Hard to argue
with that, but how people would argue with it? But
(12:19):
they'd say, but the risk, it's too volatile.
Speaker 2 (12:23):
Well, what we want.
Speaker 1 (12:24):
To do as investors is we think about the risk
adjusted returns. One of the ways we do that is
we use something called a sharp ratio. The sharp ratio
looks at.
Speaker 2 (12:31):
Both the risk and the reward that we have.
Speaker 1 (12:34):
So if we take a look at the sharp ratio
of a couple assets, let's look specifically at the sharp
ratio of Bitcoin and the US Treasury. Specifically, what we
can see is that the max draw down of the
US Treasury for the last five years ending June thirtieth,
twenty twenty five was forty eight percent.
Speaker 2 (12:52):
About half your money was lost hold in US treasuries.
In bitcoin, it went down.
Speaker 1 (12:57):
The max draw down was actually seventy six percent, so
the draw down was much worse. However, if we look
at the sharp ratio, which looks at both the draw
down and the return profile. We see that TLT was
point thirty nine, which was very risky. We see that
Bitcoin was over one, which was much much safer. And
the reason why is because you have to look at
(13:19):
both the return and the game, or the risk and
the reward. I should say, so when we look at
TLT over one month, three months, six month, one year,
three or five years, and we see that again it
is down heavily five years thirty eight percent, But if
we look at Bitcoin, it was all gains.
Speaker 2 (13:36):
Over one thousand percent game.
Speaker 1 (13:38):
And so you have to understand risk and reward in
both of these, and so we can see across the
board bitcoin wins. But a couple things to keep in mind.
It's not just about total performance, total volatility, total risk.
We also want to think about liquidity. How fast can
I get my money out? Like with real estate specifically
if I have single family residents, how long does it
take me to get money out if I just need
(13:58):
a little bit five thousand, three twenty thousand? How liquid
is that market? All right, now, let's get to the
super cycle part of this, because, as I said, we
have about nine trillion dollars that's going to be unlocked
and it's going to rush into these types of assets.
Speaker 2 (14:12):
So what does history say about this?
Speaker 1 (14:15):
What can we learn? Well, a couple things that we
can learn. First of all, we know that the four
to one K was created by the Revenue Act in
nineteen seventy eight. Okay, so it's when they change things,
when money started flowing into it. We know that stocks
became standard in a four to one K around the
early nineteen eighties. We saw that the S and P
five hundred in nineteen eighty one was about one hundred
(14:37):
and thirty and today it's about fifty eight hundred. That's
a forty four times increase since the four to one
k's came into existence and started buying stocks what we
call passive flows, passively buying them. Now, this is this
is different than retail investing. Retail investors are trying to
time things. Should I buy now? Should I wait? Four
(14:59):
to one k's are every other week. My paycheck has
money that goes into my four oh one K and
it automatically buys back to the passive income. But for
an illustrative chart, we can see here from nineteen thirty
until this point when the four ones were created nineteen
eighty we can see that the S and P five
hundred was relatively flat. Yes, it went up and down,
but it was relatively flat.
Speaker 2 (15:19):
But look at what happened since four to one k's
started buying the S and P five hundred, it started
going straight up.
Speaker 1 (15:27):
So, if history is our guide and we now know
that the four one ks can unlock and that capital
can now move into three types of alternative assets, what
do you think happens to those three.
Speaker 2 (15:38):
Types of alternative assets?
Speaker 1 (15:39):
Well, that may not be definitive, but let's put a
let's put a number on it here. What we can
see is that if we do the math on how
the capital should flow, we can see again, if there's
nine trillion dollars sit in four O one k's, if
one percent of that allocation moved into alternative assets, that's
almost ninety billion dollars. Ten percent of that moved out
(16:02):
of four own k's and into one of these three
assets are all three, that's almost nine hundred billion dollars. Now,
just to put things into some math, If that's almost
nine hundred billion dollars, the entire crypto market is only
four trillion. Bitcoin's only about two trillion dollars. So what
happens when almost one trillion moves into a two trillion
(16:23):
dollar market.
Speaker 2 (16:24):
Yeah, it explodes. You can do the math. But let''s
look at some other parts of history.
Speaker 1 (16:29):
What we can see here is we can understand that
pension funds entered also into stocks in the seventies. We
know that insurance companies started buying real estate in the
nineteen eighties. We know that endowments they started moving into
stocks in the nineteen nineties.
Speaker 2 (16:43):
This is into private equity and to venture capital.
Speaker 1 (16:45):
And we have the tech boom, but now we have
retirement accounts moving.
Speaker 2 (16:49):
Into this new alternative investment class.
Speaker 1 (16:52):
Let's take a little bit more charts, So let's look
at gold, for example. We can see what happened right
around the same time nineteen eighty gold had been kind
of moving higher, and then look.
Speaker 2 (17:03):
At the growth that we have right there. As a
matter of.
Speaker 1 (17:05):
Fact, you can see before it happened and after, before
gold became legalized.
Speaker 2 (17:10):
A lot of people don't understand this, but back here, well,
we don't go that far.
Speaker 1 (17:14):
Back in nineteen thirty three, the US government took everybody's
gold and made it illegal to even own gold. And
it wasn't until here that you were able to own
gold legally.
Speaker 2 (17:25):
Again.
Speaker 1 (17:26):
So again, when a rule change happened legally and people
could move their money into the asset, what happened, Well,
gold went.
Speaker 2 (17:33):
Up, as you can see over four times.
Speaker 1 (17:35):
This is the history and this is what happens when
money gets unlocked and can move into new assets.
Speaker 2 (17:41):
It creates a super cycle.
Speaker 1 (17:42):
So I've been talking a lot about something I call
the quantum wealth window. About every fifty years we have
a technological revolution that opens up.
Speaker 2 (17:51):
Now there's two things that happened.
Speaker 1 (17:53):
One of the technology changes the course of humanity, right,
like instead of walking and riding horses, we had to
have cars. Right, instead of having to send a letter
in the mail, we now have the internet and email,
and we have that going on right now. We also
know that the richest people in the world, the legacy wealth,
was always created.
Speaker 2 (18:09):
In one of these wealth windows.
Speaker 1 (18:11):
Now we are in the sixth wealth window we've seen
in the last three hundred years. And at the same
time we're seeing this, we're seeing now nine trillion dollars
being unlocked and ready to rush into these new asset
classes cryptocurrencies, bitcoin, etc. Now this isn't just another trade,
it's not a short term move. This is a structural
reformation of the entire capital market, right, not another trade.
(18:34):
We're talking about nine trillion dollars that just got permission
to now come out of their locked gates in a
four one K and can now come into these assets again.
Not a correction, a reformation, and this is the greatest
wealth transfer in history. Now, if you want to know
more about how we're positioning for these and how that
money might move into bitcoin and where that goes over
(18:56):
the next ten, twenty, thirty forty years, you might want
to watch this video right here, and I'll see you
over there.
What happens when nine trillion dollars in boring four to
oh one k money gets permission to chase yield.
Speaker 2 (00:05):
Because that's about to happen. Trump's signing the order. The
game is.
Speaker 1 (00:09):
About to change forever. I'm talking about trillions of dollars
that have been stuck in losing or low yielding retirement
accounts now being able to go by bitcoin or private
equity or real estate. And for the first time in history.
Now this isn't speculation.
Speaker 2 (00:24):
It's happening. And here's what everybody's missing.
Speaker 1 (00:27):
This is about the entire financial system reorganizing. When the safest,
most conservative money in America, retirement accounts, starts chasing alternative assets,
you get what's called an asset supercycle, now, the kind
that creates generational wealth. So in this video, I'm going
to show you exactly which assets explode first, the timeline
that Wall Street doesn't want you to see, and how
(00:49):
to position yourself before.
Speaker 2 (00:51):
The herd arrives.
Speaker 1 (00:52):
So let's go all right, So we are talking about
one of the biggest moves in the financial system that
we've seen today. Of course, it all comes on the
back of Trump's executive order. Another one, now, He's racked
up quite a bit of executive orders. Not something I'm
super fond of. But anyway, that's beside the point. That's
a whole another topic front of the video. What we're
(01:13):
talking about is his executive order that's unlocking about nine
trillion dollars and a massive amount of money, about forty
three trillion dollars total are in these retirement accounts in
the financial system. But this is affecting about nine trillion dollars. Now,
the big move is that it can now take money
the nine trillion in four one ks and can it
(01:33):
push them into what we call alternative assets. Now, alternative
assets is where I've basically made my entire career. Forget
the stock, the S and P five hundred, We're talking
about alternative assets. I'm going to break that down for
you now. Part of the reason why is because, of
course the S and P. Five hundred hasn't really been
getting people where they need to be. We know that
about half of all baby boomers are broke. They have
(01:56):
no money, number one, Number two. Of the half that
do have money average about two hundred and forty thousand dollars.
So we need to get the returns to improve We
need to get them to make more money if they're
going to have any success or any hope of retirement.
Speaker 2 (02:11):
Now.
Speaker 1 (02:11):
Part of the reason why they've not been able to
do this so far is because apparently it's too risky.
People aren't smart enough to know what they're doing. It's
too volatile. So we must protect them. At least that's
what the government thinks, and Trump says, no more, no
more of that, So he signed this executive order to
specifically allow people to take their own money in their
four oh one K that they was holding the back
(02:32):
from what they want to invest into, and now they
could direct it.
Speaker 2 (02:34):
Now.
Speaker 1 (02:35):
A couple things that I think are worth noting in
this specifically is we can see that this order unlocks
a massive opportunity for PE firms.
Speaker 2 (02:43):
Private equity, and crypto investments.
Speaker 1 (02:46):
So bitcoin and cryptocurrencies, Like I said, about nine trillion dollars.
The White House officials said, alternative assets again, not the
SMP five hundred. They offer competitive returns. We need them
to get their returns. It offers diversification benefits and will
improve americans retirements prospects.
Speaker 2 (03:03):
That's the key piece. We need to get them a
little bit more money.
Speaker 1 (03:05):
If they're going to have success, because surprise, surprise, social
Security is not going to be there.
Speaker 2 (03:09):
Okay.
Speaker 1 (03:09):
It says that typically they have a fiduciary responsibility to
plan participants people in the four one K to select
appropriate investments, and alternative investments often are more volatile than
typical funds.
Speaker 2 (03:23):
Okay, so they're trying to protect them.
Speaker 1 (03:25):
They don't want them to diversify out too much because
typically alternative investment investments are more volatile.
Speaker 2 (03:32):
Okay. I'm going to show you some of the data
around that.
Speaker 1 (03:34):
So this is a chart right here of the treasury bonds.
This is represented by the TLT, which is an ETF
of the long US Treasury bond, which is supposed to
be the risk free rate. It's the bedrock of the
global financial system. And what this shows us is that
over the last five years, you've lost about fifty percent
of your money. Now, most financial plans in a four
(03:55):
one K your financial advisor put you into is something
what's called a sixty forty portfolio, meaning sixty percent of
your money is in stocks, forty percent of it is
in bonds.
Speaker 2 (04:05):
And look at what's happened.
Speaker 1 (04:06):
You've lost fifty percent of your money so rather than
your money being stuck and your plan advisor putting you
into plans like this that lose money, I think it's
a good idea to let you choose where you want
to put your money. But let's explore the alternative investments. Okay,
the three horsemen of these alternative investments. We're talking about
real estate. We're going to dig into that private equity.
We'll take a look at that, and of course my
(04:27):
favorite bitcoin will take a look at that. So let's
go through these one at a time. Let's start with real estate.
Of course, if you've been following me for any time,
you know that I started my career in real estate.
I still own real estate. I like real estate. But
there's a couple things that we should know, specifically around
in your four to one K in your retirement account.
They talk about liquidity, they talk about volatility, and in
real estate is certainly ill liquid You can't sell it quickly.
(04:50):
At best case scenario, it's probably a couple months. Sometimes
it could be even worse, depending on the market cycle
where you're located.
Speaker 2 (04:56):
Things like that. The other thing with.
Speaker 1 (04:57):
Real estate is that there's high transaction costs. It's very
expensive to sell a piece of real estate. It's also big,
big sales, big purchases, big amount. So let's just say
you needed five thousand dollars for a purchase or ten
thousand dollars fortification. You can't just get five or ten
thousand dollars out of your house, so it's i liquid.
There's high transaction costs to move them. And so most
(05:17):
likely if people were going to use this in a
retirement account, they'd probably use something like a rate, a
real estate investment trust, something like that. They wouldn't want
to own it directly. They wouldn't want the maintenance headache.
They wouldn't want the property managers getting calls late at
night when your toilet's breaking down.
Speaker 2 (05:30):
Things like that.
Speaker 1 (05:31):
Some other things with real estate in a retirement account
that can be problem matic is a geographic concentration risk.
But if we take a look at the case Shiller
index for real estate, we can see a couple things.
Number one, this goes back to nineteen eighty eight. Real
estate had been pretty much flat here until the dot
com bubble blew up. When the dot com bubble blew up,
(05:52):
rates went down, real estate went up into a bubble.
Two thousand and eight we had the real estate crash,
and we've been basically on an upward trend ever since.
So the last couple decades real estate has been a
pretty good investment. Now, let's stack this up and take
a look at it in a chart here. So what
we have here is reates versus direct So how should
we own real estate, especially if we can get money
(06:13):
from our retirement account into real estate specifically, So the
investment type here is an equity rate. Here is a
private sire commercial real estate, and here we.
Speaker 2 (06:23):
Have us home prices.
Speaker 1 (06:25):
And what this shows over one year, the rates have
performed better in a one year period eight point seven
versus two six and two seven. Over three years they
didn't do too well. However, they lost less. Let's just
stay in commercial real estate and over five years and
over ten years they outperformed. So if I was going
to move some of my money in my four one
(06:46):
k into one of these horsemen's into the real estate bucket,
the equity rates are probably the best option for me
in this scenario.
Speaker 2 (06:54):
Now, of course, there's more advanced options. We're not talking
about that. We're just talking about in your retirement account specifically.
Speaker 1 (06:59):
It looks like it's when there. Okay, remember those numbers.
We're going to stack all these up at the end.
Speaker 2 (07:04):
Okay.
Speaker 1 (07:04):
The second horseman would be in my alternative investments is
private equity. Now Tony Robbins recently wrote I Believe, his
third book on money, part of the trilogy, where we
talked about private equity being one of the best investments
that you can get into, and he talks about wre
Typically you're going to make twenty to thirty percent on
your money versus you know, sp five hundred and six
(07:24):
or eight percent return. A couple things they know about
private equity. Typically they have pretty high minimum investments, so
typically you probably need to be an a credit investor.
Means you're making over two hundred fifty thousand or a
million dollars of assets, and.
Speaker 2 (07:36):
Typically you need to put two hundred and fifty thousand.
Speaker 1 (07:38):
Up to one million dollars into private equity. Also, the
thing with them is they're not very liquid. Typically you
have to lock up about five to ten years. When
you put your money into the fund, it's stuck there.
You can't get it back for like a five to
ten year period. Not ideal if you're towards the end
a nearing your retirement. Obviously, if you're just starting out,
maybe that works.
Speaker 2 (07:57):
Okay.
Speaker 1 (07:58):
As I said, typically you have to have an accredit
investor requirement.
Speaker 2 (08:01):
Of course, liquidity issues.
Speaker 1 (08:02):
If you're within that lock up period, you can't get
any of your money out. And then typically they have
very high fees, so you're typically going to pay two
or twenty What that means is of the money that
you have in the fund, they're going to take two
percent as management fees, So every year, two percent of
the money of in goes to management. And then on
the upside, they're going to take twenty percent of the
(08:23):
gains that they get you.
Speaker 2 (08:24):
Okay, let's take a look at how this is working out.
Speaker 1 (08:26):
What we can see here is that we are currently
getting more and more allocations going to private equity from
large institutions. And the reason why is again because of
their performance, right, because they're beating regular funds. And what
we can see here is the allocations we see for
endowments and foundations. They're the leader in allocating to private equity.
(08:47):
Endowments being like Yale, Harvard, things like that. We can
see they're allocating about twenty five to thirty two percent
of their entire fund towards private equity, just so you
can see how they're allocating this. Again, most people, most
individuals don't have any, but the endow onents they do
twenty five to thirty two percent. Okay, what we can
see is since they've been doing this and sort of
(09:08):
going back to Tony Robbins book, we can see the growth.
Here's the year two thousand and look at the amount
of growth.
Speaker 2 (09:13):
Here we are. This is only to twenty twenty two.
Speaker 1 (09:15):
You can see the enormous move for money going into
private equity, chasing yield. The S and P five hundred
hasn't been performing well, the mag seven have four hundred
and ninety three, other companies not doing so well, and
so they're chasing yield. Where do we get it, Well,
they move to private equity. Well, let's stack these up
and take a look at what we've got so far
and what we can see. Here's the assets we have
(09:38):
private equity right here, here's the S and P five hundred, NASDAK,
the Russell two thousand and then the Treasury bond. What
we can see over one year, three year, five years,
and ten years. And what we can see is that
while private equity looks really good.
Speaker 2 (09:53):
Actually, the winner has been the NASDAK.
Speaker 1 (09:55):
What we can see over one year, three years, five years,
and ten is we have seven point one percent. One
P five hundred did better over one year. The Nasdaq
did even better in the one year period. Over five years,
we got seven percent here in private equity, almost eleven
percent in the.
Speaker 2 (10:10):
S and P five hundred, eight and a half in Nasdaq.
Speaker 1 (10:12):
Five years, sixteen percent in private equity, about sixteen percent
SP five hundred, but almost nineteen.
Speaker 2 (10:18):
Percent in the Nasdaq.
Speaker 1 (10:19):
And over ten years we have fifteen percent in private equity,
thirteen percent in five hundred and sixteen percent in Nasdaq.
Speaker 2 (10:26):
So all of them are actually pretty close. Now.
Speaker 1 (10:28):
Of course, this is a private equity index. Some have
done way better, some have done way worse. What we
can see somewhat pretty close now. The Russell index has
done pretty poorly overall, hasn't kept up about half of that.
Speaker 2 (10:40):
I did put.
Speaker 1 (10:41):
The US Treasury bonds on here just so you could
see over one year, lost five percent, over three years,
lost ten percent over five years. They've done pretty terrible.
We also have real estate down here at the bottom
ten percent, four percent, six and a half percent, and
six percent So what we can see here is that
the Nasdaq has been better performing than real estate and
(11:03):
private equity.
Speaker 2 (11:04):
And of course most of you.
Speaker 1 (11:05):
Can buy the Nasdaq and this and P five hundred
in your four to one ks right now. You don't
need alternative investments to do that. Okay, let's go to
the third horsemen of alternative investments, my favorite, of course, Bitcoin.
Speaker 2 (11:17):
Now, part of the reason why I love bitcoin.
Speaker 1 (11:18):
Is it's brand new, it's technology, it's changing the world
as we know it.
Speaker 2 (11:23):
But it's also had the best performance.
Speaker 1 (11:25):
It has been the best performing asset over pretty much
any period in time fifteen years, ten years, five years,
three years, and one year. Let's take a look at
it when we stack it all up. So if we
have private equity, sm P five hundred, NASDAK Russell Treasury,
and now we have Bitcoin here. So instead of seven percent,
twenty four percent or twenty nine percent, the Nasdaq looked
really good. Bitcoin did seventy, not twenty nine, seventy.
Speaker 2 (11:49):
Over three years.
Speaker 1 (11:51):
We had the winner here the s and P five
hundred at ten point nine, but Bitcoin did sixty three percent.
Speaker 2 (11:56):
Over five years.
Speaker 1 (11:57):
We had the winner right here at nas eighteen percent,
but Bitcoin did eighty two percent over ten years, we
had the winner right here again back to the NASDAK
at sixteen percent, but Bitcoin did one hundred and thirty
nine percent. So pretty much, over any time period you
want to look at, bitcoin has outperformed. Hard to argue
with that, but how people would argue with it? But
(12:19):
they'd say, but the risk, it's too volatile.
Speaker 2 (12:23):
Well, what we want.
Speaker 1 (12:24):
To do as investors is we think about the risk
adjusted returns. One of the ways we do that is
we use something called a sharp ratio. The sharp ratio
looks at.
Speaker 2 (12:31):
Both the risk and the reward that we have.
Speaker 1 (12:34):
So if we take a look at the sharp ratio
of a couple assets, let's look specifically at the sharp
ratio of Bitcoin and the US Treasury. Specifically, what we
can see is that the max draw down of the
US Treasury for the last five years ending June thirtieth,
twenty twenty five was forty eight percent.
Speaker 2 (12:52):
About half your money was lost hold in US treasuries.
In bitcoin, it went down.
Speaker 1 (12:57):
The max draw down was actually seventy six percent, so
the draw down was much worse. However, if we look
at the sharp ratio, which looks at both the draw
down and the return profile. We see that TLT was
point thirty nine, which was very risky. We see that
Bitcoin was over one, which was much much safer. And
the reason why is because you have to look at
(13:19):
both the return and the game, or the risk and
the reward. I should say, so when we look at
TLT over one month, three months, six month, one year,
three or five years, and we see that again it
is down heavily five years thirty eight percent, But if
we look at Bitcoin, it was all gains.
Speaker 2 (13:36):
Over one thousand percent game.
Speaker 1 (13:38):
And so you have to understand risk and reward in
both of these, and so we can see across the
board bitcoin wins. But a couple things to keep in mind.
It's not just about total performance, total volatility, total risk.
We also want to think about liquidity. How fast can
I get my money out? Like with real estate specifically
if I have single family residents, how long does it
take me to get money out if I just need
(13:58):
a little bit five thousand, three twenty thousand? How liquid
is that market? All right, now, let's get to the
super cycle part of this, because, as I said, we
have about nine trillion dollars that's going to be unlocked
and it's going to rush into these types of assets.
Speaker 2 (14:12):
So what does history say about this?
Speaker 1 (14:15):
What can we learn? Well, a couple things that we
can learn. First of all, we know that the four
to one K was created by the Revenue Act in
nineteen seventy eight. Okay, so it's when they change things,
when money started flowing into it. We know that stocks
became standard in a four to one K around the
early nineteen eighties. We saw that the S and P
five hundred in nineteen eighty one was about one hundred
(14:37):
and thirty and today it's about fifty eight hundred. That's
a forty four times increase since the four to one
k's came into existence and started buying stocks what we
call passive flows, passively buying them. Now, this is this
is different than retail investing. Retail investors are trying to
time things. Should I buy now? Should I wait? Four
(14:59):
to one k's are every other week. My paycheck has
money that goes into my four oh one K and
it automatically buys back to the passive income. But for
an illustrative chart, we can see here from nineteen thirty
until this point when the four ones were created nineteen
eighty we can see that the S and P five
hundred was relatively flat. Yes, it went up and down,
but it was relatively flat.
Speaker 2 (15:19):
But look at what happened since four to one k's
started buying the S and P five hundred, it started
going straight up.
Speaker 1 (15:27):
So, if history is our guide and we now know
that the four one ks can unlock and that capital
can now move into three types of alternative assets, what
do you think happens to those three.
Speaker 2 (15:38):
Types of alternative assets?
Speaker 1 (15:39):
Well, that may not be definitive, but let's put a
let's put a number on it here. What we can
see is that if we do the math on how
the capital should flow, we can see again, if there's
nine trillion dollars sit in four O one k's, if
one percent of that allocation moved into alternative assets, that's
almost ninety billion dollars. Ten percent of that moved out
(16:02):
of four own k's and into one of these three
assets are all three, that's almost nine hundred billion dollars. Now,
just to put things into some math, If that's almost
nine hundred billion dollars, the entire crypto market is only
four trillion. Bitcoin's only about two trillion dollars. So what
happens when almost one trillion moves into a two trillion
(16:23):
dollar market.
Speaker 2 (16:24):
Yeah, it explodes. You can do the math. But let''s
look at some other parts of history.
Speaker 1 (16:29):
What we can see here is we can understand that
pension funds entered also into stocks in the seventies. We
know that insurance companies started buying real estate in the
nineteen eighties. We know that endowments they started moving into
stocks in the nineteen nineties.
Speaker 2 (16:43):
This is into private equity and to venture capital.
Speaker 1 (16:45):
And we have the tech boom, but now we have
retirement accounts moving.
Speaker 2 (16:49):
Into this new alternative investment class.
Speaker 1 (16:52):
Let's take a little bit more charts, So let's look
at gold, for example. We can see what happened right
around the same time nineteen eighty gold had been kind
of moving higher, and then look.
Speaker 2 (17:03):
At the growth that we have right there. As a
matter of.
Speaker 1 (17:05):
Fact, you can see before it happened and after, before
gold became legalized.
Speaker 2 (17:10):
A lot of people don't understand this, but back here, well,
we don't go that far.
Speaker 1 (17:14):
Back in nineteen thirty three, the US government took everybody's
gold and made it illegal to even own gold. And
it wasn't until here that you were able to own
gold legally.
Speaker 2 (17:25):
Again.
Speaker 1 (17:26):
So again, when a rule change happened legally and people
could move their money into the asset, what happened, Well,
gold went.
Speaker 2 (17:33):
Up, as you can see over four times.
Speaker 1 (17:35):
This is the history and this is what happens when
money gets unlocked and can move into new assets.
Speaker 2 (17:41):
It creates a super cycle.
Speaker 1 (17:42):
So I've been talking a lot about something I call
the quantum wealth window. About every fifty years we have
a technological revolution that opens up.
Speaker 2 (17:51):
Now there's two things that happened.
Speaker 1 (17:53):
One of the technology changes the course of humanity, right,
like instead of walking and riding horses, we had to
have cars. Right, instead of having to send a letter
in the mail, we now have the internet and email,
and we have that going on right now. We also
know that the richest people in the world, the legacy wealth,
was always created.
Speaker 2 (18:09):
In one of these wealth windows.
Speaker 1 (18:11):
Now we are in the sixth wealth window we've seen
in the last three hundred years. And at the same
time we're seeing this, we're seeing now nine trillion dollars
being unlocked and ready to rush into these new asset
classes cryptocurrencies, bitcoin, etc. Now this isn't just another trade,
it's not a short term move. This is a structural
reformation of the entire capital market, right, not another trade.
(18:34):
We're talking about nine trillion dollars that just got permission
to now come out of their locked gates in a
four one K and can now come into these assets again.
Not a correction, a reformation, and this is the greatest
wealth transfer in history. Now, if you want to know
more about how we're positioning for these and how that
money might move into bitcoin and where that goes over
(18:56):
the next ten, twenty, thirty forty years, you might want
to watch this video right here, and I'll see you
over there.
Host
Mark Moss
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