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All the people I know who are wealthy, a lot of my friends who are worth millions of dollars, how

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did they get there? Did they buy gold? No. Did they buy real estate?

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No, they didn't. They might say they do now to protect their wealth, but they didn't get

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there that way. Let me tell you, they all did it through. This is the best

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hedge against inflation of all time, okay? It's

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the fastest way to outrun inflation and unlike

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cash, it can compound very powerfully. All

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right, so check it out. You're going to be thrilled or

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you're going to be disappointed, either one. Here we go. The best

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way to hedge inflation is to actually increase your skills. The best way

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to hedge inflation is to earn more money. The fastest way to

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outrun it is to earn more. Unlike cash, skills can

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compound drastically. You can end up finding skills that you can totally transform

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your earning power with, and your income is the most important thing you

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can do to enhance your wealth. It really is. You can't save your

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way to wealth. You can do it for a period of time, but you can't get it down to nothing. So,

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there's an example in, I mean, many examples in

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the past where there's inflations crushed the economy. I

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know without a doubt that people in that economy with skills, sought after

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skills, were still getting paid a ton of money in all sorts of different

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currencies and or gold and or in barter to apply

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their skills to the economy. Okay, so it doesn't, if you've got skills,

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people will find a way to give you something of value to get them. So

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it doesn't really matter if your local currency, like the Australian dollar is completely, you

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know, getting, It's completely collapsed in the last few years in

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terms of its value, but... I know that if I've got

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skills, I can get paid in gold, I can get paid in US dollars,

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I can get paid in barter. Like if I'm good at what I do and people

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need it, they will find a way to pay me. Even if the currency is toilet

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paper, I know during COVID when there's a lot of toilet paper, I could have provided a skill to

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someone. So Lloyd, I'll pay you in toilet paper, go give me the toilet paper. It doesn't

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really matter what it is, your skills are inflation proof. And

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it doesn't matter if the global currency is crypto, USD,

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gold, barter, whatever, your skills transcend

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all of the global currencies. All of them. So

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the most important thing you can do is improve your

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knowledge and skills because they are inflation proof. They will ride inflation way

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up because there's people out there with skills. Think about it. Think

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about Mark Zuckerberg. He's now like the top three or four wealthiest people

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in the world. He's also the youngest in that group. Think

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about the skills that he applied. He became worth $100 billion. Do

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you think that outperformed inflation? Yes. Do you think Jeff Bezos outperformed inflation?

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Yes. Do you think Warren Buffett outperformed inflation? Yes. All the people

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I know who are wealthy, a lot of my friends who are worth millions of dollars, how

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did they get there? Did they buy gold? No. Did they buy real

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estate? No, they didn't. They might say they do now to protect their

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wealth, but they didn't get there that way, let me tell you. They all did it through actually

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improving their skills and starting and building their own businesses. That's

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how they did it. So don't, and

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some people have certainly, like there's a story of a lady, she

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just gave a billion dollars to a charity. Her

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husband happened to invest with Warren Buffett, that's stocks, that's Berkshire Hathaway, and

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ride that sucker way up to a billion dollars, and of course,

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incredibly powerful hedge, because Warren Buffett in

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the last 60 years created 5.5 million percent return. To

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put that in perspective, the S&P 500, 30,000 percent return. To

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put that in perspective, it way outperformed inflation. Inflation hasn't

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been anywhere close to those two numbers. So stocks and businesses, yes,

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can also outperform it. But for most part, it's businesses

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because of skills. So if you want the ultimate hedge, invest

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in yourself. You are the ultimate hedge. You are the best asset to

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invest in to overcome inflation. So could hyperinflation happen

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in Australia? Could we absolutely destroy the power of

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the Australian dollar? Theoretically, yes. Will

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it happen? Technically, well, technically yes, but theoretically or

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I would say no. It's unlikely because we've

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got a floating exchange rate. We've got an independent reserve bank.

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We've got global trading partners. We've got a ton of resources here,

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deep capital markets. And we do have, despite the challenging

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leadership we have at the minute, that's a whole other episode of what I think about that. But

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we do have the ability to control money supply. And

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we do have hard assets backing. We've got land, arable land.

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We've got farming, commodities. We've got resources, energy, hydrocarbons.

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We're good. But if hyperinflation does happen,

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Like what happened in Germany, what happened in Venezuela, what happened in Zimbabwe. In

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those scenarios, you know what happened? People fled back. They just

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dropped the currency. They went back to other currencies. They went back to the US dollar. They

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went back to gold. That's what happened. The

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economy doesn't die. The paper money is just forgotten. All trust is

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broken and we stop using it. So it's not like you'll just have

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nothing. You will have figured out by then if there's hyperinflation, what

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does work and you'll have already gone there. But I can almost guarantee you that

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if you have business skills and you have the ability to pivot and

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you buy businesses and build businesses, there's no amount

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of inflation that can hurt you because you are indestructible because

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you invested in yourself. And of course, one of the other hedges

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that's happening that I haven't really covered here because I don't want to is cryptocurrencies, especially

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Bitcoin. They're like, oh, Bitcoin's a hedge against inflation. Oh,

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my God. Do I have to talk about Bitcoin? It's a code. It's a

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piece of code. And people are like, read the Bitcoin standard. How

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much research you have to do to realize something's valueless? Look,

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people are using crypto and specifically Bitcoin as an inflation hedge.

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But the fact of the matter is this, gold has got thousands of

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years of measurable data against inflation than

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crypto does. It's tangible. Remember, the inflation hedge

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is against tangible assets, right? Things that

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can produce value for the world. Crypto doesn't produce any

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value. How do I know that? Because I went down to the supermarket, With

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my wife, we were doing a checkout and I said to the lady, ìHey, do you take

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cryptocurrency for my groceries?î She went, ìNo.î I was like, ìPfft.î Then

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I went to my landlord the other day, my property manager and he called up and said, ìHey, you

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owe rent.î And I'm like, ìOh, do you take Bitcoin?î He goes, ìPfft.î So

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I'm like, ìOkay.î And so I rang up my American Express. I

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got an American Express card, platinum card. It's a wonderful card, lots of points. And

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I rang him up the other day and I had like $100,000 to repound that. And

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I said, ìHey, do you take cryptocurrency? Do you take Bitcoin?î They went, ìPfft.î How

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is crypto or Bitcoin a hedge when it's not even valuable?

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I can't use it for anything. At least I

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can sell gold on the open market. I can sell it.

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You can touch it. You feel it. Even though I hate gold, I can at

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least see it's there. You can't see anything with crypto. It's

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just code. Right? There's

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certainly value in the technology of a blockchain. There's certainly value in

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the technology of internet. There's certainly value in technology of AI, LLM

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models. There's value in those for sure, because they speed up things. Yes? But

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I can't see it in crypto. And so it might feel

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like it's a hedge against inflation. By all accounts, if you haven't bought it, it looks

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like it's hedged. But how they measure it? is

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in USD, right? And so if the USD disappeared overnight, so

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would the value of cryptocurrency, right? Because it's really got to be

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valuable in the real world. And that's why I don't think it's the best hedge. So

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I don't hold any of it. I never will hold it. Even if the world adopted

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it as a currency, which I cannot see happening, I would

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still own businesses. I would still, for that matter, if it

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was the right price, own a piece of property. I would still own things

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that are valuable. And I just can't see how it's valuable. This is why I

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don't personally own gold. I don't personally own crypto. I personally own

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things that are valuable to the world. Because I know if push

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came to shove and shit hit the fan, like it did in COVID, did

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people go to crypto? No. Did they go to gold? No. They went to toilet

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paper. So I'm thinking to myself, wouldn't I

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want to own companies that produce toilet paper? That's a better hedge, right? This

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is where my mind's at. This is how I think. So I know that people got wealthy by

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not owning those assets. I know they got wealthy by building businesses and investing

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in themselves. So I'm all about playing wealth games. What are the wealthy

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doing? What did the wealthy do to build wealth? because it's much

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better than just preserving it. Thanks for listening to Money Grows on Trees. If

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you enjoyed the episode, leave a five-star review on Apple Podcasts and

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Spotify and subscribe to us on YouTube so you never

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00:08:25,707 --> 00:08:28,829
miss an episode. And if you're serious about building wealth, make sure to

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check out the links in the show notes and follow me on all social media

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platforms at LloydJamesRoss for more. See