{ "episodeId": "SLP593", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "morgen_rochard": { "name": "Morgen Rochard", "role": "guest", "tag": "MORGEN" } }, "segments": [ { "speaker": "stephan", "time": "00:12", "start": 11.5, "text": "Hi everyone and welcome back to Stephan Livera podcast brought to you by swan dot com the best place to buy Bitcoin. Rejoining me today is Morgan Rochard she is the founder and lead financial planner of Origin Wealth Advisors and yeah welcome back to the show Morgan." }, { "speaker": "morgen_rochard", "time": "00:26", "start": 26.45, "text": "Thanks Stephan for having me back." }, { "speaker": "stephan", "time": "00:29", "start": 28.77, "text": "So where did this come from? So I think this came from, I got tagged into a question from like a few years ago. Someone was like, \"Oh, do you have any updated thoughts on this whole Bitcoin and fire thing?\" And I, I think, I, you know, I was just kind of asking the question, \"What does it look like Bitcoin and the so-called fire financial independence retire early sort of, movement, if you wanna call it that?\" and I noticed you, you had a, you have a blog post written on this and," }, { "speaker": "stephan", "time": "00:56", "start": 56.35, "text": "you know, Four percent rule, so maybe, maybe you wanna start with your kind of opening thoughts there." }, { "speaker": "morgen_rochard", "time": "01:04", "start": 64.05, "text": "Yeah, sure. So the four percent rule is based on, what your reader or your listeners probably know about, which is the, the Bill Bengen Trinity study. And the Trinity study was based on a portfolio of stocks and bonds. they, they did a number of different types of portfolios, but what they landed on basically was fifty percent stocks, fifty percent bonds, over a thirty year period, if you were to only withdraw four percent, your money would last during that entire thirty year period And what they did is they looked at rolling periods. So every single, at the end of the year, they used the, the December thirty-one balance, and they took four percent of that, and they had the person spend that throughout the year, and then the next year, they looked at the December thirty-one balance, and they basically took four percent of that, and so forth. and so obviously, like the portfolio would fluctuate over time, right? In good years, you would have a lot more in spending, and in bad years, you would have a lot less in" }, { "speaker": "morgen_rochard", "time": "01:59", "start": 118.51, "text": "allow somebody to last for thirty years based on a four percent withdrawal rate, and also like your listeners aren't doing a fifty percent stock portfolio and a fifty percent bond portfolio, so, and neither are like the people in my practice, right? Most people in my practice are either much more heavily weighted towards equities or much more heavily weighted towards Bitcoin, right? And so in which case, like the Bill Bengen study is, well, it's a good starting point, right? It's not exactly what I would use as a reference point." }, { "speaker": "stephan", "time": "02:23", "start": 143.06, "text": "The" }, { "speaker": "morgen_rochard", "time": "02:23", "start": 143.2, "text": "other issue is that, people like to look at the four percent number, but they don't necessarily equate that with what that means for their personal, financial situation. And so four percent, right, is a floating number if you're just looking at it as a percentage basis, right? But most people have generally fixed expenses. And so a, like, a percentage isn't really going to capture, what somebody needs to spend on a regular basis just because, expenses aren't on a percentage, they're fixed. And so that was kind of what started my research was Okay, how can we look at this from the perspective of somebody who needs to know how much they can spend from a flat perspective every single year, and also account for the fact that they've got this, you know, pristine asset, let's call it, that they want to maybe do lots of different things with. They wanna maybe pay for their retirement, but they also wanna maybe have multi-generational wealth, they also maybe have other goals that they wanna do or bigger spending years when they wanna travel or smaller spending years when they're not doing that or pay for kids' weddings or a Go into how we look at like what somebody can spend in that portfolio. If you're looking at it though from a strict FIRE perspective of like, okay, I'm gonna spend the bare minimum, right? I'm just gonna take out of the portfolio, what's my withdrawal rate? I would say even from that, you wanna be conservative, right? Because what we don't wanna see happen is people who do FIRE, right? And then ten years later, they're like, \"Oops, I made a mistake. I have to go back to work.\" And so in my, in my research, what I" }, { "speaker": "morgen_rochard", "time": "03:53", "start": 232.64, "text": "What I'm seeing a lot of people do online and a lot of people talking about, but what it didn't take into account was what actually happened to your Bitcoin stack over time when you use these higher withdrawal rates. And it's also like using these kind of lofty, investment return numbers, which, yeah, they may pan out, but we may not necessarily know what that means from an inflation standpoint and what people can actually spend in the future if Bitcoin does, let's say, go to a trillion dollars a coin. Does that mean that everyone who owns Bitcoin are trillionaires, or does that And so when I took all of that down, what I wanted to do was kind of boil it down to like, okay, we're all Bitcoiners, how can we look at this from a Bitcoin perspective rather than looking at this from a fiat perspective? And that's kind of like the basis of how the research came about." }, { "speaker": "stephan", "time": "04:36", "start": 276.49, "text": "Yeah, great. And so one topic that came up from what you were just explaining there is the difference between a Bitcoin hodler and the asset types represented by equity or bonds, which is the typical, like a typical thing people are doing is like sixty forty stocks and bonds or things like Like this, maybe nowadays maybe some allocation with property, maybe they have like an investment property, that kind of thing. But obviously Bitcoin is different, right? It doesn't have a, a cash flow or a yield per se, and so that's an important differentiator, isn't it?" }, { "speaker": "morgen_rochard", "time": "05:10", "start": 310.47, "text": "Yeah, definitely. So the thing that sort of sparked and when I was doing all this research was, oh, it's Bitcoin doesn't compound, right? Like we say it's a compounding asset 'cause we're looking at it in dollar terms, but like realistically, it doesn't It doesn't actually compound, right? You buy one Bitcoin, and you have one Bitcoin, and if you start spending that Bitcoin, right, if you're using, let's say, an eight percent withdrawal rate, right, the first year you have point nine two Bitcoin, right? and then in the next year, as you keep going down, right, you have point, eight four Bitcoin and so forth until you've basically spent your stack, half your stack in the first eight years. And so what most people then think when they're thinking of that higher withdrawal rate is like, and my point has always been that, like, I think we care actually a lot about what that stack does over time rather than what that sliver may or may not be worth in the future." }, { "speaker": "stephan", "time": "06:02", "start": 362.25, "text": "Yeah, and I think this was maybe, correct me if I'm wrong here, but I think there was maybe a little bit of back and forth. I think Jeff Ross came out with this eight percent number, and then you responded back saying, \"Also consider how much of your stack you would have left over after thirty-five years, because as an example, I think he came out with a number saying, But the idea is every year, so it's not just kind of like, you know, eight percent of your stack every year from time zero, it's eight percent as of each year. So it's like a declining, you know, balance. A declining balance. Yeah. Right." }, { "speaker": "morgen_rochard", "time": "06:37", "start": 396.79, "text": "Yeah, for sure. So I actually did the math on that. So if you take eight percent of the declining balance over the years, at year thirty, you have, if you started with one Bitcoin, you have point o eight Bitcoin left. So you've spent ninety-one percent of your stack, basically ninety-two percent of So I think for most people, right, like maybe if that point o eight percent Bitcoin is worth quite a lot, maybe they don't care. My perspective on that though is that that's a very fiat mindset to be in of like, okay, I worked really hard to accumulate this amount of Bitcoin and now I'm gonna spend it to zero basically and, and die. And it also doesn't account for the fact that, like, generally people have, like, even though they've got some fixed expenses, they have varying life events that happen. So maybe in one- maybe you've accounted for that eight percent Catastrophic happens to somebody's house, right, and insurance maybe isn't covering all of it, or, maybe you wanna do something good, like pay for a kid's wedding or college or whatever it is, right? And so there're gonna be other years where you have much higher expenses, generally like much, much higher, right? Not just like, we're not looking at that eight percent number now, maybe some, in some years people are spending twelve, fifteen, or even twenty percent, right? And if we've only accounted for that eight percent over thirty years, now you've Those are going into looking at retirement to be looking at this from a much more conservative perspective, and yeah, that does mean that maybe, maybe you end up in a situation where, okay, you worked an extra five to ten years and you maybe didn't have to, but then you've got significantly less, significantly more left over at the end that you wouldn't have otherwise had. But I do think that that's a better situation for most people than like you've run out of money and you can't do the things that you wanna do during your life, and now maybe you're even asking your children" }, { "speaker": "stephan", "time": "08:21", "start": 500.91, "text": "Yeah, and I, you know, I wanna point out a couple examples. I know, two things come up there. So one is you mentioned this idea of how much of your balance do you still want left, and that reminds me of a book I read a couple years ago. It's called Die with Zero by Bill Perkins. Now, this is kind of popular in some of the fire circles. Now, I, I personally, I think there were some interesting points in the book, but I don't necessarily agree with everything there, right? but I think it comes to that point you" }, { "speaker": "stephan", "time": "08:51", "start": 530.63, "text": "That you want to leave to, you know, we want to leave it to our children and to our grandchildren and so on. then, yeah, maybe die with zero isn't, it's not gonna be a satisfactory answer. Now, look, depending on how many children you have, like if you have-- if you end up having a lot of children, your stack obviously gets divided, you know, by your spouse, your surviving spouse, and your children, and then the number of grandchildren they have, then it-- pretty quickly it starts, you know, diluting out, right?" }, { "speaker": "morgen_rochard", "time": "09:19", "start": 559.23, "text": "Yeah I think that there's also, I mean, there's research about that in the fiat world as well, that basically like by the third generation, either it's been divided out so much that there's a lot less, or, you haven't passed on the values well enough that like by the third generation they're spending it anyways. And so I think it's a combination of things, right? It's like I, and what I think is so kind of beautiful about the Bitcoin world is that these values that people have right now, they're very, they're like, they're lower time preference, right? They're sort of evaluating what's important. I see a lot of people really valuing family and valuing hard work, right? All of these like sort of standard values that have been American for a long time, but that have sort of, you know, disappeared for, for some time, and they're now making a comeback. And so, like, these are the kinds of things where if you You don't need to work till you die just so you can pass it on to the next generation. You should spend some of it, right? And you should use it, but you should be mindful about how you're doing it, and then also not just passing on the money, but passing on those values, right? And teaching your children the values so that they teach their children, and so that they teach their children. And obviously, like, we can't control things beyond the grave, but we can do our best with planting those values and planting those seeds over time so that they retain, like Hopefully your stack really can last. there are examples of, you know, family like generational wealth that has passed through many different families, right? Even fiat times. And so, there's a book I actually like, it's Mitzi Purdue, the Purdue family, like how they've ma-managed to not just maintain wealth, but maintain the values for their family. and it's just that they, they basically use a handbook with their family about what the, what the kids need to know and what the kids need to teach the grandkids and so forth, so that It's not about the money, it's about like how you're living. And I feel like Bitcoiners, we're in like sort of a pivotal period of time right now where we actually, we have the opportunity to change the way things are going to go for future generations if we look at it that way rather than looking at it as like, \"No, I accumulated these assets, and now I'm gonna die with zero.\"" }, { "speaker": "stephan", "time": "11:26", "start": 685.95, "text": "Right, yeah. And, you know, I think there's a couple other things while we're kind of on this whole retirement early sort of discussion, we can talk a little bit about what can go wrong. I'll give you an example. So there is a guy from the fire world, his, I think his online screen name is financial samurai, I think his name is Sam Dojin or Dogan or something like this. Now, he was famously retired and then went back to work because what he found is that the cost of living had gone up a-and the kind of, the quality of life that Children, it wasn't, you know, it w- his, his saved up balance wasn't enough. Now of course, if he had been stacking Bitcoin, you know, he probably would have been fine, right? But nevertheless, there, there can be life situations that can change. As an example, a person may retire, single or married without children, and then later have children and be like, \"Ah, actually, now I need more money,\" you know? Or I've heard of examples where maybe people do this thing where they're like, \"Oh, let me go retire in Thailand, somewhere And now actually, you do need more money. So I think there's all these things that can go wrong, and so I guess that's where the conservatism aspect comes in, isn't it? Doesn't it?" }, { "speaker": "morgen_rochard", "time": "12:34", "start": 754.32, "text": "Yeah, for sure. And I think that that's why you don't wanna like measure it out to the dollar. and, and in my practice generally what we do is we try to project out these future incomes, or future spending needs situations. So for instance, like somebody single who stacked quite a lot because, you know, they, they didn't have really any expenses," }, { "speaker": "morgen_rochard", "time": "12:55", "start": 775.09, "text": "All of a sudden they are buying a much bigger house, they need childcare, they need all these things for their children, right? Their kids aren't satisfied just playing with one toy truck and a traffic light, they need more things, right? And so the next thing you know, right, expenses that were maybe forty k a year have now tripled. And so, right, if we had, had projected that out to the future of like, okay, I'm a single, I'm a single guy, I hope in the future that I'm going to meet my spouse, in which case, like," }, { "speaker": "morgen_rochard", "time": "13:25", "start": 805.19, "text": "So that's when I retire, rather than the, like, the asset or the spending need that I have today. And I think that people like, it's hard, right? Because you don't actually know what's gonna happen in the future, right? But it's better to be conservative and assume, like, okay, my expenses are gonna grow, there're gonna be some years where inflation is significantly higher, let's say than three or four percent, or given my particular inflation rate that I've measured over the years because of whatever buckets of things that I'm spending in, I actually have more like" }, { "speaker": "morgen_rochard", "time": "13:55", "start": 834.69, "text": "a It's hard to give somebody a rule of thumb exac- it's kind of the, the issue I think, and people wanna hear, \"What is that safe withdrawal rate?\" Because they've been hearing that four percent rule for so long. and that is actually why I created the actuarial tables that I did in that blog piece that I sent over to you, it's to just give some people some guidelines of like, okay, like really at the most conservative standard, this is the what you can be spending per year to make sure that you have a flat Bitcoin rate that you can spend over and so like obviously it's much, much more conservative than I think what the average person really will end up using in, but it's at least a starting point for people to have some kind of rule of thumb and then to go from there and to be planning and thinking about what worst case scenarios might be for them. and I would say just playing it fast and loose is, it's, it's going to lead to issues down the road. and most people don't want to have to go back to work after they've been retired for ten years, is what I've" }, { "speaker": "stephan", "time": "14:52", "start": 892.14, "text": "Yeah, and it may also be a point in time kind of thing where the person is in a career right now, where if they leave, it's sort of, it's not that easy to come back in after five years or ten years. Maybe the industry has moved on, maybe the industry is obsolete, maybe your skills are obsolete. Like you know, so you, you have to be realistic about, that aspect, and I, and I know some of the people in these communities, they sort of feel this psychological desire, or it's called one more year, right? Like this kind of, \"Oh, let me save one more year,\" and they just keep one more yearing until, you know, but, but that's the challenge, right? Is finding the right balance of like saving enough, but then not overworking, or at least working in a career that you don't like, right? Maybe the idea is You save up enough and then you change your career that you do like, and even if it, if even if it's a pay cut, at least it's something you actually enjoy, something like that." }, { "speaker": "morgen_rochard", "time": "15:45", "start": 945.09, "text": "Yeah, definitely. And you can do, like, you can plan for that too, of saying, okay, I can look at my actuarial rate and maybe like today I can spend two percent or whatever it is, but if I know that like I'm gonna do some like part-time work or whatever, maybe I only spend one percent of my stack in the meantime," }, { "speaker": "morgen_rochard", "time": "16:07", "start": 966.85, "text": "necessarily like what my future, retirement might look like. And so, like again, these are sort of math problems that people have to solve, which is, I think, time-consuming, and challenging. and also it's kind of hard to think ahead of like, okay, what, what would I be doing if I'm not doing what I'm doing today? we do have a client though, like, this kind of what you said reminded me of this, is where he decided to leave the workforce, and spending very, very little, so like from a" }, { "speaker": "morgen_rochard", "time": "16:37", "start": 997.25, "text": "No big deal, but, you know, then met his spouse, then expenses went up, right? Like then has been out of the workforce for too long, and so like trying to find the work that he used to do isn't actually possible. It's literally this exact scenario, and so, and like that maybe is sort of an easy example to think of, but obviously there's other, there's other issues that could come up, right? Or like the opposite would be that say two people are, they're married and they have kids, and they, they've figured out Retire, but like maybe there's a change in the household for whatever reason that was unexpected, or wife wants to stay home with kids that, that she didn't realize after having children, she always thought she wanted to have a career, but now that she's had children, wants to actually be home with the kids, right? And then all of a sudden the planning and the scenarios, everything changes about like savings rates and how much is needed and so forth. And so, like I, I think that why it's difficult to just sort of put a, a number on these things and why it Is because you don't wanna end up in that situation for sure. And the last thing I'll say about it is that, there are so many podcasts in Bitcoin right now that you can literally listen to Bitcoin all day, right? and I'm not knocking you by any, like, any stretch of the imagination. I love your podcast, Stefan, I listen to it all the time. There are a lot of podcasts out there, right? And there are a lot of guests that come on podcasts and they're very excited about Bitcoin, right? And rightfully so, Bitcoin's awesome. I love" }, { "speaker": "morgen_rochard", "time": "18:07", "start": 1086.85, "text": "We're not living in the future yet, right? Bitcoin's not five hundred thousand dollars per coin. Bitcoin's not a million dollars per coin. And what I always see happen is that people are already like, \"It's inevitable, so I don't need to worry about it because I know Bitcoin's going here, and therefore, whatever planning you're looking to do is really not relevant for me because my price target's gonna happen imminently. Like, we're in the having, it's about to happen. \" So I hear this quite a lot, and it's like, \"I wanna be there My expenses aren't gonna change, right? And I'll feel super wealthy. but, the other side of that, right, is like, we don't know what that reality is yet. And so before we start popping champagne and telling our boss we don't wanna work for them anymore, and, you know- Basically blowing up our financial plan. Like, let's wait until we get to these price targets and see what the world looks like before we start making every-- making adjustments." }, { "speaker": "stephan", "time": "18:57", "start": 1137.18, "text": "Yeah. Important lesson for everyone. Don't count your chickens before they are hatched, right? It's a classic saying. Exactly. It's, it's a classic saying for a reason, and so, I think, yeah, there does tend to be a bit of a kind of inevitability discussion, let's say, but- That doesn't necessarily give you the timeline, right? It could happen in five years, ten years, twenty years, we don't know. So I think that's, important to remember. so what we'll do is I'll, I'll link to your post in the show notes and maybe we'll put it up on screen as well, but just to give people a rough idea, as you're saying, like, let's say someone is, you know, thirty-five, their withdrawal rate on the actuarial table you've got here is one point five four percent. Let's say Just give people like a rough number, and then let's say someone is like, you know, sixty-five, it's two point eight six. So you, it's kind of like you've got a bit more of a buffer in there just to make sure that, you know, unplanned events don't, throw things out of whack. and I think this is another one, where you touch on this in the blog post as well, which is that if you were to, let's say, retire during a bull run and then we take an eighty percent drop," }, { "speaker": "stephan", "time": "20:12", "start": 1211.83, "text": "Sort of, consideration. so how do you think through that scenario?" }, { "speaker": "morgen_rochard", "time": "20:17", "start": 1217.37, "text": "Yeah, sure. So there are two ways to look at it. The first way would be, okay, you wait until we're in a bear market and you see whether or not the numbers still work out. Most people don't like to hear that though, so I'll just leave that shelved and people can decide to do what they wanna do with that. The second thing to do actually would be that you sell some assets, right? So if you hit, let's say you calculate, okay, my price target is For the best, right? what that does, though, right, is it pushes you into a pretty high tax bracket probably, depending on when you bought those coins and so forth, you're probably gonna have a pretty big tax bill in one year, so that's something to consider. but, right, you have now given yourself, let's say, the fiat runway that you need, since we're not living in this Bitcoin world where you're doing everything in Bitcoin and everything is priced in Bitcoin, right? You have that fiat runway to wait and see basically what happens in the future. And" }, { "speaker": "morgen_rochard", "time": "21:12", "start": 1271.93, "text": "A potential problem of, let's say, okay, I sell, instead of selling, let's say, you know, two percent over those five years, so like, you know, a smaller percentage, right? You're selling eight percent of five years, right? It's a significant portion. And so, again, the math is gonna matter, right? Of like, okay, how do I get to that price target? So generally what we do in my practice is we look at everybody's spending, we look" }, { "speaker": "morgen_rochard", "time": "21:36", "start": 1296.1, "text": "at the, like, what do we think is true spending, And then taking that spending number from there, using the actuarial table to actually back into what your price target would be. Let's say, okay, if I can only spend one point three six percent per year, how much Bitcoin do I need, and from a spending perspective to meet my fiat needs? and then calculating like what an inflation rate would be over that time, right? And so forth. So there's a lot of different factors that go into it, but basically if you hit your price target and you're willing to sell, you know, three to five years worth of expenses" }, { "speaker": "morgen_rochard", "time": "22:12", "start": 1332.39, "text": "the last thing would be that if you're willing to cut expenses, should something bad happen, right, then you can retire at the top, but just you have to maybe factor into the, like, factor in whether or not you'd be able to cut your expenses by fifty, eighty percent, yeah." }, { "speaker": "stephan", "time": "22:25", "start": 1345.46, "text": "Back to the show in a moment. The lead sponsor of this show is Swan dot com, and Swan has a mission to onboard millions of people into Bitcoin. I also work at Swan, helping on some educational content for the team. Now, the team have also put out a new version of the Swan One Bitcoin application, which is available on your smartphone, whether it's Apple or Android. 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As many of you know, I grew up in Australia, but I left. I was sick of it in terms of the taxes and the COVID tyranny and all these other things. And so that's why I left, and now I live in Dubai. But that's not necessarily the place for you. You have to think exactly what works for you, for your family, for your business. And Nomad Capitalist have worked across dozens of different countries. They've helped people get passports, residences, bank accounts, and all kinds of other things. And importantly, it's not just about Maybe also about making the pieces fit together in terms of how your business fits with your family and you as an individual. Nomad Capitalists have helped many, many people in terms of going overseas, and if you're interested, go to nomadcapitalist dot com slash apply. This is applicable for people with a net worth above one million US dollars. That's nomadcapitalist dot com slash apply. And now back to the show. You need to quote unquote time the cycle, but really sell in a bear, sorry, sell. A small amount as like your, call it four or five year fiat cash cushion, when the price has gone up. So I guess those are kind of the three main options I can see. I'm curious if you have any thoughts on, let's say, option two there, which is like borrow against a small percent of your stack. What do you think about that?" }, { "speaker": "morgen_rochard", "time": "25:00", "start": 1499.93, "text": "So I actually think for people, borrowing could be more expensive than they think. and the reason why is that it depends on your tax rate, obviously, and how much you're selling, and whether or not you're gonna be really pushing yourself into a higher tax bracket to, let's say, sell that four to five years worth of expenses. But as far as I've seen for, the rates on actually getting a loan, the rates are pretty similar to tax rates, in which case now you have, now you're basically, you're margining your Bitcoin, right? Go down to a price where you have to either sell your stack or put up more money. so like for a lot of people, that maybe isn't necessarily a good thing to be doing, and paying the tax bill might be equivalent or less than the interest rate. The other thing to keep in mind is that these are rolling loans, so, you have to pay the interest over time, right? Which is equivalent to, let's say, paying the tax bill, right? But every single year, if you're not paying back the loan that you took out, which most people aren" }, { "speaker": "morgen_rochard", "time": "26:00", "start": 1559.65, "text": "Two years and you're paying somewhere between one to two percent to reoriginate that loan, and so, and that's on the total loan balance, whereas capital gains tax is just gonna be on the difference between where you paid for bit-- like what you paid for Bitcoin when you first bought it versus where you sold it. And so, there's actually a smaller difference between those two things. So again, you have to do the math. I prefer, to be honest, not to be taking loans, to be using that as, like, as spending money. A loan, in my opinion, should be something April fifteenth. So you take out a short term loan, you get that payment in July, you pay off the loan, right? And you paid your taxes on time, and now you didn't pay penalties and interest and all sorts of things, right? So that's like a great example of why you would take out a loan. Another thing would be like you're doing a business, right? And you've calculated the net present value of you taking out this loan and that it's actually going to have a good internal rate of return, you'll be able to pay off the loan," }, { "speaker": "morgen_rochard", "time": "26:56", "start": 1615.71, "text": "right? Reality, it's just gonna hold value or maybe cost me extra money 'cause I want all these things, right? We think of it as an investment, but it's not. Or I just wanna pay for food on my table because I don't wanna pay taxes to the government, right? These are things that you're not actually going to be able to repay and you're just gonna be lingering the loan longer and longer, so, and potentially putting yourself in a situation where you can be sold out of your Bitcoin should the market go down. So, I would say really use loans with caution" }, { "speaker": "morgen_rochard", "time": "27:30", "start": 1649.63, "text": "Make some s'mores, right? And it's great. Whereas a wildfire, right? All of a sudden, like, you know, we gotta use all sorts of hoses and helicopters and things to put it out. Debt's kinda like that. Debt could be a nice little campfire that keeps your hands warm, or it can turn into a wildfire, and obviously, you use it with caution." }, { "speaker": "stephan", "time": "27:44", "start": 1663.61, "text": "Yeah, I see. Yeah, and I think, that's probably, yeah, I, I think you're mirroring a lot of the thoughts I'm having, which is that, now I'm still working myself, but, but I think if I were in that situation, I think I would rather just kind of spend down a small percent, o-of the stack, right? And just sort of save up until you get to that point. but yeah, I think it, it has been a, a conversation over the last, you know, few That kind of thing. and as I'm, rough numbers, I think it's about fourteen or fifteen percent annual interest rate per year that you would pay on a loan, with most of the providers, right? I know Unchained, my, you know, previous sponsor of the show, I know there's Letten and a few others out there," }, { "speaker": "stephan", "time": "28:32", "start": 1712.25, "text": "And yeah, if you're, if you're gonna pay fourteen to fifteen percent, then you sort of, you need, Bitcoin's kaga to really stay, you know, pretty strong, over that time period, or at least have a lot of collateral in there, and then you're kind of starting to risk more of your stack, and so it just kind of, the numbers are a little more challenging. I mean, they can work for certain individuals, but not a lot, not many individuals out there. Yeah, they're" }, { "speaker": "morgen_rochard", "time": "28:56", "start": 1735.84, "text": "definitely more challenging too if you add in the origination fee" }, { "speaker": "morgen_rochard", "time": "29:02", "start": 1741.93, "text": "Balance, and most people's tax rate is gonna be on capital gains, at least it's gonna be zero percent if you're taking ninety thousand dollars or less in cap gains and you're a married couple, you're looking at fifteen percent between ninety and I think it's like four hundred and fifty, I can't remember off the top of my head, so don't quote me to that. And then it's twenty-three point eight percent after that, and obviously if you live in a high tax state, then you're gonna be paying more than that, but something to consider maybe would" }, { "speaker": "morgen_rochard", "time": "29:32", "start": 1771.95, "text": "way to maybe like meet in the middle of like not having to pay so much in taxes, but also not necessarily having to take out a loan. And I would say the math is gonna be pretty similar, if not worse, with the loan." }, { "speaker": "stephan", "time": "29:41", "start": 1781.47, "text": "Yeah, interesting. And so, I guess the other aspect of it would just be if you think you could run a business, you know, like, and maybe if you thought, but then now you're kind of layering another, like, other kinds of risks, right? Like if the idea is, okay, take out a loan, purchase a business" }, { "speaker": "stephan", "time": "30:02", "start": 1801.89, "text": "If business can pay off the loan, that would be fantastic, right? But not everybody is gonna be successful there, and then you have to think about like business failure rates and things like that." }, { "speaker": "morgen_rochard", "time": "30:11", "start": 1810.67, "text": "Yeah, for sure. And the interest rates are high enough where it's, it's sort of, you like, you really need to do the math. We had this with a client where it was a business opportunity, and I don't wanna share too much 'cause I don't wanna give like anyone who might know him, but basically the math worked out that it actually didn't make sense. It made Extra, like, additional strain on his personal financial situation. And so, like, I would, I really encourage people to run the numbers and do the math. And I know it's really, like, people don't like to do that, they like to just sort of, you know, take the easy way out and just sort of make a financial decision without hav-having run any numbers. but like, the more you're just like in a, in a basic spreadsheet looking at what is possible, I think the easier it's going to be down the line when, you know, things come up There is uncertainty, there are risks that you can't mitigate through insurance or other things. There's just going to be things that come up that you're not going to expect, and you need to have cash to do that, and that's why, like, we hold Bitcoin and why we also hold like some sort of fiat emergency reserve, right? So that we can meet short-term needs and long-term needs." }, { "speaker": "stephan", "time": "31:19", "start": 1878.88, "text": "Yeah. And so I think you make a great point there about running the numbers. Obviously, Pierre has been very public about running the numbers, and, I think I'm a bit more-- Started to count it, so I'm a bit more kind of, I'll actually do some calculations and think about it, but yeah, worthwhile for people to think about. I wanna ask a little bit about where you think a lot of, let's say, fiat, financial planners and, advisors are going wrong, because I think- A lot of them are probably gonna be underestimating CPI inflation, aren't they? Like, aren't they just gonna be telling their customers or, or their clients, \"Uh, oh yeah, just hold these government bonds or hold this other thing,\" and then actually they're kind of losing out a lot because they're not holding Bitcoin, don't you think?" }, { "speaker": "morgen_rochard", "time": "32:06", "start": 1926.39, "text": "Yeah, so, I mean, I think the real issue is that there's a non-zero probability now that Bitcoin is, like, becomes the world's reserve currency, right? I know that maybe that sounds a little crazy. To somebody who's not normally an avid listener to your podcast, right, some sort of, I don't know, Paul Krugman type listening to this would think that I was insane, obviously, but there really is a non-zero probability that this happens, and it's also non-zero that it happens in our lifetime. I'm a millennial, I think you are too, right, that it probably does also happen in our lifetime. And so the real risk is like, is, is undervaluing that, that we-- that you're an advisor who still thinks that it's a Been through multiple cycles, right, and hasn't gone away. And so I think like that kind of leads back to what we were saying earlier, like it's inevi-- like there's an inevitability there, right? Of like, okay, this is happening, we're already living in this Bitcoin world, even though we're not. So there's two sides to that, right? We're not living in the Bitcoin world yet that everyone feels like maybe that we're living in and we want to pop champagne, but there's also the other side of like, this is vapor, this isn't going" }, { "speaker": "morgen_rochard", "time": "33:18", "start": 1997.78, "text": "At the end of the day, if my client doesn't wanna do anything with that information, right? We can't force them to buy Bitcoin, we can't force them to get involved, but at least we did our, like, we met our fiduciary obligation by informing them of what the risks were and why this might mitigate that process. as we see governments around the world just de- like deflating people out of their money, right? Or, sorry, I'm using the wrong word here, inflating, right? The, the currency by printing and devaluing people's money Right? I mean, like it, it's hard to see how the printers can be turned off, right? It's hard to see how we can all of a sudden have trust in these governments, again, like we maybe had in, in past generations, and even, like, even if somebody is going to come into office, or one person might come into office in one country and make lots of changes in that country, right? It doesn't necessarily mean that the next person who comes into office is going to do the same thing, and then maybe the money printer will be turned back on" }, { "speaker": "morgen_rochard", "time": "34:13", "start": 2053.28, "text": "And so, like, the fin- like financial advisors need to be looking at that. The, the problem is that, we've gone through many, many years of seeing returns basically in stocks and bonds. And so even though on every single one of these fat cards and mutual fund sites and all over really, it always says past performance doesn't mean that there'll be anything related to future results, right? And we know that in our brains, we're still looking, all of us are still looking at past performance and we're projecting it out because we don't have any other measure of- Doing so. And the other problem is that all of these charts have come out for financial advisors that show all the different news events over time, and that if you just held on to your stock and bond portfolio, you work out fine. So, you know, rebalancing's necessary related to a client's risk tolerance and time horizon and what, what factors they have going on in their life, but at the end of the day, like, the news doesn't mean anything. And so, like, I feel like that attitude right now is, is false, and it's really hard for a financial advisor who Need to change when they've seen all of these different events over time, but we're kind of at a pivotal point now that not only has like trust in governments eroded, and governments have proven over and over and over again that they're gonna print money, but we now also have an alternative to that, whereas in the past we didn't. So in the past, you just had to buy the stock and bond portfolio and kind of hope for the best, and you really did, it did work out okay if you just held it, whereas now I don't necessarily think that that's the That credential financial advisors, are sort of, are making it difficult for, these people to get the information that they need. They're not necessarily putting out- Like" }, { "speaker": "stephan", "time": "35:52", "start": 2152.28, "text": "the CFA Institute and stuff. Yeah." }, { "speaker": "morgen_rochard", "time": "35:53", "start": 2153.44, "text": "Yeah, exactly. So, CFA Institute, like they're, they've come after some CFA holders for putting out public information about Bitcoin. CFP recently had an inquiry against, me and some other people in our, in our, financial advisors network. I actually recently left the CFP board as a result. So that, and so like people who are credentialed are basically being told that they can't disseminate this kind of information, and then they're leaving, and now the people who are left are disseminating the information that all the other people have already heard a million times over, and they're not necessarily getting the information that they need." }, { "speaker": "stephan", "time": "36:28", "start": 2188.15, "text": "Yeah, that's unfortunate, but, yeah, I think it's a great point you make about past performance as well, because- Even in fiat, you know, financial world, people are kind of thinking, as an example that book, \"Stocks for the Long Run\" by Jeremy Siegel, right? It's kind of like this, \"Oh, just, just invest in the stock market and you'll be all-- it'll all be good, you know, and it'll return, let's say ten percent pre-inflation, let's say ten percent a year on average, right? Now some years it'll be more and some years less, but whatever, whatever, on average," }, { "speaker": "stephan", "time": "37:00", "start": 2220.05, "text": "kind of, you know, assume The world is changing, it's-- things are rapidly shifting, and it's important for people to understand, you know, where things are really going. Now, if you look on some of these forums or some of the online discussion, it's kind of seen as, you know, crypto, like crypto is seen as like this kind of d-gambling thing, and I guess there's still that diff- that difficulty separating Bitcoin and \"quote-unquote\" crypto and meme coins and things like that. I'm curious, have you-- have you experienced that? I, I'm" }, { "speaker": "morgen_rochard", "time": "37:34", "start": 2254.49, "text": "Yeah, I mean, we're definitely, I don't know how to necessarily put this without sounding critical. so, I mean, I think that when people see, like, they go onto, let's say, my, my company's website, right? They go on my company's website and they see all over it that we help people with their Bitcoin. and some people in the Bitcoin world, right? They see that and they're very excited, \"Wow, finally a financial planner who is willing to help me.\" Other people see that and they're like, \"What is wrong with That it's okay to do Bitcoin financial planning, right? And so, like obviously it's, it's all perspective, it's all perspective for sure. And I do think that, there, there is a lot of that in the traditional financial planning world of like, okay, people who are looking at this stuff are just, like, they're not thinking clearly, right? They're, they haven't really, they, they don't know the research, let's say, on like stocks for the long run. And it's like, no, no, no, we, we know that research" }, { "speaker": "morgen_rochard", "time": "38:33", "start": 2313.25, "text": "Financial planners, right? Where there are some financial planners who spend a lot of time doing research and, and figuring out all the things that they need to know, right? There's the ones in the middle that are just mediocre financial planners, and there's ones like all the way on the tail end that nobody should probably use, right? But somebody's gonna use them and get scammed and so forth, right? That's gonna be in every single aspect of any kind of career, right? There's always gonna be that bell curve of everybody. and I think though that some of the financial planners that Land of, of, you know, hurting their clients. and so like it's all the rhetoric basically in, in the traditional space, it has changed though over time, and I would say like especially with the intro of the ETF, I mean, I hear Bitcoin in, in our world now more than ever because like financial advisors have an ability now to help their clients get involved in a way that doesn't involve them being like, okay, go to Coinbase, okay, now change it to Bitcoin because the pairs are all messed up in there and they want you to buy some D-gen coin there, okay Yeah, we'll wire the money. Oh no, the wire is being held up by Coinbase, right? Like, this is like stuff that we've dealt with, where all of a sudden, for whatever reason, Coinbase doesn't want the incoming wire to happen. Okay, let's go through, jump through all these hoops, right? For a financial planner like me who only has forty-five clients, like I can spend all day with a client doing that. For the average financial planner who has, you know, somewhere between a hundred and fifty and three hundred clients, it would be insane for them to spend, And so there's a lot of things that have to happen, I think, in the financial planning world to get people holding Bitcoin outright rather than holding these ETFs, which is kind of what I'm hoping will happen over time. But at least in the meantime, right, Bitcoin's sort of a household name because there's an ETF, advisors can allocate to it, they're learning a little bit more, it's not as taboo for them to be learning about it either, and so hopefully it kind of moves the traditional finance world along in the direction that it's supposed" }, { "speaker": "stephan", "time": "40:30", "start": 2430.12, "text": "to go. Excellent. And when it comes to your clients, without obviously doxing individuals and things, but I'm just curious if you have any thoughts on how it has been for some of them to kind of ride through multiple cycles, right? OriginWA has been, Origin Wealth Advisors has been around for a little while now. Have you found clients have become more comfortable hodling?" }, { "speaker": "morgen_rochard", "time": "40:55", "start": 2455.24, "text": "Yeah, it's, it's, it's been actually a joy to see. So my firm is 10 years old next month, actually. I've been advising on Bitcoin now since 2016, so of like about eight years. and so that does mean that clients have been through multiple cycles for sure. I think it depends on the client for sure. Some clients, they just are like, \"Man, this is just what Bitcoin does, \"and, you know, they were gonna do that with their traditional fiat portfolio anyways, it's sort of Oh, that's all, you know, there's some of that that goes on, and then there's other people obviously who are like, \"I heard from my neighbor that I'm supposed to sell right now, \" you know? So we have both sides of that, for sure happening. I would say though, on, on average, more people are sort of in the camp of like, \"Okay, I've now weathered several cycles and like my stomach is tough now, and this is a portion of my portfolio that I don't really think about very often.\" and then like we And like they have such a significant portion of their net worth that if they worried about it every single tick, right, then they would seriously make themselves nauseous. And so I think that all of that is sort of points to making sure that like your asset allocation matches your risk tolerance and time horizon, right? Because when it does, then you can kind of stomach anything. If you don't need the money and you have belief that Bitcoin is going to do what you think it does, right, and you've done the research and run numbers and so forth, right, and you are like really committed to your portfolio" }, { "speaker": "morgen_rochard", "time": "42:25", "start": 2544.54, "text": "And you're just sort of looking to kind of make a quick trade so that maybe you can retire early or whatever it is that people do, and they're looking to buy assets that can potentially go up very quickly in a short period of time. Then, yeah, I mean, you're gonna get shaken out, and we see it over and over again, whether it be in my practice or anywhere else." }, { "speaker": "stephan", "time": "42:40", "start": 2559.91, "text": "Back to the show in a moment. This show brought to you by CoinKite dot com, the creators of the best Bitcoin hardware security devices such as the Coldcard Mark four and the new Coldcard Q Offline, our private keys offline. Now, the way these work is you can do that setup, write down your twelve or twenty-four words on the, the seed word cards, and keep that secure. Now, you can use this device to interact with the Bitcoin network using software such as Sparrow Wallet, Electrum, or Vector Desktop or Nunchuk as a few examples. Now, you have a range of security features that you can use with these devices such as passphrase, you can use SeedX or or- My favorite is multi-signature. Now, if you're starting in a basic way, just start with the device and the USB-C cable, plug it directly to the computer, and use it that way, and then later improve your setup. But I believe these devices are great at helping secure your coins, especially as you start to migrate up into multi-signature security. But don't be disheartened or don't be scared away, they are accessible, and I think you actually do learn about Bitcoin in the process. So to get yours, go to coinkite dot com. Code livera to get a discount on your cold card. This show also brought to you by mempool dot space, the leading Bitcoin and blockchain visualizer. I use it all the time when I'm checking transaction fees and trying to understand what is the state of Bitcoin's mempool. You can search transactions historical as well as unconfirmed ones and also see a great way to visualize things across the Lightning Network, Liquid, mining and so much more. Also, for those of you with an enterprise, they offer a mempool dot space. Enterprise program. So for those of you as part of that enterprise program, you might wanna get increased API limits and you might wanna have increased access to the team in terms of feature requests. You might wanna have special branding in terms of how your custom instance of mempool dot space looks. So to sign up for that, go to mempool dot space slash enterprise. And now back to the show. Interesting. And so On the rebalancing question, you know, that's gonna be hard, like if someone's a hardcore person, they're gonna be less inclined to rebalance, obviously, but I'm curious how you approach that with clients." }, { "speaker": "morgen_rochard", "time": "45:02", "start": 2701.86, "text": "So ideally, we never rebalance. That's kind of my, that's where I start, of like, okay, we never rebalance. And then client's like, no, no, we're gonna rebalance, okay? And then we're like, okay, how much are we rebalancing, right? And so, like my, my hope actually is Big of a deal. I think though that if we do have another sort of booming cycle this time, that I think there will be pushback from sort of the clients who aren't the hardcore bitcoiners who came in and took maybe these one to five percent positions or five to less than ten percent positions, right? That they're going to say, okay, maybe it's time for us to do something. at that point, what, what I would like to do, and in order to be fair with the client, is to reassess total asset allocation, right? Show them where they're And what Bitcoin is relative to their total net worth, and then decide what is a good new good position size, not what was the former position size that we wanna cut all the way back to, but what's a good new position size. And so I think that as people are holding, my hope, and I don't have research on this, so maybe like, you know, I'll come back in four years and I'll tell you that actually what I'm telling you right now is garbage. my hope is that if people hold Bitcoin over a period of time, right, and they get used to So you can cut it to a larger percentage than what it was when it first began. and I think for most people, we're gonna be able to do that. My hope is to still keep positions of at least five percent or more for most people. like I really don't wanna go back to those one to three percent allocations that we started with. I really just think that they're kinda meaningless and that they don't actually provide the, not insurance, 'cause that's not the right word, but they don't actually manage the risk that we're looking to mitigate, right? So if we have a one percent position, yeah, we're gonna be, you know, mitigating one percent, right? It's, it's not that helpful, right? And so, I, I do hope for most people that they're, they're much more comfortable with like these five to ten percent positions for people who aren't, like, you know, your hardcore listeners." }, { "speaker": "stephan", "time": "47:05", "start": 2825.22, "text": "Right. Yeah. And, here I'm reminded of, I think there's a Michael Saylor, you know, Michael Saylorism, he said something like, \"You don't have to put" }, { "speaker": "stephan", "time": "47:20", "start": 2839.65, "text": "Who maybe they start with five or ten percent, but then, you know, as you know, Bitcoin can like five x in a cycle, so they might go from five percent to twenty-five percent just like that, and all of a sudden become like a much more material portion of their portfolio. but I guess a-at the end of the day though, for most of your clients, hodling Bitcoin, I mean, I'm sure it's been life-changing for them, right?" }, { "speaker": "morgen_rochard", "time": "47:40", "start": 2859.99, "text": "Yeah, for most people it has been life-changing, and I think the other thing that I found sort of funny is that Of Bitcoin rather than the number of coins that we hold. For some people, yeah, they're like, and this is the, the small minority, they're focused on the number of coins that they hold. This is where I'm hoping people go, how many coins do we hold, not what dollar value are these coins worth. How many, how many coins do we hold, and how are we trying to protect the stack? Because, right, we worked maybe really hard to accumulate five or six coins or whatever it is in somebody's portfolio, in which case, like, maybe five or six is just the dollars worth of Bitcoin and whatever, and I need to rebalance because it feels uncomfortable because I've got all this fiat, right? And it's like, who cares about fiat? We're, we're done with fiat, right? Like, we care about the Bitcoin stack. And I think that sort of like relates to how I've been approaching the retirement research, is like, we care about the Bitcoin stack, we don't care about the value relative to fiat. We wanna protect that stack, and we wanna do it in a way where we can still live the life that we wanna live, But also like value the savings that we've created. Yeah, I" }, { "speaker": "stephan", "time": "48:54", "start": 2933.85, "text": "totally agree on, measuring your net worth in Bitcoin terms as, you know, you know, people who are further down the rabbit hole, they tend to do that, but obviously people who are new, you know, it's a process, and I understand for people who are new, they're kind of, \"Oh, let me dip my toe,\" and that's where this kind of one percent allocation kind of idea might come from, but over time, you sort of, get more, One other area, so you were touching on, you know, we're, we're living in this kind of debase scenario, right? Like just governments are printing, and governments and, you know, the, the, the banking system are, are sort of print-continually printing, and that's just the world we live in today, whether we like it or not. and so most people are anticipating more printing and more debase, but I'm curious how much of a probability or chance you place on Let's say a Jubilee scenario or some kind of government openly defaulting scenario instead of the more printing scenario. How do you sort of think about those scenarios if you, if you have any thoughts on that?" }, { "speaker": "morgen_rochard", "time": "49:57", "start": 2997.23, "text": "Yeah, for sure. So, the US government has defaulted on their debt, I don't remember how many times, off the top of my head, but I think it's something like six, maybe. please, if I'm wrong, like, you know, send me hate mail, but it's not Stefan's fault. and so, like, it's I actually don't see how we get out of the debt anymore. It's funny, like if we go back in time, if we look at two thousand eight, like, yeah, during the global financial crisis, we printed a lot of money. and again, I don't remember the numbers off the top of my head of where we were in debt, but I remember at the time being like, \"We can get out of this. Like, this isn't that big of a deal.\" Yes, it's a big deal because it was kind of unprecedented money printing relative to what we had done" }, { "speaker": "morgen_rochard", "time": "50:43", "start": 3043.38, "text": "in That world, right, that we could have grown our way out of it and paid down our debt and so forth, and probably balanced the budget at some point. But that's not what happened, right? Instead, they just continued to use the money printer, and so now we're actually in a position where, like, just servicing the interest alone on the debt, puts us in a situation where, like, we can default. And so, like- I don't see how we don't default. And again, like that's for all these institutions and individuals that hold all these government bonds who are basically told that these risk-free, quote-unquote, especially the shorter term ones, right? The shorter term notes, fifty percent of the US debt are-- is the shorter notes, though, right? They're constantly rolling these things. And so, right? We're not like, maybe, maybe, yeah, maybe they default on the longer term bonds first, but like there's still half the debt, which is, you know, sixteen, seventeen trillion dollars in It's not a risk-free rate, by any stretch of the imagination. And so I think people do need to consider that, and that's another reason why I rate, obviously, we hold, we hold something like Bitcoin, and why you would also wanna make sure that you hold it in cold storage, rather than, you know, having somebody else hold your keys, is because, like, you wanna make sure that you can actually protect that money. I, I could see a scenario where, like, we default on, we do a partial default on debt in order to" }, { "speaker": "morgen_rochard", "time": "52:04", "start": 3123.87, "text": "Maybe you don't default on all of it, obviously that would sort of be picking and choosing who has to pay back the debt, and, and again, it always leads to like the taxpayer base gets screwed in one way or another, whether it be through inflation or through defaulting or through whatever it is that they're debased out of their money and they're left with less. And so, especially in like- I like to think of, let's say, 401k portfolios, right? So there are a lot of people who they work for an employer, the employer matches four percent, they're, they don't really think about their asset allocation, so they put the four percent in, right? And then they get automatically put into what's called these target date funds. And so the target date, what they do is they say, okay, this person's gonna retire at sixty-five, so we're gonna put, like, you know, them in the twenty-two thousand forty-five portfolio, right Right? And so somebody who's closer in retirement, maybe they're not in the twenty forty-five portfolio, maybe they're in the twenty twenty-eight portfolio 'cause they're gonna retire soon, right? They mostly hold bonds. There's a huge problem with that because the-- these people have no idea what these-- what this person who's retiring in twenty twenty-eight is actually going to be doing with their money. So the fact that they're holding, you know, seventy plus percent in bonds just because they're retiring soon, that's a whole other issue that I could really go off on. but like portfolios who don't even know that they're going to be the ones that could potentially be defaulted on. and so again, like the little guy gets screwed over and over and over again, and the person who's closest to the money printer has the most power, and I mean, it's just, it's a cycle that repeats itself, and a cycle that we're trying to get out of." }, { "speaker": "stephan", "time": "53:39", "start": 3219.04, "text": "Yeah, that's really sad, and as you say, there are a lot of people, and even abstracting away from just the US, right? Like even in other countries around the world, this is a typical kind of thing where they will just put you in like a default allocation. Some of that is stocks, some of that is bonds, and in, let's say, normie, you know, fiat financial, planning and advice world, they're, they're kind of thinking of it like, \"Oh, you have your stocks and your bonds, and maybe as you age, you kind" }, { "speaker": "stephan", "time": "54:09", "start": 3248.66, "text": "Typical thinking. But then in this kind of default scenario, there would be massive write downs, right? So it's, it's either-- So you're kind of screwed on both sides, right? It's kind of on one side, they just keep debasing it, so you're just, you're just kind of losing more money than what you're earning, right? You're just-- It's financial repression, right? Like the amount you're earning is less than the amount of CPI inflation on one side, and then on the other side, if they do the kind of honest pathway of, \" Massive write downs, and as you said, that guy with his money in the twenty twenty eight target date fund, he's getting absolutely rinsed. He's getting like a massive haircut, and, you know, the system has really utterly failed these people at most people. And" }, { "speaker": "morgen_rochard", "time": "54:54", "start": 3293.77, "text": "then, do we think that he can retire in twenty twenty eight? No, right? He can't. So it's like the pe-the, the older population now is definitely going to bear the burden of ever-of all the money printing that's happened over the last twenty years. it's really, it's, it's It really breaks my heart. There are two things in finance that break my heart. It's that, like, the, the government defaulting situation, and then the, the whole life insurance people who sell these like annuities and whole life policies to people who don't know what they're buying, and they get trapped in with these fees and everything else, and they basically like, it's another way of just, like, forcing people to have less than they otherwise would. and it's always just sort of the unsuspecting person that gets trapped in, in all of this. And I think what In these, you know, credentialed places like CFA, CFP that I've been a part of for many, many years, right? They're going after the bitcoiners, right? They don't like what the bitcoiners are doing, but they have no problem with, like, the annuity salesman or, like, the government potentially defaulting on its bonds and then, you know, all of these people being, really rinsed, of all their life savings. And so, it's, it's a strange, it's a strange time for sure, We can't." }, { "speaker": "stephan", "time": "56:10", "start": 3370.17, "text": "Yeah. one other question, just to kinda round things off the Kaga kind of conversation, because anytime you're doing this kind of safe withdrawal rate calculation, you're naturally having to think about things like, okay, what do I think CPI inflation is gonna be, and what do I think Bitcoin's, compound annual growth rate is gonna be? Now, in early years, it might have been hundreds of percent per year, now obviously it's tapered down. I mean, maybe on- On a ten-year basis, something like fifty percent-ish is probably where we're at, maybe a little over fifty percent. I'm curious where you see that. Do you just kind of anticipate it's gonna just keep tapering down, or what, what do you think?" }, { "speaker": "morgen_rochard", "time": "56:51", "start": 3411.28, "text": "Yeah, you know, I wish I had a good answer for you, I really have no idea." }, { "speaker": "stephan", "time": "56:55", "start": 3414.82, "text": "Yeah." }, { "speaker": "morgen_rochard", "time": "56:56", "start": 3416.08, "text": "I wish I had a good answer, and I think that's why we do very conservative planning as a result of that. I still just like to use like an eight to ten percent number. I know that that's wildly off, I know that it's super conservative. I like to have very conservative expectations and then have, be like surprised to the upside. Surprise to the upside. Yeah. Yeah. And, and then what I also like to do is look at it Say, okay, like, how much money am I gonna have in twenty years from now? And it's like, okay, first of all, like, yeah, Bitcoin does, maybe it's done, you know, fifty percent year over year for the last four years or whatever it is, and maybe you can project that forward. But also, like, sometimes it does three hundred percent and then it does minus ninety percent and then it does, you know, twenty percent and then it does another twenty percent and then it does minus eighty, you know? It's like, it's all over the map" }, { "speaker": "morgen_rochard", "time": "57:51", "start": 3471.2, "text": "Like we, you don't look at the sequence of return risk is what we kind of, the, the term that we like to use, in traditional financial planning, which is that like in a down year, you're taking out significantly more than you would be in an up year. and, and so it, it mucks up the numbers quite a bit. So unless you're doing some sort of random, like, projection of what your assets are gonna look like and have that smooth out when you actually calculate it out to be, you know, that fifty percent year over year return number, Event, like that's kind of why I'm like, you know what, let's just use an ultra-conservative number, because like the number of scenarios that we would have to run, like our spreadsheets would look crazy, right? And like maybe I can, you know, get somebody to create some sort of computer program for me, and that would be much better, but like given the rudimentary tools that, that I currently use, right, this is-- we use a conservative number. I encourage people though, though, if they're willing to like basically do these Monte Carlo sim" }, { "speaker": "morgen_rochard", "time": "58:51", "start": 3531.1, "text": "I would say still when we're projecting these things out, like going over twelve percent is just gonna make the numbers look crazy. I mean, they just are. And then, yeah, a, a higher, withdrawal rate is absolutely going to make sense, right? I mean, the higher you put your rate of return, right, the higher the withdrawal rate can be. but if your rate of return is fifty percent and inflation, as a result of what's going on in Bitcoin, is also fifty percent, then it's net, net zero, right? And so the inflation number" }, { "speaker": "morgen_rochard", "time": "59:18", "start": 3557.52, "text": "is gonna we've also seen like times change over the past, you know, fifteen years that Bitcoin's been around. like what does the next fifteen years really look like? Does anyone know what that means from an inflation perspective? I mean, we can put numbers on these things, but at the end of the day, right, if we're not kind of taking it year by year and looking at the numbers over and over again, I think it's gonna be hard to make these projections, and all the more reason why if you're retiring at the age of thirty-eight," }, { "speaker": "stephan", "time": "59:47", "start": 3587.12, "text": "that you about it. so I think that's a good spot to leave it. I will put the links in the show notes, so Morgan's blog post, which will be there, and then also the website is originwa dot com. So, Morgan, thank you for joining me today." }, { "speaker": "morgen_rochard", "time": "01:00:03", "start": 3603.08, "text": "Thanks so much for having me. Always a pleasure." } ] }