How Do Young People Get Rich?

Summary

Podcast Summary: Ask The Compound – “How Do Young People Get Rich?”

Date: June 25, 2025
Hosts: Ben Carlson, Duncan Hill
Guest: Josh Brown
Theme: Exploring pathways for young people to build wealth, the realities of options trading, crypto vs. gold, and nuances of investing philosophy.

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Episode Overview

In this episode, Ben Carlson and Duncan Hill, joined by financial commentator Josh Brown, answer audience questions about the mechanics of getting rich as a young person. They peel back the realities of short-term windfalls (like crypto) versus long-haul strategies, debate options trading as a risk management tool, discuss whether Bitcoin might replace gold, and clarify what it really means to be a “Boglehead.” The conversation moves through traditional and unconventional wealth paths, current market trends, and the evolving influence of retail versus institutional investors.

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Key Discussion Points & Insights

1. Using Options to Lock in Stock Gains

Timestamps: 02:01–08:42

• Scenario: Should investors use options (puts, calls) to lock in gains from windfall stocks like Nvidia?
• Josh Brown’s Take:
  • Don’t dabble in options unless fully committed and educated.
  • “I don’t think you should be a part-time options person.” (03:24)
  • Options introduce ticking-clock risk; not suitable for most.
  • Prefers holding stock for long-term upside over options speculation.
  • “Having somebody turn an hourglass over on me is not conducive to the way that I invest.” (04:28)
• Ben’s Perspective:
  • Sees options as non-trivial, high-pressure, and best left to experts.
• Cautionary Insight:
  • 90%+ of options expire worthless—any experimentation should use limited capital and be purely for learning.

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2. How Do Young People Get Rich (Beyond Crypto)?

Timestamps: 08:43–19:28

• Ben’s Caution:
  • Sudden crypto wealth can “warp reality,” likening to “child star syndrome.”
  • “Young overnight riches has the potential to screw you up.” (08:50)
• Industry Paths & Modern “Get Rich” Avenues (List, per Josh/ChatGPT):
  1. Long-term investing (“good habits”): Still effective, but takes time.
  2. High-paying tech/finance/consulting: Not accessible to all.
  3. Day trading: “Bullshit…nobody gets rich, it’s fake.” (13:45)
  4. Social media entrepreneurship: Fastest route if you are dedicated (e.g., niche content on TikTok, YouTube, Instagram).
     • “If you are 25 years old and want to make your first million by 30…this is the fastest way.” (14:29)
  5. Real estate investing: Hard for young people without prior capital.
  6. Bootstrapped or VC-backed startups: Build a business that fills a need—mundane businesses can be lucrative.
     • “Cleaning pools…detailing cars—nothing special, but built an amazing reputation.” (16:34)
  7. E-commerce, consumer products, dropshipping, gaming, side hustles: All valid, but require standing out and luck.
  8. Selling sexuality online (e.g., OnlyFans): Not a joke; real money for some.
  9. Alternative investments: For people already wealthy.
• Generational Perspective (on Gen Z):
  • “Everything is gamified…career path is a game. Relationships are a game.” (19:03)
  • Gen Z mindset seeks “the hack,” not the grind.

Memorable Moment:

• Discussion of unconventional wealth (OnlyFans, niche YouTubers):

  “This is a way that young people are getting rich…It’s filling a very specific need in society.” – Josh (10:16)

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3. Will Bitcoin Replace Gold?

Timestamps: 19:29–30:16

• Original Question: With Bitcoin’s growing market cap and declining volatility, why would people store value in gold versus Bitcoin in the future?
• Ben’s View:
  • Gold’s value proven by its resilience, especially amid global sanctions (“You can’t sanction gold bars”—21:39).
  • Gold and bitcoin both outperforming at present.
• Josh’s Counter:
  • Gold and Bitcoin have coexisting roles.
  • Historical context: Gold was crucial as a universal store of value on Silk Road trade; Bitcoin upgrades this for a digital age.
  • For refugees and migrants, digital currencies allow wealth transfer across borders—a modern replacement for “gold in the jacket lining.”
    • “Today’s version is: upload everything you own into the cloud in the form of a digital currency.” (23:06)
  • Central Banks/States: Still need physical gold, not digital assets, due to geopolitical risk and sanction evasion.
  • “Doomsday” Scenario: If global infrastructure collapses, gold may have use—otherwise, digital assets are increasingly accepted.
    • “Fighting-age males and reproductive-age females will be the currency…” (29:38)
  • Synchronization with Technology: Gold lost primacy as global commerce achieved real-time consensus via technology.

Notable Quote:

“Stable coins…could replace gold 100%.” – Josh (27:50)

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4. What Does It Mean to Be a “Boglehead”?

Timestamps: 30:24–36:41

• Question: Can you be a Boglehead without a pure three-fund Vanguard portfolio?
• Ben:
  • 80% of his investments mirror the Boglehead philosophy—index funds, low cost, buy-and-hold—but allows flexibility.
  • Emphasizes discipline, low costs, and staying invested, over dogma.
• Josh:
  • Believes there’s no need for community “religion” over investment style.
  • Personal investing can blend strategies as suits the individual.
  • “Even one second spent worrying about what someone else is doing with their money is wasted.” (32:13)
• Broader Message:
  • Label flexibility is key; one’s investing approach need not be constrained by community policing or purity.

Memorable Exchange:

"Kiss my ass. I'm a Boglehead in my mind is what you should tell people.” – Josh (32:10)

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5. How Can Public Companies Reach Retail Investors?

Timestamps: 37:29–41:32

• Question from Investor Relations Professional: How to engage retail audiences and RIAs (registered investment advisors)?
• Ben’s Insight:
  • The retail audience is increasingly important—less so institutional money.
• Josh’s Advice:
  • Not worth trying to win over RIAs; they rarely advocate individual stocks or attend company meetings.
  • “If you want to engage with the investing public who actually care…do that direct at the retail level.” (39:57)
  • Focus on social media, direct-to-consumer media (podcasts, YouTube, etc.).
  • Put CEOs/companies where retail investors can connect with them.

Memorable Quote:

“Go where they are…Put your CEO in a place where other CEOs don’t go and they’ll stand out.” – Josh (40:48)

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Notable Quotes & Moments

• On options trading:

  “Having things that are expiring and having somebody turn an hourglass over on me is not conducive to the way that I invest.” – Josh Brown (04:28)

• On crypto-rich youth:

  “Young overnight riches has the potential to screw you up…It’s going to warp their reality.” – Ben Carlson (08:50)

• On fast routes to wealth:

  “If you are 25 years old and want to make your first million by 30…social media entrepreneurship is the fastest way.” – Josh Brown (14:29)

• On the need for hacks/Gen Z:

  “The first instinct…is what’s the hack? What’s the trick?...Everything’s a game.” – Josh Brown (19:03)

• On Bitcoin as gold’s successor:

  “Today's version is upload everything you own into the cloud in the form of a digital currency.” – Josh Brown (23:06)

• On religious investing identity:

  “Even one second spent worrying about what someone else is doing with their money is wasted.” – Josh Brown (32:13)

• On engaging the modern retail investor:

  “Go where they are...Put your CEO in a place where other CEOs don’t go and they’ll stand out.” – Josh Brown (40:48)

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Episode Flow & Timestamps

• [02:01–08:42] Options trading for existing stock gains
• [08:43–19:28] How young people build wealth (traditional vs. new methods)
• [19:29–30:16] Bitcoin vs. gold as stores of value
• [30:24–36:41] Defining “Boglehead” philosophy
• [37:29–41:32] Strategies for public companies to reach retail investors

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Tone

The conversation is candid, skeptical of hype and get-rich-quick schemes, and leans toward pragmatism. The hosts and Josh Brown keep it conversational, irreverent, and rich with anecdotes—offering actionable advice while deflating illusions commonly held by young investors.

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Takeaways

• Building wealth as a young person is more accessible via entrepreneurship and content creation than traditional finance, but requires being in the top 1% for the chosen field.
• Options trading is risky and should be treated as a full-time pursuit, not an afterthought.
• Bitcoin and gold each serve unique functions; both can exist for different needs in a portfolio or in society.
• Investing approaches should prioritize what works for the individual—labels like “Boglehead” are less important than overall discipline and low costs.
• Reaching today’s retail investors means favoring direct engagement through new media platforms over traditional institutional or advisory channels.

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For more insights or to submit questions, visit: Ask The Compound Show

Transcript

[A]

Welcome to Ask the Compound. I am your host, Ben Carlson. Crypto has made a lot of young people very, very wealthy. Short of striking it rich on a lottery ticket. Investment like that, how do young people build wealth Today we will answer that and more on the show today. Stick around. I am coming to you live from the HQ in Chicago, Illinois. We need new Ritholtz wealth management headquarters. Duncan, how we doing?

[B]

Doing great. I. I'm liking your ha.

[A]

Looks nice in here. Ask the compound. ShowMail.com is our email here. We love your questions, especially people live in the YouTube chat and on Twitter. So if you have a question, throw them at me. I will answer it on the fly. Welcome back to our regulars chopping it up. They're always there before the show starts. Talking to each other, building friendships. See if Duncan's mom makes it today. On today's show, should you use options to lock in some gains from those tariff tantrum stock trades you made? How do you get rich as a young person? Will bitcoin replace gold someday? Am I really a boglehead? Someone questioned my status as a boglehead. I defend my honor today. And finally, how can public companies reach retail investors to bring them on to shareholders? Today's show is sponsored by our friends at Public Invest Almost [e-mail] stocks, bonds, options, crypto and more. Clear cash to work with Public's high yield cash account earning 4.1% APY plus. They don't have this old outdated website. It's brand new. It's designed this century. It's clean, intuitive. It's modern. Discover why NerdWallet gave public five stars for its ease of use and investment selection. Fund your account in five minutes or less with up to $10,000 when you transfer investments over to Public, you can now boost your IRA with a 1% match. When you open an IRA on public, you can earn a 1% match on annual contributions. Find out more at public.com atc it's public.com atc paid for by Public Investing. Full disclosure is in the podcast description. All right, wonderful questions today. Let's do it.

[B]

Yeah, we got a full slate. Up next or up first, we have one from Todd. With the run up in Nvidia since its woe following Liberation Day, it sounds like Michael has enjoyed a nice gain in his position since jumping back in. Does it make sense for an investor in this position to buy some out of the money puts or sell out of the money calls to participate in some of the volatility on the downside and lower basis if it pops, effectively spending some unrealized profit on the puts and or settling for an exit of the position at the strike price should it trade up through that level. This one's going to take some explaining from you and Josh.

[A]

All right, let's bring on everyone's favorite Nvidia expert, Mr. Josh Brown.

[B]

Hey, Josh.

[A]

Josh. I have to defend my honor. I more or less retired from stock picking, but I can't let Michael take all the glory here. I was buying Nvidia, the tariff tantrum. We had those down 4 or 5% days. Number two in a row, I was buying, I think it was down 35 to 40%. And I thought if we're going to have an AI bubble some point, this is going to be a great entry point. So I'm up, I don't know, 45 or 50%. I'll be honest, I've never traded options before.

[C]

It's amazing how much you're up in such a short period of time.

[A]

It's crazy, right?

[C]

Yeah, yeah.

[A]

Two months later and you're up that much. Is this, is this idea getting too cute? I know people love option income these days, especially on the more volatile names. Is it getting too cute with things? And I guess it perhaps probably depends on your time horizon. But do you ever use options for anything like this?

[C]

No. I think if you're, I think you have to decide at some point in your investing career whether or not you're a person that utilizes options for speculation or you just use them for hedging or maybe use them for both or if you just completely leave that part out and I don't think there's room to dabble, I don't think you should be a part time options person. And I say this to people and they're like, yeah, yeah, yeah, whatever. And that's fine. Like you. How do you know if you're going to be utilizing options until you do? For some people, it becomes a really big part of what they're. And they have to experiment. But like ultimately they become options people and that's perfectly fine. I did, I was doing options 20 years ago and I very quickly concluded when I invest in a stock, I want the full upside. I'm willing to bear whatever risk I'm taking and I'm willing to utilize stop losses, whether they're physical, like input into my trading system or they're like mental. That's, that's the way that I manage risk. But then there are other people who are like, look, I don't want to lose the position. But I recognize that sometimes there'll be more volatility than others, and I want to do what I can to manage that risk without selling the stock. And then there are still others. Stock replacement strategy, perfectly valid. There are times where that might make sense. And then on the farthest end of the spectrum, there are people that use options to get an equity position and use leverage because they don't have as much capital to put up into a trade, but they want to make a lot of money on that trade because they have a high conviction. So I'm cool with everything. I just, I. I made the decision that having things that are expiring and having somebody turn an hourglass over on me is not conducive to the way that I invest.

[A]

I like the point about the dabbling, because if you talk to someone who actually trades options and know what they're doing, it's not something that, you know, set it and forget it type of strategy. You have to know what you're doing and live.

[C]

You live in the trade now, now, because the time value when you purchase a call option out of the money call option, the time value that is akin to taking an hourglass and turning it over and those grains of sand. And every day, as you get closer to expiration, that decay is taking away more and more of your principal, which means not only do you have to be directionally right on what you just went long using options, you have to get the timing right, and the timing has to be right now. And I have a lot of pressure on me in my life and in my career. I don't need more. I don't need to create new forms of pressure. I'm also. Look, you mentioned your timing on Nvidia was great. You bought it perfectly. And you're up 40, 50% in two months. I'm in Nvidia for 10 years. I bought it in the summer of 2015.

[B]

I was about to say one of my earliest memories when I first discovered you was watching CNBC like seven years ago, and you're talking about Nvidia.

[C]

Okay, so I have a 10,000% return in Nvidia. You understand?

[A]

Like, so you're the James Franco with the noose around his neck saying, first time.

[C]

Yeah, and I've sold. And I've. And I've sold some Nvidia on the way up because it got irresponsibly large relative to the rest of my portfolio.

[A]

By the way, Michael, who's in Chicago with me, is in the chat. He says he's holding. He's not, he's not trading. That's selling.

[B]

He's up 50%. Yeah.

[C]

All right, well look, there's a lot of legitimate, there's a lot of legitimate ways to use options in a portfolio. Defensively, offensively. All good. It's not my thing. I don't talk about it, I don't do it. And, and you also be. I wouldn't tell people not to. I wouldn't tell people not to. But look, if you're, if you're just starting out and you want to experiment with what it feels like to have options trades on or different ways to hedge or whatever you should. I want people to do it responsibly, learn where the money at stake is not life changing and perfectly fine with that.

[B]

Something like over 90% of all options expire worthless though, right? People should know that. It's some crazy number.

[C]

Yeah, but, right, but, but the amount that the, the amount that you're losing on those options that are expiring worthless should be small. Right? And then if you hit 1, you buy call options on a biotech and they announce a partnership with Merck or a phase 3 clinical trial went, went well, that biotech Stock goes up 80% in a day, which is a thing that still happens and the option goes up 1,000% a day. You're not ever making money like that. I don't care. Crypto, nothing. It's a lot. It's lottery. Ask, should you orient the entirety of your portfolio around that happening? I would say no, but let's not pretend that it doesn't happen. And by the way, God forbid that happens, you're going to get a knock at your door from the SEC because they're going to say, what the hell did you know that made you buy all those call options in this stock 10 days ago? But that's another conversation.

[A]

All right, question two.

[B]

All right, up next, we got one that came in from Twitter. Short and sweet. Aside from crypto, how do young people get rich?

[A]

All right, so I would argue that a lot of the young people who may, I'm not kidding. A lot of the young people who struck it rich in crypto, I would argue that they are potentially going to be screwed up because of it. It's like the child star syndrome right now. This is, you know, this isn't exactly the question, but I think it's going to warp their reality. There's all these stories of like George Clooney and Jon Hamm said that they getting famous later in life. They were in like, their later 30s when ER and Mad Men hit and they were saying they are so happy it happened then and not in their 20s. And obviously that's still relatively young. But I think that young overnight riches has the potential to screw you up. Having said that, I think you're probably better off figuring out worthy, more worthy goals in your 20s than just getting it rich. But I guess, Josh, the question would be, short of hitting a lottery ticket on some call options or on a bitcoin, like Moon, like, what are the industries where you can. If that's your goal as a young person? It used to be, I don't know, investment banking. I'll go to med school, become a doc. Like, what. What industry?

[C]

Nobody has time for that anymore. So. So OnlyFans was not a joke. It's a way that young people are getting rich. I would not say that there are 10,000 Sophie rains, but are there a thousand? Probably. They may not accrue the amount of money that she has, but, like, this is a way that young people are getting rich.

[A]

Side note, for my wife, I don't know who that is.

[C]

Okay. I don't either. They're selling their sexuality on the Internet. The country is filled with lonely men of all different ages who are very happy to turn over $20 a month to these young ladies.

[A]

Do you actually. I'm serious about this. Do you think AI is actually a threat to OnlyFans? Because I think it possibly could be.

[C]

No. No. Because it's a very small subset of people that are okay with it being fake or intellect. Japanese hentai. I don't even know how we got here. The vast majority of people need for there to be some versimilitude to these interactions. They need to feel like if they send a dm, it's getting ready by a person. They need to pretend that this could. In another universe, this is their girlfriend.

[A]

All right, Keeping your clothes on.

[C]

And it's filling a very specific need in society. And many, many young women, to varying degrees, some of them are, like, going absolutely crazy on these apps, and some of them are just in bikinis. But, like, it's not a joke. How do you get. How do young people get rich right now? Like, overnight building an online presence, selling sex, selling real estate expertise, selling, like, there's a whole host of ways that influencers are capitalizing on just the. The TikTok scrolling. It's. It's literally like the national. That's. The national pastime is doing this. And it's. People spend six, seven hours a Day on average. In a digital fantasy world. If you are supplying those fantasies to these people, you could get rich. It's happening every minute of every day.

[A]

Don't you think the more traditional route would be just okay, you're going into the tech field, you're working for a tech startup, you're working in AI, you're getting some stock options. I think that for a lot of people probably would happen. What's the percentage of Nvidia employees now that are millionaires?

[C]

It's a really high, I guarantee you more people, more young people have made their first million doing something influence on Instagram, on TikTok, on YouTube. Way more people have done that than have become engineers and made their first million at Nvidia. So it's just, look, it's not, no judgment for me. I have a 19 year old daughter, I don't want her doing that. I have a 16 year old son. I don't want him to come to me and say hey, hey dad, I have, here's what I want to do with my life. I'm going to break up packs of baseball cards and have people bid on them online. Like that's not what I want from my kids, but it's a legit thing. I asked ChatGPT one of the 10 most common ways that young people are becoming rich in the last five years. Some of them are super dumb, but I'll just, I'll give them to you and then you comment on the ones that you think are worth diving into. It's your show. Long term investing via 401k and IRA. Okay, so this is the one that we would tell people, build good habits. Everybody knows it. It's not like oh really? That's how it's done. Everybody gets that. It just takes forever. High paying tech, finance or consulting jobs. Again, everyone knows it. Not necessarily available to the majority of the of the young people in America. These jobs are just not, they're not like make a phone call and it's.

[A]

Almost like the housing market where if you come into that now you see all these people already got rich. There's obviously going to be more opportunities, but a lot of that money's already.

[C]

Been made active stock trading and day trading. Bullshit.

[B]

Yeah, it's like you see so many people talking about that and mostly in a spammy way. How many people actually get rich on day trading?

[C]

Nobody. It's fake. You know who gets rich? The people who own the day trading businesses that are basically fronting money to people who want to try their luck. Most of them wash out, few of them work. But it's all algorithms. Now you literally, you cannot, you cannot compete. You cannot compete with algorithms on a daily basis. But it's fine. There are a lot of people who are willing to buy. It's like, oh, I want to be a professional riverboat gambler. It's like the most absurd premise. But fine, I don't care.

[A]

Hey, my blackjack system is undefeated. Keep going.

[C]

Social media entrepreneurship and content creation again, for me this is number one. If you are 25 years old and you want to make your first million by 30 and you don't have an advanced degree and you don't work at Goldman Sachs or a 16Z, this is the fastest way. You have to be dedicated. It's a job, it's not a hobby. But you could do it. You find a content niche that is not crowded. Not a lot of people are filling. Get really good at editing videos and you just go at it like an animal. You could absolutely make yourself a bad.

[A]

It's probably way harder now than it was 10 years ago. Obvious there's way more people who only gotta get.

[B]

I've heard teachers, teachers now say that they used to have students say they wanted to be a professional football player or basketball. Now it's all YouTuber, Influencer, YouTuber. Yeah, they all want to be influenced.

[C]

Real estate investing and rentals. I don't really see how most young people could buy real estate if they don't already have a million dollars. But fine. Alternative investments, gold art, private equity. I don't believe in that. You're not going to get rich. That's what rich people do once they're already rich. Bootstrapped or VC backed startups. Yeah, yeah. You probably know if you close your eyes and think about who are the young people in my life, probably you have three or four of them that you know of who are actively raising money for a startup right now. And they won't all work. But that's the game of life. But this is legit. Like this is a thing that's happening. Find a need. You don't even have to raise money. Just look around. What do people around me need? What are people complaining about? I will fill that need. I will do that service. I will build a reputation because I'm really good at helping people with problem X. And if I really go for it, within five to 10 years, I'll be a millionaire. Hundred percent. I so believe in that. And I see people doing this, cleaning pools. I see people like, like, you name it, like Very mundane businesses. They're not inventing microchips and they are becoming millionaires. There's a young guy in my neighborhood who brings his truck. He's got a water pump on it. Him and his girlfriend are literally detailing cars in people's driveways. This is like nothing special, but built an amazing reputation. He has a waiting list, he has an app.

[A]

You know how dirty parents cars get from their kids?

[C]

Yeah.

[A]

Need supply for that niche.

[C]

E commerce or consumer products. So like these are people that like make a product, put it on Instagram, it's an instant hit. Or get themselves on Shark Tank. It's still a thing that can happen. We see that with fashion brands especially. And it's young people, like people in their 50s are not doing this because they don't know how to figure out the algorithm. They don't know how to get attention for themselves. So that, but that's a thing. Inventing new consumer products, hair products, lip gloss, you name it, it's happening. Freelance consulting and aggressive saving. Sure. Last one. Online teen entrepreneurship and side hustles. Dropshipping gaming streams. Reselling, endorsing people's products to their products.

[A]

There are a lot of weird ways to get rich these days. I'm gonna stick with my sponsorships. I'm sticking with my idea that you're better off building good habits. And if you get rich, good, that's a great byproduct. But that's not, that shouldn't be the goal for most people to get.

[C]

Well, that question was how do young people get rich? Not how should young people get rich? That's a different.

[B]

What about starting a cafe or a restaurant? I've heard those aren't actually very good businesses in general.

[C]

Nobody, nobody would do that.

[A]

No. It's capital intensive and low margin and.

[C]

Nobody, nobody is excited to start something that requires their presence 60 hours a week. People don't do that to themselves.

[A]

That's a full time job.

[C]

Millennials and Gen Z's, that's not. Their aspiration is to live inside their work the way that boomers did and Gen Xers did. Like they, they look. The most interesting thing about Gen Z and where it differs from every other generation, the first instinct they have because they grew up on video games, like the first instinct is what's the hack? What's the trick? A shortcut is a little bit too demeaning. It's like, all right, I get it, you do this, you do this. But what's the fast way around? That's the way their minds work. Because they had an iPad in the stroller at 1 years old playing Temple Run. It's just. So it's all hacked?

[A]

Everything is gamified?

[C]

Yeah, everything's a game. Investing is a game. Career path is a game. Relationships are a game. People have, like, ranking and matching algorithms for dating. It's all. It's all like, what's that? What's the trick? So that's the question. How do young people get rich? The good news is there are a lot of ways. The bad news is you got. If you pick one, you got to be top 1%, because most people. It's not going to work.

[A]

All right, we got a question in the chat about bitcoin, actually, by the.

[C]

Way, I'm sorry for getting into Japanese animated porn on your show. I didn't mean to. It just seems so apropos.

[A]

It really did. Okay.

[C]

I didn't get into, like, tentacles or anything like that, so it didn't go too far.

[B]

Okay.

[C]

You guys all right?

[B]

Yeah. Yeah. No, we're both just turning red, I think.

[A]

No easy segue to bitcoin from that, but let's do it.

[C]

We'll make it happen.

[B]

All right. Up next, we got one from Alex. I have a few Bitcoin and cold storage from 2022. Well done. I'm not a massive bitcoin maxi, but I'm gradually becoming more of one. Why wouldn't bitcoin replace gold? Let's assume as market cap grows, volatility chills out. Why would we continue to store value in something we have to mine, smelt, ship around the world, test, and store in physical vaults? I can't think of a reason why in the future we would continue to use gold in that way when bitcoin exists. I'm looking for the counter argument, as my fin twit cohort tends to ignore the hard truths and only focus on mooning.

[A]

Okay, so I was talking to the soccer dads recently, and they're all into bitcoin. And I've tried to stay away from those conversations because I just. I don't want to get into it. They're, you know, they're watching the podcast and the YouTube videos on Bitcoin, and they said, ben, come on, give us your opinion. What's your. What's your, like, ultimate upside level for bitcoin here? And I said, I don't know if bitcoin became digital gold. That seems like a pretty worthy goal to me. And the guy's like, what? That's it? That's. You got to think bigger than This, I think that's a pretty good outcome. I got some stats for you here, Josh. This is your stat of the day. Gold is up 26% this year. Is up 26% last year. John, chart on Gold is outperforming the s and P500 this decade. In the 2000s, booming stock market, 14% per year. Gold is outperforming. That might surprise some people. Yeah, I had chart kid Matt look for me. Let's do next chart the size of each market. Gold 22.4 trillion. Bitcoin 2.1 trillion. And you can see gold has been mooning a lot more than bitcoin in recent years. Surprisingly so. I don't know if gold went nowhere. That's a 10x. I think one of the reasons people underestimate why gold still has some value is when they put all those sanctions on Russia a few years ago. It's easy with a computer to say, wiping out this asset, wiping out that asset. You can't do that with gold. So all these governments around the world, you can't sanction gold bars. Right. So I think that's where it still has some value. Do I think it makes sense in a more technological world that bitcoin should be easier and, you know, to store and all that stuff? I think so. But gold's lasted a long time. Like, are you surprised that gold is doing so well, Josh?

[C]

Well, can I just clarify, is the question, will it replace it? Like get as big as that's. Or is the question like, will it. Will the way gold is used be replaced by the way bitcoin is used?

[B]

I think they're saying, as a store.

[A]

Of value, why would you not use, well, gold? And the reason I show these returns is because bitcoin has been doing well, but gold has been doing well, too. So if it's going to replace it, you would think gold would be going through in the doldrums, but it's not. Gold is going crazy.

[C]

So I talked about, I talked about this earlier this week with Rick Edelman. The easiest way to explain bitcoin and digital assets to old people is to remind them that when their ancestors came to Ellis island, it was unsafe to carry openly any kind of wealth or currency because it would immediately be taken from you. So what a lot of our great grandparents and great great grandparents did.

[A]

I learned that on the 1923 finale, actually.

[C]

Yeah. So literally take gemstones, all the wealth of the family. Sell everything in the house. We're going to America. Sell everything in the house. Convert it into whatever diamonds, little gold coins, and sew it into the lining of a jacket. So that was 1900. OK. Picture of Vito Corleone arrives in Ellis island and whatever he was able to take from Sicily, you know, after they killed his mother and his brother and his father, it's like sewn into the lining of his jackets. That's the immigrant story into America. It's very different. Today. We have a world filled with migrants and with refugees, and not, not just coming into America through Canada or Mexico, but just all over the world, people are displaced. Today's version is upload everything you own into the cloud in the form of a digital currency, hopefully a stable coin, and not a Bitcoin. So you don't have the volatility. Wherever you land, wherever you are, your.

[A]

Bank account is also off in the ether somewhere. Right.

[C]

It's not wherever you land, you download your money back to your phone to use, you know, and so it's hard for us to relate to. We're not refugee. Although with last night's democratic primary result, I may be on the run soon, but we're not refugees. We don't have the need for this. But when you explain this to old people in their frame of reference, they know that their parents, or their parents parents did have the need to leave the old world and bring wealth with them. So now you have. So will it replace gold for that? Yeah, I think it will. Will it replace gold for a Russian central bank that needs to have physical wealth because ones and zeros are not a safe way to store currency in the international banking system? No, it won't. So gold and Bitcoin can coexist, and that chart you just showed is perfect chart to demonstrate that phenomenon. There's a use for gold and there's a use for digital assets, and they don't necessarily always have to replace each other, but in some cases they will.

[A]

Yeah, they can both do well at the same time. We've seen that the last two years, as they've both done on it. Yeah, I don't think it has to, but it does seem to me like they're in a generation or two, young people will go, why do we need this yellow metal? Who cares? Let's just.

[C]

All right, so here's a little bit of context. Important. The civilizational purpose of gold was primarily ruling dynasties, hoarding something that people agreed had value, mostly because it could be made into very primitive forms of jewelry. And then the Silk Road changed that and gold became much more functional and much less about ornamental. And the Thing about the Silk Road is most of the commerce was relay commerce, meaning you don't have somebody from China going all the way to Europe. You have 500 different people trading different goods all along the route. But you needed a single medium of exchange that everybody could agree on was worth what it's worth. Because remember, relay trading is like, oh, you have a camel, here's a rug. All right, now I have a rug. The next person I run into has spices. Here's my rug, I'll take your spices. The next person I run into, ooh, I could parlay these spices into, I don't know, a weapon like whatever that, whatever that. So but the one thing that they needed was there were two different coins. There was a Persian coin and a Byzantine Empire coin. And they have found these coins at both ends of the ancient Silk Road, meaning the coins traveled and they were gold, silver in the case of the Persian coin and gold in the case of the Byzantine coin. Because everyone all along the Silk Route, they have no phones, they have no Internet, there's no newspaper. Everyone agrees this gold coin is worth what this gold coin is worth. That's ancient. Like human humanity requires for there to be a universally accepted medium of exchange. So does it have to be a physical coin when most of transactions are happening on the Internet? No, it doesn't.

[A]

Right.

[C]

Stable coins are a dollar is a dollar all over the world. That's amazing. It's amazing. And that's why you see the race of all these institutions and banks to develop their own version of a dollar is a dollar. By the way, that could replace gold 100%.

[A]

You said there was no communication back then, but it sounds to me like they were all zero hedge readers. They owned gold and silver.

[C]

Like yeah, they used, they used ravens in the Byzantine Empire, they were owls with papyrus in their claws. No, look, you just. If somebody a thousand miles away is conducting a transaction, every and everyone has to agree on what the value of things are. This is, this is the way it was done. We, by the way, here's really interesting and then I'll stop. It's not a coincidence that the before this recent high, the all time high, inflation adjusted for gold is 1982.

[A]

Yeah, it just passed that recently.

[C]

It was underwater just past that it took 40 years. Do you know what that old high in gold's price coincided with?

[A]

S and P?

[C]

Bottom no.

[A]

What?

[C]

The personal computer.

[A]

Ah, I think so.

[C]

Because for the first time someone in London and someone in New York could both agree instantaneously on what something is worth. So to me there's not a lot of coincidences. To me that's more like synchronicity and oh, wait a minute. Everyone on the globe now can, can check in with each other on what something's worth. Maybe gold is not as important as it used to be.

[A]

So maybe we're going to see a long IBIT short GLD ETF someday if.

[C]

It doesn't exist already.

[A]

Yeah.

[B]

Something that I think about with that is imagine a nation state taking down our infrastructure or power grid or something, you know, how do you access your Bitcoin then? Right. So that would be one of the doomers.

[A]

If our phones don't work, we're all going to be in the fetal position. Right, Right.

[B]

No, I'm just saying I think this is one of the arguments people make for gold is like you still have it though. If something like that happens, you know.

[C]

Fighting age males and reproductive age, females will be the, the currency in a situation where we're.

[A]

Josh is going hand in hand, off the grid.

[C]

I mean, I'm telling you the truth. It'll be access to fresh drinking water. It'll be bullets.

[A]

That's why I live by the Great Lakes.

[C]

Yeah.

[A]

Chicago safe.

[C]

We can't invest in portfolios. Thinking like, what if, you know, we go into Mad Max times, I'll melt the gold.

[A]

I'm going to show up in my GLD shares at the Fort Knox and say, hey, melt this gold bars down into bullets for me.

[B]

That being said, what would you long in a Mad Max scenario? No, I'm just kidding.

[C]

All right, next, I'll be one of the. I'll be one of the first to go. I won't have the will to live. I'm not into that stuff. I don't want to live that badly.

[B]

Okay, up next, we have a question from Keith. In the latest episode, Ben said he's definitely a Boglehead. Bogleheads believe in a set it and forget it mindset with simple portfolios holding low cost ETFs like an S and P or total stock market fund for the equity allocation and a total bond market fund for the bond allocation. I'm interested to hear how Ben thinks about the Boglehead approach and the Rihlis model allocation for clients. Does realhost diversify with many different strategies and fund categories.

[A]

All right, listen, I think some people assume unless you hold the three fund Vanguard portfolio, which is total stock, total international, total bond. Unless you do that, you're not a Boglehead. I think that's ridiculous.

[C]

You identify As a Boglehead, I think.

[A]

Listen, the majority of my personal assets are in index bonds. Michael, we talked with a Vanguard guy today at the Morningstar conference. And I said, I'm going to be talking about Vanguard today. And Michael said, ben, you're definitely not a Boglehead. Here's why I think I am 80% of a boglehead. My biggest position is VTI. Same with our clients in the stock portion of their portfolios. VTI is the biggest position. I am a buy and hold investor. I stay the course, I think, in actual long run. Josh, in one of your books, you wrote that John Bogle himself invested in a hedge fund. His son's hedge fund. His son's hedge fund. And your whole point was like, listen, it's okay to have competing ideas in your mind and your portfolio. No one is perfect. And so I think the people that say, well, I'm a true Boglehead because of this. I think it's more about staying the course and keeping costs low and, and thinking and acting for the long run. To me, that's a person who's a Boglehead. Fair enough. Yeah, I'm like 80% of one, I guess.

[C]

Like, why do you have to be considered a legitimate Boglehead in the eyes of anyone else? Who cares what people think?

[A]

This is one of the things I'm defending. My honor.

[C]

Kiss my ass. I'm a. I'm a Boglehead in my mind is what you should tell people.

[A]

There you go.

[C]

What's the difference? So one of the things, one of the things I've let go of in my life, I used to have, like, investment debates on the Internet. And who gives a shit? Like, we're all not going to be here that long. Even one second spent worrying about what someone else is doing with their money is wasted. So I. I don't defend what I do. I don't care what anyone thinks. I wrote a book called How I Invest My Money, and I wrote the, the intro. And I wrote one of 20 chapters. We interviewed 20 different people who work in the business in different ways. And how do you invest your own money? And I explained, look, this is what we do for clients. And here's how I personally deviate. I make venture investments. My friends come to me and say, I'm starting a company. I write a check. I back it. Is that Bogalish? I don't think so, but I want to. I don't need to adhere to somebody else's categorization of what I do. I happen, I happen to believe that people should own individual stocks and they should learn how to invest and they should research companies and they don't have to agree. It's just what I think is what I want to do. Like, I think it's perfectly fine the way I invest. My 401k is pure Bogle. I'm 100% stocks. I never sell. Every dollar that gets added to it every two weeks goes directly into the stock market. Sometimes I buy high, sometimes I buy low. I'm not concerned with valuations. I don't care about geopolitics, not hedging it. It's pure Bogle. But then the money that I actually have control of right now, I can act with it how I. How I wish, and it's nobody's business. And if I don't adhere to. To somebody's dictionary definition of some strategy. Oh, no, you know what I mean?

[A]

Like, it's not coming to you anymore to defend my honor.

[C]

I know.

[A]

I feel like I don't really care. It's kind of funny.

[C]

Yeah. I feel like. I feel like people are looking for a religion sometimes. You probably agree with this, that.

[A]

Yes, that is a big part of it.

[C]

All right, so if you want to be so doctrinaire about your investing process that it conforms to, like, a chat room somewhere, you could go do that. I don't give a shit.

[A]

The lack of mental flexibility, I think you're right. Is actually. Some people see it as a good thing, like, I'm being disciplined. But I think for some people, it's a bad thing if you're not willing to open. And I think when I first started investing and I read some books, I thought, like, I've got this figured out. I know the exact right way to invest. And I've realized there are so many other ways to be successful, because I've met these people who are successful doing it a different way, and that's okay.

[B]

This segment's gonna kill on Boglehead Reddit, right?

[C]

Well, I have so much respect for Jack Bogle. I read his books, and I met the man, and I think he is probably more on target with what actually works for regular people than any other person who's ever written about investing. But that doesn't mean that everyone has to fall in line. It's just like, all right, that's a really important insight that Jack had, which is that the less you do, the better. The lower you can keep your costs, the better. Like, all of those things were, I think, incredibly revelatory.

[A]

I actually think the Whole millions of people standing on the shoulders of giants is picking and choosing the best things from some of the best people that you followed. And not everything because no one can follow exactly how someone else invested.

[C]

Dude, people like, oh, you can't pick stuff. I can't. So then, so, so then when I, when I identified CrowdStrike right after it came public and the fact that they were doing cybersecurity in a, in a cloud based way while everyone else was doing software and updates and they would, they built this neural net of users where if a threat, if a threat hits one user, all of the other users software is immediately updated to protect them from that threat. And I read about that and I look at the company, I say, you know what? Sounds like these guys are going to run away with it in the cloud era. 20, 21, I buy the stock at 120. Now it's 500. Like why should I miss out on that opportunity? Because Jack Bogle didn't agree. Like, it's like insane actually when you think about the degree to which people are trying to hold each other's, hold each other accountable. What business is it of anyone else's what someone does with their investment capital? So look, I.

[A]

Rich, that was our own, that was our biggest. Not to brag of the show. By the way, credit to you.

[C]

Yeah, rich people don't, rich people don't think this way yet. You meet somebody who made their money in like New York City real estate or like farmland or like oil and gas. Like you meet these people, they don't give a shit what anyone thinks about how they deploy capital. It's like, oh, that's a great opinion you have. Don't. Don't mind me while I splash mud on you with my roll.

[A]

I'm sorry, I'm a man of principle. I'm standing on principle today.

[B]

It's gonna be a Deadhead. You know, if you like one Grateful Dead song, they'll welcome you in. You know, it's much easier.

[A]

Grateful Dead's overrated. All right, next question. It's almost as overrated as Wes Anderson. Duncan.

[B]

Oh my God.

[A]

All right, okay, next question.

[B]

Last but not least, we have one that is anonymous, which means it's going to be juicy. I work in IS IR investor relations.

[A]

Yes.

[B]

Okay. I work in investor relations at a publicly traded large cap company. We have a strong base of institutional investors and a solid platform for reaching them. But we're now evaluating how to better engage with a retail audience. Traditional methods like retail focused conferences tend to be ineffective and don't scale well. Instead I'd like to explore getting Facetime with RIAs who incorporate an active strategy into their work. As insiders in the space, how would you recommend a corporation go about doing this? Is there meaningful appetite among RIAs to engage directly with corporate investor relations? I'm also open to other ideas, including social media, which Josh has discussed before on tcaf.

[A]

You know, I think it's really funny coming from the institutional world where that, that crowd always just thumb their noses at the retail crowd like we are so much better than you. And now retail in like the wealth channel. That's where everyone wants to be. Yeah, right. The institutions are kind of like passe at this point. And I understand why a company would want to desire this. They want The AMC or GameStop thing where people are advocates for them. Right. And Josh, you mentioned a religion. I'm not sure RIAs are exactly the way to go about.

[C]

This is not a good use. This is not a good use of time.

[A]

No, there's not that many RIAs who have that strategy or who are going to be like profits for your company. I think it's more the Robinhood Reddit self directed crew that matters. Right.

[C]

That's what I would do. I would, I would spend my time on outreach to young investors who are self directed and actively trading wealth. Wealth management. It's, it's. There's a subset of wealth management firms where they are actively building portfolios. I would say that's like less than 10% of the assets in the industry. Most of the assets in the industry. The money sitting at Vanguard, blackrock, State Street. And then there is this whole direct indexing thing where the stocks are being chosen algorithmically. The stocks get sold at the drop of the hat. You get a 10% market correction and somebody sells Coke and buys Pepsi. There's no, there's no conversation with investor relations. It's irrelevant.

[A]

And even the active strategies, tax laws harvesting the active strategies these days are mostly quantitatively based or index based. They're not. People are even know what factors dividend.

[C]

So I don't think it's a good use of time if you're in ir to try to get in front of a lot of RIAs. Even though there's a ton of money in our channel. We're not, we're not like doing due diligence at an individual company level as an industry. We're not on conference calls, we're not attending shareholder meetings. We're not even voting. The proxy votes are happening at the etf level on our behalf. So I think it's a good instinct. It's just, it's misplaced enthusiasm. I think you really need, if you want to engage with the investing public who actually care to hear about the story of a company, I think you want to do that direct at the retail level. And then how do you do that? You got to get. You got to do a ton of.

[A]

These days, pivot the AI. Just say, we're going to AI. That'll get everyone.

[C]

Do a press release about AI. You want to do Yahoo Finance. You want to do cnbc.com, you want to do podcasts.

[A]

Yeah. Go where they are.

[C]

Put your CEO in a place where other CEOs don't go and they'll stand out. We have CEOs companies on our network.

[A]

Speaking of, get your CEO on a podcast or two. Let them tell their story.

[C]

Right. We've had George Kurtz on. He crushed. Multiple times. He crushed it. Like we, we put CEOs on Kanal Kapoor. We interviewed in Chicago two weeks ago. Like, if you want to reach regular investors, find out who's influential to regular investors and do their shows. Don't worry so much about the Wealth Channel. It's. It's not a fertile ground for you.

[A]

Right. Okay. Interesting that we're getting these kind of questions, though. I never would have believed this 10 years ago that that's where people wanted to pivot to, but it makes sense.

[C]

Yeah.

[A]

All right, thanks everyone in the live chat. As always.

[B]

We have a record. We should acknowledge we're almost at 3,000 people watching between Twitter and YouTube.

[C]

Oh, that's dope.

[A]

Sweet.

[C]

Shout out to everybody that came to the live. You guys, the enthusiasm is awesome. We love it.

[A]

We always appreciate it. Email us. Ask the compoundshowmail.com if you have a question or a comment. Check out the Compound and friends this Friday morning. As always. What else we got? Subscribe Rate Review thanks everyone.

[C]

On production. All the things, everything.

[A]

All right, see you everyone.

[B]

See ya.

[D]

Thanks for listening to Ask the Compound. All opinions expressed by Ben Carlson, Duncan Hill and any of their guests are solely their own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Wealth Management may maintain positions in the securities discussed in this podcast.