Danger Of Short-Term Trends and the Future Of Artificial Intelligence with Ben Way

Danger Of Short-Term Trends and the Future Of Artificial Intelligence with Ben Way

Jason starts the show talking about how to avoid alligators. He uses this as a metaphor in real estate investing. In the interview segment of the show, he hosts Ben Way, CEO of Digits. They talk about how credit cards will move towards cryptocurrency. Then they end the discussion about automation and its impact on society.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:52
Welcome listeners from around the world. This is your host, Jason Hartman, thank you so much for joining me today and greetings from sunny Florida sunny and hot and humid Florida. It’s not super pleasant here. A little bit of trivia for you, you know in the place like Florida, you got to worry about something new alligators? Yes, alligators.

Jason Hartman 1:16
That’s really a thing here. And I know we have lots of listeners in Florida, but something that I learned. amaze me. So a little bit of trivia for you here. Before we start the show today. Do you know that an alligator when it’s chasing prey can actually run 30 miles an hour? Yes. Do not ever get close to an alligator. Because if you think that that thing can’t move, it can move 30 miles an hour. And then apparently there’s this apparent I’m not sure if it’s true or not myth going around, that if you ever get in an encounter with an alligator that you should zigzag. Supposedly, that’s actually a myth and it’s not true. So there you go. There’s your bit of trivia for today. alligators. Now in the rental property business, you know, there is a another use of that term alligator. Yes, an alligator is a property with negative cash flow. It’s this alligator around your neck. And you want to avoid that and avoid that. And if you have experienced challenges with your rental portfolio from time to time, which you will, if you haven’t experienced them yet, get ready because they come to every investor. I don’t know. I don’t know, maybe there are some investors out there that haven’t had any challenges. But yours truly is certainly not one of them. I’ve had my share of challenges over the years. But the wonderful thing is, if you stay on course, if you stay on the path, the races one by the people who continue to go down the path and just keep going and have that dogged persistence, no matter what the problems, and it’s always good to ask yourself compared to what right is it Compared to getting some lousy return in the stock market, is it compared to investing in precious metals or cryptocurrencies and losing a fortune in one day, you know, granted, you can also gain a fortune in the day I get it. But overall income property, the most historically proven asset class in the entire world. So let’s make sure we stay focused, keep our eye on the ball, as we are here in Episode 1016 1016. So today, we are going to talk about robotics. We’re going to talk about automation. Yes, the big job killer feared by many people, but the question is, and we’ve talked about it on other episodes before, is it really a job killer? Or is it a job creator? Or maybe it’s not a job creator? Maybe it’s just a prosperity creator. You know, it is truly amazing. Well, first of all, it’s an amazing time to be alive, but it’s also amazing The innovation of the human mind, how we can always find something else to do, and how capitalism allocates resources so efficiently that we can always find a new product, a new service, a new widget, a new something that other people will need or want. And we can sell that and create value in the marketplace. And we can’t even imagine what these things are today. So that’s the thing you’ve got to keep in mind, when we have these fearful thoughts about technology and automation, and then changing the future. The challenge always is and this is the thing with real estate investments, that always gets people it always gets people. It’s not the long term trend. The long term trend is always pretty good. The long term trend if it’s if we’re talking about technology and disruption from technology And the idea that it could be a job killer. The long term trend is not that scary. What gets people is the short term trend? What gets people when they don’t follow commandment number five and my 10 commandments, Thou shalt not gamble, when they don’t follow that when they speculate when they buy properties that don’t make sense from day one. What do they do they get killed by the short term, right? There will be this transition in the market. There’ll be a transition in the economy. And it will typically be a good two year transition, if not longer, it might be a little shorter, might be longer, but allow two years, okay. Now, when you buy these expensive properties in the cyclical markets, and you go through the transition, where the property is really in the trough, that’s what kills you or it’s in the trough in terms of rental income. Because I didn’t make sense from day one, because he didn’t follow commandment number five, Thou shalt not gamble property must make sense the day you buy it or you don’t buy it. If you didn’t do that, then you are in the position where you are going to get burned and suffer greatly. So we want to avoid that, right? We want to buy these properties that makes sense from day one. And the same is true with automation. And the way it changes the modern alchemic economy, right, because when we have these changes, it’s the transition that kills people. It’s surviving the transition period. That’s what hurts. That’s what gets people. You know, overall, the long term trend usually cures everything. You know, there’s an old saying, Well, I don’t know if it’s an old saying, but it’s my old saying, and I always say, and I originally thought of this from relationships, you know, I break up with a girl and I’d be really sad about it, and I would remind them Myself, that time heals all wounds, Time heals all wounds, and time puts things in perspective. Of course, if you have children, you see how they get so upset, and so sad about things or so depressed about things or so angry about things. And it’s because they don’t have the time perspective of an adult. And hey, it’s it’s not their fault. You know, when you’re only 15 years old, and something happens to you, you know, it’s a big part of your life when you’re only 15. But when you’re 50, it’s a small part of your life, and you’ve gone through it before and you know, you can keep it in perspective, and you have that maturity. And you understand that time heals all wounds, and that enables us to look at the long term, the big picture to be able to back up and it amazes me and I’m sure you’ve been amazed by it too, at one time or another. How many children are running around the world in adult bodies? Doesn’t that amaze you? It amazes me. And you know, where they have this instant gratification mindset, where they are focused on the proximate, what’s right here right now. That’s all I can deal with. And that’s so immature. And it’s such a bad strategy is so unsuccessful. You’ve got to look at the big picture. You know, if you’ve been doing museum when we were in Philadelphia, doing our Philadelphia event, we went to this incredible museum with all of this amazing impressionist art. It’s amazing, you know, you look at the picture up closely, and you can see the brushstrokes, right. And that’s sort of interesting, right? And that’s why these people are the masters because of the way they paint, and so on and so forth. But when you back up, and you look at the whole picture, it looks even better. So always keep your eye on the ball. Always keep your eye on the price. Always look at the big picture. always play the big game. always play the big game. The small game, you know, there’s an old saying you can win the battle but lose the war, right? Maybe that’s appropriate to this as well and sort of a different set of circumstances or different context. But hey, before we get to our interview today with Ben way, and we talk about automation and robotics, I wanted to play a little voxer message for you, that I got from one of our clients. Now, this particular client was actually a contractor for us first, and he still is you’ve heard him on the podcast a couple times over the years. Maybe you met him on our Florida property tour, and that’s been rash. And just to tee this message up that I’m going to play for you. It’s a quick, quick little message about his real estate investing. He just closed on another property and he’s building a very nice portfolio for himself. He’s engaged. He’s going to get married in December. You know, he’s done a lot of different work for us over the years. But I want you to know that I did not solicit this message. Okay. He left me out. This message, and I said, Hey, can you just leave that message again, but take out the other stuff we were talking about, because it’s irrelevant to the listeners, because I want to play it on the podcast. And so here is what he said. And I think this will be informational to you. It’s just a quick message. Here we go. So Jason, I’m actually 29 years old. We’ve been working for what five and a half years together. First time we talked, I was 23. And we started working together when I was 24. And knowing you this long, My only regret about real estate, I now own a few properties that I got through you. My only regret is I didn’t get started earlier. I wish I got started earlier. And the reason why I didn’t get started earlier, is really quite simple. I just didn’t know anything about real estate and I didn’t bother to learn more about it. Despite working with you. I just was very ignorant towards it. I just assumed That you needed a lot of money, like Donald Trump and all these people, Robert Kiyosaki to buy real estate. I knew nothing about loans, mortgages, depreciation, tax deductions. And you would think, you know, I have a master’s degree in business, went to some very good business schools worked on Wall Street, you would think I know about all this stuff, or at least be introduced to it in class or on the job. But no, that’s not the case at all. I did not learn any of this until I started working with you talking to listening to your podcasts being on your podcast, conversing with your investment counselors coming to meet the masters. So anyway, I’m in my late 20s. Now, and I’m fortunate that I bought my first house when I was 28. And I like it. happy that I’ve gotten started with you and I have the rest of my life to now continue and pursue this kind of hobby, I guess in real estate. So thanks for that. And the other thing I should mention, Jason is I learned now, but in my early 20s, mid 20s, since I was completely ignorant towards real estate, I put money in guess what the stock market and again, you think, oh, if you put your money in 2010 2011 2012 and the stock market, you must be super rich now, because the stock market has only gone up since then. Well, that’s wrong. I lost a crapload of money in stocks. And that’s partly was partly my fault. I was young, I was trying to get rich overnight, essentially gambled it away in the stock market. But you know, that’s what your 20s are for, I guess. It’s for the Doing dumb things and learning from those mistakes. So what did I learn from the mistake of investing in dumb stocks? Well invest in real estate instead, it’s not gambling if you go your way of doing things safe, good rent to value ratios, good neighborhoods, high cash on cash, you know the numbers definitely matter and if you invest in good properties, then I think hopefully you can get wealthy down the road obviously nothing overnight. But so far so good. I’m happy with the way things have gone over the past year since buying properties from you and I look forward to buying many more and also liquidating my socks so that I can buy more real estate. So that message that you just heard really explains the coulda, shoulda woulda concept right we all have these regrets. We all have the coulda, shoulda woulda, those and look we can’t change the past, we can only change our future by how we act today in this moment. And that’s why it is so important to invest for your future, to invest more for your future. Because there will be a time I promise it will come. We all know it will come. You don’t have to rely on my promise because you know it without me even saying, you know that there will be a time. Maybe it’s two years from now, maybe it’s five years from now. Maybe it’s seven years from now, we don’t know. But we know it will come. There will be a time that you will say, I wish I had started back then. And if you’re not in the starting mode with your real estate investment portfolio, then you’re in the building mode. And you’ll say, I wish I bought more back then why didn’t I buy more properties? I had the money. Why didn’t I do more. I could have done more shoulda coulda, woulda regrets, regrets regrets. The way to not have regrets in the future is to act today. Okay, so contact your investment counselor at Jason hartman.com get started. If you don’t have an investment counselor, just go to Jason Hartman comm fill out any form on our website, and one of our investment counselors will reach out to you, and we will help you with that. Now, let’s get to our guest benway. But before we do that, I want to tell you that we have two events coming up in early November in Hawaii and beautiful, gorgeous Hawaii. This is the good time of year to go in early on November. These events are a little ways away, but we’re going to be announcing a fantastic early bird special. We are doing a totally new conference in Hawaii a two day event that we have never done before. new content, new stuff and in a beautiful, gorgeous resort location. We are at an iconic hotel on Waikiki Beach. But I think the most iconic hotel on Waikiki Beach, and that’ll be early November. And then we will have one day off in between. and we will have the venture Alliance mastermind retreat in Hawaii. I have always wanted to go to Hawaii. And I hear it’s the most beautiful place on the planet. So the big event, the conference, the two day conference, is on Waikiki Beach, right near the airport really easily accessible, direct flights from lots of places around the world. I hope. Some of our clients in Australia and Asia in New Zealand, that part of the world will come to this event because we’ll be a little closer to them. And then, of course, all our people from the west coast, the United States, it’s an easy flight for you. If you’re on the east coast. The way I recommend it is, hey, look, I’m an East Coast guy. Now I’m in Florida, right? So that’s a little bit of a trek for me. If you’re on the East Coast, what I recommend is you just make it a point to stop on the west coast. And visit California or Oregon or Washington or Phoenix or Vegas, or something for a day or two, and then you break it up real nicely. You know, we all have things to do in all these places, fun or people to see your business to do or whatever. So that’s a really good way to planet. But anyway, we will have a registration page for a fantastic early bird price for this event coming up real soon for you. So keep those dates open. Save that date, save the date, first week in November this year for beautiful Hawaii. We will have that very shortly for you. Okay, let’s get to our guest today. Let’s talk to Ben way. And let’s talk about robotics and automation and how they’re going to affect us and our investments.

Jason Hartman 17:50
It’s my pleasure to welcome Ben way he is the CEO of digits. He is a cast member of the Bravo TV show startups in Silicon Valley. In the acclaimed documentary, the startup kids and author of job Apocalypse, the end of human jobs and how robots will replace them. Ben, welcome. How are you? I’m very good. Thank you. Good. It’s good to have you on the show. And you’re coming to us today from Miami, Florida. And I am in Fort Lauderdale. So we are close to each other, but on Skype, so yeah, we had a great conversation before we came on the air here. You are doing a lot of interesting innovative things. First, tell us about digits. startup in the crypto space it looks like to do with cryptocurrency credit cards. Tell us more.

Ben Way 18:40
Yes, indeed. So about three years ago, I joined the traditional payments company and to be quite frank, I knew very very little about the payments industry. About a year ago I recognized that there was a huge opportunity in the crypto payment space for a new type of Have crypto credit card provided that basically allows you to change any credit or debit card in the world, including the ones in your pocket into crypto card. And that’s exactly what we did. And we came up with this, this concept of digits. We spelled out the company and now we’re doing an IC o for it. And the really interesting thing about digits is that we’re not issuing any physical credit cards. We’re literally converting the credit cards that you have in your pocket right now into crypto card. So you can choose whether you want to own your credit card, where do you want to pay in crypto? And from a merchants point of view, they get exactly what they were expecting exactly the time they will expect to you.

Jason Hartman 19:45
So in other words, if you have a charge that you’re doing on any given day, and your crypto currency that is in the account, that would be debited. Is that a high or you think it’s at a high Then it would be wise to maybe pay with the crypto currency versus the Dollar, right? You’re always arbitrage these

Ben Way 20:06
two gives you that choice. Absolutely though, one of the amazing things that we have done and we had to solve the problem, the largest payment problems with crypto, which is volatility and network transmission time, which basically means that a merchant needs to get exactly the amount of money they were expecting at exactly the time they were expecting it. And so we had to solve those problems. And by solving those problems, we actually came up with quite unique concept called the hedge lending network, which we believe is the first real time lending platform in the world. And through that, the really interesting thing about digits is if you swipe that card today, and you pay $100 in crypto in from your crypto account, you have the if you won, you have the option of paying back that transaction 366 days later in fed and getting any uptick in the value of crypto. So if crypto doubles, then you can actually pay back the original transaction plus the small transaction fee and get the uptick in crypto. So you can actually hedge a year ahead with

Jason Hartman 21:19
digit. Okay, that’s fascinating. So you said you could pay with Fiat I believe meaning dollars any fiat currency like a euro or $1? Or you could pay with the cryptocurrency. But why, Ben? I mean, this is the story that’s circulated widely about the two pizzas for $82 million, or whatever, when they’re paid with Bitcoin. But why would anyone allow a 366 day float? That is a long option period. There’s got to be a decent amount of option consideration to have that long of a period because, wow. So long time,

Ben Way 21:57
we’ve actually created a very unique Commercial, which means that in 366 days, you can pay back that transaction and fit. However, if the market has gone down during that time and it goes past a certain trigger point, then the kryptos automatically liquidated and the lender paid back. So we see that option is kind of being the icing on the cake of the transaction. If you swipe that card and crypto continues to go up, then you’re gonna benefit from that. But if crypto goes down, and we liquidate and pay back the lender, then you don’t get that facility but you you still spend the hundred dollars you’re expecting to spend the time you’re expected to spend. So we kind of see that facility as a side effect of our model is not kind of like a core proposition. It’s just one of the many benefits and the other major benefit is that we turn a short term taxable event into long term taxable event that can save up to 30% Have the transaction fee in tax. So it’s these kind of two huge benefits that that actually are just side effects of the way we built the whole system in trying to solve these two big problems which is volatility and network transmission time and then affect the way we do that is the hedge lending network is a two sided marketplace and the hedge lending network itself takes the risk.

Jason Hartman 23:28
How do you turn any card into a cryptocurrency card though? Is it simply because I mean I don’t do anything with my American Express card in my wallet or my visa or my MasterCard in my wallet, you do something with the back end account right? I don’t Yes, I don’t talk to my credit card issuer about this right.

Ben Way 23:50
Right. Exactly. So we these is way to explain it is that we kind of interrupts the payment before gets the Visa, MasterCard networks and we check Whether it’s a crypto registered card, but the really important thing is is we still settle the transaction across the Visa, MasterCard networks. And so we play very nicely. With Visa MasterCard, we’re not trying to take them out of the loop, we actually leverage the value of transactional network. And that’s a very big differentiator for us because by settling on the Visa, MasterCard networks, it means that we don’t actually have to deal with single merchants from emergence point of view. It is just a normal credit card transaction. So it means that we can integrate a much higher levels and all the merchants below, you know, you are attached to that automatically a part of the digital program. And literally we don’t have to sign any new agreements or anything because we’re just settling the transaction exactly the way right

Jason Hartman 25:00
Yeah, very interesting. Very interesting model. Good, good stuff. I want to leave the topic of digits if we can talk about your book because I think it’s a fascinating topic. But before we do that, is there anything else you want us to know about digits or cryptocurrencies?

Ben Way 25:15
No, really just if you’re, if you’re interested, check out the digits.io website when pre Ico right now we’re about to launch or when Gen labs and want to build a really long term valuable business.

Jason Hartman 25:29
Fantastic. Okay, so the future of jobs, I tell you, I have made many very good predictions on my podcast over the years been the one I have been a miserable failure at is interest rates. But hey, you know, everything else has come true. So that’s all right. If you didn’t win the interest rate game with me, that’s fine. The rental market, the real estate market, all of that stuff. I’ve been pretty good at all of that. But the one thing I am really struggling with is the future. of robotics and automation. And here’s the reason I struggle with this. And you know, your your book is addressing this topic very specifically. But, you know, if you look at every innovation over the course of history, people have always been in fear that they would lose their job, that massive amounts of people would be displaced, that there would be economic collapse, etc. And that has never really happened. Looking at the census for the last maybe 50 years or so the only job out of all job categories they they cover that has gone away, because of technology is elevator operator. We do operate our own elevators nowadays. So we don’t need the guy sitting in there, you know, to picking our floor, but everything else is still there really, right. But I wonder if this time it’s different. And the reason I wonder is that, okay, self driving cars, autonomous vehicles. The transportation industry is one of the Biggest industries on Earth. But the people that drive your lift in your Uber and your delivery truck, they’re not going to learn robotics, will they just all be displaced into jobs that we can’t even imagine yet? I don’t know what what will happen? What will come of this massive unemployment? Or, you know, massive prosperity?

Ben Way 27:20
Yeah, I mean, there’s there’s a few ways of looking. So first of all, the data that you’re looking for on who lost their jobs because of technology and automation, actually, is that is just hidden. And one of the analysis I did my book somewhere, I believe it’s hidden is the amount of time for an economic recession to recover. So if you look at all the recessions from the beginning of this century, every recession has taken twice as long as the previous recession to recover. And the reason for that is that when when the economy is growing, it becomes inherently more inefficient. And organizations don’t want to change and they don’t want to optimize, they’re just happy. They’re making money. And they don’t focus resources on efficiency. When you go into a recessionary dip, what happens is that organizations have to become more efficient, and they automate, we automate. And what happens is that it takes twice as long each time that happens to the jobs to come back to the same level, because what you’re seeing is actually that slack. Some, My belief is in the next recession, whenever that may be, is you’re going to have a horrific recession, where we may not recover from on a job spaces, where you kind of hit a point of no return for jobs. And, you know, I think, you know, I do think the next major recession is probably going to be that point. And, you know, you’ve mentioned about the elevator operator, but actually, there’s thousands of hidden jobs that have disappeared. For instance, you know, we used to fly planes with two pilots and an engineer had to be every single time now this test pilots and and so you know we’re getting to the these points of efficiency where you know just because something hasn’t happened in the past doesn’t necessarily mean it’s not gonna happen in the future and innovation has been on a kind of quite a linear curve and at some point is going to break the system of labor and then coming back to your point and there’s two points of view and I’m ever the optimist so say well, you know, if we’re lucky we’ll be treated like well looked after pets you know where life will be so good because what people forget with automation and AI and all that is the cost of everything decreases right right. So you know medical, you know, the cost of medical you know, if everything’s being done through technology it’s

Jason Hartman 29:54
very it’s very deflationary. No question about it. Yeah,

Ben Way 29:57
exactly. So the maybe a balance That can be obtained by suspect. Before we get to that balance. There’ll be a huge amount of social unrest. Before we get there.

Jason Hartman 30:09
You may be right. I mean, the prognosticators are predicting things like 47% unemployment, from these mega shifts that are coming our way technology is, it feels like and maybe it felt this way back when the steam engine was invented, or the light bulb? I don’t know. But right now, it feels like we’re about to see a huge change in the world through technology because we’ve had this networked world for 25 years or so. Right? And it just keeps compounding the effects of it. So maybe it’s like looking at the chart the graph and seeing that hockey stick of this exponential change. Certainly Peter Diamandis is talking about things like that very positively from his perspective, but I don’t know let’s Look at the table of contents in your book. And maybe I’ll just give you some fodder for conversation here. So I can’t help but notice chapter number three, the adult industry. Right, you know, hey, let’s we’re all human. What are you talking about there? I mean, I want to think that maybe you’re talking about dating sites. And Xbox.

Ben Way 31:23
Yeah. Oh, you’re having sex with the robot and the sex industry and you know, how we fall in love with robots and how there’s no reason we went for Netflix and fall in love with animals. We can certainly fall in love with robots, right? They’ve psychological studies already proving that the under the right circumstances, humans can form pretty strong emotional bonds with robots.

Jason Hartman 31:47
So interesting.

Ben Way 31:49
Yeah, it’s Yeah, I mean, it’s, it’s fascinating. I think the real question behind so could have great effects, you know, like, it could stop sex trafficking. It could really Free a lot of people who are very lonely. Yeah. What was that mass murderer? That kid in California that shot out

Jason Hartman 32:08
in Santa Barbara?

Ben Way 32:09
Yeah, yeah, Santa Barbara SHUT UP 10 people, because, you know, girls said no to him, right. Yeah, you know, the, you know, sex is important as part of the

Jason Hartman 32:18
human condition should we need it.

Ben Way 32:20
So it can have some very, very positive outcomes. But more fascinating side for me is, and this is just from an interest level is psychological and moral issues behind it, for instance, is having sex with a sex bot? Is that being unfaithful to your partner? You know, if you create a robot that looks like a child, is that pedophilia? And if it is really familiar, is it better than a pedophile, you know, having a robot or human. So there’s all these kind of interesting more dilemmas that humans again I have to like, grapple with in the next 10 years about their morality. Say what it is to be human.

Jason Hartman 33:02
This will be continued on the next episode. Thank you for listening and happy investing. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.