What I don't believe in is buying a completely ridiculously overpriced
property that's got negative cash flow, sending you into a financial spiral. And
that's currently what is happening because prices are ridiculously out of control. Bitcoin's
a hedge against inflation. Oh my God. Think
about Mark Zuckerberg. Think about the skills that he applied. He
became worth a hundred billion dollars. Do you think that outperformed inflation? Yes.
Do you think Jeff Bezos outperformed inflation? Yes. Do you think Warren Buffett outperformed inflation?
Yes, the best way to hedge inflation is to actually... I'm Lloyd James
Ross, seven-figure investor and entrepreneur, and I've helped thousands of
business owners and professionals turn financial stress into
success. If you're stuck in old money habits, overwhelmed by investing,
or unsure where to start, this is for you. I'll give you the mindset
and strategies to take control, grow your wealth, and achieve
financial freedom. It's time to make your money work for you. How
to protect your wealth in the Australian dollar collapse. Inflation's up, the
dollar's down, leaving your money in the bank. It's like putting it into a
leaky bucket or chucking it into the fireplace. But here's the thing, smart
money people and highly intelligent people financially have beaten inflation before.
So in this episode, I'm going to break down exactly how you can protect your wealth
even in uncertain times like now, using proven strategies that
worked in most of the cases of brutal inflation in
the past. So some economic history tied into this. So
if you haven't watched the previous episode yet on why the Australian dollar
is collapsing, go and watch that now. Go watch that episode, because we'll set up
and tell you why it is actually falling. Because once you know why
it's falling, then the how-to of how to get out of it will be in this episode now.
So every few decades, Inflation
seems to roar back, which means the value of the currency falls. And
you have to adapt or you're going to get lost or fall behind. Your
wealth is going to get hit. And history shows us that inflation can
be survived and even used to grow your wealth if
you play the game correctly. So just
to be clear, in the past there's been some examples
or real-life experiences where hyperinflation has
completely decimated the economy. And as I said on the previous episode,
it has crafted things like World War II from it, right? So hyperinflation, Zimbabwe,
Wyoming, Germany, it's extremely unlikely in Australia
we're going to see hyperinflation to that extent, where we're taking
a wheelbarrow of money down to the shop to buy a loaf of bread. But nonetheless,
It's inflation's already eating away at your wealth, all right? We are
a developed economy, thankfully, with institutional safeguards and we've
got an independent monetary policy and all these sort of fiscal controls in place
to mean that our money is safe from hyperinflation, but
An economy or a country and a government can get a bit ahead
of themselves and they can start pulling too many levers, which seems to
be happening at the minute. It's causing more inflation than
normal and it's slowly draining away the value of your wealth every
single month and every single year. Let's get
tactical. I'm going to take you through real examples
of how you protect your wealth in periods like
hyperinflation or in periods like we're seeing now, which is rising inflation. So
the very first one, the simplest one, and before I
explain these, let me just explain one economic concept that you have to understand. To
prevent inflation wiping away your wealth, what you want to do is
buy assets, typically hard assets, not
always, but typically hard assets that you only
buy once and never have to buy again. Because once
you bought once with today's currency, no matter how much inflation
runs away, you never have to worry because the value of that will follow the
currency. And there's no proven better way to do that than
with property, okay? Now you would have seen on some of my ads lately and
some of my content, I'm just like killing property. I'm like, property, you
don't need it. And what I mean by that is, cause I had a friend of mine asked me
today, he goes, Lloyd, What's this? What are you doing? You
don't like property. I'm like, oh yeah, okay, the ads are working pretty well. I've
had a vendetta against it at the minute because what I
don't believe in is buying a completely ridiculously overpriced
property that's got negative cash flow, sending you into a financial spiral,
and putting you under extreme financial pressure that you feel like killing yourself. I
don't want property to do that to you, and that's currently what is happening because
prices are ridiculously out of control. But the reason for it
is because people are running to it to prevent inflation wiping away their
wealth. And they know that property is one of the ways to do that. So
here's, I want to caveat this. I believe in buying property when
it's appropriately valued for the right reasons to produce passive income over
time to put you in a better financial position. Without a doubt, I'm a big believer. However,
we haven't seen property at that price range in this country for
many years. So right now, I'm against it. And
I don't own any. Because I don't think it's going to create any wealth in
the next couple of years. It's extremely overvalued. That's
why I've started a rebellion against it. Because there's other smarter ways
to make money and grow your wealth than property. And I became a multi, multimillionaire
without owning a single house. So there are ways. And I want to give you
hope that you can do it too without having to clamor into a property you can't afford. I just
want to caveat that, just so you know. So check it
out. For an inflation hedge, property is
good because once you buy it once with specifically with a mortgage to if
you can afford the mortgage and put a reasonable deposit in there. Because
the value of the mortgage falls away over time towards the bank. So like the
bank lends you $800,000, in the next say, I don't know,
20 years, it's worth $400,000 or less. So
inflation is working for you if you have a mortgage. And the other thing
too is you don't have to keep rebuying the house necessarily. You do have to do
some upkeep. But what you don't want to do is buy a property that requires you
to continually put money into it because you do get hit by inflation. So here's an
example. Let's say you bought an apartment and
the apartment's got high body corporate fees, it's got high maintenance, it's
got high insurance, it's got high operating costs, that could be
a problem when it comes to inflation because you're having to put money in all the time. Whereas
if you buy a house that doesn't have the same running costs, perhaps
something that's a bit newer or you're buying it undervalued. more
land attached to it, then you're going to find that it's a better hedge, just so you know.
Here's a historical example. In the 1970s, when there was a
massive oil embargo and inflation shot up to 13% and interest rates
shot up to 17%, property owners who already owned a
property thrived because the rents climbed, but the fixed rate
mortgage they had, they were able to keep that in today's dollars. They
were actually able to devalue their mortgage, which is amazing for
a mortgage holder. The same thing happened in
Australia during the early 2000s boom, I'd say the late 90s boom, which
is the last real estate boom we had, which is 25 years ago. And
real estate outpaced inflation due to rising wages and population growth. The
same kind of thing has happened over the last few years, but
now it's a point where not many people
can even buy a house. So it's not as effective
right now. So here's how to win when it comes to using
property as a hedge. One, focus on positive cash flow. Do
not put yourself in a position just to beat inflation by house when you're putting
yourself in an absolute financial bond that will cause you to commit suicide to
get out of it. This is crazy. People are doing that. People
laugh that it's like, I saw an article with a guy recently,
he felt like he had nowhere to go financially and he killed himself. This is what we're
doing to people because we're focusing on, I must own a house to have any social
status in the country, which is a joke. You can't take it with you when you die.
Make sure if you're going to do property, have high cash flow.
wherever possible. I know it's difficult in this interest rate environment and the price of houses, crazy,
but still possible. Lock in wherever you can fixed interest
rates. Now in America, you can lock in 30 year fixed interest rates, crazy.
Anyone in the States who bought a house can lock in a 30 year fixed term at
two and a half percent, killing it. But we don't have that in Australia. We
don't have those types of fixed rates because we don't get the same borrowing
power that you get in America. The same capital is not available
in Australia. So in Australia, we can have fixed rates for about four to five years.
So if you're on a fixed rate now, just so you know, that's going to stop in
the next four or five years if you just fixed it. So fix it wherever you
can, but be aware that it can come off the fixed rate. Avoid overleveraging
and speculative property traps. Boom, boom, boom. This is a big warning sign for
right now because people are overleveraged and there's a massive speculative
property bubble. Right now, just be aware
of it. You're buying into the biggest property
bubble in the history of the country. Last time, A
friend of mine on X, well, acquaintance on X, appropriately
sent me to some history, some economic history in Australia. The
last time we had an immigration-led boom like we're having now,
boom, was in 1870 to 18, actually it
was, yeah, it was 1870, 1890, I want to say, late
1800s. And what happened then was there was a massive gold rush in
Australia and had huge immigration coming to Australia, and
of course, a massive property boom. just like what's happening at the
moment from immigration. But if you look at
the data, the property market
didn't recover for like 70 years. 70. Yes.
You think this is the first time there's been an immigration-led boom in the country? You're wrong. So
can property go sideways and down for seven years? Yes, it can. Happened
in Tokyo in 1988. The property market in Japan still hasn't recovered.
And I know what you're going to say, but Lloyd, they didn't have immigration in Japan. Well,
they did in Australia in the late 1800s, and it didn't recover for like 70 to 80 years. So
just be aware that yes, property can be used as a hedge to
protect your wealth, but buying in an overpriced bubble and buying too
much leverage and not being able to service it is a problem, it's a worse problem.
So don't be too pedantic about protecting your wealth when you're gonna put yourself
in a financial bind for the rest of your life. You don't want to handcuff yourself just to get away from inflation.
What kind of life is that? Next way to prevent your
wealth being degraded is high interest savings accounts. I
know it's not as effective. I get it. But here's where it helps. It
doesn't build wealth from your money, but it does protect it from inflationary
wipeout. Meaning, if you put your money in the bank, it's like a
bond. You're lending money to the bank, and they're paying you accordingly for
the borrowing of your money. That's kind of what it is. It doesn't sit in a
vault. Just sit there, and they just pay you money. They
actually use the money themselves to lend at a higher rate. For example,
right now, you can I've got some money in the term deposit myself, and
the term deposit is producing about 4.5%. You can get better. Up
to 250k, you can get better savings accounts in some
places like St. George and ING. I think they're like 5 and 5.5%. This is
in Australia. In America, not so easy. You
can put your money into treasury bonds, which is probably better than
a savings account in the States in the bank, and they're paying about 4.5%. So
whether it's treasury bonds or treasury bills in America, or
whether it's Australian savings accounts, you can get about 4.5% return
on your money, and that will prevent at least 4.5% a
year of inflation biting away at it. Again, not the best,
but it's certainly a place to store your wealth. And in Australia, we
have government guarantee of your money in the bank of
up to $250,000, which means if there's a bank run and the bank
collapses, the Australian government will give you your money back. And
the same in America too, by the way. And I don't think it'd even stop at $250,000. I
think they would just honor it and get it going. Otherwise, we don't have an
economy. Real use case, here's what happened in countries with high inflation like
Brazil in the 2010s, smart savers rotated into
cash high-interest savings accounts and
short-term bonds. So there's an example of what happened in Brazil and this happens all
the time. I mean, even looking at Warren Buffett right now, just so you know, he's
put $370 billion into
short-term treasury bills, just so you know. So here's an example of how he's
putting his capital, not into risk assets, he's putting it into risk-free
assets, getting a 4.5% return on $370 billion.
So if it's good enough for Warren Buffett to protect himself against inflation, good enough for
you and I, all right? So that's the other way to do it. All right, the next way to
hedge your bets to a collapsing Australian
currency is the global hedge for a weak Australian
currency, which is actually the US dollar. And you're probably thinking to yourself,
why would I trade one fiat currency that's getting killed by inflation for
another one? Well, here's why. The US dollar is the world's reserve currency,
which means during times of inflation and during times of uncertainty, people
flood to the USD, not the AUD, not the Australian dollar,
the US dollar. And so what happens is the value of that dollar
is more steady against other assets. And so you do have a better hedge
against inflationary pressures if you own the world's reserve currency. You'll
notice soon when I explain some examples of what's happened during hyperinflation if
you have USD it's better. It's the last currency that's
effectively Disappeared and so you're better
off to own that than you are to the only Australian currency during risk off
Experiences like we're seeing now. Okay, so some historical examples
of what happened in 2008 the global financial crisis when there
was a massive run on banks and US banks were going bankrupt and Even
then, the Australian dollar fell from 98 US cents down to
60 US cents. In a matter of weeks, it just collapsed. Bang. So
even though the American economy was wobbling, people
flood to the US currency as a safe haven. It's a safe haven asset,
just so you know. So it can protect you from a falling Australian
dollar if you hold USD. And a lot of our wealth is held in
USD currency, not Australian currency presently. Okay,
in 2020 in COVID, again, the same thing happened. The Australian dollar was 70 cents, 70 US
cents, it was buying 70 US cents, and it dropped down to 57 US cents because
there was uncertainty. People thought the world was gonna end. And when that happens, they
run to USD denominated currency, okay? It's
just, it is a quick way to hedge your bets
against a falling Australian currency. The next way, this is arguably the
most popular way to hedge inflation. Not
necessarily the best, but it is timeless. And this has worked time
and time again for thousands of years. And of course,
you guessed it, it's gold. Not my favorite asset because it's
not productive, meaning if you have an ounce of gold today, in the
next 100 years, you still have an ounce of gold. It's
like, I've talked about whether you want to own the goose that
lays golden eggs or whether you want to own the golden egg. Owning gold is like owning one
golden egg and then hoping it grows in value over time, which it does
against inflationary pressures, but I prefer to own the goose. However,
if you want to buy gold, and that's why gold's up like 40% year to date, is because
it protects purchasing power during crises. And so you'll see gold go
up in value when there's inflation happening and also when
there's global uncertainty. And here's why. Because there's limited supply
and they can only pull out gold over a certain period of time So there's like this
global demand for an uncertainty limited supply eating a scarcity hedge
and that's why it's a great example of what you can put your money into
to protect it against inflation so during the German crazy
hyperinflation when they're taking wheelbarrows of the the paper mark down
to the to the to the shop to buy a loaf of bread really happened in 1923 and
Gold was the go-to there.
So people that moved their money into gold as that paper currency
collapsed, they protected all of their wealth. Same
thing in the 1970s, the oil embargo in the United States, inflation went crazy. Gold
went from $35 an ounce to $800 an
ounce in under 10 years because of the massive inflation.
So you can see very clearly when there's massive inflation, gold is
a run-to asset for a lot of people, which is why it's had such a tremendous rise in the last
12 months. but in times of risk on, doesn't do anything. Goes
sideways, goes nowhere, doesn't produce income. So it's not a great financial freedom vehicle,
but it's a great currency hedge, right? Gold didn't make people rich, as they say,
but it sure meant they didn't get their wealth wiped out. Just quickly,
if you're ready to take control of your finances, but feel stuck on where to
start, I have a solution. My book, Money Bias Happiness, simplifies
investing and wealth building with practical steps to help you achieve financial
peace. Get your copy via the link in the show notes, and let's get your
money working for you. Now, back to the episode. Next one,
oil. All right, black gold. I'm reading a book at the moment called Titan.
It's a John D. Rockefeller story, the richest man in history. He would
be worth in today's dollars about $600 billion if we wind it forward with
inflation. And he owns Standard Oil. And so if you look
at one of the greatest hedges against inflation is oil. Oil,
the reason why it's a hedge is because oil is in everything. It's
in transport, it's in food production, it's in goods
and services. Oil is in fuel, it's in everything. It's
in food production because of fuel and farming equipment.
Oil passes the inflation test because it keeps profits flowing. It's
an inflation-proof product because we need it in everything. It
actually forms the basis of most inflation, price inflation,
because it is in everything. If you have a world without
oil, goodbye iPhone, you don't have one. In fact, almost all
goods in the world, if you don't have oil, they disappear. If we don't
have oil, one of the key hydrocarbon, the
food bowl of the world disappears and you and I starve to death. I
just don't think people really grasp how important oil is to
your well-being. You probably have no idea. It's
such a great hedge because if inflation goes
up, guess what? You just increase the price of oil. It's like gold. It
will ebb and flow with inflation itself. And so the value of
oil becomes more and more valuable over time because it's a scarce resource.
There might only be enough for the next 200 years. Here's
what has happened recently to hedge against inflation. If you take a
look at Warren Buffett's share portfolio, the top five positions, guess
what's there? Chevron. And Chevron's one of the world's largest oil
producers. And you look at Occidental, it's now up the top five as
well. So two of the top five positions in his portfolio are
oil companies, Occidental Petroleum. So the reason he's positioning
his portfolio into oil companies is because he knows that oil
has pricing power, that he knows when inflation goes up, you can just simply
increase the price of oil. It's an inflation hedge,
right? But he doesn't just buy the actual commodity, he buys the
businesses that produce. So he's still buying stocks
in companies to hedge inflation, which we'll come to in a second. So
during the 1970s, oil shocks, inflation went out of control again,
as an example. Oil stocks went way up. Now, if
you're looking in the last couple of days, when Iran was attacked
by Israel, Iran's like
it produces I think Iran sends 15% of China's
oil comes from Iran So Iran's a big oil producer you look at
when this conflict bang oils Oil supplies
contained a bit and bang the price of oil has gone up to now. It's like it
was $45 a barrel and now it's gone up to 75 and like a
number of days and So oil can
surge when there's high inflation and global
unrest. So you look at what happened in the 70s, oil went
drastically high. And people made a ton of money out of
energy. Energy, oil. Oil is the foundation of
all energy. So currently, most energy I should say.
So 2021-2022 inflation, it
went up to $120 a barrel. So you can see real world examples
during COVID went up to $120 a barrel, or certainly after COVID, went
down to negative. What's interesting about COVID is that when the global economy stopped,
oil went drastically down, and it went down to negative $37 a
barrel. So let me explain what that means. you
were being paid to house oil
back then. It was like the ultimate oil boom. So if you had to bought
oil companies back then, you killed it. But it went up to $120 a barrel,
because it is a good hedge against inflation, right? So there you go. Great
way to beat the inflation pressures is oil. Now,
what's next? We have gold, oil.
Buffett's moves on oil. Here we go. Stocks.
This is interesting because you're like, well, how do paper assets protect against
inflation? Here's how. With real businesses, real
businesses beat fake money. So people are like, Lloyd, how come you're not
buying gold? You're not buying this? I'm like, I'm already hedged in
inflation because I have businesses. So one business we have is
a laundromat, and we know if inflation goes way up and the dollar loses its
value and collapses, we just increase prices. Why? Because people need to
clean their clothes. Fact. It's a very recessionary proof business
model. People need clean clothes. They don't want to walk around in smelly clothes
and filthy clothes, so they need to wash. They need to dry. So if inflation
inflates the value of the local currency, we just increase prices. So
businesses that do well in inflationary times are
ones that can raise their prices. It means they've got what's called high
or good quality pricing power. So they can increase
their prices during inflation. They can increase dividends. They
can effectively outperform inflation. So for example, one
of the most powerful companies in the world when it comes to pricing power
is, you guessed it, Apple. Because people would
trade their second car in to get their hands on one of these like the pricing This
is probably worth $30,000 to people not 1500 bucks It's
got so much pricing power in it And I know that because I
know that people would literally trade their cars to get this and I know cars
cost 30,000 So this is really a $30,000 product, but
it's not being sold for that. So Apple knows it can incrementally increase
the prices like this and over and over again to
combat inflation because they know that people are still going to buy this because it's such a
valuable commodity to people. The same thing I can see over
there in the fridge, there's a can of Coke in there. Another example of a company that
can actually outperform inflation is Coca-Cola because Coca-Cola
has the ability to increase each can by one cent. Over
8 billion cans consumed daily. Think
about that. Some huge number of cans consumed daily
can increase it by one cent. It's almost 2 billion cans of Coke consumed
daily. So you think if Coke can increase it by a cent, it's
increasing it by like 2 billion cents a day. Isn't
that insane? So it's got pricing power, so it can outperform inflation. So
check this out. Look at what Warren Buffett's doing right now. Look
at this. He knows that the US dollar is inflating. He
knows that, and I'm talking about the Australian dollar, but the US dollar is also inflating. He knows this. So
he's positioned his portfolio into bonds, which
helps hedge inflation a bit because you're getting 4.5%. He's putting his
money into oil stocks hedge, and
he also owns Coca-Cola as a company. His highest
position is Apple. Think about this. And he's got
Moody's. So all these companies in his top five or six holdings, which
takes over most of his portfolio and other private
companies he owns, he's got pricing power. See his candy. Big,
big powerful company. He bought that for $25 million many years ago. It's worth
billions now. And it can increase its candy prices to
combat inflation because people will still want to buy its product. So he's
got tremendous hedge in inflationary pressures with his
holdings and businesses. So, companies can raise prices in
inflationary times. This happened during the GFC, the
S&P 500 soared because of rising money supply. Owning an
index fund, if you've got companies in there like Microsoft, Google,
Apple, etc., Coca-Cola, they can increase their prices. McDonald's,
the Big Mac index. When you went to McDonald's recently,
I bet you were shocked by the price of stuff. Yes, it
hurts. It used to be you could go to McDonald's at $5.95 for a meal. a
house to get a meal at McDonald's. It's the
Big Mac Index. McDonald's is a perfect example of a company and
a business that can increase its prices. Why? Because it has. So
if you want to hedge inflation, businesses are a wonderful way to do it.
That's how I do it. That's how I do it. So I'm excited that
I own certain companies that are hedged with oil stocks. I'm
excited that we have businesses that are hedged in products
and services that people need. You know, super, super
effective way to do it, right? So you can either get it through some sort of
index, you can get it through ownership of businesses, private or
public. All right, next one. This is the last one. The
best hedge of all time. We said the best to last.
This is the best hedge against inflation of all time. It's
the fastest way to outrun inflation. And unlike
cash, it can compound very powerfully. So
check it out. You're going to be thrilled or you're going to be
disappointed, be the one. Here we go. The best way to
hedge inflation is to actually increase your skills. The best way to
hedge inflation is to earn more money. The fastest way to outrun it
is to earn more. Unlike cash, skills can compound drastically.
You can end up finding skills that you can totally transform your earning power
with and your income is the most important thing you can do to enhance
your wealth. It really is. You can't save your way to wealth. You can do it for a
period of time but you can't get it down to nothing. There's
an example in, I mean, many examples in the past where there's inflations
crushed the economy. I know without a doubt that people in that economy with
skills, sought after skills, were still getting paid a ton of money in
all sorts of different currencies and or gold and or in barter to
apply their skills to the economy. If you've
got skills, people will find a way to give you something of value to
get them. It doesn't really matter if your local currency like the Australian dollar
is completely getting It's completely collapsed
in the last few years in terms of its value, but... I
know that if I've got skills, I can get paid in gold, I can get
paid in US dollars, I can get paid in barter. Like if I'm
good at what I do and people need it, they will find a way to pay me.
Even if the currency is toilet paper, I know during COVID when there's a lot of toilet paper,
I could have provided a skill to someone. So Lloyd, I'll pay you in toilet paper. Go,
give me the toilet paper. It doesn't really matter what it is, your skills are
inflation proof. And it doesn't matter if the global currency
is crypto, USD, gold, Barter,
whatever. Your skills transcend all
of the global currencies. All of them. So the
most important thing you can do is improve your
knowledge and skills because they are inflation proof. They will ride inflation way
up because there's people out there with skills. Think about
it. Think about Mark Zuckerberg. He's now like the
top three or four wealthiest people in the world. He's also the youngest in
that group. Think about the skills that he applied. He
became a multi, he became worth $100 billion. Do
you think that outperformed inflation? Yes. Do you think Jeff Bezos outperformed inflation?
Yes. Do you think Warren Buffett outperformed inflation? Yes. All
the people I know who are wealthy, a lot of my friends who are worth millions of dollars, how
did they get there? Did they buy gold? No. Did they buy real
estate? No, they didn't. They might say they do now to protect their
wealth, but they didn't get there that way, let me tell you. They all did it through actually
improving their skills and starting and building their own businesses. That's how
they did it. So don't, and some people
have certainly, there's a story of a lady, she just gave
a billion dollars to a charity. Her husband
happened to invest with Warren Buffett, that's stocks, that's Berkshire Hathaway, and
ride that sucker way up to a billion dollars, and of course,
incredibly powerful hedge, because Warren Buffett in
the last 60 years created 5.5 million percent return. To
put that in perspective, the S&P 500, 30,000 percent return. To
put that in perspective, it way outperformed inflation. Inflation hasn't
been anywhere close to those two numbers. So stocks and businesses, yes,
can also outperform it. But for most part, it's businesses
because of skills. So if you want the ultimate hedge, invest
in yourself. You are the ultimate hedge. You are the best asset to
invest in to overcome inflation. So could hyperinflation happen
in Australia? Could we absolutely destroy the power of
the Australian dollar? Theoretically, yes. Will
it happen? Technically, well, technically yes, but theoretically or
I would say no. It's unlikely because we've
got a floating exchange rate. We've got an independent reserve bank.
We've got global trading partners. We've got a ton of resources here,
deep capital markets. And we do have, despite the challenging
leadership we have at the minute, that's a whole other episode of what I think about that. But
we do have the ability to control money supply. And
we do have hard assets backing. We've got land, arable land.
We've got farming, commodities. We've got resources, energy, hydrocarbons.
We're good. But if hyperinflation does happen,
like what happened in Germany, what happened in Venezuela, what happened in Zimbabwe. In
those scenarios, you know what happened? People fled back. They
just dropped the currency. They went back to other currencies. They went back to the US dollar.
They went back to gold. That's what happened. The
economy doesn't die. The paper money is just forgotten. All trust is
broken and we stop using it. So it's not like you'll just have
nothing. You will have figured out by then if there's hyperinflation, what
does work and you'll have already gone there. But I can almost guarantee you that
if you have business skills and you have the ability to pivot and
you buy businesses and build businesses, there's no amount
of inflation that can hurt you because you are indestructible because
you invested in yourself. And of course, one of the other hedges
that's happening that I haven't really covered here because I don't want to is cryptocurrencies, especially
Bitcoin. They're like, oh, Bitcoin's a hedge against inflation. Oh,
my God. Do I have to talk about Bitcoin? It's a code. It's a
piece of code. And people are like, read the Bitcoin standard. How
much research you have to do to realize something's valueless? Look,
people are using crypto and specifically Bitcoin as an inflation hedge.
But the fact of the matter is this, gold has got thousands of
years of measurable data against inflation than
crypto does. It's tangible. Remember, the inflation hedges
against tangible assets, right? Things that can
produce value for the world. Crypto doesn't produce any value.
How do I know that? Because I went down to the supermarket, With my wife,
we were doing a checkout and I said to the lady, ìHey, do you take cryptocurrency for
my groceries?î She went, ìNo.î I was like, ìPfft.î Then I went to my landlord the
other day, my property manager and he called up and said, ìHey, you owe rent.î And I'm like, ìOh, do
you take Bitcoin?î He goes, ìPfft.î So I'm like, ìOkay.î And
so I rang up my American Express. I got an American Express card, platinum card. It's a
wonderful card, lots of points. And I rang him up the other
day and I had like $100,000 to repound that. And
I said, ìHey, do you take cryptocurrency? Do you take Bitcoin?î They went, ìPfft.î How
is crypto or Bitcoin a hedge when it's not even valuable?
I can't use it for anything. At least I
can sell gold on the open market. I can sell it.
You can touch it. You feel it. Even though I hate gold, I can at
least see it's there. You can't see anything with crypto. It's
just code. There's
certainly value in the technology of a blockchain. There's certainly value in
the technology of internet. There's certainly value in technology of AI, LLM
models. There's value in those for sure, because they speed up things, yes? But
I can't see it in crypto. And so it might feel
like it's a hedge against inflation. By all accounts, if you haven't bought it, it looks
like it's hedged. But how they measure it is
in USD, right? And so if the USD disappeared overnight, so
would the value of cryptocurrency, right? Because it's really got to be
valuable in the real world. And that's why I don't think it's the best hedge. So
I don't hold any of it. I never will hold it. Even if the world adopted
it as a currency, which I cannot see happening, I would
still own businesses. I would still, for that matter, if it
was the right price, own a piece of property. I would still own things
that are valuable. And I just can't see how it's valuable. This is why I
don't personally own gold. I don't personally own crypto. I personally own
things that are valuable to the world. Because I know if push
came to shove and shit hit the fan, like it did in COVID, did
people go to crypto? No. Did they go to gold? No. They went to toilet
paper. So I'm thinking to myself, wouldn't I want
to own companies that produce toilet paper? That's a better hedge, right? This
is where my mind's at. This is how I think. So I know that people got wealthy
by not owning those assets. I know they got wealthy by building businesses and
investing in themselves. So I'm all about playing wealth games. What are
the wealthy doing? What did the wealthy do to build wealth? Because
it's much better than just preserving it. So I hope this makes sense to you and
you've enjoyed the episode. And if you have, hit the subscribe button,
leave us a comment. What do you think is happening to the Australian dollar? Do
you think it's going to be hyperinflated? Let me ask you this. What is
your hedge against inflation below? Leave it in the comment section,
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