TikTok’s worst financial advice, Pimp my Portfolio & the pros and cons of music royalties

Bryce: [00:00:31] Welcome back to another episode of Equity Mates, a podcast where we explore what's possible in the world of investing. If you've just joined us for the first time, a massive welcome. We have a huge episode today. My name is Bryce and today we are looking at Kiss selling their music rights. We have Pimp My Portfolio and not financial advice from some of the, shall we say, best TikTok investors. To chat through it as always is my equity buddy, Ren. How are you? 

Alec: [00:01:02] I'm very good Bryce. Very excited for this episode. A lot to cover, none more so than the TikTok investors. 

Bryce: [00:01:09] I know. I'm a bit nervous about that one.

Alec: [00:01:11] No would be good. 

Bryce: [00:01:12] Yes. Well, well, let's get stuck in a couple of follow ups from some conversation that we had last episode. We were chatting about granolas or Europe's answer to the Magnificent Seven.

Alec: [00:01:27] Yes, the magnificent 11. 

Bryce: [00:01:28] The magnificent 11. Yes. 11 stocks that had been piled together. And we realised that the Aussie market doesn't have the acronym equivalent. 

Alec: [00:01:41] Yes. Yeah, yeah, yeah.

Bryce: [00:01:42] So we put out, we put out the call to the community and on and, went away with some homework to see if we could come up with some acronyms ourselves. And now, a long time friend of the show, Charlie Viola, sent us a message. A couple of days later, he came up with an acronym for Australia's version of the Magnificent Seven. 

Alec: [00:02:02] Okay, what's he got? 

Bryce: [00:02:03] He's got BANCCR. 

Alec: [00:02:05] Well, I mean, without even knowing the spelling, that seems fitting, given where a country bank in mind is. 

Bryce: [00:02:11] Exactly. I think top, top seven stocks are four banks and three minus. 

Alec: [00:02:14] Top seven stocks. 

Bryce: [00:02:15] On the ASX. So he's coming 

Alec: [00:02:19] Sorry no they're just seven of the biggest stocks. CSL plays golf does it. 

Alec: [00:02:25] What do you mean? I think that's, hh yeah I see what you're saying. Seven of the top ten or whatever it is.

Alec: [00:02:31] Yeah yeah yeah yeah yeah. You never you've never heard that saying before. It's like it's big in like footy content when it's like, here's the top five players from this week and like a standout player doesn't get in. It's like, oh well Isaac Haney plays golf does it? Bryce not not up with pop culture.

Bryce: [00:02:49] I don't think but is CSL bigger than those seven? 

Alec: [00:02:53] Yes, bro. The biggest three it's BHP, CBA and CSL. Geez. Do you host an investing podcast? 

Bryce: [00:03:08] Well anyway, Charlie has come in with BANCCR, and so he said BANCCR. 

Alec: [00:03:13] Okay. So what? Just give us the companies as you spell it out. 

Bryce: [00:03:16] Obviously playing on the bank. So b for BHP, a for ANZ and for NAB, c CBA, c for CSL, r for Rio.

Alec: [00:03:24] Okay. So he hasn't just, bank and banks and mines 

Bryce: [00:03:28] So he also wanted to try and fit T. I think it was Telstra and then Fortescue there as well. 

Alec: [00:03:35] I mean, the thing that my biggest takeaway from this is Australia doesn't have enough big companies that start with vowels to make this work. Like, over in the States, there's a lot of A's you've got like your Alphabets and your Amazons, whereas we really have ANZ. And then you've got a lot of consonants, hard consonants as well. You've got like Rs and Cs, B, t for Telstra, f for Fortescue.

Bryce: [00:04:00] Yeah. Anyway thanks Charlie. Let's keep the conversation going. 

Alec: [00:04:05] Well done Charlie. Appreciate it.

Bryce: [00:04:06] Appreciate it very much. Appreciate it. And keep the conversation going in the Equity Mates discussion group on Facebook. We'd love to hear from you. Another follow up we were speaking about, the investment in Fairlight last week. The small cap manager says on their website that they invest in a market cap range between 500 million and 30 billion. However, when we were looking at their top five holdings, Constellation Software was part of that, which has a 50 or so. 

Alec: [00:04:32] It's like 75 billion Canadian dollar market cap, which is like 55 billion US.

Bryce: [00:04:37] And so we had the question, is this just because they're now letting their runners run, which we hoped was the answer? Luckily the guys at Fairlight, Will and Nick were listening to the show and, came calling and yes, confirmed that they did let their runners win. So they do still buy within that 500 million to 30 billion market cap range. And they also confirmed that the fund can be hooked up to share sites. So few little things to close out there, Ren. 

Alec: [00:05:06] Great. 

Alec: [00:05:07] All right. So you mentioned at the top of the show, we wanted to speak about Kiss, the band, because they made headlines last week. They sold their music back catalogue for $300 million. Now, this is part of a much longer trend that has really been playing out outside since, like, 2018, 2019. A lot of major artists have sold their back catalogues for serious money. Bob Dylan, an estimated 300 to 400 mil. Stevie Nicks, 100 million. Imagine Dragons 100 million. David Bowie 250 million. Bruce Springsteen, I think he's the biggest so far. An estimated $500 million. And there's an investing story here, and there's an investing story that we can participate in. So we wanted to talk about it, given that Kiss had brought this right into the forefront again. So I think let's start with the investing logic behind buying music back catalogues for massive nine figure sums. The reason is that with the rise of music streaming, Spotify and Apple Music, music back catalogues have become quite reliable annuity-like streams of income. And what do we mean by that? Pretty consistently every month they will get, you know, x million streams. And those streams then translate to payouts from Spotify and Apple Music. I think we did the maths on Justin Timberlake's back catalogue. I think he sold for 100 mil. Don't quote me on that. But he does 27 million downloads or streams a month on Spotify. Yeah, I think they're going right for a stream these days. Is about half a cent, so $5 per thousand streams. So that works out to be what, like $135,000 a month. 

Bryce: [00:07:01] Or one point for a year or something. Something like that. 

Alec: [00:07:03] So, you know, off a 100 million initial events investment, you're getting like a 1 or 2% yield. 

Alec: [00:07:10] Right? That's what I want anyway. We'll get to that. 

Alec: [00:07:14] And that's the investing logic. Investors we're looking for income. This is partially why this became really popular in a low the low rate environment where bonds and more traditional income paying assets weren't paying a lot of income. Music royalties have really become an asset class in themselves. 

Bryce: [00:07:34] Not one that I've ever invested in.

Alec: [00:07:36] Cool. 

Bryce: [00:07:37] Yeah I just anyway we'll get to it. But there are, there are different ways in which you can invest in music royalties. So there's the labels that produce them. You've got the big ones like Warner Music, Sony I guess there's a bunch of independent labels as well that you could go into. Then there's direct on platforms like royal.IO or Song Vest. But then what we want to focus on now is how you can invest in the actual funds that are buying the rights to all of these back catalogues. So the funds that are buying up Bruce Springsteen, funds that are buying up David Bowie, because those are a little bit more attractive. 

Alec: [00:08:14] Yeah. Now it's a good news, bad news. The bad news, like so many things in the investment world these days, the majority of these funds are in private markets and only for the biggest of big investors. So one that you'll say quite often that has bought a lot of music rights is Round Hill Music Trust, which I yeah, isn't listed, but they get money from, you know, big institutions and who want exposure to these asset classes. But there is one that is listed. It's listed over in London, and where you can buy it through the London Stock Exchange. It's called the Hipgnosis Songs Fund. Now they have bought some of the big music catalogues the Red Hot Chilli Peppers, Journey, Chainsmokers, Shakira and Neil Young. So appealing to a lot of different musical tastes. Yeah, yeah. And they've bought a heap more, but those are some of the bigger names. So I had a look at the financials on Tikr, because over the past year, it's actually down 20%. Which isn't really surprising because this is an income play. And we've seen rapidly rising interest rates. And then you have to revalue all other streams of income relative to the risk free rate of income, which is, you know, what has rapidly been increasing with rising interest rates. So all interest rate sensitive assets, all income paying assets have been revalued. So the fact that it's fallen isn't surprising. But here's a look at their finances. So 1.9 billion in intangible assets on their balance sheet. And that's where the ownership of music royalties is recorded on their balance sheet. Yeah. so 1.9 billion. And last year they did $147 million in revenue. So that's about a 7.5% yield. Pretty good. 

Bryce: [00:10:15] Is it? Okay. Nice. 

Alec: [00:10:22] So that's pretty good. 7.5% yield. More than your savings account is paying. Certainly more risky than your savings account. And I want to get to the risk in a second, but just to close out their financials. Despite making $847 million in revenue, they made a loss of $90 million. 

Bryce: [00:10:40] Doing what?

Alec: [00:10:41] Now this is my question. What is the operating costs? And it wouldn't be people buying music because that would be CapEx. So it wouldn't sit on the operating cost line. The depreciation would sit in the operating costs.

Bryce: [00:10:56] But just spending. 

Alec: [00:10:59] Your cost base shouldn't be that hard. 

Bryce: [00:11:02] Hustling. 

Alec: [00:11:05] Going to concerts. Going to concerts. Yeah. 

Alec: [00:11:09] So that's probably my key question. Is this fund an attractive way to get access to music royalties as an asset class because it's listed and it's a liquid and all of that. But you do also have this idiosyncratic company risk, which is also a company that's spending $250 million a year in operating costs? Yeah. So that's probably the key call out. There are other listed ones. There's a tiny one, Mills Music Trust, which is now just over the counter in America. It's also down 13% over the past 12 months. It's only got a $10 million market cap. But Paul McCartney was or still is the major shareholder. But I think it's sort of being whittled down into nothing. And I think that's where this whole music royalty story becomes quite interesting, because a lot of these catalogues are seen as having quite good staying power, you know, then. But even the most popular music will have diminishing streams over time. 

Bryce: [00:12:14] This is my biggest not gripe with it. But when I think about it, is this something that I'm interested in investing in? And I'm going to be honest, it's not because A. just think that the economics behind it, I just going to continue to deteriorate. You're going to get less and less for every thousand streams I reckon over, like you've seen it in many different forms of media. And I also think that there's only a limited pool of really top quality, good big back catalogues. And if you, if you've got like I understand, 7.5% yield. Not bad. If you look at some of the yield Maximiser ETFs they're pumping out almost 10%. So to your point about comparing where you could put your money, but I think the pool is limited with what they can buy. And I feel if you don't get your point, get the funds that are actually getting the Michael Jackson back catalogues and those music catalogues that are getting money.

Alec: [00:13:10] But you say even for me, Michael Jackson will have diminishing streams over time, like just as generations pass. The one exception to that rule, Mariah Carey's, Christmas song. That's got to stay in the chart. 

Bryce: [00:13:24] Like this is also a business model that's now starting to slowly play out and will obviously gather speed in YouTube.

Alec: [00:13:32] Yeah, yeah, that would be an interesting one

Bryce: [00:13:34] A lot of people are buying up YouTube back catalogue. 

Alec: [00:13:37] There was a guy who's got 4.5 million subscribers who posted a video that I watched yesterday saying that he's giving up on YouTube, and I was like, the annuity stream.

Bryce: [00:13:47] No, I think about that. Like our podcast, like, honestly, podcasting is exactly the same. A little bit different though, because we still need to turn up every week. 

Alec: [00:13:56] The YouTube algorithm is more powerful than the desktop channel. 

Bryce: [00:14:00] And you can run that without. You could walk away from it for 15. Well, like a year and still get if we walked away for a year. 

Alec: [00:14:09] But for the most recent episodes we still get some downloads for us. 

Bryce: [00:14:13] Yeah, yeah. But not no, no, not to the tune of a 7% yield. 

Alec: [00:14:17] But if any private equity is listening. 

Bryce: [00:14:20] Would be happy to talk.

Alec: [00:14:22] So yeah, for me it's like if I was interested in a non bond or dividend, stock royalty, sorry income play. So like outside of those two really common income paying assets, I think there are better, royalty plays. So this is a royalty play. But there are like, you know, Deterra Royalties is one that I think about, which is a company listed on the Australian stock market that has a portfolio of mining royalties. Like for me, that seems more forecast-able and more stable than music royalties. I think there are probably more compelling income and royalty plays for me.

Bryce: [00:15:04] Just on that point, Ren. I'm looking at the Betashares. Why Max fund? So its an Australian top 20 equity yield Maximiser fund. 20 blue chip stocks not tracking an index put together to to pump out as big a dividend as possible. And the last 12 months they've been doing 9.12%. 

Alec: [00:15:22] Nice. Another income ETF we've spoken about on the show. JP Morgan's equity premium income. JPPI just had to look at the distribution yield 6.5%. 

Alec: [00:15:33] So I think what we have is there are Lots of ways to get income in the stock market. Lots of different asset classes. Music isn't that compelling for us. But if you are a musician, the flip side is get that back. 

Bryce: [00:15:50] Yeah, get on. Yeah. Get million of dollars

Alec: [00:15:54] I think what we're saying is like, the present value of your, the net present value of your royalty stream is worth less than the upfront money you're being offered now. So get back.

Bryce: [00:16:05] We are back with another Pimp My portfolio, where you get the opportunity to submit your portfolio for our expert to provide some ideas on how it can be improved. As always, we're joined by Luke Laretive from Seneca. How are you? 

Luke: [00:16:25] Bryce? How are you boys? 

Alec: [00:16:27] Good, good. Excited for this one? Yeah. 

Bryce: [00:16:29] Yes. So we are joined as well by equity mates community member, Anuhbav. Welcome. 

Anuhbav: [00:16:35] Hi, guys.

Bryce: [00:16:35] So Anuhbav has submitted his portfolio. We're keen to crack in. Before we do, Ren, give us a bit of a high level on the breakdown of a Anuhbav's portfolio.

Alec: [00:16:45] Yes. So this portfolio is all ETFs. Interestingly, it's underpinned by a third of the portfolio is an S&P 500 ETF. And then about 13% of the portfolio is an ASX 200 ETF. So those two ETFs together are a little bit less than half of the overall portfolio. Then we have some thematic ETFs semiconductors, cyber security, Asian technology hydrogen, battery tech. And then to close it out with about 5% in each of these positions. Bloomberg Commodity ETF and an international small companies quality ETF. 

Bryce: [00:17:23] Now also I should mention what hasn't made it into this talk is that there are some investments in REIS, spaceships and 18% of total portfolio is also in crypto. 

Alec: [00:17:37] That's going to trigger. 

Luke: [00:17:41] That's a new

Bryce: [00:17:43] That's thrown like a bit.

Luke: [00:17:44] Because I didn't get that. I didn't get that. 

Bryce: [00:17:46] I know, I know, sorry. Not all that info made it through to you, but, we like a few surprises here at equity mates. So, Anuhbav. Before we get Luke to, to give his views, how have you thought about constructing? So you've got a bunch of ETFs, some micro investing in crypto. How have you thought about constructing your portfolio today? 

Anuhbav: [00:18:05] Yep. The basic thought was, similar, like have a core portfolio and a satellite approach. And basically a core for me would be, the S&P 500 and the ASX 200. So I mostly wanted most of my money in that S&P 500 because I'm confident with that market and then played around with several tonight thematic ETFs like I've sold and in and out of several other ETF in my degree as well. Like I sold SG ETF then bought semiconductors. So basically that's where I chop and change depending and just have some inflation kind of hedge with Beacon that commodity ETF. As I thought and just have crypto on the side just to get some returns, which has been pretty good as far as now, to be honest. So yeah, basically that was the top. 

Bryce: [00:19:03] Yeah, I love it. I'm guessing you, I will leave it to Luke.Luke, Over to you. What's the name of the portfolio that you've given Anuhbav?

Luke: [00:19:11] I had to quickly rename it. Just quickly. A slight addition to my previous name. It's Satoshi and the ETF escapade. 

Alec: [00:19:19] So. 

Luke: [00:19:23] It was the ETF escapade, but I've quickly, quickly, right up there, on the floor. Okay. So I'm going to go through what I like. And then a few thoughts for me on how you can improve. So what I like, is I really like you sort of core allocation, you know, thinking about 50% of my money tied up in, you know, S&P, ASX 200. Now, do I think the ASX 200 and TFS as a general comment are a good share? I would say I know the rating wise, I think the index doesn't represent the economy. So you know those ETFs index tracking ETF. The idea is that the stock market's a representation of how the economy works. I think in Australia that's a unique misalignment for lack of a better word. Now we can have a conversation about that maybe another day or and get into the nitty gritty. But just take my word for it. I really like the allocations to the small quality smalls, and I really like the allocations to commodities. I think they're perfectly reasonable. I'd argue for active management, as I always do, but we can. No qualms. Shall we say? No qualms on that particular front. I would like to see a little bit less. And listening to you talking now. Anuhbav, I would like to see a little bit less sexy, story stuff. And the sectorial sort of thematic ETFs, a little bit more, more invested in the foundational stuff, maybe not chasing, some of these markets so much. And even if you did want to get into that. So, you know, have exposure to those things. I would like to see, that maybe through like a small cap manager or a small mid cap manager or a, you know, active manager who's got a concentrated portfolio and can maybe, protect capital a little bit better than just riding a lightning on those sectors. Longer term, you're trading quite actively by the sounds of it, which is great. I think just don't get caught up in thinking that you can get, you know, the out of this stuff. Successfully. Long run. I think it's pretty well proven. That sort of timing the market on a macro, is really difficult to do sustainably and perhaps think about as you do make profits and you do take profits again, diversifying into some more broad base things. I think an MSCI all world ex Australia type exposure would be probably suitable, as would be some emerging markets exposure, whether that's through an active manager or even just a, you know, an old world who's going to get you a lot of the way there. So if you, if you, you know, got your heart set on buying ETFs. I would though finally the my final sort of comment would be, you know, 60 basis points roughly to buy the shares for an ETF. You can get an active manager for, you know, 80 or 100. Whether that's Fidelity or Gqg emerging markets, whether that's, you know, some of the other, concentrated global guys that we chat about. There's a lot of good managers out there who've got a sustainable track record for outperforming who if you're comfortable paying by the shares 60 odd basis points, I'd be more than comfortable throwing in an extra 20 or 30 and being with an active manager who's actually doing a job for me, rather than just reweighting based on, you know, some esoteric index weights. 

Alec: [00:22:39] What, what ETF was that in relation to? Or was that just the. 

Luke: [00:22:43] Just as a general thematics? And I think if you're trying to play those thematics, there are great fund managers who do have a lot of potential for outperformance in their markets, who are leveraging some of these themes, but in a more nuanced and kind of preferred way for me. 

Bryce: [00:22:58] Anuhbav have you thought about active managers in your portfolio at all?

Anuhbav: [00:23:02] Not really up to this point, but no, definitely something I can I can, go and have a look like, Luke said like all the thematic ETFs there, like the management fees. Pretty high compared to your, like, general, S&P tracking index. So, you know, definitely I can, I can talk to, active managers, manage ETFs, do something that I don't have an exposure to. That's was my another question. Like how many ETF is too many, since I'm not going the single stock way. Has it like to diversifying is is that happening in my portfolio. Is was another one that I had. 

Luke: [00:23:46] For me if it was my money. Yeah. I mean, I would be thinking about a much more. So get that core sorted out so that you've got more exposure than just the US and Australia, but get the numbers right for you. That might be 50-50. That might be 80-20, it might be 90-10, whatever the numbers are for you. And once you've got that core sorted out, I would be looking to the satellite positions, and looking to managers there. I think it would simplify what you're trying to do, kind of on a self-directed basis into it and give you a little bit more process, a little bit more structure, and probably a little bit less work to do. And then perhaps, maybe, if there is a couple of stocks that you do like, or an ETF that you are particularly passionate about, you know, down the bottom there that 5% allocation or something like that's appropriate. But, I would try and find a process that is simpler by still gives you and gives you more diversified, more exposure across the world, but perhaps with less diversification.

Anuhbav: [00:24:45] Yeah, no, I understand.

Bryce: [00:24:47] And what about the final piece in the small I mean, almost 10% of the portfolio is in macro investing apps. I guess similar commentary there then.

Luke: [00:24:57] I think the micro investing apps provide people with an opportunity to hack their mentality, for lack of a better word, and round up, you know, purchases and stuff, which feels like an easy way to save money. Get it, invest it ASAP. And I think there's a lot of benefits to it. I've got no real qualms with it. And the portfolios I offer from what I've seen, pretty pretty fine. So, assuming you're investing along that basis, then. Fantastic. Outside of that, I would just say to, you know, incrementally move money across to your to your main portfolio that's got a little bit more. More of that, a larger investable universe, if that's what you're trying to do, and just make use of that investable universe, where rather than the limitations that generally come with some of these, round up apps, you guys kind of know my crypto thoughts. Like I said, it's not my, it's not my wheelhouse. Right? I mean, look, if you're on it and you're doing well and you're happy, takes a profits along the way and be sensible about it because, to me, it just seems like a leverage play on risk.

Bryce: [00:25:57] Love it. Well, Anuhbav I hope you've been able to, get some actionable insights there. And thank you for submitting the portfolio. I think a lot of people would have taken something out of that for their own portfolio today as well. So thank you very much. 

Anuhbav: [00:26:10] Thank you. I just want to thank you guys for getting me started investing. I like I started three years ago, I think, and just started off listening to you guys chat. So you guys, making it seem easy. So I just want to thank you guys for doing that. And thanks, Luke, for having a review of my portfolio. 

Luke: [00:26:31] My, you're an absolute legend. I, these guys have done a fantastic job, and, yeah, I'm stoked that you put it in for us. So thank you very much. 

Bryce: [00:26:38] Yeah. Thanks Anuhbav, appreciate it.

Alec: [00:26:39] Thank you. Love that you got it all. 

Anuhbav: [00:26:42] Cheers guys. 

Bryce: [00:26:42] Thank you. Bye bye. 

Luke: [00:26:44] What a legend. What a nice man.

Bryce: [00:26:49] Thank you to Anuhbav for submitting the portfolio. And, if you would like to submit yours for, look to have a look at, head to equitymates.Com/contacts. Everything is there. Otherwise you can book in a time with a look at equitymates.com/advice. 

Luke: [00:27:03] Just make sure you're as nice as a no that's all. 

Alec: [00:27:06] And say nice. 

Alec: [00:27:07] Things about us as well. You know you're.

Alec: [00:27:08] There while you're there. Exactly right. You know, there you go, a stroke. 

Bryce: [00:27:11] But, Luke, as always, thank you so much. We'll pick it up in the next segment. 

Luke: [00:27:14] My pleasure. Gentlemen. 

Bryce: [00:27:19] So we're going to take a very quick break. And on the other side, we're back with not financial advice, the TikTok investors edition. Welcome back to equity mates investing. It's time for a new segment. 

Alec: [00:27:47] That's right. We are back. More for the sting than anything else. But we come across a lot of terrible financial advice when we're on just, I don't know, online, on social media. Yeah. Every Friday, we like to celebrate some of the worst financial advice we've seen across short form video. TikTok, Instagram reels, YouTube shorts. And I wanted to bring some of those today to the podcast and, and share some of them with you, Bryce, because it's a jungle out there. And if you, if you were trying to learn to invest just on social media.

Bryce: [00:28:25] Oh my God. 

Alec: [00:28:26] Oh my gosh. 

Bryce: [00:28:27] Well, we were, we were speaking with someone the other day who was talking about their son's influence, from TikTok. And his current perception of money is that you don't need it. 

Alec: [00:28:43] Yeah. I think the quote was, you Can just dig a hole. 

Bryce: [00:28:46] You can, to live, you can dig a hole in the ground.And we said how did this come about? He said he's watching too much TikTok, so it's a dangerous world. 

Alec: [00:28:55] Reflecting on that conversation, I want to meet the creator who's convincing people of that. Like, how good must that video be being marketed? If this isn't a desperate call to the Australian government to make financial advice, more professional, financial advice more accessible, I don't know what is. But Bryce, I've got three short phone videos to you today. All right. Let me introduce you to the world of TikTok investors. 

Bryce: [00:29:23] And we don't know how this is going to go because I'm not the best with this sort of stuff. Online. I'm not an online guy. 

Alec: [00:29:32] Oh, no, that's not true at all.

Bryce: [00:29:34] You get what? Go on TikTok?

Alec: [00:29:37] Golf content. Formula one. 

Bryce: [00:29:40] Not on TikTok, not on TikTok. We should discuss podcast. 

Alec: [00:29:46] All right, here we go.

Audio Clip: [00:29:48] Alright boys, here's how you're going to make your first $10,000 in the market. Last year, l take $5,000 and turn that into $100,000 just now by doing this one simple trick. And that one simple trick is realising that everybody has lied to you up to this point, and you should never be investing in a big cap. Stocks like Amazon, Apple, Google, Tesla, etc. because those stocks, they've surpassed their growth phase and you're only going to get 5 to 10% gains yearly.

Bryce: [00:30:13] What's the trick?

Alec: [00:30:15] You get to it. Everyone's lied to you. Are you into it? 

Bryce: [00:30:19] I am, I think this is good content. Yeah. 

Alec: [00:30:21] The backing music. You're ready? 

Bryce: [00:30:24] Yeah.

Audio Clip: [00:30:24] If you have $1 million in that stock, that's great, because a 5% game would give you $50,000. But if you're anything like the average man out here, you only got a couple thousand dollars to invest, which means your 5% gain is only going to get you around 100 to $500 per year, which is nowhere near what you need in order to become financially free. The key to that is taking out a little Amount of capital and put that into a. 

Bryce: [00:30:47] Wrong. More than enough. 

Alec: [00:30:47] We wrote a whole book about it. 

Bryce: [00:30:49] We have written a whole book about it. Wrong, wrong financial advice, not financial advice. 10% a year. This guy's biggest problem sounds like the time horizon.

Alec: [00:30:57] I think so. I think he wants to get rich pretty quickly. All right. Ready? 

Bryce: [00:31:01] Yeah. 

Audio Clip: [00:31:01] The key to that is taking your low amount of capital and putting it into a risky asset like penny stocks, like cryptocurrency, like NFTs. And being ahead of the trend, being ahead of institutional investors. If you want to know exactly. 

Bryce: [00:31:13] Wrong, wrong. Hard truth, as retail investors, you can't get ahead of institutions. 

Alec: [00:31:21] It's simple. It'll take your low amount of capital and get ahead of the best investors in the game.

Bryce: [00:31:27] Wrong, exactly. Low amount of capital. Wrong. Anyway, keep going. 

Alec: [00:31:29] That's it. So that's 

Bryce: [00:31:31] Wait, so all he said was just put it in crypto. 

Alec: [00:31:34] Don't invest in large cap stocks. Invest in penny stocks and crypto ahead of institutional investors. 

Bryce: [00:31:40] And he rightly pointed out the magnificent returns that the large cap stocks actually gave people.

Bryce: [00:31:49] Right. So there was a lot wrong with that. Next, 

Alec: [00:31:52] Do you wanna take a deep breath. Are you ready to keep going? All right. Feel free to stop me at any time when there's shouting wrong. 

Audio Clip: [00:31:56] People out here flexin that they make 10k a day, and I understand, I understand to the 99.9%. That's a fact. And I get it. And so be it, guys. It's a lot of money you can live off that. Now that we have that out of the way, let's talk 2.001% that understand what 10K actually is. 

Bryce: [00:32:13] What he's saying?

Alec: [00:32:18] He is saying, people who make 10 grand a day are making a lot of money. 

Bryce: [00:32:21] Wrong wrong wrong wrong wrong wrong. Who is making 10k a day? How much is this guy making?

Alec: [00:32:27] Oh apparently more.

Bryce: [00:32:29] Oh my God. Okay. What's this? What's the secret? 

Alec: [00:32:32] No, no. First of all, he's going to tell you what ten grand a day is not enough. Yeah, yeah, yeah.

Bryce: [00:32:37] Is he in a Lamborghini or something? 

Alec: [00:32:39] Nah. He's just unsurprisingly, a lot of these TikTok investors sitting in front of podcast mics.

Audio Clip: [00:32:50] I understand. I understand it's a lot of money for perspective, perspective, perspective. But I'm going to talk to the guys that have big ambitions and big dreams. 10k a day, what is that 300k a month. What is that 3 million a year? Ten years is 30 million. 40% taxes. What do you have left with? Not enough.Living expenses you left with 15. You just for ten years. And you have 15 million in the bank. I know. 

Bryce: [00:33:12] That is more than that is more than many people earning a lifetime. Way more than these guys lost. 

Alec: [00:33:18] if you worked for ten years to cover all your living expenses? You're left with 15 million. You've failed.

Bryce: [00:33:25] Oh my goodness. You can understand why people get so depressed watching this stuff. They understand. Yeah. Anyway, I keep going. 

Alec: [00:33:31] For context, this guy would be like mid 20s as well. 

Bryce: [00:33:35] How much is he earning per day? If he's not? He's not exactly. Well he doesn't have 15 mill the bank after 10 years. 

Bryce: [00:33:40] No. Okay. Keep going.

Audio Clip: [00:33:42] But it ain't a lot of money because you can spend it really fast. Or I could just work for ten years and go for 100 million. But I'm going to cash out at the end. 

Bryce: [00:33:52] what? how? what? Hang on. 

Alec: [00:33:53] Wait, this guy only works 10 years and gets a hundred mil. I'm going for a bil. 

Bryce: [00:34:00] What the hell? This guy's maths is. 

Audio Clip: [00:34:03] Instead of cashing in at the end of every single day. It's been a long period of time. And I'm going to cash out the big bag. 

Bryce: [00:34:09] Great. Good for you. I've no idea what he was trying to say there. 

Alec: [00:34:14] He was saying, 10 grand a day isn't a lot of money. 

Bryce: [00:34:17] Yeah, but then he's going to work and a hundred million. Doing what? 

Alec: [00:34:21] Yeah. You got to subscribe. You've actually got to subscribe to his official Capital Club waiting room. Link in bio. That comes up on the screen. 

Bryce: [00:34:29] Oh my god. This is the world's biggest Ponzi scheme. 

Alec: [00:34:31] You know what? If this segment takes off, we should actually sign up to some of these discord 

Bryce: [00:34:36] Sure sure and see what they offer. That would be depressing because it'll only further, I guess, highlight how many people get sucked into this sucked-in for the quick win. I think the biggest, the biggest takeaway if you are getting sucked into these videos is there's no quick win. You can't get rich overnight. This stuff. Yeah. Come on. 

Alec: [00:34:54] Yeah. Final video. Hey, now I want to give you the context. 

Bryce: [00:34:57] We should make parody videos like this. 

Alec: [00:34:59] The thing is, these go so. 

Alec: [00:35:01] Far that, like. 

Bryce: [00:35:02] I Know, I know.

Alec: [00:35:04] So I want to explain what you're looking at. You hear two guys in, like, the early 20s, like 22, 23 sitting in front of podcast mic. 

Bryce: [00:35:14] Okay. 

Audio Clip: [00:35:16] He said once you have $20 million, like you can have everything unless you want to buy a jet or a yacht, like you're set. But for me, I kind of burned through 20 million. And, like, I could spend 20 million. 

Bryce: [00:35:27] I mean, I love ambition, I guess, but, like, 10 to 20 million. Okay. 

Audio Clip: [00:35:31] Dude, I could spend 20 million before you could say 20 million. Like. And I even think like, a hundred million is not a lot. I know, like, would you buy an $80 million jet? Let's say, you know, you get to a point where, you know. What amount of money are you going to be like, okay, I'm going to chill out. I'm going to retire. Never, never say never. No. 

Bryce: [00:35:52] No, no amount of money. There's no amount of money. I could spend 20 million faster than you can say 20 million. 

Alec: [00:35:57] And then he said 100 million. Still not a lot of money. 

Bryce: [00:36:00] This guy's perspective on things. 

Alec: [00:36:02] And this is like millions of views on TikTok, like this is the like we're not we're not scrubbing the deep, dark recesses of this world. This is just like what's coming up on our feed. 

Bryce: [00:36:12] It's unbelievable. And the problem with that is that it really clouds the view of how you can like, if 100 million is not enough money, you're not going to be doing an investing strategy that we've written a book about. Do you know what I mean? Like you're not. 

Alec: [00:36:28] You're not gonna do long term sensible 

Bryce: [00:36:31] Happy with the market. 

Alec: [00:36:32] Yeah, yeah.

Bryce: [00:36:32] You're gonna be I don't know, what are these guys doing? 

Alec: [00:36:35] Well, the amount of stuff that I found about, like punting on, like crypto and like trying to find the next, like, undiscovered crypto or all that stuff. It's like, just get rich quick stuff. I mean, it's not new. Like generation after generation trying to get rich quick. It's just with social media supercharged. 

Bryce: [00:36:54] Well, I think the call out is if you have a video on your TikTok or instagram to send it through. And we'll, we'll include it in our not financial advice segment. 

Alec: [00:37:04] And do not take and do not take social, do not take financial advice from social media.

Bryce: [00:37:09] That's it. Well, we're going to leave it there. I do have one big favour if you are enjoying the show, if you're getting a lot of value out of it, we'd love it if you could write and review us on your podcast app. We would, it really goes a long way in terms of getting us in front of new equity mates listeners. And we'd love to hear your feedback as well. If you'd like to submit to Pimp My Portfolio or have a question or interested in joining us, on any of the other segments, equitymates.com/contact is the place to go. But, Ren, we'll leave it there. Pick it up next episode.

Alec: [00:37:38] Sounds good.