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You Hey everybody, it's Sarah. Welcome back to The Money Mechanics Podcast. I'm very excited to be joined by Lee today. So Lee is contact of mine that I met actually quite recently in the UK. And I met him at one of the networking events that we run in Northamptonshire, and it was about two weeks before he was getting on a plane to move to Thailand. So, Lee, you're coming to us live from Kotal in Thailand. I believe, right. Yeah, yeah, I am.

So today we're going to be talking about all things crypto and money, which is very exciting. So Lee, just for anyone who's never met you or come across you before, tell us who you are, what you do.

So I I'm Lee Markham, and nice to meet everyone. I

i decided about five years ago that I would take a look at this crypto Malarkey, because it seemed like everyone was changing their life, and I didn't really understand it at all. Walked away, then realised that I should probably understand why I'm walking away before I just give up on something, because there must be something to it. And it kind of went from there before that I was in the RAF. I did 13 years in the RAF. Thought that would be my whole life, because I had no real reason to leave, until I started to look at the world in a different way, I guess. And then thought, No, I can't do this. I need to do my own thing. Felt my natural calling, which was teaching, because I love to teach. And here I am, yeah. And so now, obviously, you are a crypto trader. You trade crypto, right? You invest and hold, but you also trade day to day.

Actually? No, okay, I wouldn't call myself a trader. I do trade from time to time which, but not in the traditional sense, where I'm surrounded by screens and I'm watching red and green candles all day. I actually consider myself more of an investor in crypto for the long term. And when you when you look at the returns that crypto can generate, I won't go there now, but you don't really need to trade because they're good enough as they are great. So let's talk about, first of all, what you were in the RAF, and you just said, then you want to do something for yourself. Let's talk a little bit about the mindset shift of coming away from being in a very stable, very structured, like employed environment, you know, that has its own risks associated to it, but actually is pretty reliable to giving that up, becoming an investor and then moving to the other side of the world. Let talk. Talk about what you think's changed, like mindset wise, in that period of time,

it has been such a dramatic shift in such a small period of time. Because I think when you're in the military, whether you believe it or not, you become institutionalised, and you have that group mentality of it's for the bigger cause. And I think you realise, as you go up the ranks, and as you're in there for longer, you discover that there's certain skills that you've got that you don't get to explore because you're not in the right role for it. So I had a lot of undoing. I was still in the RAF when I was going on this mindset journey, and it was a book called The Rich Dad, Poor Dad. Loads of people have probably read it. And then it moves on to the Cash Flow Quadrant,

without a doubt, without and I actually read it way before all of this happened, and I didn't really take it in properly. I read it again, and it was like reading a different book, because I had a little bit more awareness about me. And then I read the Cash Flow Quadrant, which is his sequel to that, and I thought, I don't think I can do this job anymore. What am I doing? I need to do something different. And I want to, because he talks about being an employee, and then self employed, where you own a job, and then a business owner, and then an investor. And I thought, I need to move across the other side of the quadrant. But what the heck do I do? What am I good at? I don't really know if I'm good at anything other than what I do in the in the RAF. So I had this, I had this mentor who said success loves speed and go and build authority, and as long as you give value. And there was a book, another book, and it said value, money is the byproduct of the value that you create for other people. And I was like, That is a belter of a quote. I wonder how I can steal that but, and it just is something I thought of, and I thought, if I can give value to other people, then maybe they'll pay me for it. And I couldn't believe the first person that ever paid me to learn about crypto, because obviously there's a stigma associated to it. Whenever you say crypto, I had to.

Get used to saying that I was in the RAF, where I was given a good response. Someone would say, Oh, my granddad was in the RAF, or my family were military, and they go, that's great. And it was quite a nice reception. And then it shifted to oh, I teach people about crypto, and they go,

and you're on the back foot. Straight away is I have to now prove to this person that I'm not a scammer, because they assume that they go hand in hand with each other, yeah,

and for the first I would say, probably four years of teaching it,

it was really difficult. People didn't want to know about it, and now it's changed big time.

So let's just for anybody who's listening to this, who is brand new, like has heard the word crypto, Bitcoin floating around, but it's literally got no fucking idea what that means. Just explain to people in the simplest way that you can, what actually is cryptocurrency.

Okay? I think that the term currency is probably the wrong term, because there's very few that are actually currencies at all. I would think of them really as a stock or a share within a company that gives you access to services. That's really what it is. But when it first came around, it was in 17 years ago, believe it or not, that Bitcoin came on the scene, and it was created by an anonymous person. We still don't know to this day who it is, which I think is a good thing, because if you don't know who the CEO is and it isn't owned by anyone in particular, then they're not corruptible. They're not you can't sway their opinion.

Yeah, exactly. So it was formed in 2009 and it was right after the 2008 financial crash. And I think probably the people watching this would have felt the pain in 2008 because it was a housing crash, and we trusted the banks. We had to, because that's where we park our money. And whoever, this person who, or group of people that created Bitcoin. They created what was known as a peer to peer, cashless, digital payment system where you can transact value across the internet with anyone in the world at the speed of data, and you don't need to rely on anyone in the middle. You don't need to trust a bank. You don't need to trust the intermediary whatsoever. All you need to know is it's based on mathematical code, and it's verifiable by anyone. And I know that sounds like a bit of a mouthful, but in simple terms, you're transferring value across the internet, and you don't need to trust anyone other than the fact that the code is completely visible, and if you want to go check it out, then you can. And that is essentially cryptocurrency, and they've evolved since then, because other companies and foundations have looked at Bitcoin and gone, oh, that's a great idea. I wonder if we can do anything that's better, because Bitcoin is now old, maybe it's a little slow. We can go faster than that. We can make the transactions cheaper than that. And the term cryptocurrency is probably wrong, because many of them are not currencies. They're just you own them, and it will give you access to goods and services, and that's really what it is. Okay. A very short interruption of the episodes, I want you to get back to listening. I just wanted to remind you that the Money Mechanics weekly newsletter is completely free, and we'll send this out to you every week. All you've got to do is find the link in the show notes and get signed up. When we send this out to you, this weekly newsletter is going to include things that will help you to become a better money mechanic. It could be things like what's happening in the markets, things like budgets, how that's going to impact you. And I'm also going to share a lot of insight into what I'm doing in my own portfolio and in the portfolios of the guests we've got on the podcast, to really just help you understand what you could do differently to make your money work as best as it can for you, make sure you go and find that link and get signed up. So explain to people. So again, I want to go back to, like the real beginners, like who have never heard of it before. So I There's, obviously, there's crypto digital assets, basically,

when people talk to me about crypto, they always say, but Sarah, it's not tangible, like, it's not it's not real, and I don't trust it because it's not tangible and it's not real. And I always say, Well, I own shares in Coca Cola, but they're not tangible, like, I can't touch them, feel them, like, I've not got a certificate. Now, everything's in the digital world. How would you reassure somebody who's thinking, I want to understand this crypto thing, but it's intangible, so I can't get my head around it, especially a lot of people listening to this will be property people who are so in the tangible space, bricks mortar, like we've got houses you can't pick up and run away with how do you reassure people that can't quite get their head around this digital asset piece?

I think when you when, when the reason comes out that I can't because I can't see and touch it, therefore it doesn't have value you can't see or touch Facebook.

It's just software. It's code. That's it, but you still use it. It still has value, and it's what bitcoin does, is it gives people the ability to transact with absolute certainty that no, there's no manipulation, and there's no maybe manipulation in terms of price. But then again, everything is manipulated with price, if you have everything. So one of the things I like to say to people is, where, how does Bitcoin verify a transaction? So when you do it on your bank, and you primarily, we transact online. Now we don't use cash as much, arguably, which probably should, but we don't use cash as much, and we would send it because we trust the bank and they, what they would do is, I've Lee's got 1000 pound in his account, and he's going to transfer 500 pounds to Sarah. What happens? Well, they changed the digits in Sarah's account to increase it by 500 and reduce mine by 500 there's no actual physical movement of anything. It's just a change of figures. And when it comes to

that, we're just relying and trusting that the bank are going to do the right thing. We can't verify that it's right because we can't see behind the scenes. We just trust that that's the case. And when we look at the fiat currency, and there's a lot of people in not in the crypto world, not familiar with that term, fiat currency is everything that we use today, pounds, dollars, euros, they became a fiat currency in 1971 and that's because President Richard Nixon took America off of the gold standard. The dollar used to be backed by gold. It's no longer backed by anything other than trust. Yesterday, $1 bought me $1 worth of stuff, and tomorrow should do the same, because I trust the government, and there's no actual tangible assets backing it. Well, what they do, and they're doing it right now, and they've been doing it for a long time, is they inflate the currency supply by printing more. And when I say print, that's like inverted commas, just creating more. And they do this to stimulate the economy, but which is basically just numbers on a screen, right? They just add numbers on the screen. That's really all it is. Yeah,

that is it. And I have to ask people, What do you think happens to the value of the money in your bank account when they start printing more of it and they go, Oh, it probably goes down. Why? Well, it goes down because there's more of it. Okay, so you're saying it's a supply and demand thing. Well, yeah, I guess it is, because the more of something there is, the less valuable it becomes. Well, if we're measuring, if you're saying that, and the cost of everything is going up, your coffee, you go to Starbucks or Costa and a flat White's bloody four pound, and you think, this is ridiculous, this little bit of coffee. Is it because the coffee beans are becoming so rare? No, because it takes more of the pounds to buy the same stuff, because they have lost their value. And we're measuring everything we own in a currency that's losing value. I refer to it as you're measuring your wealth with a ruler that gets smaller every year. So it's always going to look like it's gone up. And when it comes to Bitcoin, you can't inflate it. You can't just go, You know what? We need a bit more, bit more Bitcoin, because there's not that many there, and the demands going up. So let's make more. Well, we can make more for a process called Bitcoin mining. And people think I actually told my mom, you have to put your overalls on and get a pickaxe and go down the mine and find some bitcoin. And bless her, she believed it, but she wouldn't know, would she? So it's mean of me to do that because she wasn't brought up in this era. Yeah, she's, she's of a generation where we didn't have anything like that. So I only make fun because it's my mom, and I get to,

yeah, exactly so. And she and I have to say, well, by bringing these new Bitcoin into circulation, no one's just going type. That's me typing, by the way, that's my impression of typing numbers onto a screen, making more it takes real energy. Bitcoin mining is a it's where lots of computers all around the world. It's a big decentralised network, and people are running this software on their computers, and they're all competing against one another, and I won't go any more technical than that, but they're all trying to win the new piece of Bitcoin. That's how it comes into circulation, that's backed by energy. So when, when someone would say, well, it's not backed by anything, you know, it's not tangible. Every piece of Bitcoin that's in existence cost real energy. Energy costs money. Therefore you could argue that it's tangible in that sense. So that's why, yeah, so I think let's come back to the supply and demand thing. Because I had a conversation recently with somebody, and I was it was actually a friend of mine, and we were talking about crypto, and I was saying to her, how much money I've got in crypto, what I hold, etc. And she said, But Sarah, I don't really understand how Bitcoin is going to be any different to fiat currency, because surely you can just create more. And I was trying to explain to her that actually, with Bitcoin, there is a finite amount of it. I think it's 21 million Bitcoin, right? Is that? Right? Yeah, yeah. We've mined so far over.

We've mined about 20 million, so there's about a million left to mine, is my understanding of it. So do you want to just elaborate a little bit on that so people can understand the finiteness of it and what will eventually create that? In my opinion, again, this is not investment advice, in my opinion, why the value of Bitcoin will continue to go up. Because actually, we're going to reach a point where it's all been mined and it's all owned, which means if people don't want to sell it, the price will go up. That's my understanding. So talk to us a bit about that.

I would say what you said is absolutely spot on. And if I'm going to add any meat to the bone, it would just be that

we're nearly there in terms of how many Bitcoin are in circulation, but the person who created this is so smart that they built in this scarcity mechanism. So what happens is, every four years, the amount of bitcoin. So imagine, I like to use real examples that people can relate to. So imagine gold mining. Now, we know for a fact that there is a limited amount of gold on Earth. We don't know how much there is. We just know that one day we'll stop finding it, and then that will be everything that's in circulation, as far as we know. But we know there's a limit. We just don't know what the limit is. And we mine physical gold out of out of the earth a certain amount, roughly every year there'll be a certain amount of tonnage of gold that we bring in, and we call that a stock to flow ratio. The stock is how much there is, and the flow is how much new gold makes its way into circulation. And the same with Bitcoin. But the difference is, we not only know there's a fixed supply of Bitcoin, we actually know what the supply is, and we know when we're going to reach it, in the year 2140 unfortunately, I don't think any of us will be around. I hope we are, but I don't think we will in 2140

and we know that's going to happen because all of these computers that are verifying transactions to make sure that people are not spending money that they haven't got, because it's all very technical behind the scenes. But the point is it's mathematical, mathematical certainty that you can't really cheat the system. I wish it was like that in the traditional banking world, but it isn't. And the fact that there's only going to be 21 million, and we know when that's going to be, when you look at how many Bitcoin are already held by people for a long term. We've got the person who created Bitcoin that hasn't moved any of their Bitcoin since day one. They've never moved and that's a million of the supply. Then you've got asset managers like Blackrock strategy, which is owned by Michael Saylor. Even the US government and other governments around the world are buying and holding Bitcoin as a store of value because they recognise it's Scarce you've also got and I think this is a really interesting one. There's lots of people around the world that have Bitcoin on their phone in a wallet, and they haven't touched it for years because they've forgotten how to access it. And if you don't know the password or the seed words, which they're known as, and you can't get back into it. And there was a great story, I say great story, a horrific story of a guy in Wales who accidentally threw away his hard drive that had his private key on there. And it'll be worth, I think it's going to be worth close to a billion, very close to a billion dollars now worth. And he was trying to excavate the tip to Britain, said, I'll split the money with you. And they said no, and he's kind of had to write it off. Now that Bitcoin will never be replaced, no one who's going to do it. No one's going to say, oh, I can make more Bitcoin. Well, no, you can't, and it wouldn't be a good idea anyway. So let's just say that's now been removed from supply. That's one person. How many other people in the last 17 years have done something that's similar? So we actually don't know how many Bitcoin are actively able to circulate. So we can assume that the supply of Bitcoin is probably less than the 20 million that we mentioned that are available. How many people are on the planet, 8 billion. How many people, percentage, wise, roughly, own Bitcoin, less than 8% of the world. So even if every millionaire decided, Oh, actually, I think I should probably own one Bitcoin, they couldn't even own one because there's not enough for everyone. And when the rest of the world wakes up, and unfortunately, I firmly believe that the likes of Black Rock and friends have, they've known for a long time that what Bitcoin is and where it's going to go, but they've been able to manipulate your opinion so that they can acquire it nice and cheaply. And when they're ready to go, and they've held enough, they'll go, bitcoins really good, by the way. And then you go, Oh, really. Oh, I better buy some then.

You now you've given me the endorsement. So yeah, I think with crypto, Bitcoin, Ethereum, Solana, like any of the coins, I think, in my experience, people's biggest barrier to it. In fact, I think there's two biggest barriers. One is fear of not understanding.

Like, fear of just I don't really know how it works. I don't really know how to buy it. I don't really know how to do it. That's one thing. But the other thing is this underlying fear that it is a scam. Everybody that they know has lost money in crypto because they've put it into a scheme or a pyramid fund or someone's start like, etc. So let's talk a bit very honestly about the risks associated with crypto. I think the first one, obviously, is volatility. And anyone listening to this podcast will know that I always say, don't invest what would destroy you to lose? Because we need to be ready for the fact and expect that volatility will happen regardless of where we are in the market, whether we're at the top the bottom, whatever's happening, there will always be something that will create volatility. So volatility aside, what other risks are associated with crypto and how can people prepare for them?

Okay, um, I just want to touch on the volatility as well, that

the volatility, in my mind, is what gives it the bigger advantage over other assets. Because they said it's a great quote, again, I wish it was mine, but it's not. Volatility is the price of being early, and when you are early to an investment and other people haven't got involved and pushed the market cap of Bitcoin is only 2 trillion. It's not that much. The whole market cap of crypto is only 4 trillion. So again, not that much is probably, I mean, when you look at Gold, it's 30 trillion. And you look at the commodities and forex markets, so much bigger.

But anyone has never heard the phrase market cap before, so just again, I try and remember, we've got real beginners on here. So market cap is just the total global value of this particular asset. So the market cap just means, if one person owned everything, that would be the value of what they own. Basically, that is the market cap. That's a great way of saying it. I've not heard it I've not heard it explained that way. That's good. I remember when I was first started, and I used to people say, Oh, the market cap of and I'd be like, what is the what is that? What does that mean? So I try really hard, if we're here in jargon, to go, oh, I wouldn't have known that at the start. So I'll explain it. So that's why we put that.

Yeah, perfect. Yeah, no, it's great. I like to, I've created all kinds of courses. I work with people at all levels with it, and sometimes I have to remember what they don't know, yeah, not remind you. And I always think of my mom. I go, right? Would my mum understand this? Go back? And my mum, bless her, would not understand that? She'd love to, and I think she could, but I'm not sure she would. The thing

is, tell me off. Yeah, exactly. Hello, Sarah's mom.

So, yeah, it is volatile. But I think that creates a lot of opportunity if, if you look at, let's say, housing, and now we know housing doesn't go up in a straight line. It does have, you do have like, ups and downs. Of course you do in any market, otherwise it would be completely manipulated and not real, but they're much less volatile and aggressive than they are in crypto. You could look at a portfolio and the next day has dropped 20%

but it's an unrealized loss, until you actually sell it, and what you'll find is you end up becoming numb to this, and you just go, you know, if I just zoom out on the chart, and what I mean the chart, the price action, and look, look at a bigger picture, rather than focusing on what's happening right here over the last week. Let's have a look over the last year. Okay, the general direction is up, and we've had a few volatile moments along the way. For me, that's that's buying territory, that's me getting a bar a bargain and people in property they're looking for they made most of their money during financial crisis. It's not nice, but it's a great time to do it. And we get that gift with crypto all the time, if you can reframe it that way,

so that's volatility, but you mentioned about the some of the scams or things to protect yourself from. Yourself from. One of the reasons a lot of people in my network who know me have come to me because they've been burned,

and the primary one is projects, MLM. MLM as a business model, I don't think it's overly bad. All you're doing is incentivizing the users to share value with other people, rather than the company going, I'm just going to spend it on a marketing team and a big billboard. You know, if you like something, if I go to a restaurant, I won't, I won't stop talking about it. I'll tell everyone, and I'm not getting anything for it. But if they said to me, Lee, if you refer people to our restaurant, we'll give you a free meal, then everyone's going to know about it, because I'll have my megaphone out in the town centre, because I'll share it because, but there's no problem with that. People don't mind that. And go, yeah, he's getting a little bit of a commission. But, you know, he's just sharing value. That's fine.

But when the person I always think the person joining the opportunity should always get more value than the person.

And share in it, and when it's combined with crypto, run away, because it will never work. It's never worked, and it's created this horrible image in people's minds that that's what crypto actually is. And the people who were burned by this kind of thing were probably this is a sad part. They rely because crypto is a new technology and it's a new industry, and it's a lot of jargon. They rely on the fact that you don't know the terminology. You don't know what it means. You throw out words like NFT and web, free and AI blockchain, and they go, Oh, I don't know what that means, but it sounds fancy. And you're saying that if I put this much money in, I'm going to get a daily cash flow. Because everyone in the UK and probably other countries, say everyone, a lot of people, they're bloody struggling, and it's not been made any easier by the government, obviously, and they're looking for another way of making additional income. You can't blame people for that they want to, want it. And when it sounds like they don't have to do anything other than invest and they get a monthly or daily return, they're going to be very tempted by it, and that's where they sting you. So you have to education is the best antidote to this. I totally agree. And I think, like, again, I've met people. I do a lot of speaking on the circuit, and the property space, investment space, obviously, we run our event. And a very common conversation I have is I put money into one of the schemes. I won't name any of the schemes. It's not fair. To do that. But again, do your due diligence and stuff. Everybody that's listening. The thing about the MLM style schemes, where, where any where crypto is concerned anyway, is it's not necessarily a scam. In the fact that the crypto is a scam, that's not actually, it's not the crypto that's the problem. The problem is that in order to be able to be paid out from the top, they have to continue to recruit at the bottom. So it's effectively a pyramid scheme, right? So the money is coming from the top of the of the of the tree. So everything we do at Money Mechanics, what we really try to champion is that we want to make people aware, educated and confident enough to be able to be the champion of their own money. So in this scenario where we don't, you don't understand it, you're nervous of it, but you want that return. You want to be able to see the benefit of it, because you need a bit more cash flow. You're struggling financially, etc, you've got debt, clear, whatever it is. The thing is, I think people don't realise is that you actually can get the returns yourself. You can invest the money yourself. You don't need to be super clever rocket scientists have a finance degree to take the money that you would have put into an MLM screen for somebody else to invest it for you. You actually can do it quite simply by just learning how to buy it, and again, like I buy my crypto on my phone, and I wouldn't say I'm in any way a crypto specialist. I'm absolutely not. I just, for me, it's about hedging against risk. So I believe if fiat currency failed, I own some bitcoin. So for me, I've hedged against that risk in the future. That's my own opinion. I think a lot of people think that they're not it's not accessible to them because they're not an investor yet, or they don't have a lot of money yet. So let's talk a little bit about if somebody wanted to start buying their first bit of crypto, how much money would someone actually need to start just buying some

you can the joy of it is it's an asset that you can start with a couple of pound like it's a really low barrier to entry. Now, what you're going to get in return for that's probably not going to change your life, but you would know that anyway, because you're only putting a couple of pound in. But you to access this

again. I keep talking about my mum here, but she

today, they deserve it. So they she said to me, Lee,

because she brought me up as a single parent, and I remember her working three jobs on her right she my Nan would come and look after me while my mum went out to work at night. I remember it really well, and she said to me recently, maybe, maybe six or seven years ago, Lee, I have got no pension whatsoever because of jobs I worked in. Some of them were cash in hand. My state pension is like 16 pounds a week. It's laughable. What am I going to do? And I thought, I don't know.

And then five years ago,

she said to me, I've got some money. This was inheritance from my Nan, and it was, it was about four grand. It wasn't a lot. And but she said, Well, it's a lot to me, but what am I going to do with it? She left it in a building society. And I said, How much is that earning you in interest? And she said, about 2%

I said, What's inflation? I don't know. I said, it's fine. It's fine. Let's go on Bank of England website. Let's see. That's what they tell you. Inflation is not real. That doesn't factor in things like shrinkflation or anything like it's just a complete scam, really. But anyway, let's take the value and.

And I think at that time, because it was just post covid, so it's a bit higher. I think now it's sat around three and a half percent, but it was higher and a half year.

So I said, Let's deduct inflation from your interest earnings. We're in a negative now. So that's how much purchasing power that money is losing every single year. You can't do? You have to grow, you have to outpace inflation, at least, otherwise you're not going to have a better standard of living. And I said for me, if it was me, I would put a large chunk of it, and let's be honest, there's not a whole lot into Bitcoin. That's what I would do. It's risky in the sense that the asset is much newer, but if you put it into a building society, it's going to do nothing. You're not nothing. You're not going to start learning about property, because it's a lot more intricate there. It takes a long time, and you need much more capital to start. Typically, you can buy gold, but gold is a store of value.

Again, it's gone crazy this year, but typically it's flat lines. It stays with inflation. I would go a bit more aggressive, and I'd buy bitcoin, and then every month I would set up a regular payment amount. You can do this on revolute, but, I mean, that's a great easy way, and we can get a little bit more technical and go, now you're a little more knowledgeable. Let's, let's be more crypto focus and get away from the banks and do it slightly different, because that was why crypto was designed anyway. So she put four grand into crypto, into Bitcoin. The price was about $30,000 at the time, and obviously, today, it's about $102,000

so that's already done amazingly well in just a few years. And she does 150 pounds a month on a standing order to buy bitcoin. And she said, that's nothing, though, Lee, everyone else is probably putting loads more in. Said, don't worry about them, just, let's just do you. Doesn't matter what they're doing, as long as you're consistent, that's going to Well, I mean, I look at it now and I can't help but kind of smile, because I think she's earned that, and it's given her the opportunity. It could have gone horribly wrong, and then people might listen to it and go, Well, it could have gone the opposite way, but that was the risk that she was willing to take. It was either I've got four grand that's going to erode over time and do nothing, or I take a chance on something that is being more adopted. Four grand, in reality, doesn't do much anymore, right? Four grand, when actually what we're talking about is pension, like what we're going to live on when we are not working. Four grand is not enough. So it when you then put inflation into the mix, actually we're guaranteed to lose money. So actually, what's the bigger risk, putting it into something that could go up in value, versus leaving it somewhere where it's guaranteed to go down in value? This is something we talk about a lot of money mechanics is, how have the banks convinced us as society that a guaranteed loss of our money is better than a potential uplift on our money? I don't know how they've done it the best marketing team in the whole world. I don't know, but that's what we believe. We believe societally, that leaving money in a building society, in the bank, safe, safe as houses, right? Like that, because the banks are never going to go bust. It's protected, etc, etc, which is to a certain degree, but it's actually not all that protected, really, when you dig into what the protections actually are,

guaranteed loss of value versus potential gain in value, potential loss in value, potential stay the same. Why is it that we believe that this is better than this? Do you think that's a mindset thing? Do you think it's an education thing? Do you think it's a

like, just a financial literacy, like, what is creating that misunderstanding? Do you think I

think it's a combination of everything? I

think the rules of money have changed now, and we typically learn from our parents. And there's a great book called Killing sacred cows. You may have read it. It's great money book, No, and I'll write it down, though your sacred this great book, definitely the audio book. So he says in there that your sacred cow is your pre existing belief around money, and it's typically what your parents taught you. So if your parents were scarce and they lived in a scarce mentality where they didn't invest and they they earned money, and they put it in, like the teapot in the cupboard or a coffee pot or under the mattress, that kind of scarce mentality, then you'll probably have that as well.

I bet. You've heard this phrase from maybe your parents, or if I won the lottery, I'd put it in the bank and live off the interest. Everyone said, put it in the bank and live off the interest. Well, good luck doing that today, because it doesn't work.

Yeah, no, but we still apply what we used to know. So I think it's financial literacy big time, because school, I don't know what their schools are teaching kids nowadays about how to perform it or how to get a job that probably won't even exist in five years time, exactly 100%

so yeah, maybe a.

A combination of financial literacy because they wasn't taught it, a scarce mentality that they inherited from their parents, and just not being aware of how to actually manage this stuff.

This is so interesting, and I think the let's come back a little bit to the scenario

that I think a lot of our listeners are in, okay, so that is going to be maybe not investors yet, maybe carrying debt, maybe in employed or self employed, trying to keep their head above water, like just about maybe managing it, but struggling a little bit. If somebody is

thinking, Do you know, I've been super curious about crypto, and this is how I want to get started.

Obviously, education is an important thing, and I think, you know, I'll put the in the show notes, like how people can contact you if they want to talk to you. A bit more about that. But if it was you starting again right now in 2025, 2026 let's say you've got 150 pound a month. Let's use that same figure that your mum's using.

How would you advise people to get started with the with crypto into their portfolio? Like, what would you suggest

I would? I would come up with a plan before I put any money into it, and I would have a look at my own finances and go realistically, how much can I afford to put into crypto that isn't going to affect my life? So come up with a budget and a plan, because most people don't have a clue what's coming in and out of their accounts every month. Yeah. I mean, I even had a look at my subscriptions the other day and thought, bloody hell. Why have I even got that going on so easy,

so easy, because everything's monthly now. So I would look at that and I go, what's what can I afford to invest? Because you said this earlier, it should never impact your life if you invest, really, it should just be able to come out of your life. Because if you, if it does, then you've probably over leveraged at that point. So I would do that have a clear amount of how much can I afford to invest? I would

look at my risk tolerance. You'll know if you're a risky person based on how it feels. You get that gut feeling, well, I'm about to invest that, but I go hard to know. I feel a bit that's too much then, because your intuition knows, so probably slash it in half and see how that feels. So have a number in your mind of what it should be your risk tolerance of, okay, because I would consider Bitcoin to be a less risky than other crypto assets. You mentioned Ethereum and Solana and XRP.

Value of those in terms of market cap, which we said, is lower. So the chart, the opportunity for them to grow is slightly easier because they're less valuable already. It's like buying amazon before it was huge. It was easier to make money in Amazon early than it is now.

So yeah, understanding you as an investor is absolutely crucial. And yeah, education aside, the next thing is really to

do it, because I think we think too much about the risks of Oh, but what if this happens? What if you don't do it, then what? You can analyse this forever. But if you don't take any action, then you're guaranteed to get nothing.

So sorry if I didn't answer the question. No, no, it does answer the question. I think doing it is a really important thing, like take the action, like do the step. So, and it's quite a funny story. So in like, 2015

ish, I think Bitcoin then was, it was about $250

if I remember correctly, I said to my mentor at the time, I've got 1000 pound, I'm going to put it into Bitcoin. I'm going to buy four Bitcoin. That was my what I said to him, and he said, so he was a property guy, and he said, you don't want to do that. It's so risky, like, 1000 pounds. Like, can you afford to lose 1000 pound? I was like, Well, no, not really, because I just started my business, I still had debt then, like, I'm still figuring it out, and I didn't buy it,

and I'd probably have, I'd have that foreground would be nearly half a million pound now, and I'm raging about it because I didn't do it. I took advice from people that from someone that didn't hold Bitcoin, didn't hold any crypto, who'd never done it, who didn't understand it, who was a property person. And because I trusted that opinion, because he was my mentor, I thought, well, actually, I'll just trust the opinion. I'm paying for his time and his advice. So I'll just trust the advice. But had I gone slightly outside of his advice and talked to people that were doing it and understood why they were doing it, I would have done it, and I would that for that 1000 pound would be nearly half a million pound now, and life would be very different for me, because I would have, you know, I'd be in a very different position. I want to talk a little bit, because I know you know a lot more about this than I do.

You buy and you hold, I buy and hold as well. And I get the question a lot from Yeah, but Sarah, that's fine, because if I buy and hold.

Value goes up, I can't get to any of it because I have to sell it to be able to do it. Can you explain a little bit about borrowing against the value of Bitcoin in the same way that we borrow against the value of houses? I don't think a lot of people realise that once you have a portfolio of digital assets, stock, shares, etc, you can borrow against the value of it to be able to fund other things. So tell us a bit about that. Lee, this has

been something that's been available for quite a long time in crypto, but it's become more mainstream now, because the US are allowing you to do this, use it as collateral on a mortgage application. So this is, this would be coming into, into US law, and you've also got Jamie diamond, the CEO of JP, Morgan, who was a big critic of Bitcoin. I don't believe he ever was. I think he's saying that because it was in his best interest to criticise it, but that's a different story. Who has now said that you can hold Bitcoin on as collateral, on a balance sheet, again, for to proof of funds. This is a huge change of tune, but borrowing against your crypto is no different, essentially, to what you would do in property. Now, don't take my advice in property, because I am not a property guy. I've got basic understanding, and even that would be questionable, so I'm not your guy to listen to with it, but I do like working with property people in crypto because they get it. They don't realise that they understand as much as they do with crypto. It's a natural transition, because the terminology is similar, loan to value, collateral, yield, equity. They get all that, and it's the same. So let's say I'm simple, so I like using round numbers. Let's say you've got one Bitcoin, and it's $100,000

we can imagine that. And you might wonder, if people are watching, why does he keep saying dollars, we're in England, and mixing it up. It's the global reserve currency. It's why we price oil in dollars, and why we proprie so that's why one

Bitcoin, $100,000 and you go, I don't want to sell that, but I need access to liquidity now, because shit hits the fan and my car's gone kaput or, I don't know, maybe you see an opportunity in the property world, and you think that's too good to miss. It's only $20,000 pound down. I've got a Bitcoin, but if I sell it, you've got capital gains. Potentially, if it's gone up, and we know that's already been slashed multiple times, this is gonna happen in the budget. And who knows, who knows? So people don't want to sell it. That's another podcast in itself, isn't

it? So what do you do? Well, this is where you can hold on to the asset that we believe will appreciate over time, with a lot of volatility along the way, but it will appreciate because time has shown us that that's what the trajectory. Trajectory of Bitcoin has been. The price goes up now it doesn't apply to only Bitcoin. That's just an easy example, and you can do this with other coins as well. So let's say you hold some bitcoin, and you got 100 grand, and you want 20,000 of

pounds or dollars, whatever we use in here to release that, but you don't want to sell the asset that's going to go up in value, and because you don't want to pay tax on it, well you can. There's various different platforms out there. And I would say to anyone who's tempted to do this after I say it, because you probably will be, because it's an amazing strategy, lots can go wrong if you try this without knowing what you're doing, but when you get it right, is, is how I built my portfolio to what it is now. And I started with next to nothing, and I cannot believe it, and that was because I used this strategy of,

I've got one Bitcoin. I'm you don't need that much. You can do it with less. But one Bitcoin, it's worth 100 grand. I want 20 grand. Well, Bitcoin on the platform I'm referring to right now allows you to take a loan to value of 50% quick maths, 50% of 100 grand is 50 grand. Okay, I can borrow 50 grand. Would you max out your loan to value? Well, in crypto, definitely not, because if the price of Bitcoin drops, then you're over leveraged. You're above 50% loan to value. Now, what do they do? They'll send you a polite reminder and go, Hey Lee. Then you're you either need to add more collateral to bring yourself back into balance, or we're about to sell some of your Bitcoin to cover the loss. Well, you were going to sell it anyway, I guess. So. It's not really like anything's changed, and you, you definitely don't do a full loan to value. You give yourself some buffer, and you say, right, I'm going to take out 20 grand. And this platform will say, do you want it in pounds in your bank account, or do you want to take it out as more crypto? You go, I love it in pounds, so I can go and do something goes in your bank. Do you pay tax on it? Well, I'm not a tax advisor or an accountant, but because it's debt in the UK, it's considered debt. We don't pay tax on debt, so it's a tax efficient strategy. What happens? Well, I've got a great story on this. It's a quick one, don't worry. So

I've got a client of mine. He's been with me for about four years. He owns a few dental practices, and he wanted to buy he was working with me. He's one of my first clients.

And he said, Lee, I've done what you mentioned. This was in 2023 Lee, I bought those Bitcoin that you said, Because I in January 2023 the price of Bitcoin dropped from 59,000 or something, down to

15 grand, very quickly. And I said, if it were me, I would be buying I pray. I pray for that to happen again.

It

gives us another chance. And so I love the volatility. I said, buy some bitcoin, if you can. Anyway, you come back. He said, Lee, I've got free bitcoin. I was like, free, good work, man, that's great. And he said, Yeah, yeah, yeah. Came back to me again

in March, and they were 23,000 each. He said, Lee, they've gone up, and I'm going to get a new car. There's now the a five I really want to get. And I found one that I like, and it's 30 grand. I've got enough. If I sell my bitcoin, I can get it and have a little bit left over. And I was like, Don't, you dare, don't he said, What? Why? Why? I said, just give me a call. Give me a call. So he called me up, and I said, right, whatever you do, don't sell them yet. Let me I need to teach you a strategy and hop on a call. I'll teach you. It'll take me about an hour,

but I would want you to implement this properly, so let's just do it. He said, okay, okay. I trust you. What you want to do is you want to borrow against that crypto then really? Release the money that you can. Don't buy the car outright with 30 grand, because if you do, you're going to have to really over leverage, just maybe put a deposit down on it for now and just wait. So all right, okay, then what so? Well, your free bitcoin now are worth like, 40,000

no more than, sorry, like 65,000 or so, nearly pushing $70,000 so you've done pretty well. If you did a loan to value of 50% you could buy the car outright, but you'd be a little bit overstretched. So I wouldn't buy the whole thing, but, you know, it's up to you, but I wouldn't do it. He said, I can put more money in the account. There's more collateral. All right, we'll do that. Then, if you're happy with that, and then take out 30 grand as a loan, go and buy your car, and then wait, okay, I'll do that. So he did, so show me this new, new Aldi. Look, I've got it. Lee, I bought it with with my loan. Now what I said, just wait. Said,

I can't believe how easy it was to get that loan, because I didn't even ask for a credit check, and am I supposed to make monthly repayments? I said, No, no monthly repayment. He said, Why? Though they're charging you an interest rate of 17% a year. It was, but your assets are going to go up more than 17% a year, so it's negligible. So all that needs to happen is your Bitcoin needs to appreciate, which we know it does over time, to such an extent that you can sell a portion, 30 grand of it, pay off your loan, and whatever you have left is yours. Well, it come to around December, and his Bitcoin portfolio was worth about $160,000

at this point. With his free bitcoin, he said, Lee, should I sell a portion of it?

I can't advise you. I'm not a financial advisor, but it's probably a good idea to remove the risk at this point, so you can sell some. So he sold 30 grand to move

my camera there my wife's messing about in the house.

So he sold 30, 30,000 worth of bitcoin. Yes, there was capital gains tax to pay on that, because it had gone up quite a lot. But he paid off the loan. His car was free, and his portfolio sat at $130,000

I love this. This is so cool. So if someone wanted to apply for a loan like that, like, what are the platforms that are out there that they can do it on?

So there's a few. It depends how technical you are. That one is called Nexo. There was one previously called Celsius, but it collapsed. I know that's not a round of confidence for people, but that's one of the educational pieces of knowing how to research platforms. Is the platform over collateralized? Do they have proof of reserves? If your answer is, well, I don't know. I wouldn't even know how to check

that. That's why we have businesses like yourself and me, so we can help people with that. But

there's decentralised platforms as well, which are a little bit more technical. There's no customer service or anything. You're dealing with, nothing but code. That's it. As long as you have the amount in your account, and you you say, look, I've got this amount of bitcoin. I'm going to park it here, and they will pay you interest on it, way more than the bank. And then if you So, you're going to earning from that. And then you can say, well, I'll take out a loan, and then they'll charge you interest on it, but because you're earning interest on the collateral, and it offsets the interest more

money than the interest on the loan, it makes total sense to me. I mean, this is fascinating to me. Fascinating and again, like everybody in the UK who's in the property world will know that at the moment.

And property investors are having a big conundrum of, do we sell up because of all the legislation that's just come in, like renters rights has just come in, there's all this stuff. Obviously, there's a lot of tax happening with Labour government. There's lots of changes happening. And the thing about property is your ability to refinance against the value of the asset that you own and pull money out and reuse it, and pull money out. We use it now. We've got the ability to do this against these sorts of assets that the GR, the capital growth,

beats property in pretty much every city in the UK, if you look at the data, if you look at the data, and I know property, people say, Yeah, but capital growth over time, blah, blah, blah, and I get it, property will always be in my portfolio. I'm pretty certain I'm a property girl, like I love property, but I always try to encourage people to look at the data, the data, the numbers, tells us, you know, the capital growth of this asset versus the capital growth of that asset. This asset is outstripping this asset at the moment, and if we can now also refinance and reutilize our money. That is, in fact, the reason why we all do property is because we can cleverly use the asset as collateral to fund other things. Now we've got access to do it here that is very interesting and very exciting, which I'm sure a lot of people will be really curious to learn more about. So Lee, I

want to come back a little bit to the mindset of somebody who invests in crypto. What do you think people need to have nailed in their minds, in their heads to be able to be successful in this space?

You need to understand why the current financial system is so flawed. Because if you don't know what the problem is, you can't find the solution. So you have to so you have to understand that. And you probably, I know I'm generalising that most of your audience are property people, but they're already long term mindset. That's not even a word, is it? But they have a long term mindset, and you certainly need that. You need to be able to handle volatility, and that's either that's a combination of emotional maturity, having a little bit of risk in you, understanding and actually being prepared, because it was really difficult for me and a lot

of military people, because we're very cynical. We that's just how we were bred in the forces to be very cynical about everything. You need to be open minded and open to you know, someone might just know a little bit more than you, and I'm always open to it. There's people that know more than me in crypto, and I love learning about that from them, because they've got experiences that I don't have, and I might have experiences that they don't have, but so your mindset needs to be very geared towards openness, willing to learn and also willing to accept that what you previously thought about crypto might be wrong, and that's really hard accepting it's that cognitive dissonance of I don't want to a comfort in lies easier than a hard truth. And I think we've all had the wall pulled over our eyes with crypto by the big players we have, because it's changing now, because those same people, the banks and the governments that told you to avoid crypto, are the same ones selling it to you. Yeah,

the irony, I feel like we could go on a very interesting debate around political, governmental, institutional use of finances and influence of our finances, but that's probably for another episode, I think so I want to, I could talk to you about this for all day long, and maybe we'll do another episode on this in maybe six to 12 months. Because what's interesting is that this market is changing so often. I think actually keeping people up to date is really important, but we have to wrap up at some point. So at the end of every episode, we always ask our guests to answer a question that was left for you by our previous guest, and then we'll ask you to leave a question for our next guest. So the question that we were asked by our previous guest was if you were going for a period of crisis in your life right now, what are the three things that you would do with your finances to get yourself out of it?

Wow,

okay,

I feel like I'm going to do an Elon Musk style, long pause to think about it, but that's all right, you got time? No, it's a great question. If I was going through a period of crisis, what three things would I do to

with your money? What would you do to help you get out of it?

Okay,

so I'd have to liquidate something because a lot of the assets are so I'd want access to liquidity that I could I could grow something quickly. I

I would probably borrow against my portfolio. Because especially now, we're at a point in crypto where it's so impossible to ignore it. I think we're at the.

Cusp of something massive happening, especially with the dollar doing what it's debasing so quickly in the pound and people flock into assets. So I wouldn't want to get rid of it, but I would need access to liquidity pretty quickly.

I would, if I was in a real crisis, I would actually channel my inner aggressive risk taker inside me, because I started my crypto business with no money, and I reckon I can do it again. So I would, I would probably go aggressive into highly undervalued coins that have a demand placed on them and well, the ones that I would be looking at that are majorly under priced are coins like Solana, at the moment, Sui

and a strong AI coin, such as bit tensor, that are undervalued. And the reason I would go with them, and I wouldn't throw lots of money at this, because I think I'm in a crisis. I need to do something with it, but I need to potentially, I would be looking right now, because the market's down, we've had a bit of a period where the market's gone down. You will know the phrase, when people are being when the market's fearful, be greedy. That's a Warren Buffett, isn't it? And no one wants to buy when the market's fearful. Everyone's scared to do it. And they go, Oh, what if it keeps going down? I would go, that's my opportunity. So I'm going to go in and buy some undervalued things. So that would be my first bit take a loan, buy some undervalued crypto assets, and I would probably release some more. And am I allowed to invest in my own business? Yeah, can invest in what you want. Sure. Sorry, you want to do. I'm asking you the rules here, but you didn't even ask

the question. Yeah. There's no rules.

I think

there's no greater investment than in yourself and your own business. And for me, things like Facebook ads or Instagram ads are really powerful. The return on investment on them are massive. Now I know I give a good service to people, and I know what I do creates value. It just needs to get under the right people's noses and then they do it. And if I could invest some of my capital and go, let's get this under every person's nose to the point where I can't even facilitate this much education for people, because I'm only one man. I'm going to do that and

invest it in my business.

That's what I would do.

So you'd leverage against what you've got. So you'd put what you've got to work as quickly as you could, in as intelligent way as you could. You would double down and invest more. And you would also develop self and business. They're like the three core things that you would do amazing. Thank you very much for that. And then we ask you a question for our next guest. So you literally ask them anything you like. Ideally link tediously, somewhere to money, finances, investment. What would you like us to ask our next next guest?

Okay, if you have kids, or you were, or you had, if you have kids already, or you were to have kids,

would you? Would you trust the traditional education system in school as it is today? And if, if you do, what would you add and what would you teach them at home that would make the biggest difference to

to their future? So would you teach them things? I'm not going to say some examples, but what would they what would you be teaching your kids now to

excel in a world that's nothing like it used to be, used to be great question we'll ask that. Thank you very much, Lee. Appreciate it. So thank you so much. It looks like the sun's setting where you are, which is lovely.

Yeah, it's fine. It's Lee's in hotel in Thailand, and been snorkelling today, living the dream life, which is amazing, Lee. Thank you so much for your time. If people want to get hold of you, talk to you about your education, just pick your brains on stuff or follow you on socials. Where are you? How can people get hold

of you? You can follow me on social media. Instagram is crypto underscore, Lee Markham. You can go to my website, which is bluegrass training.com,

my wife's from Kentucky, so that's the bluegrass state, and she's been my biggest cheerleader alongside my mom. So I gave her the name, bluegrass comes from there.

So and you'll find because I work directly with property investors, helping them diversify into crypto and pretty much doing everything with them, and that's the hardest bit is, all right, there's, there's definitely not a shortage of information. You can go on YouTube, you can find it every like everything that we do, both me and you, there's information

available put together in a way. So I've put it all together, and that's what I do. So yeah, if people want to work with me, then fantastic. So.

Uh, bluegrass, make sure the link, the links and everything are all in the show notes. So we'll make sure that the correct links everything for people to access. And thank you so much for your time. It's been great chatting to you, and you too. We will wrap it up.

See ya sounds good. Thanks for having me.

No worries. Thank you so much for getting to the end of the end of the podcast episode. I really hope that you enjoyed it. I just wanted to take this opportunity to remind you that the weekly Money Mechanics newsletter is available to you completely free. This is a newsletter that I'm going to send out every week to just give you some ideas around what's happening in the markets, what's happening at a global level, what's happening at a lot more local level, so that you can better understand what you can do with your money to make it work for you for the future. I'm also going to share in the newsletter what I'm doing in my own portfolio, just to give you some insights into what my ideas are, why I'm making the decisions that I'm making, in the hope that it will help you to make those decisions in your own portfolios as well. All you've got to do is find the link that's with this episode, hit the link and subscribe, and that newsletter will start to come out to you every single week. I'd also really love to take this opportunity to invite you to drop me a review. I love the opportunity of getting to share these podcast episodes with you. It really helps me to better understand how we can do the best job that we can here at Money Mechanics, if you tell us your feedback. So drop us a review. Tell us the sort of guests that you want. Talk to me and connect with me on Instagram, you know, talk to us on YouTube, wherever you are hanging out. Tell us how you're finding it, and we can make this the very best podcast it can be. Thank you again for being such a valued listener. I appreciate you all, and I'll speak to you soon. You.

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