If you're watching this video, you're going to learn three big things.
Number one, why Josh thinks Bitcoin stands apart from the rest of crypto.
Yeah.
Number two, why dollar cost averaging may be the best strategy for you as a beginner.
And number three, how Bitcoin and real estate can protect you from inflation.
Ooh, today's guest is Josh Cadillac.
That's a last name for you.
Real estate investor got his start in the 2008 financial crisis and now thinks deeply about Bitcoin, about wealth and our broken financial system.
So if you're brand new to Bitcoin, come on inside the world's biggest Bitcoin welcome center for today's show.
Welcome to Sat Chats, the Bitcoin podcast where we chat about sats.
sats are the smallest part of a bitcoin the same way pennies are the smallest part of a dollar
with sat chats we are building the world's biggest bitcoin welcome center to serve as
your gateway to generational wealth so if you're brand new to bitcoin we want to chat about sats
with you we really do head to satchats.com to grab your slot in the studio today i'm your host
Stewart. And I'm your co-host Anna Bevan and with us today in the virtual studio is number 185 Josh.
So Josh, welcome to Sat Chats. Thanks for having me. Of course. We'd like to start with asking you
what was it like to get into real estate in the 2008-2009 financial crisis? It's a testament to
poor timing I would say more than anything. It was the financial crisis that really facilitated
the need to make the shift. I was long in commercial real estate and restaurants at the
time and just had opened a couple of restaurants. And obviously, Southeast Florida is my home,
which was the epicenter of the financial crisis. People stopped eating out. Restaurants took and
tanked just about everything and took the commercial real estate and just about everything
else with it. And so I went from being well-positioned, not overly leveraged,
to being very much upside down and losing just about everything.
And so I went to real estate as the something that I knew something about
to start from scratch.
So yeah, it sucked.
In summary, if we're going to take and put it in a really brief, concise way,
it was scary.
Had to make it work.
My father had passed not too long before that.
been told, I mean, total the guilt trip of you take care of your mother, your brother,
and your sister. This is the last thing he says to me. And then we have things go sideways like
this. So real estate was very good to me. I was able to take and build it all back and then some.
So yeah, it was terrifying on the way in, but it's been good to me.
Hmm. So did did that real estate explosion, financial crisis, people are underwater.
You personally were embattled trying to get started in real estate at the absolute nuclear apocalypse moment to do so.
Your dad tells you now you need to carry the whole family forward.
Like, were you simply feeling a whole bunch of fear or, and maybe just like vague rage?
Or did you say, you know what, this is somebody's fault.
It's the traditional financial system's fault.
It's the fiat money.
It's the banking.
Did you have any of that in your vocabulary?
or was it, I mean, kind of like me, just generally thinking that things were messed up?
No, no, I didn't think about it from that standpoint.
I mean, I knew it was the politicians that put their thumb on the scale by expanding home ownership
as a means of doing what they always do, winning a popularity contest.
You know, home ownership under my administration has, you know, expanded this much.
Both sides of the aisle were up to their eyeballs in this, right?
So they put their thumb on the scale of the financial crisis.
And then when the bill came due, they kicked the can down the road.
They passed it off to me and bailed out others.
I knew that on a macro level had occurred.
But as far as it being a fiat money problem, we're really thinking it through from the standpoint of them financially manipulating it to take and not have to deal with the consequences and bail out their buddies from dealing with the consequences of what they caused.
No, I hadn't. I didn't necessarily think was a healthy way to think either at that point from the standpoint of I needed to take action for myself. Right. And I'm a big believer that you can play the role of hero or victim in your own life. And the way you know whether you're playing victim is if you're taking and trying to complain. Right.
victims complain about things the hero has bad stuff happen to them too but they ask the question
all right what are we going to do about this right and so I didn't want to let myself go down that
rabbit trail like I didn't want to let myself really think it through and place blame there
was time to do that once we were we were post-crisis if you will once I had everybody taken
care of and made sure they were good so for me I think it it was you know really myopically
focusing on how to do today well is what I had to do to get to get to the other side of what I
needed in my own personal life. Later on, I read Safadina Moose. And I'm a big, big reader. I've
read most of the major economists, Hayek and Friedman and Keynes and all these guys. And
working my way through exactly what happened is something I actually enjoyed that journey.
but that was, that came along much later on, I would say.
You had that, I guess, baptism by fire
during the 2008 financial crisis.
I think they call it a great financial crisis now.
Well, anyways.
It wasn't great for me.
No, I do.
Come on.
Like, why were you, what, the great financial crisis?
The Great Depression.
Yeah, the Great Depression.
That wasn't great either.
Yeah.
No, the greatest generation.
I checked the Yelp reviews on these things, guys. They're not good.
Well, I know that, you know, my personal experience during that time, Josh, I was still,
I was still at university. So I just finished up my bachelor's and I had been asked to get a
master's degree. So I was, I was still kind of sheltered there at university during the time,
but I was pretty active listening to the news. And, you know, I heard people talking about
getting underwater in their mortgages. The whole thing was kind of a big mess. Certain companies
were getting bailed out. Others were not. The subprime mortgage stuff made me so upset. It's like,
why? Why would packaging up, like if I took a rotten apple and then, and I can't sell it. And
then I find 99 other rotten apples and say, Hey guys, I got a big barrel of rotten apples.
Yeah. People are like, oh, now I'm getting that barrel, baby. It's like, what are you there?
Anyways, I know that Bitcoin came into existence almost directly thereafter, right? January of 2009.
Almost as a response to that or the timing, I don't know. But you talk about reading, say,
Fadina Moose, you talk about reading some of the Austrian economists like Hayek and also Keynes,
which was interesting to hear, but like, you're just in it to win it at that point. At what,
at what point did you pick up enough bandwidth in your life to start reading these books
and to find Bitcoin for the first time? Um, well, the genesis of this, I'm on a podcast with my
broker, who's a friend of mine. He has me on, um, frequently on his, on his podcast. And he said to
me at the end where we finished the podcast. And at the end, he says, by the way, guys, a good friend
of mine is doing this crypto conference here in Miami. And he gives the dates and the times.
And he's getting ready to end the podcast. And at the end of the podcast, he says,
you know what, Cadillac? He called me my last name for some reason.
It's Cadillac. You should go. Thank you. In fact, he says, you know what, Cadillac? You should write
a course on crypto and real estate. I'm like, well, little problem. I only write courses about
things that I really know well, and I know nothing about crypto. He's like, don't worry about it.
I've got people that will help. So lo and behold, I go to this conference and I walk in with like
all the questions like, all right, why would anybody want digital money when you could just
like make more of it? And then I got my head wrapped around the idea, oh, this is very limited
supply. And, you know, all the, all the like basic questions had them all. And as I'm getting my head
wrapped around this thing, I'm doing, because I run a real estate investment fund at the same time,
I'm constantly thinking about allocations of capital, risk management, right? I always look
at something like, does it solve a problem? Does it have legs, right? If it has legs, is it a fad
or will it be around? And so I'm going in with the same set of disciplined investing eyes I'm
trying to look at this with and saying, what's the problem this solves? Or is it something that
just that you have to have a hoodie? Because if you're at the cryptocurrency conference,
you got to have everybody had a hoodie there, right? Is it just something for this subset of
people that is like a click kind of thing. And as I really started to get my head wrapped around it
more and more, I started to get very excited about the idea because I could see the problems,
you know, the issues even with gold that it's now resolving. Like gold was the best thing we had,
but wait a second, this is actually significantly better than gold because it fixes some of the
problems that we have with gold. You know, the one thing it lacks is it's not as pretty, right?
But otherwise, pretty much all the things that gold does, it kind of does better.
And so like working my way through all of that was kind of my genesis.
And it was a crypto conference and then some conversations that I had with some of the people that my broker set up that led to the first CE approved crypto course on crypto and real estate for continuing education.
And there was a lot of activity with that for a couple of years there prior to the collapse we had.
It really hasn't picked up momentum yet.
I fully expect it will at some point here, again, because Bitcoin in particular is uniquely well-suited to buying high-value assets like real estate, more so than being used for smaller transactions in my estimation.
That's very interesting.
So do you have experience brokering or closing on home sales where the individual buying the home does it with Bitcoin?
It hasn't been my transaction.
I've been brought in on transactions like that because it is such an unusual process to go through.
The issue really with it is the laws on the books never really anticipated this form of payment.
And so some of the escrowing issues and things like that are not an inherent problem with Bitcoin, only that the laws are set up in such a way that it never had anticipated doing things this way.
So in order to legally comply with some of the banking regs, there's some tap dancing that has to be done to actually make the thing come together.
I was like, do you think that there are going to be more transactions with Bitcoin for houses?
Because I think that just makes a lot of sense.
I don't know if like how the rules would change.
I mean, you would probably have more experience with that.
But I see that as probably one of the most attractive ways to use Bitcoin in like real world.
Honestly, I think it's even sexier than that because there are ways to borrow against your Bitcoin for the purchase of real estate.
And so that to me is where I start to get excited about things because leverage has always been one of the things that most has allowed the United States to not only catch up with, but surpass the rest of the world.
There's an amazing book by Hernando De Soto called The Mystery of Capital,
Why Capitalism Has Worked in the West and Failed Other Places.
And it talks about how our title law, actually, because our title law is so strong in the US,
the cost to borrow money against real estate is so much lower than other parts of the world.
It allows capital to basically be created People have not just the asset That the problem with a lot of cryptocurrency You have the great you have your Bitcoin You watch it It watches you You watch it It watches you You can do anything with it You know you just you just you just look at it But if I could borrow
against this and now use this in the traditional markets, and this is one of the things with
crypto mortgage, some of these things that have come out where you can take and borrow against,
use it as collateral to now buy real estate. Well, one of the big problems that my crypto guys,
my big crypto investors had is they got all this crypto and no freaking income.
Well, wait a second.
If I can take and borrow against my crypto and buy income producing real estate, I now
have traditional income.
I can use that income now to go qualify to buy a house or do whatever I need to, to more
fully participate in the traditional investment market.
So it's bridging that gap between the non-traditional investment that crypto is and getting into
the traditional space, because that's what traditional investments have.
the ability to borrow against that value to get into other things. With crypto, that's been
an uphill battle for a little while to sort out the DeFi space. And frankly,
there was a lot of bad actors in the crypto space that I think have really, I mean, I think the value
of most crypto would be significantly higher if it wasn't for the poor integrity of a lot of the
early players in the space. Yeah, I was just going to like double click on the crypto mortgage thing.
Okay. So you mentioned that there are specific outfits that let you do it in buying real estate.
Are there different benefits than like a Salt or a Ledin who let you have a Bitcoin backed loan?
Well, it's just using it as collateral. So I'm trying to think of the name of the company that was one of the first players in the space, because there were a couple that tried and they would let you borrow against your Bitcoin at a ratio.
So I'm drawing a blank right now on the name.
It'll come to me.
But using it as collateral and then pledging the real estate makes it a very safe loan for the lender because you have the crypto that you're holding in collateral and you're also holding the first mortgage on the property.
So because it's a fairly low risk loan, the interest rates do not have to be particularly high, which makes it very competitive.
It also allows your cryptocurrency. Now you still own it. You still own the appreciation on it, but now you also own the real estate. So you're actually, if you're going to look at what we hope Bitcoin is going to be, which is a true hedge against inflation, it hasn't really functioned that way through this inflationary cycle as its value has been more specularly manipulated than being a true track of, hey, the value of dollars have gone down, the value of Bitcoin goes up, the value of dollars went down.
the value of Bitcoin went down at the same time. And it's now seeking out, kind of figuring out
how it should behave as a true hedge against inflation. Whereas real estate tends to behave
as a pretty true hedge against inflation. The value of money goes down, the value of real
estate went up. We saw the exact, this is exactly what happened through it post COVID, right? Real
estate prices nationally went up because the value of the money you're using to buy the real estate
with went down. There's just too much speculation still in Bitcoin to see it behave truly like
this. I like to track Bitcoin as kind of being in the stage where the internet stocks were in the
late 90s, early 2000s. Nobody quite knew exactly, like they knew it was a good thing, but they
didn't know quite what it was. And so the value has this high volatility that we saw in the early
internet stocks, right? That volatility was driven by the fact that everybody kind of knew this was
a really good and important thing, but they didn't quite know how good or how important because
one of the quintessential things that I look at as an investor is history. History is always where
I want to go up. I want to see, all right, last time this happened, what did this do?
And with the internet stocks, you didn't have it. So anytime anything happened, they go up 40 points,
they go down 30 points. It was just chaos. With Bitcoin, it's kind of the same thing, right? A
butterfly sneezes in Tibet, Bitcoin's value falls 10%. It's just, you know, like it's a thing.
And so everybody's kind of figuring it out. But the question is, how did that internet thing work
out for us? Right? It was a really good idea. It was really powerful. It's just, we didn't know
quite how to value it. I think it's the same thing with Bitcoin. And I think that you saw the big
run up from, you know, it was like 15,000 it fell to, but it was back up over 100,000. I think
that's actually a much better reflection of what when the majority of the world gets its head
wrapped around what this thing is and what it does of how it should track with the devaluation of
money. So that's kind of the thing that I'm looking at through this whole thing to kind of
drive the decisions I make as far as how to allocate capital to it, if that makes sense.
It does. And it makes me wonder, as someone who thinks about this from an investment standpoint, for the brand new Bitcoiner out there, how should they approach their first leg of the sat stacking race?
Would you recommend a dollar cost averaging strategy? How do you do it?
I'm going to dollar cost average the same way I would in the stock market. And there's one simple reason why I will never know as much as the people that eat, live, breathe and sleep this.
Like in real estate, on real estate, I could I could try to time the market. I just because I'm up to my eyeballs in it every single day. This is what I what I do. Right.
When I'm buying, if I'm buying NVIDIA or Tesla or any of these things, I am not going to allocate the time it takes to be wise enough to try to get in front of the other folks that are in the exact same space trying to take and squeeze every nickel out of that thing.
So what I got to hope is that over the oscillations, I can catch the middle of those.
My overall average will be the middle of those oscillations and I'll still do well.
And the thing that's critical with that is understanding that you're going to be giving away the tops, but you're going to be missing the bottoms.
That's what you're shooting to do.
You're looking to catch the middle.
That only makes sense if the thing is good enough, that that middle is going to be significantly or going to be better than other allocations of capital.
And I think with Bitcoin, the case is pretty easy to make because of the very limited supply.
I mean, that limited supply for the entire world and the amount of acceptance it has and how much more room there is for acceptance and demand, I think is the thing that really establishes.
establishes. I mean, the idea of million dollar Bitcoin to me is it's got to happen at some point.
Yeah, it's got to happen. It's got to happen. How do you disseminate 21 million over, you know,
the world? Yeah. And that number is diminishing, right? Because there's people that are losing
access to their, I mean, it's never going to be 21 million. It will never be that much. When it's
all out. There's people that have lost it. There's accounts that people don't have access to,
whatever. So it's going to be less. Totally, dude. I mean, something like 3% of the world
has some Bitcoin. We got to go 33X from here just to meet the current global population.
By the time we reach 33X, there's going to be some more human beings than that.
like we perhaps perhaps perhaps yeah no actually the estimates from the uh most recent estimates
that i saw was by the year 2050 world populations should start actually declining interesting okay
yeah no there's actually that actually makes a ton of sense yeah no believe it or not there's a
handful of things that they look at it would be interesting i'm trying to think of the book that
i read on the topic but um there's a handful of things that that speak to world population growth
than when it does. And so like education levels going higher, especially education levels of
females, when females have access to higher education, they put off having children later.
And so actually you have a seeing in large parts of the world, there's actually a population crisis.
But that doesn't matter. The rate at which the devaluation of our money is happening at,
there's plenty of room, plenty of legs for Bitcoin to take and move. And frankly,
it's mainstream integration into the global economy as governments start to take and want
to have some of it to stabilize their assets.
All of this is massive demand that's just really untapped into.
And once again, fixed supply and diminishing supply.
It's the deflationary asset.
So yeah.
it it it really does tie into what you said about bitcoin's value in dollar terms being
so volatile because most people don't know what it is that they're looking at you know so
i i've heard you know i've heard you use the term crypto a number of times on the episode so far
and i want to take i kind of want to pull the car over to the side of the road for a second
for the brand new Bitcoiners out there to ask you,
you know, as someone who has evaluated
many different types of investments,
homes, you were in restaurants for a moment there,
you talked about dollar cost averaging into stocks,
now Bitcoin and cryptocurrencies.
Do you separate Bitcoin from other cryptocurrencies?
And if so, why or why not?
Because Bitcoin is the one that's proved anything in my mind.
Like we wouldn't be talking about anything else if it wasn't for this thing that somebody created, wound up, let loose, and hasn't really touched.
I mean, it runs on its own.
I mean, it's fascinating that this thing has done what it's done.
And I mean, to get enough people to believe this digital, non-tangible asset has value was a tremendous threshold to cross.
But now that that threshold's been crossed by enough people, I don't think there's an unringing of that bell, right? There's no way where everybody agrees it's valueless, right? Because that's really the thing, right? I mean, why is a dollar worth a dollar? Because we all agree it's worth a dollar, right? If we stopped agreeing it's worth anything, they'd have a real problem because it's not backed by anything.
Bitcoin has enough adoption of enough people that believe it has value that it's not going anyplace.
And that was a huge, huge, I mean, I say to people all the time when I'm talking to people who haven't thought this through,
I say, what was the last time you took green money out of your pocket and paid for something?
And they're like, yeah.
I'm like, so wait a second.
The idea of doing digital transactions is nothing new to you.
It's just what you're doing it in.
And so, I mean, the problem for crypto really is the clunkiness of it.
You know, there isn't the Amazon of doing this thing yet.
You know, we're like, I can sit up, I don't have to put pants on to get Listerine at my house later that day.
I mean, that's what Amazon has done, right?
Amazon, what they did is they just made shopping freaking so stinking easy that I don't want to put pants on anymore.
it's not like that with crypto with with using bitcoin in particular yet i mean it's gotten
better but it's still kind of clunky it's still you know you got to send that a little about just
to double check and make sure you got everything right and you know it's it's it's not quite
simple yet if they get past that when grandma starts taking and paying for things in bitcoin
then things get super interesting. How long do you think it'll be before that happens? Because
I am a 2025 class of 25. So I only know what we have now. I don't know the like meeting somebody
in an alleyway to buy Bitcoin. I don't know having it only live on your computer. I only know
the fact that I can have it on my phone and a digital wallet.
So how long do you think it'll be before it gets to the Amazon level of easy?
You know, when I first started, I would say it was 2018, 19 myself.
They were trying to solve this problem.
They recognized that it's the problem.
The issues really are this.
You're so responsible for securing it yourself, right?
I mean, you aren't beholden to anyone to use it.
Like you don't have to ask anybody.
There no third party but there no third party And that rough for grandma because she wants to call customer service and ask them why there this problem There nobody to call
And so really getting people to have a way to handle this where they're going to have great certainty as to what they're doing and they're not worried about making mistakes.
Like that's always the thing I hear and I see is when people do a transaction with crypto, they're a little nervous, like to make sure that you got everything right.
I don't want to lose it. I don't want to take and make a mistake because if you make a mistake, there's like no unwinding that.
And so, you know, figuring out what that looks like is something that that I think is going to be critical if we want to take and use it as like a daily payment system.
I don't know that that's really what Bitcoin winds up being.
I think Bitcoin probably winds up being the digital long-term store of wealth that replaces
things like gold just because of the nature of it.
I don't think it could ever facilitate the number of transactions to take and buy ice
cream at the store.
I think it would be too expensive to do that.
But something like real estate, where the kind of closing costs that we have are...
Or if you got to take it, pay a fee to do it.
Like, who cares?
It's the smallest number on the closing statement.
So there's some really sexy things that I think come from this where, you know, you're closing a transaction at midnight in your swimming pool at the house.
You throw a house party and the buyer and the seller show up.
And when the party starts, the seller owns the house.
By the time the party's over, the buyer owns the house because they did it with a digital contract right there in the swimming pool.
No shirt, no shoes required.
I think that's kind of where this thing gets really, really sexy.
But how long it takes them to do this, and even if it's possible, because the nature of it is what makes it good.
But there's some inherent things in the nature of the way that we've done it by having no third parties involved that kind of give it some Achilles heels.
that if we solve it, solving that Achilles heel kind of counters what makes it so. Because the
easy answer is we get a third party involved. But one of the big things is we don't have the third
party involved. So it's going to be, I mean, there's some smart people out there. Obviously,
they came up with Bitcoin. So they're pretty sharp out there in the world. Hopefully,
they're able to find some ways to make this smoother and easier for people.
Totally. I mean, the first thing that comes to my mind when you say that is
the Lightning Network, which they've been working on for a while now. Has it been seven years,
eight years? I'm not sure. But we just reported the other day that they cleared over a billion
dollars worth of transactions in November. And the average transaction was $223.
Yeah, which was higher than I expected, because I just think of like $7 cups of coffee. But
to your point on this show, we often have to kind of defend the clunkiness of daily payments with
Bitcoin. And there's part of me that's like, look, guys, let's just stack sats while we wait for the
smart people to figure this out. Because for me, tapping to pay on like the credit card where you
tap to pay the smartphone where you tap to pay, I feel like that kind of like blew up during the
pandemic because we wanted touchless forms of payment. Like I don't remember tapping to pay
a gigantic amount pre pandemic, but then I feel like tapping to pay like exploded
because we were all just trying to like, and get out of there. It's only in my mind,
a matter of time before the lightning network has its own moment. And all of a sudden everyone is
tapping to pay with sats on the lightning network the same way that everyone is tapping to pay with
their smartphones with their credit cards and between now and then if i can protect myself
from getting poor slowly through the green money in my pocket getting worse and worse and worse
because it's planned that way it's literally that's the design then i'll i'll jump through
the clunkiness of things and take the rewards of having done that. You know what I mean?
Yeah. No, it's hedging your position for sure. And I mean, I like the idea of hedging my position.
The thing is this, right? I can see Bitcoin right now is the leader in replacing gold,
Right. Like it is that is like stock to flow ratios, everything about it, transportability, ability to avoid capital control.
Like, I mean, if you want the unplugged and recognized currency, the thing is with the lightning record, the lightning network and all of this, that is an add on on top of what Bitcoin is.
And that becomes, as an investor, I get concerned with baking that into the cake because it doesn't do it yet.
And that leaves room for somebody else.
And there are other cryptocurrencies that are trying to come in and solve that problem inherently and how they're created.
So for Bitcoin, this is a layer that's put on top of Bitcoin to solve a different problem than what it was initially created to do.
I think it was initially created to give us stable money.
Right now it wants to be stable money with the ability to make daily payments on a rapid on a rapid basis.
Maybe they saw that because of the adoption, there's there's reason to think it could come in and fill that niche, too.
I don't think that reduces the the desire to have Bitcoin to stack sats, as you're saying.
I just, I don't necessarily want to take and concede that it's going to be the winner of that daily payment method as well.
I think some cryptocurrency will be.
It may be Bitcoin because once again, it's adoption.
But I think not necessarily, like always looking for what's good and what's not.
The nature of how it was created wasn't to take and solve that problem, I think.
They're smart people, again, trying to solve it.
I think there might be somebody else that comes along maybe and wins that battle. And now you're
holding two different things. But I think the transition between the two is a very easy thing
as well. Your digital long-term store of wealth and what you're going to use to make daily payments
is our worst case scenario when it comes to Bitcoin. If that makes sense. Yeah. So do you
view real estate as a way to get more Bitcoin or Bitcoin as a way to get more real estate?
Dang, that is something else entirely. That was that's a hot question.
I think it works. I think it only works the Bitcoin to get real estate. I don't think it
works the other way. I wouldn't leverage real estate to buy Bitcoin because obviously now I'm
taking on the cash flow discrepancy of paying the debt service without revenue coming back.
If I owned Bitcoin though, leveraging my ownership of the Bitcoin to extend my position of real
estate does make sense to me because now that real estate is throwing off positive cash flow,
which is allowing me to pay the debt service on the money. So now I have two inflationary
resistant assets alongside plus cash flow, which positions me well to pay for owning both. Wow,
my camera just got really excited sorry yeah it was like it was like it was like it was like wait
let's zoom in on you for a second because you're spitting hot fire because you are you are helping
me understand let's imagine i have some bitcoin i go to a lender like salt okay they've got some
higher like salt will kind of let me get a little bit more from my bitcoin than others because they
have like a higher risk tolerance so i can i can get up to 70 of the value of my bitcoin out of that
sucker, go buy a home. And then let's say I'm renting that to where I'm like, now I'm like
Robert T. Kiyosaki mode all over again. I'm getting the passive income. You could take a
portion of the passive income to pay salt your monthly interest. If that's how you chose to set
it up. That actually is interesting to think about where the monthly flow of cash could be used to
deal with the interest. My question for you, though, is how much can we trust in real estate?
And here's what I mean by that. You know, you got your start at a really nasty time for real estate.
Foreclosures were happening. Subprime mortgages were happening.
during the pandemic you know we had number 14 robert come on this show you're number 185 josh
so 170 episodes ago this old man came on the show and said hey look all my life i built wealth by
taking my earnings saving them up to get the down payment on a home buying that and putting you know
a renter in there to where he had like six homes here in Raleigh that were supporting his lifestyle
and old age. And he woke up one morning during the pandemic to hear that the government had
effectively paused the payment of rent. They're like, guys, nobody needs to pay rent. It wasn't
like an elected official. It wasn't a law. The way that he's told it, at least some bureaucrat
in Washington, D.C., who we don't even know what that person's name is, just said, you know what?
Y'all don't need to pay. And he kind of felt like the rug had been pulled out from underneath him.
And so anyways, as a Bitcoiner, I feel like I can rely on the protocol.
I can't always rely on these homes to do what they're doing. I know that's kind of like a,
that might be even like tinfoil hat mode a little bit, but there are risks to both. I mean, how would
you, how do you, how do you hold those in your mind or, or talk to people about that?
So there's a chart that I use and I have a class where I teach inflation and real estate, right? I
speak all over the country and, um, it shows the, the price index of real estate from 20, from 1900
to today. And it's this beautiful straight line that curves up, has this big dip and then back up
again. And so what I'm saying to you is, as I said, you know, as an investor, I always look to
history. What has it done with these different pressures? I can see World War I. I can see World
War II. I can see the Great Depression. I can see coming off the gold standard. I can see all of
that spelled out and I can see how the product has behaved. When it comes to the federal government
not requiring people getting federal assistance to pay their loans, because that's really what
happened. They were on federal loans. We own a property management company. There were two
of the 300 and something properties that we manage that didn't pay. Otherwise, everybody paid.
And so it wound up being more of a talking point. That's the thing with politicians. They just say
things that sound good, right? Most of the time, you know, if it's popularity contest winning
type stuff. Housing is one of the primary human needs, right? So like you have all the Bitcoin
in the world, but if you don't have a roof over your head, that's a big deal, right? So we have
to have shelter. For that reason, it tends to be one of the safer, more stable things. And to your
point, when COVID hit, the stock market lost a third of its value in about six weeks. What happened
to real estate prices? Nothing. They didn't move. And then they took off like a rocket because
anybody that had a pulse and has ever read a history book knew they were printing a bunch of
money to stave off a financial crisis that they knew was coming. And the second, they decided to
close the US economy and the global economy, basically, they knew, hey, look, we're just
kicking the can on a financial crisis, inflation's coming. So if inflation's coming, what do you do?
You get long in real estate, because what happens? The value of the property goes up and the rents go
up as well. What did we see? The rents go up in the value of the property. You're double dipping
on the same inflation. So for those reasons, if you're looking for stable, if you're looking,
I don't want to say it's tinfoil hat. I appreciate, you know, the, the self-awareness to say, Hey,
look, this might be, be that I'm going to say to you that if it gets so bad, that real estate like
is done, real estate is like shot. You have much bigger problems. Like, I don't know where you're
going to spend your Bitcoin at that point because everybody's busted out. Right. It's, it's so
fundamental to what we need. I mean, at that point, we're talking zombie apocalypse, you know,
Like I'd be worried more about brass than Bitcoin.
If you're with me, we'd be looking at bullets and figuring out how, you know, who we're going to take out to get lunch today.
That's the level I think you'd have to be at because real estate has been such a consistent producer for the most part.
And I think that marrying the two, they are actually inflationarily speaking.
Speaking of inflation the thing that you concerned about that the green money getting less valuable Real estate has always been the safest bet to hedge against inflation I think Bitcoin in its purest form let say its completed form after this enough people that are not speculators own it I think behaves much like gold has recently where it been this huge drop in value as it doesn seek to
It naturally is going to reflect the fact that the money that people are buying, what they're exchanging for it, is a less valuable commodity.
So as that deteriorates in value, the value of this is only going to go up.
Wow.
It's a lot to think about.
And what I really enjoy about today's conversation with Josh is that we got to jump into the thought process of someone who has spent a lot of time thinking about real estate, different types of investments.
I guess what I really like about Josh is that he has a mind that is open enough to pursue Bitcoin.
I feel like there's, because we've had a number of realtors on the show, Josh, okay?
I don't know if we've had any brokers.
That's the next level, you know.
Josh has reached the level of the two bald twins
on that one real estate reality show
where it's like a bunch of hot chicks who are realtors.
Sunset, selling Sunset, right?
I was like, what are you talking about?
You know what I'm talking about?
Yeah.
I don't know if we've had brokers on the show.
We've had a lot of realtors
and a lot of them are like,
homes, homes, homes, homes, homes.
Homes, homes, homes.
The same way that I'm like,
Bitcoin, Bitcoin, Bitcoin, Bitcoin, Bitcoin.
Like, we're talking past each other, you know?
And I like that someone can come on the show and say, hey, homes and Bitcoin and maybe a few other things as well.
I like that we got to learn about your absolute, you know, boiling cauldron moment there in the 2008 housing crisis, financial recession craziness.
And that you went on a journey to kind of learn more about economics, study some of the greats.
Saif Adina Moose comes into play.
Anybody, I challenge you to read the Bitcoin standard from the front to the back with an open mind and not have it.
First two chapters of that book, man.
First two chapters of that book, some of the best, that and the first two chapters of Basic Economics by Thomas Sowell, two of the best things you'll ever read.
It's literally in my mastermind group.
That's the book study we're doing is the first two chapters of Basic Economics by Thomas Sowell.
You know, understanding prices, such a thing, man.
I mean, when you realize how powerful a price is and everything that's conveyed with that, it's such an amazing thing.
And, you know, I'm sorry to take and interrupt there.
But I mean, if people just understood economics a little bit better, it's such a driver for every major financial decision.
And you can easily call BS on politicians when they're saying that this is a great idea.
No, no, no, no. No, no. We did that. It didn't work then. It's not going to work now. Let's not do that. But it's a thing.
Oh, 100%.
But the people are different. Doesn't that count?
It's different politicians?
If the people are different, then the same action should be different. Right?
No. Human beings don't change. Let me tell you. I'm going to give you a simple one. Rent control has never worked. It will never work.
It will always make less housing for the very people it's trying to make more housing for.
The reason why is the very same reason why Boris Yeltsin came to, I believe it was Houston.
And the thing that blew him away wasn't the aircraft or anything.
He went to a store and in the store, the shelves were full.
The Soviets were never able to keep the shelves full.
And the reason why is they had a guy named Bill and Bill's job was to figure out what the price of everything was going to be.
Bill could never be smart enough to have the right price for everything.
We hear that. And he actually asked us.
He asked the U.S., how do you guys set what the right price for everything is?
And you know what they said? This is genius.
We don't. The market determines the right price for things.
So best example I could give you, Miami, my market.
They were talking about rent control because our rents went ape.
I mean, they went nuts.
COVID, everybody came here.
It was the Wild West.
You put your mask in your glove box and you don't see it again.
I mean, seriously, two weeks in, mask was in the glove box.
Nobody wore a mask.
Everything was like everybody was coming here.
Rents went nuts.
They didn't do it.
They passed a law.
You had to give a little more notice, whatever. Guess what happened? The number of apartment buildings built went through the roof. Our rents have gone down the last two years because there's been so much more supply added to the market just because they gave the market a chance to fix it.
So I think that, you know, if we, again, pick up a history book kind of thing and see what happened last time we let the pressures build, I think that we're expecting people to be different because they have different intentions and things like that.
it doesn't really change on a macro level, but choices people make on an individual level,
and those choices stacked up is what economics is really studying. When you apply pressures
to real human beings, what choices do they make? And if we stick with that, I mean,
Seoul is really so good at talking about this. Letting those prices fix the problem
is really what needs to happen.
I mean, when people want more cheese,
the price of Cheerios goes up.
Well, why?
Because they need more milk.
Well, they need more milk.
They're not, they're letting cows,
they're keeping more cows around.
So they're feeding more cows to get more milk
because the price of cheese.
Well, what do they feed the cows?
Well, part of what they feed them is the corn.
Well, the corn is what they use to make the Cheerios.
So now your Cheerio price went up
because they need more milk for,
I mean, it's amazing that all that goes on
and nobody is actually, like Bitcoin,
Nobody's controlling it.
It's just automatically happening behind the scenes.
An economy is a beautiful symphony of things going on.
And where Bitcoin comes in, I think, is supplementing this, always trying to solve that.
How can we do what we're doing already?
How can we do it better than we were doing it before?
And so, you know, as long as the government keeps their thumb off the scale with real estate of trying to increase the demand for real estate by artificially
supplementing the lending side of the market, I think both Bitcoin and real estate will stay
stable hedges against inflation. Swell-based. Amazing. Love the market, the free market. Love
pricing. I read an incredible book that I'll recommend to everybody called 40 Centuries of
Wage and Price Controls. Literally reviews 4,000 years of attempting to control things
from a top-down perspective.
Y'all, it doesn't work.
Spoiler alert.
Spoiler alert, no.
Let's take a moment here for our sponsor,
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Amazing.
Yeah.
So today in the studio,
we are tasting the lemon garlic flavor
and acting as your taste buds
for this tasting moment.
There we go.
Okay, cheers.
Cheers.
It's cold.
Mm-hmm.
It's fresh.
Mm-hmm.
Got a bright lemony taste there.
Man, this one's good.
A little bit of garlicky-ness, keeping it kind of on the savory side.
Yeah, I feel like the garlic's not too garlicky.
The lemon comes in and really cuts it, I think, in a beautiful way.
That's a good way to get my day started here.
I know, geez.
um josh we do ask each of our guests if they'd be willing to come back on in nine months to give
us an update on their bitcoin baby there's like a lot that i still want to cover with you yeah
um including whether well maybe i'll just keep it in my pocket here so we don't so we don't
because we can probably go for a while would you be willing to come back on in nine to give us an
update. Sure. Okay. Now that's the case. Number one, first of all, thank you. Number two, it's
time. Well, I'll let, I'll let Abe do this, right? Since he's going to come back on in nine, let's
see what he thinks is going to happen between now and then. All right. So since you are a Bitcoiner,
we would like to ask your two sats for our brand new Bitcoiners in the audience, what you think
is going to happen in the next nine months. Oof. You know, it's one of the things that's,
been super interesting with what's gone on is, and drives me, I don't want to say drives me a
little crazy, but there's the law of unintended consequences, right? And so normally the founders
of the U.S. gave us a huge gift in the sense they gave us intentionally a very inefficient
system. The system is designed that you can't change it really quickly. We've had a race here
with the current administration. I'm not picking winners or losers. I'm just saying they've done a
lot really quickly between tariffs and all this other stuff. Now, what's going on as of today,
what's going on with Iran, the street of Hormuz, oil prices, all of this. What I would love,
Like, what would be amazing to me is if they're able to resolve this and get some friendlier form of government in place in Iran where that Iranian oil does not have to be sanctioned anymore.
I think in a universe where that happens, prices to everyone falls.
And I think it puts tremendous pressure on both Russia and China to stop some of their bad behavior in the world.
If that happens, then I would think that the amount of capital in the markets in things like Bitcoin and everything should go very well.
Right now, I would say to answer that question, we have to talk about, and while he's not my favorite guy, but a guy who is famous for his phrase, the animal instincts, Mr. Keens.
People will make emotional choices.
And we've seen that with Bitcoin a lot.
Emotional choices get made out of fear.
And so where the price of Bitcoin will be, I don't know.
I know that having more of it between now and then is probably where you want to be.
Yeah, there we go.
That's some solid advice.
Talk about cutting through all of the uncertainty.
Just stay humble, stack some sats.
Get some more.
Your future self will like you.
Josh, where can we go to spend more time with you and your podcast?
My podcast is called Know Your SH Asterix T with Josh Cadillac. And I just interview entrepreneurs. What I've realized is my real estate agents are all solo entrepreneurs. And when you work for yourself, you take on a lot of stuff that nobody really tells you about. Like, can you get you to do what you need you to do? Which is a big question.
It's, you know, like when I can't get me to go to the gym, that's one problem.
But when that now translates over into what I do in my day job and I can't get me to do
the thing that next thing that needs to get done, it's, you know, not advertised things.
So I interview entrepreneurs just talking about, you know, what sucks about working for
yourself and, you know, what's hard along the way.
So, yeah, that's that's kind of what my thing is about.
Let's go.
Awesome.
Fantastic.
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