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  • just final thoughts, Michael, I know you said a few months ago, people should mortgage their house and buy Bitcoin.

  • Do you still feel that way?

  • And just final thoughts for people that have uh that have joined us for the last couple hours?

  • To be clear, my view here is is uh If you're in a monetary environment where the money supply is expanding at more than 15% a year And you can borrow money at 2% interest or 3% interest and you can buy something a tangible value that is not being debased or inflated away.

  • It's probably a wise idea if you bought, if you buy a house and you pay 2.5% mortgage on the house, and if the house is going up in value 25% a year, the time to buy the house is not next year, it's last year, Right?

  • So, and the same is true of you if you had bought, if you if you borrowed money at 200% interest a year ago and bought the S.

  • & P.

  • Index, it went up 37%.

  • So the generic observation is when you can borrow money that is not marked to market for long durations for next to nothing.

  • If you have a use of proceeds that you're confident in, Then it's a good idea borrowing money at 2% interest to buy something that is going to go up in value, anything north of 5% is arbitrage.

  • So I would say in general it seems wise to me to hold tangible assets and let them appreciate in value as the money printer goes birth and not pay off your mortgage.

  • If you believe in Bitcoin then yeah.

  • Um If you if you didn't if you have $1 million dollars a Bitcoin and you sell it In order to pay off your mortgage, what you did is you gave up an asset that was going on 280% a year.

  • And let's just say it's going up 20% of your, let's be very conservative.

  • Let's just go to 10% of you're selling the asset going up 10% a year in order to loan a million dollars to the bank and the bank is paying you 2.5% interest on it.

  • And the Federal Reserve is going to increase the money supply by 20%.

  • So it doesn't make sense to pay off your mortgage.

  • If you have one you should have you should be long.

  • That my general view on debt is you don't want to have short term market margin debt.

  • Like don't go and buy Crypto assets are Bitcoin on 10 to 1 margin that's marked the market because you might get forced liquidated in an afternoon and lose everything.

  • But The most subsidized debt in the world is mortgage debt.

  • The US government lies $40 billion mortgage-backed securities every month and they're keeping mortgage rates artificially low.

  • And so if you're paying off your mortgage debt you're basically holding cash.

  • You're basically taking $1 million federal reserve is debasing and devaluing a 20% a year, 30% a year.

  • And so the only way to get ahead of that is split pit borrow a million dollars at 2% a year and then buy something which will hold its value and as to what you buy you know like obviously I believe that Bitcoin is the apex property.

  • But if you don't agree with me study for 100 hours that you still don't agree with me study 1000 hours.

  • If you don't have time to study for 100 or 1000 hours, then forget about Bitcoin.

  • The next apex property is a piece of real estate that you're going to use for the rest of your life, right?

  • And then the next apex property is a trophy asset that you think a wealthy person will want to buy off you in a decade.

  • Ask yourself the question, what is it?

  • I can buy that someone with money and education will want to buy from me in a decade and that you know that gets you to a portfolio of high quality assets.

  • That's why people buy high growth by a digital monopoly, growing 25% a year.

  • If I had to bet on Facebook or Apple or Google vs a value stock, I would bet on Facebook, Apple and Google because they can ship a product to a billion people over the weekend for a nickel.

  • And you know I wouldn't buy a chain of you know 20th century restaurants because they're not gonna get 20 x more efficient.

  • And also I think that's kind of common sense and that's what I think about that.

  • I think everybody should figure out what's their investment strategy or their savings strategy and for your balance sheet, someone someone wants to give you death.

  • Not all debt is evil if I loaned you a billion dollars for 100 years at 0% interest which take it presumably.

  • Right.

  • Yeah.

  • Going to be irresponsible now, is it irresponsible to buy a billion dollars a Bitcoin for 100 years at 0% interest?

  • Well if you think it's a good asset, no If you don't know what it is, I think Warren Buffett said if you don't want to hold the thing for a decade for 10 years you shouldn't hold it for 10 minutes.

  • Okay.

  • So that's my view on that.

  • If you if you don't want to hold the thing for a decade then don't hold it for 10 minutes.

  • But that's a separate question as to whether or not you take the billion dollars of debt for 0% for 100 years.

  • I think when someone is going to give you $30 million loan sorry 30 year loan for 2.5% interest which is what the U.

  • S.

  • Rate is right now.

  • It's pretty much close to free money for the rest of your life for most people depend on how old you are.

  • And so the losers are people that can't borrow the money.

  • Count yourself lucky you can borrow money for 30 years for two and a 1/2% interest.

  • The losers people can't borrow the money because they have to basically hold all their cash, like what do you have any assets?

  • So you're making 100 grand a year, and this year it's worth 100 grand, and next year it's worth 80 grand.

  • Next year it's worth 60 grand the next year, it's worth 40 grand the next year, it's worth You know, 30 grand and I can run that, you know, that There's a Taylor series, some kind of series out for about 20 years until I get it's worth nothing, Right?

  • So if you expect to live more than 10 years If you discounted at 20% a year, you know, simple math will illustrate to you that is going to be worth nothing.

  • They're like, well, I'll end with my with my petty quote, which is the road to serfdom is working exponentially harder to earn a currency growing exponentially weaker.

  • Mhm.

just final thoughts, Michael, I know you said a few months ago, people should mortgage their house and buy Bitcoin.

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Michael Saylor on How To Use Debt in Your Favour ? "Mortgage Your Home And Buy Bitcoin."

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    林宜悉 posted on 2021/07/28
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