[00:01:21] What are your thoughts on this? Is this a bunch of bunk? Is this just hopium? What should be the takeaway?

[00:01:27] Jim Crider: It’s funny. Most, I think most people live in a world of sharing these things on X or Nostr, whatever. I live in this world of actually having these conversations. I’ve had this conversation about that particular chart, I think three or four times today.

[00:01:41] Yeah, the things that you mull over and maybe talk with someone about, like that’s what I do for a living all day, and people come to me and say, Hey, what’s the legitimacy of this? And family I spoke with a bit ago, they need some Bitcoin in a couple weeks to buy a house.

[00:01:53] Basically all our net worth is in Bitcoin and some real estate. And said, Jim, do we sell our Bitcoin today? Do we wait two weeks? Do we sell half today to hedge that volatility? And it’s well, my crystal ball’s broken. But then we did talk through that global liquidity chart and personally I think there’s merit there.

[00:02:12] I think the general market sentiment is obviously better now than it was a couple weeks ago, and I think it will progress over the next few weeks. I think it’ll get really interesting, come early July.

[00:02:21] Trump’s tariff stuff, 90 days. We’re looking at, I think July 10. Between now and then, I think things will probably run off of general liquidity and then we’ll revisit tariffs and everything. Based off of that, I would say, I told him, dude, I don’t know, we could hedge it, sell half today and take a look at later times, but I personally put some stake in there.

[00:02:41] Preston Pysh: I love this talking point because this is something that I get from family and friends all the time. It’s like I’ll talk about Bitcoin, but I’m talking about it in four year, eight year moves. I’ve got a lot of confidence in what it’s going to do, and if you’re asking me what’s going to happen next week or a month from now, I’m just kind of like. Dude, I have no idea. I have no clue how to. The president could come out tomorrow and said, eh, I changed my mind. I don’t want to just tariff China now. I’m literally back on the table tariffing everybody, and then all of a sudden the market’s crap. And it’s I have no idea how to predict that. I don’t know.

[00:03:14] Jim Crider: I’m sure, deal with my words to him where I should, Trump would come out tomorrow and say, we’re going to tarriff everyone a hundred percent. that could happen tomorrow. And just derail this whole liquidity thing.

[00:03:24] Preston Pysh: Yeah , this gets into I think, something that is seen by everybody, which is how do you have this conversation? because it’s a personality thing, some of this. Some people are traders. Their longest holding period is 90 days, right?

[00:03:41] And then other people like myself, and I’m highly biased by this Warren Buffet background, where he tries to only have 20 picks in his entire life. And he is just trying to amass as many shares or proportional ownership of whatever that he’s buying for the long haul, once he finds something that he finds extremely valuable.

[00:04:00] So I’m way in that camp and I feel like I’m constantly being surrounded by people that are asking me very short term kind of questions, and it’s just, it’s almost like incompatible for me. So how do you deal with this? Because some of it is so personality driven that you’re not going to shake that out of the personality. You don’t want to change the personality, but how do you advise something like that?

[00:04:25] Jim Crider: That’s probably the hardest part of my job. We have to acknowledge, first off, that the short term focus can be derived froM2 places. One of those can be, I would say, unhealth, and that unhealth is you’re emotion driven.

[00:04:36] So even fear typically function in short term. Yeah, type durations. So I try not to go there with people. The other reason you might be having a shorter duration or timeframe is because of life. Now, typically, we try to plan around those things. Ahead of, two weeks from now, and that’s going to go with portfolio construction and liquidity and all that.

[00:04:56] But sometimes life comes at you and you have to make the decision, do I sell the Bitcoin today or in two weeks? And yeah, like you said, a lot of that comes down to personality. It also comes down to general flexibility. if Bitcoin goes from 92,000 to 72,000 and you held during that two week period, now you have to sell more.

[00:05:16] A question I pose routinely is if you had that Bitcoin and it went from 92 to 102 in the next two weeks, versus it goes from 92 to 82 in the next couple of weeks, how do those hit you? That impact you and emotionally, but then also lifestyle wise, if in a week you have to sell that Bitcoin? For a house and suddenly you cannot buy that house that you would need, and it’s your, it’ll make your wife way happier.

[00:05:41] I would probably say, what’s a little bit more Bitcoin in a week versus not having a home for your family? I would go in and sell it today versus, okay. We went from having a net worth of. 10 million to a net worth of 9.9 million. Okay then you have more flexibility to base off emotion rather than needs.

[00:05:57] Preston Pysh: Yeah. One of the other things I think that is an important conver, I love those two points by the way, and one of the things that I’m just really hesitant on, and it’s not even speaking with a Bitcoin side of it, I would just say equities at large or any type of investment. When I’m looking at short term moves, and I’m really just trying to get that timing right because sometimes you are in a situation where I need to come up with some cash because I have got to go buy this thing, whether it’s a car or whatever, and you’re just trying to make the best decision you can in that short time horizon, trading wise, and one of the things that I’ve, I guess I’ve learned through the years is if I’m dealing with a small cap company, let’s just say a company that has a market cap under a hundred million dollars.

[00:06:42] The ability to use any type of technical indicator on that I have found to be extremely difficult and borderline worthless. When you’re talking about something that’s maybe much larger, call it the S&P 500 index or Bitcoin or something that has a market cap of over a hundred billion. I think you’re starting to get to something that actually, maybe the technical indicators can be somewhat of a clue, but not even that reliable.

[00:07:10] I’m curious if you agree with this, Jim, or if you think that technical indicators are something that people should pay attention to. What are your thoughts?

[00:07:20] Jim Crider: I mean, I’ll probably get in trouble with some people that, I mean they’ll, what’s the saying that technical indicators is astrology. Astrology for men? I personally don’t really lean into technical stuff. I guess the closest a lot of financial planners out there would say that even just looking at global liquidity would be some sort of technical bias. And I would say that’s probably as technical as I would personally get.

[00:07:42] Preston Pysh: Yeah, I would agree. For me, I’m looking like global liquidity. Obviously the M2 really interesting, especially in the past five years, it’s become a really interesting metric to kind of look at that compared to all your other major equity indices and just the flow of quote unquote value into and out of equity markets and fixed income markets.

[00:08:03] And yeah, I don’t know. I, when I’m looking at really large indices and I love putting the international, like the S&P 500 with the nikai and like all these other types of indices, and you put them all on the same chart and you can see how they’re just, they’re ebbing and flowing very similarly. I mean, the magnitudes are different, but the sell off or the bid is together. Which I find really fascinating and somewhat complimentary to this idea that the M2 money supply is one of the biggest inputs to just growth and contraction in the overall economy.

[00:08:39] Jim Crider: I think that a lot of people who go to technical analysis and really I think that really what we’re pointing towards is. Themes and thematically when you look at these charts, money, supply and yeah, total global markets over prolonged periods of time. That’s speaking to thematically what is happening. That’s where there’s a big difference in looking at global or money supply charts or S&P 500 from a week. Versus zooming out and looking at the narrative for the last 50 years, you can get a lot more information from a larger data pool, and again, I’m not trying to read tea leaves into today’s movements, but rather looking at, again, thematically as anything changed here. And that’s where even, when Bitcoin dropped to the mid seventies, two weeks ago, the sentiment there was.

[00:09:24] The money’s still broken. Bitcoin’s down whatever percent in the last few weeks, but has the narrative changed? And as long as the narrative hasn’t changed, then my conviction hasn’t changed either.

[00:09:34] Preston Pysh: Yeah, totally agree. And I think this move that’s happened with the tariffs, the way that I would fundamentally try to explain it to people is.

[00:09:41] When you’re dealing with an entire system that is built on promises, which is credit and fractional reserve banking, and you have a change in sentiment as to risk and the cost of goods and all of those considerations, which the tariffs we’re doing because we just realized that. it was selling off at such an abrupt pace that then the Trump administration had to pivot and say, oh no, it’s just China.

[00:10:07] Everything else is on a pause. And then the whole market was just like, ah, okay. We don’t have to price this with as much risk as we were, and you just saw the bid on the dollar and that liquidity start to come back into the market immediately after that announcement. And so some of this stuff might just look like it’s, and some of it is a little bit of hocus pocus, but at the end of the day.

[00:10:28] I’m assuming you agree with this, Jim, that the dollar in fiat currency is still absolutely dominating the global mathematics of value around the world, right? Bitcoin’s a sliver, an absolute sliver compared to the size of the fiat system.

[00:10:45] Jim Crider: Yeah, I mean, that’s where you look at, again, looking at the theme of if the dollar is order of magnitude, the dollar is, and other assets sit. And the structural issues there versus the size of Bitcoin and my opinion being the solution to that glaring issue, like the asymmetry of owning Bitcoin, I think it just makes total sense and not owning I think is massively risky.

[00:11:06] Preston Pysh: Let’s talk about the portfolio construction. So as a Bitcoin maxi and a person who literally values everything on the planet through this Bitcoin lens, and I imagine a lot of the people that listen to this show are doing something similar.

[00:11:21] It’s very easy to get super concentrated into Bitcoin, but what does the conversation sound like for somebody that they kind of understand it, they’re like, I get it. I understand why I should have some of this in my portfolio. What kind of sizing then makes sense for this type of person? And for somebody who’s not like gangbusters, salivating at the mouth, I need to have everything in Bitcoin.

[00:11:45] Jim Crider: So you have to remember that the majority of families we work with came to us just looking for someone to help them with financial planning, retirement planning, and tax help and those sorts of things. And they stumbled on us. And innocently we’re looking for a normal financial planner. And then through our relationship and building trust, then we introduce them to Bitcoin.

[00:12:02] That is, I would say 85% of our clients were no corners prior to working with us, either hostile towards Bitcoin or zero idea about what it was, and then. Again, after building relationship and demonstrating value through tax planning and estate planning, these other areas, once we get to the conversation on investments, then we open that box of, Hey, there’s something you should know about me and our firm and how we invest, and then we go into Bitcoin and it’s from there that we’re able to unpack it.

[00:12:28] It’s a long conversation. To really make sure they have deep education on the history of money, the history of Bitcoin, and then portfolio allocation. If we’ve done a good job on education from what is money, the history of assets, the history of Bitcoin, if we’ve done a good job there, the natural conclusion that they ask us is, well, I guess I should own some. The question is, how do I buy this thing and how much do I own? And so all of our clients have exposure to this.

[00:12:53] Preston Pysh: Jim, is that a custom answer based on how well you think they actually understand it, to a degree?

[00:12:58] Jim Crider: Yes. So we have clients in their eighties. We have clients in their twenties. We have clients who have annual incomes of 150,000. We have clients who have annual income of 10 million net worths of negative half a million because student loan debt to net worth of 80 million. So, the allocation is certainly going to depend on a lot of factors, especially short term liquidity needs, near term liquidity needs, things like that. But then we have to acknowledge risk tolerance is important, and I think risk tolerance is often overemphasized.

[00:13:30] If you lean into risk tolerance like, oh, I don’t like my portfolio to move too much, and you allow that to control your allocation, then you’re allowing the client who probably doesn’t understand actual risk to dictate their portfolio. Risk tolerance is suddenly dictating how you invest rather than risk capacity.

[00:13:46] Risk capacity is way more important, and if you can help people truly understand risks, you will help influence what their risk tolerance is in accordance to all the risks of the markets.

[00:13:56] Preston Pysh: So I agree with what you’re saying here 100%, but what I would push back on is you’re assuming that they actually understand this argument that you’re making right now, and that they can separate the amount of volatility that they’re able to, handle emotionally with and separating that with their risk tolerance. And I think for a lot of people, they can’t just, they’ll look at their portfolio and be like, Jim, if it’s like the worst year ever, I can tolerate a 20% downturn, and if it’s more than that, I’m going to freak out and lose my mind. And so the question becomes more of an emotional tolerance as opposed to risk tolerance, right.

[00:14:37] Jim Crider: So conviction is built on education. So we have to make sure they have deep education, therefore they have deep conviction. That, and really a thought through, like one thing we ask routinely with our clients is, let’s fast forward 20 years and you were not successful in the way that you have described, and you envision what is the most probable pause of bad outcome, and they identify what led to that.

[00:14:59] I didn’t save as much as I should have. I invested poorly. I was overly concentrated in an asset. I neglected to spend my time in the way. I should have those sorts of things. And that can come up with over allocation to a particular asset or again, poor sequence of returns. And then we’ll talk through like outside of, long-term goals.

[00:15:18] Is there anything between now and the next three years that we should be aware of? And that will certainly impact portfolio construction as well. Our average client has a substantial amount of their total investment allocation. Bitcoin and then how we invest.

[00:15:32] Preston Pysh: You say substantial, just stick a number on this, like 10%, 20%.

[00:15:35] Jim Crider: So between Bitcoin and then, right. So I, we manage a few different types of portfolios for our clients. One of them, I just call it our discretionary portfolio. The discretionary portfolio. The last few years has been fully in Bitcoin adjacent stuff. So the largest position in there is MicroStrategy, followed by a handful of other companies.

[00:15:52] So between the discretionary portfolio and Bitcoin outright held, our average client right now would say is between 45 and 65% holy of total investible assets. Wow. Now, sort of while, and that’s aggregate of all ages and risk tolerance, our smallest risk tolerance of any client, or our smallest allocation of any client is 10% of total investible assets.

[00:16:12] And this person was actually lifetime FBI agent, who was very familiar with Ross’s case. So he came to us with a massive bias against Bitcoin. So winning him over to understand Bitcoin and embrace it was a huge win. It’s substantial. Now, how we approach this is a few fold.

[00:16:29] Preston Pysh: Real fast. I think this is also an important question to tack onto that you say 40 to 60% that maybe started off as 10% and it grew to that amount, and you’re just letting the winners ride. Or talk to us about, this term, rebalanced portfolio. Go ahead, take it Jim.

[00:16:46] Yeah, so

[00:16:47] Jim Crider: that’s tough because a few years back, I started this company four years ago. Okay. At that point. I would argue and was arguing that we were probably nearing a cycle high. I did not believe in hyper Bitcoin ization for that cycle.

[00:17:01] So at that point we were sort of hedging the possibility of a downside, down on move. I didn’t want to bring on a bunch of clients and they’d lose our 80% of their investible, their investments in Bitcoin. So at that point, our average allocation was about 15, maybe 20%. Now, we did not have a single client who freaked out and sold Bitcoin from the drawdown from 69 down to 16, not a single one.

[00:17:22] During that timeframe though, we had a ton of conversations. So February of, was that 22, 23, when Bitcoin was around 16 grand. We had a lot of conversations with clients about, Hey, let’s reduce your 401k allocation or savings rate, and we’re going to put our foot on the gas to Bitcoin. So at that point, we went from a new allocation percentage at like instead of 15% to moving into 50% range.

[00:17:45] So we have allocation of 50% plus just the. Consumption of the portfolio as Bitcoin’s grown. And that’s why it’s hard for me to give day by day even. A total portfolio allocation. Or average client, but it’s substantial. And part of that is because we’re putting the foot on the gas to buy more and also because it’s just gobbling up now performing everything else that they own.

[00:18:07] Preston Pysh: Yeah. And I’m assuming you’re pretty bullish into the end of this year.

[00:18:10] Jim Crider: Yes, sir. So that, that also speaks to how we invest. So our clients are going to go buy Bitcoin and put into cold storage. Generally the theme is there Hey, we’re going to pretend this doesn’t exist for a really long time. I’m not going to try to time it and sell it and rebalance against your other assets on this. This is going to go away. If we need to, we can do tax loss harvesting, or harvest some capital gains, or do something there for tax purposes that might make sense, or something with your estate.

[00:18:34] And outside of that, it’s going to go away for a long time. Now that other portfolio we manage that is more tactical, so that’s where we can lean so heavily into this is because, hate it or not, we will start selling some of those Bitcoin adjacent positions throughout this year. I feel comfortable with having such a high allocation at this point because I know that by end of this year we’ll be substantially lower in that discretionary portfolio as we take in consideration the possibility of a four year bear cycle.

[00:19:03] So we’ll move over to more of like risk off assets for a bit. During that time, maybe I’m wrong, but again, if, even if I’m wrong about that, our clients will still on average be substantially, like pretty substantially holding Bitcoin. They’ll just be out of it in the that other portfolio.

[00:19:18] You have to also consider what are we holding in tandem with Bitcoin? Yeah. So again, if we’re saying average clients 45 to 65%, which the only asset I’ve owned for a very long time is Bitcoin and a couple, and then well, their stocks are like MicroStrategy and. Couple other companies like that. That’s it.

[00:19:33] I don’t even own a house anymore. We sold our house a while back just so we could buy more Bitcoin and I have clients like us, they own business and Bitcoin and that’s it. But yeah, if you own 65% of your total investible assets in Bitcoin, what’s the other 35%? And that even what the other 35% is may give yourself more permission to lean into Bitcoin a little bit further.

[00:19:53] So it’s how do these things play off one another? So for instance, we don’t really own any mid or long duration bonds. Someone may argue that owning long duration bonds right now can make sense if fed drops rates, but I think that’s picking up pennies in front of a steamroller. So our bond portfolio right now is basically all ultra short duration and money market funds, and that’s all we’ve held for four years.

[00:20:15] I’m not going to take the interest rate risk, I don’t think it’s worthwhile and heck, interest rate, risk. And frankly, I think the credit risk is starting to show, we’re starting to see faults in the credit risk even for. Risk free assets. So how we’re holding our risk off assets. If the purpose of a risk off asset is to hedge against the risky ones, I’d rather go full tilt and move it to something like a money market.

[00:20:34] And then even our other equities that we own. So I manage another portfolio. I call it Frankenstein, just because it’s a, it’s an oddball. It’s meant to be more of like an all-weather portfolio. And when I initially built this is when we had a lot of heavy Bitcoin clients coming in who said, Jim, I fully believe in Bitcoin and I think it’s go up forever, but I’m 68 and if Bitcoin drops for a substantial period of time, I don’t want to go work at Home Depot.

[00:20:58] What do I own? The thing is, those people, even if Bitcoin, if they think that Bitcoin’s going to go down a lot for a while, they’re still not going to go own a 70 30 port or 30 70 portfolio with a lot of long duration bonds. That still flies in the face of their views of money and macroeconomics.

[00:21:15] So we built a portfolio that still compliments Bitcoin’s view on the system, and that’s really heavy. Like right now, the largest holdings in that for years have been gold and Berkshire Hathaway. And that’s done really well. Frankly, it’s done a lot better than I thought it would. I have been tempted to rebalance or sell out of our gold so many times over the last several months that I’ve held the conviction, and I’m glad we have.

[00:21:35] Yeah, and I tell our clients, we’re Bitcoin heavy. The goal of this portfolio is to massively underperform your Bitcoin. We hope that happens, but we also own this in case we’re wrong. Or at least in case we’re wrong for longer than your wallet can withstand. So when we frame it on, what else do you own?

[00:21:52] How much time do we buy? What’s your war chest of risk off assets, again, that allows people to feel more permission to own more Bitcoin and volatile assets.

[00:22:02] Preston Pysh: You had talked a little bit about tax planning, estate planning, things like that. What would be, a high quality comment that would apply to most listeners on the show that you think is important when it comes to estate planning? As far as just thinking through, something that’s just generally important, information that may be a lot overlooked.

[00:22:22] Jim Crider: I mean, this is insanely basic, but the most important part, like I have four young kids. If you have young kids, honestly, I don’t even care about your money when it comes to your estate plan nearly as much as I care about what happens to your kids if you and your spouse kick the bucket.

[00:22:35] So just an estate plan for that purpose. Kendra, my wife, she and I are currently planning a trip to Italy in a couple months, and we need to make sure our estate plan is fully buttoned up just in case. So I know that’s not about money at all, but your kids and making sure they don’t go to the state is a lot more important to me than how do we make sure Uncle Sam doesn’t get any more money?

[00:22:52] That, and obviously having some sort of trust in place, even if it’s not sexy at all, just helping avoid having to go through probate. And the cost and. The exposure and nakedness of your assets if you have to go through probate the time, you know that’s a pain. So having some sort of trust in place, if you’re at a high or ultra high net worth place, having the lifetime exemption is really high right now.

[00:23:16] So this is an issue for a lot of people. But if you’re starting to be an issue with the possibility of passing up the lifetime exemption, you might want to look at getting an irrevocable trust put into place. There is a way of setting up an irrevocable trust. It is section, I actually wrote it down earlier because I was, I look at this a lot.

[00:23:33] It’s section 6 75. It allows what’s called substitutionary or swap powers inside of an irrevocable trust. So what that means, like super simple, is typically irrevocable trust. If you put Bitcoin, you have, let’s say you have a net worth of 30 million bucks, Preston, and you think bitcoin’s going to go up a lot more, you might want to get that your assets out of your state.

[00:23:54] So when you kick the bucket. It’s not subject to estate taxes. Okay. So if you moved your Bitcoin into the irrevocable trust today, and then that goes from being worth 30 million to a hundred million, then you die. Okay, well cool. That’s not going to be subject to the estate tax. The problem there is the tax rate on that is going to be substantial because your, beneficiaries will not get a stepped up in cost basis.

[00:24:17] Okay? Versus if you own the asset in your estate, they will get a step up cost basis. So there’s a way it’s called ant through this section 6 7 85 is, let’s say you own. A $2 million house and a $2 million vacation house, and then a bunch of other crud. Okay? And it’s worth 10 million bucks and you don’t think it’s going to appreciate very much.

[00:24:35] Okay? And then you own, let’s say it’s worth 10 million or 15 million. You own $15 million of Bitcoin right now. You can throw your Bitcoin inside of your trust, okay? It has this swap powers. Right before you kick the bucket, you can swap out that Bitcoin with the assets that haven’t appreciated as much.

[00:24:53] Okay? Now they have to be like kind and similar value, but you can move the Bitcoin out of the trust and move it into your state and move your houses out of your state and throw it in the trust. Now you kick the bucket and your kids get a stepped up cost basis on the thing that’s appreciated a lot between now and then.

[00:25:12] They don’t get a cost basis on your house that hasn’t appreciated as much. So it’s things like that. Again, it’s not much of an issue for most people considering how high the exemption is right now. But if you think the big ones go up a ton and you hold a lot of it, it’s setting up an estate in a way that’s proactive.

[00:25:26] That can make a lot sense. Otherwise if, you already have an irrevocable trust in place. Then you have to go rewrite this to have these swap powers in place. Well, one, you probably can’t because it’s irrevocable. And if you can, if you have a really good attorney, you can figure out a way to rewrite it, it’s going to cost a lot of money. But yeah, little things like that from an estate perspective. So what applies to most people is make sure your kids are taken care of. What applies to very few but can be very expensive. A lesson is make sure your state has the proper powers in place.

[00:25:53] Preston Pysh: So a person who’s listening to this, that, let’s say their net worth is a hundred thousand, they’re listening to some of this and saying, all right, I don’t have to do all that because I’m not at that level yet.

[00:26:01] What advice do you have for the person? And I think this is important because four years from now they could be at a million plus in net worth. So what type of. Foresight or advice do you have for that type of person that might be listening to this that they can do? It’s not a whole lot of effort, but it’s something that’s really important to set themselves up early before some of those massive capital gains could happen for them in the coming decade.

[00:26:25] Jim Crider: Yeah, I mean, go get a revocable trust set up in place. It’s going to be a lot more flexible for you obviously. Have you know things in mind as far as like medical, POA and your things set up for your kids? But I would probably just go with a revocable trust and. We’re going to assume that you’re going to be under the exclusion amount for your estate.

[00:26:45] So you shouldn’t have to worry about estate taxes if, ideally you’re, you kick the bucket and your beneficiary is going to step up in cost basis on the full amount. That’s the goal. Yeah. I wouldn’t, don’t overcomplicate it. There’s a lot of people there who make estate sound like it needs to be a lot fan than it has to be.

[00:27:02] And I know what I talked about a minute ago as far as the swap powers and everything that’s, getting in the weeds, but that’s if you have a lot of money. If you’ve got a net worth of a hundred thousand or even quote unquote just a million bucks. Then I would, unless you have some weird thing going on, I would probably just settle with a, revocable trust and call today.

[00:27:17] Preston Pysh: Alright. I’m curious your thoughts on all the new stable coin legislation. The big two, big to Fail Banks wanting to play in this space. The policy changes that are on, I, saw the SEC, the new SEC director is pretty hardcore Bitcoin. What are your thoughts in this domain moving forward? And I’m kind of curious the conversations that maybe you’re having with your clients with respect to some of just these ideas in general.

[00:27:43] Jim Crider: So one of my favorite comments a client’s given me in regards to Bitcoin, and this goes back earlier about educating our clients. So a few months ago, new family working with for probably about 10 months. Didn’t really like Bitcoin at first. We talked through it, had them read, husband, wife, each read the Bitcoin standard and lots of conversations.

[00:28:00] Probably about two months ago, out of nowhere, the husband calls and says, Hey Jim, as I really start to understand this, if Bitcoin does what you think it does, and what I’m starting to realize, it’ll probably do, then it’ll probably get rid of the Federal Reserve said, oh, now you get it.

[00:28:14] Preston Pysh: You have been reading.

[00:28:16] Jim Crider: Yeah, exactly. So it’s funny because he didn’t process that. I said, yeah, it’s sort of, it’s sort of the goal in all of this in a lot of senses. So I think once you. That, that goes back to M2 and looking at charts and technical analysis, like I would say zoom out and look at the narrative and like when we look at the narrative in general, the fact that we’re having conversations that politicians are having conversations about Bitcoin on a regular cadence is pretty astonishing.

[00:28:45] It seems like the sentiment right now seems that. Everyone’s sort of forgotten that we have a strategic Bitcoin reserve. that’s no longer hoped for, or in theory that’s in place now. Yeah. And that seems like old news and we’ve discounted that. We’ve probably discounted that a little bit too much now.

[00:29:02] Preston Pysh: I mean, we, don’t know how many coins are in there. That audit hasn’t been completed. Right. But yeah, we have it. I’m very curious to know what is actually on the us federal government’s books, but. That’s a whole nother conversation. I guess where I was going with the question a little bit more is, the, there’s a big debate right now whether the, they’re backing every one of these stable coins with treasuries.

[00:29:27] Those treasuries are kicking off coupons and right now, based on the policy then the way that it looks like it’s going to get, sent through Congress is that these banks are not going to be allowed to pay out any of those coupons or any of that interest to the people that are holding the coins. This, in my opinion, is a little bit controversial because I think from an international level, you are going to have stable coin issuers that are outside the US that are going to pay out a portion of these coupons and a portion of this interest to the holders, which then creates this like competitive landscape.

[00:30:00] So I’m just kind of curious if you have any thoughts on that. Thoughts on just like a savings account moving forward? because think of it, if, let’s just say you’re in some other country and they’re paying out some of these coupons to the holders, this changes the whole dynamic of. Fractional reserve banking interest yields that are paid to people that are putting, their money on the deposit at these banks that are then being lent out and you’re getting paid a pittance for what could be the yield on some of these products.

[00:30:30] So I’m just kind of curious where you see some of this going, or just in general, just some of the policy that’s currently happening on a global scale because you’re effectively taking, what is this? Fractional reserve scheme where all the participants and users aren’t really getting any type of yield that they really deserve for the risk. And you’re pivoting to this fully backed system that you, the users now should be getting a much larger portion of the yield if they, if the policies and the laws allow it.

[00:31:02] Jim Crider: Yeah. Even hunting on, like looking at money market funds and cash positions. Maybe, without cause, but I hold a lot of skepticism there. Like it’s concerning if you unpack what’s inside a lot of cash equivalent investments, the types of exposures and risks that you’re taking. So yeah, a lot of people don’t know what to look for. You look in a money market fund, you’re going to assume that it’s going to be. Aa US debt, shorter duration, but a lot of times they can hold products that have a lot more risk than you think is going to be in there.

[00:31:33] So hopefully, I’m hoping that this will bring about a little more clarity, but I’m doubtful. I mean, the average person doesn’t know what to look for. They don’t know what duration risk is. They don’t know what credit risk is. it’s, oh, it’s, US debt. But if you really unpack, I, you go back to the big short, we think that we’re holding US based debt, but in, in reality, we’re holding like the rated mortgage backed security, something like that.

[00:31:58] So hopefully, ultimately this will lead to a little bit more transparency, but frankly, I’m doubtful that actually happens.

[00:32:04] Preston Pysh: Yeah, I just don’t know what to think. I can see the conversations that are happening on the hill, and it doesn’t seem like the banks want it to be that way. They want to be able to pay out some of that interest, but I think policy makers and people that kind of understand the power that this is going to unlock or what it’s going to unlock.

[00:32:27] Is just going to accelerate everything if they start allowing some of those coupon payments to get transmuted into additional interest income for anybody that’s sitting on a stable coin, because at the end of the day, I always look back at the whole Silicon Valley Bank thing as a perfect example of you could have had $2 million on the deposit at Silicon Valley Bank and that weekend you didn’t know whether you were going to get the 2 million or you were going to get your FDIC check for your 2 million that was on deposit and only get a small sliver of that. Whereas if you held, some people will roll their eyes at this, but I’m clearly not. If you had $2 million worth of tether and you went that weekend, you weren’t concerned or circle or whatever that was fully back, you weren’t concerned whether it was there or not.

[00:33:14] You knew it was actually back. The other one was just made up fictional numbers with an insurance policy for one fourth of what was actually on the deposit, as an example. So, yep. I just, I don’t know. There’s such a massive shift that’s happening through the tokenization of sovereign debt. That it’s fully backed.

[00:33:32] It’s fully reserved. And when you look at the profit margins of these companies that are doing this, they’re on par with the biggest banks on Wall Street that are playing a fractional reserve game that aren’t fully reserved. So the competition just seems to be heating up, and I think it’s only going to intensify like a lot in the coming couple years.

[00:33:52] Jim Crider: Yeah. Again, I would argue though that the, issue is the perception of risk. most people want a traditional bank that a go-to question is, it FDIC insured.

[00:34:02] Preston Pysh: Yeah. But if you’re qua on over that, if your Silicon Valley bank as an example, and I’m sorry to interrupt you, but there was somebody with 50 or a hundred million dollars on deposit in cash at Silicon Valley Bank, I forget which company it was, right? They almost lost all of that. If Janet Yellen didn’t decide through the stroke of a pen, that it was all safe, quote unquote, safe, right?

[00:34:23] So I don’t know if you’re a company with substantial working capital and we’re moving into a world where we have more of these types of blowups, are these bank failures? Why in the world would somebody want to have that on deposit there versus having something that is actually backed by a real bond.

[00:34:41] Jim Crider: Because it’s familiar, it’s more comfortable to be wrong, but status quo, then go out a limb and be a little bit different. Even if what’s different and if you pull, if you really start digging into things, it’s seems a little bit more safe.

[00:34:53] I think it’s, I mean, it’s similar to Bitcoin. If you’re really into Bitcoin, you’ll probably think a little bit different. You’re betting on the fact that you’re an outlier, but you’re okay with that because you understand something versus the perception of Bitcoin is it’s risky and you’d rather not own it.

[00:35:06] And if you do own some, then you’re obscure and it’s a lot easier just to go and own VTI or VO or something like that. And nominally lose, or in real returns, lose purchasing power compared to Bitcoin. But at least you’re wrong with everyone else. And I think that’s going to go the same way with banks and everything else, like just disrupting status quo is really tough.

[00:35:25] Preston Pysh: Yeah, it’s getting wild. I can only imagine four or five years from now where some of this is going to be. I just think it’s going to be crazy. I think it’s going to be totally nuts. One of the things I really respect about you, Jim, is you talk about all of this stuff that we’ve been talking about and it’s a fun conversation.

[00:35:42] Who doesn’t like to try to figure out like what the most valuable thing they can own or whatever is? But you go beyond this. You often talk about the impact of. Higher considerations beyond just money itself and time, lifestyle, flexibility, things like that. The, qualitative pieces of, quote unquote investing give us some high signal takes on this particular topic of what’s actually important.

[00:36:09] Jim Crider: Yeah, so I’ve been reading through gradually, then suddenly in that exact manner. I’m still in the gradually phase. I think I’ll hit the suddenly phase here soon. Been working on it for about 15 months I think. But Parker, I think sort of more eloquently states what I preach all the time.

[00:36:26] It says that it does not eliminate conception or investment. Bitcoin being it, merely ensures that the decision is evaluated with greater scrutiny when future purchasing power is expected to increase. I see that all the time. I see. I saw someone on, Twitter last night saying how they have a saving problem.

[00:36:44] because every time they go online to book a vacation, they end up just buying Bitcoin instead. Or they want to go do something, they buy Bitcoin instead, which, can be good. Like I’m all for saving for the future and delaying gratification, but you also get to a place of really weighing the opportunity cost of these things.

[00:37:01] Now I think that Bitcoin actually evens the scales. Some here, if, your money’s broken, then your incentivized just go spin. Might as well. You have this nihilistic view on life and money. I think that’s where a lot of like Gen Zs are, is, that’s why they’re so into like mean coins and junk is they feel there’s no way out.

[00:37:19] Might as well either blow your money or just put on something. That might go big. And if it does, that’s cool and if it doesn’t Oh well at least it was ironic or something. Yeah. There’s just nihilism. Versus having good money again really causes you to pause and say, Hey, is it more important that I do this thing or that I can do this thing times five in just a few years?

[00:37:38] And you can lean too far in either direction. as you’re aware, I have lots of young kids and like next month, in two months, Kendra and I we’re about to spend a couple weeks in Italy, just US two. We’ve been talking about going to Italy since before we were dating, and yeah. That could be more Bitcoin, but it could also be in 30 years we look back and we just never did it.

[00:38:00] But man, at least we have, yeah, a quarter of a more of a Bitcoin. What’s the opportunity cost there? Or our kids, we’re going to go, we’re going to spend a week in the mountains and a week at the beach. And I could say, you know what? Kids, we’re going to save more Bitcoin, but there gets to a place of one day they’re going to look back and it’s well, I never did anything.

[00:38:15] What about our time together? Yeah. And I think that we need to consider those in a proper framework. I think as Parker mentions there, I think that it allows you to view it more in a healthy manner and really consider the trade-offs in not over-emphasizing money itself, but viewing it as a tool. And it is your money actually being allocated to what’s important to you. And hopefully that will allow you to step out of the things that are just arbitrary and not important, where you can actually lean into the things that are important.

[00:38:42] Preston Pysh: When we look at just kind of the global landscape and you look how competitive everything is, there’s not a lot of margin for people to save. There’s not a lot of excess. You make a certain amount, you’re incentivized like you had mentioned earlier, to spend because it becomes more worthless. And if, especially if you don’t understand Bitcoin to preserve any type of excess.

[00:39:05] Profits that you have as an individual. And when you talk about this idea of nihilistic behavior of gambling on a mean coin or whatever, I think that so much of that comes down to people don’t have profits to save to meaningfully save for something. And so it’s just, it’s almost like a lottery ticket. I don’t really have any capacity to save, so I’m going to go buy this lottery ticket and that’s the end of it. So, I think so much of it is just the function of the times and how insanely competitive this fiat scheme and game has, wired everybody to act this way through the incentives.

[00:39:46] I’m curious if you disagree or agree with that, but yeah, it’s really hard and I hate kind of pointing at this group or the other saying they’re just bad or they’re not. I think it’s the incentives. I think so much of this is just rewired society that has led them down this just corrupted path.

[00:40:03] Jim Crider: Yeah. I unfortunately, I see that pretty often on a very regular basis, we’ll have people schedule 15 minutes on my calendar and we’ll just talk for a minute. And I find out that like I’m underwater each month I just maxed out another credit card. we’re living in a trailer, things are looking bad, and I want to get outta this, but I don’t know how.

[00:40:21] And like I tell them like, look, you should not pay me to help you with this. That’s going to dig you further in. You’re already behind. So what, we typically do for those people is we’ll send ’em a copy of Dave Ramsey’s Financial Peace University and the workbook. It’s look, if you can figure it out like somehow live underneath your expenses, increase your income, do something there, and also send ’em a copy of the Bitcoin standard.

[00:40:41] Like, all right, this will help short term rethink how just to use your money and then this other one re will help you big picture rethink what is money. If we can address those two things and you could steward well what you do have, if you can keep those up. As a habit, then hope that should make a difference.

[00:40:59] Preston Pysh: Jim, are those people coming to you because they found Bitcoin and they’re wanting to just do investing with their excess? Well, they’re just, they’re telling you they don’t have excess capital? Or is this just the person who’s coming to you and it’s I need help?

[00:41:11] Jim Crider: Yeah, it’s just generally I just, I need help. And it’s sad because all these, they don’t know where to go and frankly, it’s They don’t have money to invest. Yeah. It’s well, how do you free up any money? So that’s where the Dave Ramsey side of things come in. Yeah. And we can argue if Dave Ramsey’s the best source of advice or not.

[00:41:25] But just change the narrative of you have to figure out a way to stop spending so much or increase your income. I never want to get out of touch with that. To a place where I feel removed. And I see it a lot with financial planners, is only working with ultra high net worth people and suddenly someone with only a hundred thousand dollars.

[00:41:44] It’s not worth their time. It’s dude, that might only be a very small fraction of your investment or amount that you manage. That’s everything to that person. Oh, yeah. a lifetime of delayed gratification. That represents their hopes of retiring a hope of a trip with their grandkids one day.

[00:42:00] That’s super important, and I cannot lose sight of that. Like when Kendra and I were first married, we, 2013, I believe our household gross income was 13 grand. I was fortunate enough, I think before I got out of high school, my parents, I went through Dave Ramsey’s Financial Peace University like probably five times before I was outta school.

[00:42:18] So having that basis of identifying what’s important to you, how do you make sure that you’re at least paying your bills, even if it means can we go to the grocery store? And it was like if they didn’t have meat they were going to throw away that day. So we get it for super cheap. I guess we’re just going to eat a lot of lentils again this week and that stinks.

[00:42:34] I can’t imagine being there now with four kids, but sometimes it’s dude, do the hard work. Are we looking at you between now and the next couple of days? Or are you trying to look, zoom out and think generationally? Yeah, and that’s easier said than done, but again, if I would assume most of your listeners are going to be in the US and just starting off with that, the privilege that you have compared to someone living in India, don’t neglect that.

[00:42:54] Don’t let it go to waste. I don’t want to sound like you’re not doing enough, but zoom out and try to think through this like generationally, is there anything else you could be doing? And again, I’m not saying, going back to the other conversation, don’t lean where money’s the most important thing. Money’s simply a tool to help you do what’s important to you. I just want to make sure that you’re equipped with the tools so you can do those things.

[00:43:12] Preston Pysh: Alright. Final piece of advice, let’s talk about taxes, tax planning advice. What is a home run easy thing that a person can implement that most overlook when it comes to tax planning?

[00:43:26] Jim Crider: Well, Bitcoin at the moment is not subject to the watch sale rules. So if you have any Bitcoin that you bought at a hundred thousand and you want to reduce your cap gains about this year, like you, you could sell some of that and immediately rebuy your Bitcoin and get it stepped up or rebuy your Bitcoin. There’s no cap losses.

[00:43:42] Preston Pysh: There’s no 30 day, you have got to wait to rebuy it period. You can just buy it through.

[00:43:47] Jim Crider: Correct. So as things sit right now, you can sell and rebuy it immediately. You’re not subject to those rules that you would otherwise be. Like if you own Bitcoin, that’s another, thought there.

[00:43:54] If you own Bitcoin directly, you can do it. If you own Bitcoin inside of a wrapper of an ETF, then that ETF is subject to the wash sale rules. So you wouldn’t consider that? I mean, on the other hand, I don’t think it’s spoken to enough, is. Washing gains. I did that a few years ago. So in 2021, I started this company and I had no income.

[00:44:13] Kendra and I devoted a year of not taking a salary at all. So that year, heck, I sold a lot of stuff. So if you have no income, you can sell your Bitcoin and immediately purchased it again, you realize that cap gain but made your cap gain rates zero. Or maybe it’s 15% this year. It’s normally a 23.8. So even washing gains can be helpful. There’s that, the, go-tos would be. Instead of giving dollars, giving assets, and then combining that with what’s called bunching. So, easy way to do this would be to, if normally you give to charities and other things, you’re going to have about $30,000 of deductions.

[00:44:48] That’s like right in line with the standard deduction this year. So instead of each year giving 30 grand to a charity, maybe this year you give 90 grand, and then the next two years you take the standard deduction. Again, assuming the standard deduction stays where it’s at, we’ll see what happens with the TCGA and everything there with tax laws.

[00:45:04] By doing that, you are able to take an extra $60,000 of tax deductions this year. By doing that, it can be scary to give that much money in one year to a charity. So you can do that by giving to a donor-advised fund and then directing the donor-advised fund to give to the charities. Also, donor, if your church might not accept Bitcoin or your charity might not accept Bitcoin.

[00:45:24] But a lot of donor-advised funds can so give the, instead of selling the Bitcoin and giving the dollars, give the Bitcoin, not realize the cap gain. They sell it. They don’t realize the cap gain. And there you go. You can rent and repeat. Take the cash that you otherwise were going to give and repurchase Bitcoin with that cash, you just stepped up your cost basis.

[00:45:42] So you’re able to give more. Give less to Dunkle Sam step every cost basis. Major cost basis on that was 20 grand. And you give it and you buy more at 90 now, and then one day you sell it at one 20. Then you went from a hundred thousand dollars cap gain to a $30,000 cap gain by washing and stepping of your cost basis through that gift. So that’s a little one.

[00:46:02] It’s low hanging fruit. Yeah. Another one like Kindra, and I will do. So we, I was in a, was it Bloomberg or someone a few months ago I woke up to a ton of text and stuff and I was on some other, like Trad Fi podcast mentioned this article because I think it was Bloomberg said that there’s oh A CFP who doesn’t use five 20 nines and he only buys Bitcoin for his kids and some trad fight podcast like who would hire this financial planner? He’s more on, that was me. I’ll wear it with fried, but so Kendra and I, we don’t have five 20 nines for our kids.

[00:46:32] We just own Bitcoin for them. Uhhuh. Now, we don’t own that inside of A-U-T-M-A product. Those aren’t, as far as I’m aware, those aren’t available right now. Hopefully someone’s working on it. So right now, Kendra and I, we own Bitcoin for our kids. It’s legally ours, but we’ll gift it to them Monday. So something we could do is if we feel, if they’re responsible at 18 and we want to give it to ’em, we can.

[00:46:52] If they’re knuckleheads at 18, and they definitely shouldn’t have that much money, we don’t have to give it to them. But let’s say at 18, they’re responsible and they want to use that money to start a business. Well, instead of us selling the Bitcoin and then giving ’em the cash, chances are at 18, they’re going to be in a much lower tax bracket than we are.

[00:47:08] So give them the asset and allow them to sell it. I mean, there’s little things like that you can work in. Pretty easily that unfortunately people are too quick to sell so they can give cash, be it to charities or family or whoever. People are banging you up for the idea. You should just ask ’em what the return profile is of their kids 5 29 versus the approach that you’ve gotten.

[00:47:28] Preston Pysh: Just compare returns, right? I mean, it’s all numeric.

[00:47:31] Jim Crider: Yeah, that’s right. It’s well, what about with 5 29? It’s tax. It’s tax free as it’s for qualified expenses. It’s okay, well even on a tax adjusted basis, who’s winning right now?

[00:47:40] Preston Pysh: Yeah, exactly. Exactly. Alright, Jim, love chatting with you. Thank you so much for the amazing insights.

[00:47:48] If people want to learn more about you or what you’re doing, where can they look?

[00:47:52] Jim Crider: Go to our website. It’s Intentional Living FP as in financial planning, though, intentionallivingfp.com. On there, there’s my calendar for 15 minutes. If you want to throw a time on there, if you have an arbitrary one-off question, more than happy to answer that. Or if you want to talk and see if we can help, then yeah, I would love to do that as well.

[00:48:07] Preston Pysh: Alright. Jim, until next time sir, appreciate it and always a pleasure. Yeah, thanks Preston.

[00:48:14] Outro: Thank you for listening to TIP. Make sure to follow Bitcoin fundamentals on your favorite podcast app and never miss out on episodes.

[00:48:23] To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication.