A Financial Planner's Bitcoin Journey: Kimberly’s Experience - part 1

Tali: 00:00:00

Hi everybody.

Tali: 00:00:01

Welcome to Orange Hatter.

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Today you are going to be listening to my conversation with Kimberly.

Tali: 00:00:08

Hi, Kimberly, welcome to the show.

Tali: 00:00:09

Thank you for sharing your story with us.

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I'm gonna ask you, I'm gonna ask you a question that I ask all my guests.

Tali: 00:00:16

What made you first pay attention to Bitcoin?

Kimberly: 00:00:19

I had heard about it through the years, and I think those were all

Kimberly: 00:00:23

the years I was very busy and raising my kids, like we've talked about.

Kimberly: 00:00:27

Right?

Kimberly: 00:00:27

Like, April, 2020, it may have been March, 2020.

Kimberly: 00:00:31

It was covid.

Kimberly: 00:00:32

The world had slowed down, right?

Kimberly: 00:00:34

I thought the whole thing was a hoax.

Kimberly: 00:00:37

I couldn't believe that the world had stopped for this.

Kimberly: 00:00:40

I couldn't believe that Americans allowed themselves to be shut down.

Kimberly: 00:00:44

So I was already on heightened mistrust.

Kimberly: 00:00:46

Right.

Kimberly: 00:00:46

But a, uh, dear friend, and he happens to be a pastor, shared with me about

Kimberly: 00:00:52

Bitcoin, which is kind of a crazy source actually now when I think about it.

Kimberly: 00:00:56

But he shared with me about Bitcoin, the blockchain, and cryptocurrency.

Kimberly: 00:00:59

So Bitcoin wasn't necessarily anything special, do you know what I mean?

Kimberly: 00:01:03

Like, like it was just lumped in there with, with cryptocurrency and it was

Kimberly: 00:01:08

the on ramp, on ramp to cryptocurrency.

Kimberly: 00:01:11

And basically the, what, I guess what he was really sharing with me

Kimberly: 00:01:14

was the, the blockchain concept.

Tali: 00:01:16

So how did that come up?

Tali: 00:01:17

I mean, that's not a common topic for you to talk about with your pastor.

Kimberly: 00:01:21

Well, he wasn't my pastor.

Kimberly: 00:01:22

He was a friend and he happened to be a pastor, so...

Tali: 00:01:24

Okay.

Kimberly: 00:01:25

So we talk about all kinds of things.

Tali: 00:01:27

Yeah.

Kimberly: 00:01:27

But you're right.

Kimberly: 00:01:27

I think he had come across it, like somebody...

Kimberly: 00:01:30

and he, he had connections down in Florida, so he was probably had, you

Kimberly: 00:01:34

know, connections outside of our normal circle, but somehow he had just gotten

Kimberly: 00:01:39

into it, and so then he shared it with me.

Tali: 00:01:42

What about what he said made you kind of perk up?

Kimberly: 00:01:45

Yeah, I, I think it was the, the asymmetric bet, so to speak, right?

Kimberly: 00:01:49

The upside potential for it.

Kimberly: 00:01:51

You know, he definitely talked about blockchain and the, this idea of kind

Kimberly: 00:01:55

of this technology of the blockchain...

Kimberly: 00:01:58

how it was gonna allow for smart contracts and, you know, he used

Kimberly: 00:02:01

kind of some of those buzzwords.

Kimberly: 00:02:03

That's a really good question.

Kimberly: 00:02:04

I, I, you know, honestly, I think it was the investment, the, you

Kimberly: 00:02:07

know, the potential for, for returns at that point in time.

Kimberly: 00:02:11

If you heard that phrase, "I came to make money and I stayed for the revolution"...

Kimberly: 00:02:14

or something, or something like that.

Kimberly: 00:02:17

Like, people came because there's the opportunity to make money in it.

Kimberly: 00:02:21

And then as they started to learn about it and what it was, they're,

Kimberly: 00:02:25

it's not about making money anymore, it's about what it actually represents.

Kimberly: 00:02:28

So I think at the time that he, he introduced it, he, it was like,

Kimberly: 00:02:32

oh, it's this cool technology.

Kimberly: 00:02:33

It can do this.

Kimberly: 00:02:34

Right?

Kimberly: 00:02:35

Yeah.

Kimberly: 00:02:35

Now, then as I've learned more, and now I know what it's about, but

Kimberly: 00:02:38

it took me a while to get there.

Kimberly: 00:02:40

I think it took me probably a good year or so before I got there.

Tali: 00:02:43

So when he started talking to you about Bitcoin, and you thought

Tali: 00:02:46

of it as an investment vehicle, what was your goal when you were

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considering it as an investment?

Tali: 00:02:52

What were you trying to achieve?

Kimberly: 00:02:54

To make money.

Kimberly: 00:02:55

To make money.

Tali: 00:02:56

Yeah.

Kimberly: 00:02:56

Yeah.

Kimberly: 00:02:57

It's definitely...

Tali: 00:02:58

if an investment involves risk, what about Bitcoin made you

Tali: 00:03:02

feel like it was worth looking at, despite the volatility of the price?

Tali: 00:03:06

Because if we look at it historically, it's gone up and it's gone down,

Tali: 00:03:09

and the swings are pretty dramatic.

Kimberly: 00:03:11

Well, any sort of small, I mean, I used to be a financial

Kimberly: 00:03:16

planner, before I had kids.

Kimberly: 00:03:18

So I've always managed our investments and so I understand volatility.

Kimberly: 00:03:22

And you know, if you, if you're into, you know, what you'd call large cap, but

Kimberly: 00:03:27

large companies, right, they, there's less volatility, but anything new, like a small

Kimberly: 00:03:32

cap or a tech stock or you know, anything new, definitely has volatility to it.

Kimberly: 00:03:38

But quite honestly, I probably in the very beginning, didn't understand

Kimberly: 00:03:43

the risks as much as I should have.

Kimberly: 00:03:45

You know, I lost money along the way, right?

Kimberly: 00:03:48

But it was worth putting some money into and then dabbling in it.

Kimberly: 00:03:53

It was one of those things I put, I put money into it that I

Kimberly: 00:03:55

could afford to lose, I guess.

Kimberly: 00:03:57

Right.

Kimberly: 00:03:58

And that is the way you, you manage risk, right?

Kimberly: 00:04:01

You don't put money in it that you can't afford to lose, and you, um,

Kimberly: 00:04:05

also don't put money into it that you need in a certain timeframe.

Kimberly: 00:04:09

So I always talk to people about that when I'm talking about Bitcoin.

Kimberly: 00:04:12

Like, because there is, because it is volatile, you don't wanna put money

Kimberly: 00:04:15

in it that you're gonna need in, you know, 12 to 24, 36 months, right?

Kimberly: 00:04:19

Because you don't know what, where it's gonna be.

Kimberly: 00:04:22

In the long run, we know it's gonna go up, but in the, in the short run, we don't

Kimberly: 00:04:26

know because it is, it's volatile and it's impacted by a lot of different things.

Tali: 00:04:30

Yeah, yeah, for sure.

Tali: 00:04:31

So you said that your background is financial planning and you've

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always invested your family's money.

Tali: 00:04:37

What I've been asking some homeschooling parents to think about is the notion

Tali: 00:04:41

that we tell our kids when they grow up, they are, they have one job,

Tali: 00:04:46

mostly, most people have one job, right?

Tali: 00:04:47

They're, they're preparing themselves for a certain career and they have a job.

Tali: 00:04:52

But the truth is all of us have to have two jobs.

Tali: 00:04:55

We have one job to earn money.

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And one job to try to keep it.

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So can you talk about that from a financial planner point of view with

Tali: 00:05:03

our, with our current, with our financial system today, with our US dollars today?

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Why you may or may not agree with that statement.

Kimberly: 00:05:11

Absolutely.

Kimberly: 00:05:12

Our financial system today is, it's really difficult.

Kimberly: 00:05:15

You know, my, my husband and I, and I guess it's probably 'cause I was a

Kimberly: 00:05:18

financial planner, you know, we, we have saved money, I have saved money from

Kimberly: 00:05:22

the, from the get go, from day one since I've had it, I would put 10% away, right?

Kimberly: 00:05:28

Like, we have, we have been very faithful, consistent planners

Kimberly: 00:05:33

or savers and always, you know, saved and planned for the future.

Kimberly: 00:05:37

And because of what I did, like, I was aware of, um, you know, what it meant

Kimberly: 00:05:41

to be in an IRA or you know, that you wanted your max out, your 401k and you

Kimberly: 00:05:45

wanna take advantage of any tax benefits that you can get, just things like that.

Kimberly: 00:05:49

But all of that for the typical American or for, you know, the

Kimberly: 00:05:53

typical, typical person, that's their, that's a second job, right?

Kimberly: 00:05:56

Just to keep up with all of that takes a lot of time and reading and, and

Kimberly: 00:06:01

it's not necessarily something that people are interested in or want to do.

Kimberly: 00:06:05

Right?

Kimberly: 00:06:05

And then they end up using a financial planner for help, or they don't do it.

Kimberly: 00:06:09

Or they, or they do it and they, you know, they make mistakes along the way.

Kimberly: 00:06:13

But our system is fairly complex because you do have to not only save money, you

Kimberly: 00:06:19

have to have a rate of return on that money so that that money can hopefully...

Kimberly: 00:06:23

you know, there's no such thing as compounded interest rate, interest,

Kimberly: 00:06:27

when interest rates are zero.

Kimberly: 00:06:28

Right?

Kimberly: 00:06:29

So, you know, you put your money in the stock market hoping, hoping that you can

Kimberly: 00:06:33

get like an average 8% rate of return.

Kimberly: 00:06:36

You know, sometimes, some years it's up, some years it's down, and you

Kimberly: 00:06:39

just hope over, over time, right?

Kimberly: 00:06:41

That you're gonna get that rate of return.

Kimberly: 00:06:44

But with inflation, right?

Kimberly: 00:06:46

Like, these days you're not even, we're not even keeping pace with

Kimberly: 00:06:49

inflation in, in the stock market.

Kimberly: 00:06:52

And, and inflation, I've, I've, and I've learned a lot more about

Kimberly: 00:06:55

inflation in the past few years, right?

Kimberly: 00:06:57

I didn't fully understand what inflation was and how it was being

Kimberly: 00:07:01

created and, and all of that.

Kimberly: 00:07:03

And again, so if people, yeah, you have to, you, you're, youre you,

Kimberly: 00:07:06

you have your paycheck and you're earning money, just to keep, just

Kimberly: 00:07:09

to pay for expenses along the way.

Kimberly: 00:07:11

But you have, but along with that, you have to keep [enough] aside to,

Kimberly: 00:07:15

you know, provide for retirement.

Kimberly: 00:07:17

And we're all gonna be at that point someday where you can't, can't work.

Kimberly: 00:07:21

You may want to work, but you're probably gonna be at a point where you can't work,

Kimberly: 00:07:24

and you can't count on social security to be the, to be adequate for you.

Tali: 00:07:28

You're right on the point, because I'm just thinking back to the

Tali: 00:07:31

financial advice I was given right out of college, and it was the same thing

Tali: 00:07:37

that you have said just now, which is, save 10% of your money and put it in

Tali: 00:07:42

either a mutual fund or some kind of stock that you choose yourself, right.

Tali: 00:07:47

My sort of reality over the last several decades has been, even

Tali: 00:07:52

when, when I try to do the right thing, when there's a layoff...

Tali: 00:07:57

which my husband went through several.

Tali: 00:07:59

Like every time there was a financial crisis, the layoffs would just impact

Tali: 00:08:03

hundreds of thousands of people.

Tali: 00:08:05

And unfortunately, we were included in that, several times over.

Tali: 00:08:09

Every time there's a financial crisis, the layoffs would impact us.

Tali: 00:08:13

And whatever you try to save through that 10% a year, and you put it in the stock

Tali: 00:08:18

market, and hope that it'll keep up with, you know, the inflation rate and stuff.

Tali: 00:08:22

When you go through a financial crisis like that, it would be gone.

Tali: 00:08:25

It would be eaten up so quickly when you go through that.

Tali: 00:08:28

And then if you go through it several times, you can't, you go into a

Tali: 00:08:32

hole and then it's like, I thought I, I did all the right things.

Tali: 00:08:36

I've, I studied hard.

Tali: 00:08:37

I saved 10% of what I made, and every time these people, these bankers

Tali: 00:08:42

would mess with the financial system, we pay the consequence for it.

Tali: 00:08:46

And it wipes out savings and investments, when it happens

Tali: 00:08:50

over and over again, right.

Tali: 00:08:51

And it wasn't just that, you know, every time the stock market [would]

Tali: 00:08:53

go down, it would affect our assets.

Tali: 00:08:55

It was, we now have no job kind of thing.

Tali: 00:08:58

And then I also want to reference, you know, someone else that I know who paid

Tali: 00:09:02

off her house, paid off her car, and she put her retirement in mutual fund.

Tali: 00:09:07

And when she had retired and was ready to draw her funds to live on, right

Tali: 00:09:12

around that time, value went down by 40%.

Tali: 00:09:15

And it wiped out all the earnings that she had, the 8% average that she had,

Tali: 00:09:19

over the several decades that she had her money in there, and then she was

Tali: 00:09:23

afraid to withdraw the money that she needed, because then they had, once

Tali: 00:09:27

she withdraws the money, it had no more potential to go back up with the market.

Tali: 00:09:32

And she did everything right.

Tali: 00:09:33

She paid off her car, she paid off her house.

Tali: 00:09:36

But now she's facing the, the reality of having to sell her house in order

Tali: 00:09:40

to live on, because her mutual fund that she thought would be able to

Tali: 00:09:43

support her, can no longer support her.

Tali: 00:09:45

So, I think for me, that's my frustration, because you know, like I mentioned

Tali: 00:09:49

before, tell me what to do and I'll do it.

Tali: 00:09:51

Like, tell me the right thing to do and I will follow it.

Tali: 00:09:54

There are no guarantees and I feel like it's just been so disappointing.

Tali: 00:09:58

And I, I get to the point where I feel like I don't know how to tell my

Tali: 00:10:02

kids, prepare for financial success.

Tali: 00:10:04

Because I no longer understand what the right path is.

Tali: 00:10:06

Like, you have, you see these kids who become bazillionaires when

Tali: 00:10:10

they're in high school, because they have a successful YouTube video.

Tali: 00:10:13

They're 16 or 17.

Tali: 00:10:14

And you see doctors who go through medical school training, become

Tali: 00:10:18

a specialist, and then they are squashed by the insurance payments.

Tali: 00:10:23

So, what do I tell my kids?

Tali: 00:10:24

Go be a doctor, or go be a YouTuber?

Kimberly: 00:10:29

[laughter]

Tali: 00:10:29

I don't even know what to tell them, now.

Kimberly: 00:10:31

I completely understand cuz that's exactly where I'm at with my kids.

Kimberly: 00:10:35

Right?

Kimberly: 00:10:35

Our kids are the same age.

Kimberly: 00:10:36

They're, we're about, we're launching them.

Tali: 00:10:38

Yeah.

Kimberly: 00:10:39

And everything that would've been sort of status

Kimberly: 00:10:41

quo that I would've known...

Kimberly: 00:10:43

thought was the right thing to tell them...

Kimberly: 00:10:45

um, you know, in maybe the past decade or, or whatever, right?

Kimberly: 00:10:49

Like, none of that applies anymore.

Kimberly: 00:10:51

None of it.

Kimberly: 00:10:52

And, and you bring artificial intelligence in there and it's even more complex,

Kimberly: 00:10:57

because every career, and I know this is off topic, but like, every career

Kimberly: 00:11:02

is going to be affected by that.

Kimberly: 00:11:04

Every job, the white collar, college-educated jobs that, like, our kids

Kimberly: 00:11:09

would be, are headed into, all of that, that, that's all gonna look different.

Kimberly: 00:11:13

I have no idea where to steer them.

Kimberly: 00:11:15

Thinking with my kids, like, okay, you need to, to jump into Bitcoin.

Kimberly: 00:11:19

Like, understand that.

Kimberly: 00:11:21

[laughter]

Tali: 00:11:21

Right, right.

Tali: 00:11:22

Yeah.

Kimberly: 00:11:23

Or, or you better learn how to work with artificial intelligence.

Kimberly: 00:11:27

Right?

Kimberly: 00:11:27

You better be able to embrace that and be able to contribute to that, somehow.

Kimberly: 00:11:31

Otherwise, I don't know.

Kimberly: 00:11:33

I, I don't know what...

Tali: 00:11:35

Thank you for joining us today.

Tali: 00:11:36

We will continue this conversation tomorrow.

Tali: 00:11:39

Be sure to come back and hear the rest.