Retirement Mortgages: Innovation or Fiduciary Risk?

[0:02] Speaker A: I'm glad you knew what that meant because I just read it as hahaha. Jiffy. [0:06] Justin: Hello everybody and welcome to another episode of the greatest 401k show in history. I said to myself, wow, what a great show. The host, J.D. carlson is an amazing guy. So wonderful. Then there is silent J, Justin McNeil. What a great guy. If you like spreadsheets, they got this guy, nerdy Chad, and he is always bringing nuggets. And as always, everybody's favorite retireholic robe guy. So sit back and enjoy as this is Retireholics. [0:48] JD: Welcome everybody. [0:50] Chad: Jesus. [0:51] JD: Welcome everybody to another episode. Retireholics. As our great president there as the introduction, we're going to talk today with a special guest. I'll leave that for Justin. But it's basic capital. And we will spend some time talking about what I think is kind of shocking our industry, which is this retirement mortgage concept, among other things. But this, if you haven't heard, this retirement mortgage concept is for every dollar you put in your 401k they'll, they'll put in $4 for you. *, caveat. We'll talk specifics. Here at Retireholics we're announcing something very similar today. So every, for every six pack of beer you send to us, we will send you back one beer. So sign up now, send it along. Our mailing address is on the website. And get involved. Justin. Do your thing, dude. Who do we got here? [1:46] Chad: Joining us today from New York with the second best head of hair on the panel. He scores a 150 on his IQ test, but a negative 4 for punctuality. He's responsible for almost giving JD his first heart attack. And we can't wait to figure out how his company does what they say they do. So we hope hed some light on [2:04] JD: us on that for us. [2:06] Chad: His name sounds like one of his parents owned a brewery and the other went to Hogwarts, but nobody really cares about that. Everyone wants to know a little bit from him. And as always, we're going to start this with a rapid response response round here. So Hunter, how this works. I'm going to ask you a few questions. You get to respond with one word answer. Seems pretty, pretty easy enough, right? [2:27] Hunter Hopcroft: Sure. [2:28] JD: All right, I'm. [2:29] Hunter Hopcroft: I'm off to a good start already. [2:30] Speaker A: Yeah, that was good answer. [2:32] JD: You blew it. [2:32] Mark: Get it? [2:34] Chad: How often do you get confused for Ron Perlman? [2:37] Hunter Hopcroft: Always. [2:39] Chad: Okay, Could Jack have fit on the door with Rose? [2:44] Hunter Hopcroft: Absolutely. [2:45] Chad: Pepsi or Coke? [2:47] JD: Coke. [2:48] Chad: Is it Leviosa or Leviosa? [2:52] Hunter Hopcroft: Levioso. [2:53] Chad: Oh, that's how you say it. [2:55] Speaker A: Okay. [2:55] Chad: And everyone's favorite question, they're always dying to know, does Nate Moody have a hot sister? [3:04] Hunter Hopcroft: No. [3:05] JD: Oh, damn, Moody. [3:09] Speaker A: No, [3:11] JD: literally, Hunter has never watched this show and he's. [3:16] Mark: Debbie. Definitely never met Nate's sister either. [3:19] Speaker A: No. [3:20] JD: To be fair. [3:21] Speaker A: Either way. [3:21] Chad: But anyways, there was a. [3:23] Hunter Hopcroft: That was a risk reward question that I had to. Yeah. [3:27] Speaker A: Hey, you know what? I prefer that everybody shut up. [3:29] Chad: Let me finish this. [3:30] Speaker A: Yeah, go ahead. [3:31] JD: Sorry. [3:31] Mark: Justin. [3:32] Chad: The head of editorial Product marketing, Hunter Hopcroft. [3:37] Hunter Hopcroft: Thank you all. Very excited to be here. [3:41] JD: Yeah, it's going to be fun. It's going to be fun. We're going to talk about quite a few things today. We got a little Morningstar stuff to talk about with artificial intelligence. We are, we don't do this typically, Hunter, but we're going to dive deep into the company that you represent. Usually you just come and we just kind of invite you in all kinds of pop culture and industry news and we don't let people really like, pitch their stuff. But I think what you guys are doing is so unique that it would be a disservice to our audience if we didn't try to dive into it a little bit. So we will definitely spend time on basic capital. We'll kind of revisit the old gusto guideline, accrue Vestwell thing that's happening. A little financial fear of missing out. Article from our friends at the national association of Plan Advisors. Everybody's favorite segment, Tales from Texas. A little crypto and a little fin talk. So let's get started. Morningstar has an artificial intelligence assistant. The firm says that the launch reflects a transformation toward an AI first advisor experience. It also notes that the artificial intelligence assistant supports tasks such as identifying meaningful rating changes. That's cool. Okay, so if Morningstar is going from a four to a three or two to a four or whatever, it's going to kind of let me know about that. Preparing meeting briefs. Okay. Morningstar, all artificial intelligence can do that kind of shit. Supporting research and portfolio analysis. I'm intrigued. And can turn client statements into actionable proposals directly from within the advisor's workflow. Hunter, your career has been in financial services. What is your take on artificial intelligence and the day to day use by financial advisors? Are we at a jumping off moment right now where we go from just kind of casually using things like ChatGPT? I will drink to more custom task specific artificial intelligence solutions like this one we're hearing about from Morningstar. [6:02] Hunter Hopcroft: Yeah, I mean, I've worked. I started my career at rias, and I'll probably get the exact statistic wrong. It's a Michael Kitces thing that an advisor can really properly service, let's say 150 clients. [6:16] JD: I've heard him talk about this, this [6:18] Hunter Hopcroft: number before, and I assume that what Morningstar or any of these platforms that are this advisor assisted technology are trying to do is to get that number up. But in my experience in that type of firm, the stuff that Morningstar does is not the bulk of what an advisor spends their time with, with the client, really. You know, Morningstar's always been able to produce a really slick looking 12 page report on a portfolio that the client has less than zero interest in going through. So one area where I can see it being really helpful is on that, on the phone, there's something happening in the world and the client is asking questions. And instead of having to pull a report and decipher data, you could ask about a drawdown, about some sort of portfolio metric and presumably get an answer. My experience with AI is I would never trust that answer. But [7:23] JD: you can always finish your thought. [7:26] Hunter Hopcroft: I would never trust that answer. But Morningstar has a good reputation. Assuming that the data is solid, that that is a use case. [7:34] JD: Yeah. And I don't, I don't if I'm trying to read between the lines on this article that came out. I don't think Morningstar is claiming that their artificial intelligence can give any, like, real intelligent insight to, like, questions that clients might have. It seems to be, and this is a common theme I keep seeing, it seems to be an artificial intelligence that will read and understand the Morningstar data. Right. The Morningstar reports and the systems and [8:02] Mark: procedures that Morningstar's tech has, it's a guidance vehicle for. [8:08] JD: Let me ask, let me ask you, Chad. Like I felt like when artificial intelligence first was becoming popular and when it started to kind of seep its way into financial services, a lot of people were using these general tools. You told me the other day, you're using Copilot, I'm using all kinds of them, Cloud and Gemini for different, like just tasks as I'm sitting at my computer. And that's fine, that's great. I want to know, though, these, like, custom niche, you know, artificial intelligence tools that are being built specifically for certain tasks, is that really the future where we see big progress or is it more just these large language models? [8:49] Mark: I think it's a bit of both. I think when you look at something like what Morningstar is creating here, they're trying to put up some walls so that they can make sure that the accuracy of the push out of that, of that tool and technology is going to be accurate to Hunter's point. It's not going to go out and try to pull data from another metric from a, another system. Rather stay with inside Morningstar's guardrails. So I think you're going to see a fair amount of the niche artificial intelligence within operating systems. But I think everybody's still going to fall back on the, the larger language models that are out there, the bigger offerings that are out there for more in depth research. [9:28] JD: You would be disappointed in me in the fact that I own an artificial intelligence company. The other day I was looking at a list of 30 tickers and I was on a PDF and I needed to get it into an Excel CSV format to upload it. Oh yeah, and, and the dumbass 55 year old in me is looking at the PDF and typing them into an Excel spreadsheet and I'm like, wait, why don't I just ask, you know, Waves to do it or Google Gemini or whatever. And sure enough it did it in seconds. But I think we're all going to start to learn more of those little things. But I personally, I was trying to lead my audience a little bit today. It didn't necessarily work but I personally think it's going to be these really custom uses of artificial intelligence that's going [10:14] Mark: to really, if you, I mean I started, I started to give you a bit of rundown why I pushed on B for Copilot because when I'm using Waves and some of the others, I have to take what I'm doing inside Outlook for this example and I have to push it out, get responses, push it back in within Copilot. It's linked directly into my emails. I can say, hey, go to Mark's email that he sent me and create a calendar invite and send it to him for the date and time that he's asking for a meeting. And you know, it does all of those efficiency things for me, whereas I can't use an outside non niched one that doesn't connect to Outlook to do that. So there is, there's a significant amount of value in these walled off tools that are starting to come out. Is it okay to call artificial intelligence a tool still? [11:02] JD: I think so. [11:02] Mark: Not like a. No, no. [11:03] Speaker A: Why wouldn't you be? [11:04] Mark: Yeah, it's not really a tool, Justin. It's a, it's a living, breathing, growing thing at this point. [11:10] Chad: Humans are called tools at time Too. [11:12] JD: The ones that. The people that call them tools will be the first to be killed when you know the whole. [11:17] Mark: Yeah, I still say thank you. [11:19] JD: Let's. Hunter, let's get to the main event here. Let's get right to it. First, your. Your founder is a very impressive dude. As an. As a 401k industry person, you know, I've grew up in this business. I live, breathe and sleep it. I bleed 401k. I love to look at these outsiders coming in and like, pick them apart and really, like, throw stones at them. And I was, I was ready. I went, I researched this dude. I went and heard him on podcasts and went to his. His X account, did all this stuff. And I do have to say, like, he is very intelligent, very well spoken. He communicates the mission of the company really well. So he has really gotten me in terms of being a fan. Now when I dig into the details of the metrics and the fees and all this kind of stuff, I start to get a little more skeptical. But I have to say, the dude is very, very impressive. And I mean that in a good way, not in like a, you know, snake oil way. Like, he just. I really like, I want to meet the guy and talk to him. Recently, he was on stage at the Pension and Investments conference at Defined Contribution East Conference. I think you were there, too. Did you see this live? [12:41] Hunter Hopcroft: Yes, I was there. [12:43] JD: Can I ask you. You're. He's mixing it up with, like, real legacy industry people at that point. Was he. Is he pissing them off? Is he. Or is he winning them over some combination of the two? Like, what was that experience like? [12:58] Hunter Hopcroft: Well, as you. Pensions and investment is not really plan sponsors. There's a handful of advisors there, but it's. It's mostly. [13:05] JD: That's our industry. Yeah, right. [13:06] Hunter Hopcroft: Yeah, it's. It's mostly our competitors. And I, I had breakfast with Abdul this morning and we were kind of going over it because there was a lot of buzz after that appearance. And if you've been to one of those before, he put it really well, it was kind of like the class presentation theory, where, like, you know, in high school when you would do a class presentation and everyone knew to kind of like, phone it in to go up there and, like, go through the motions, and everyone was going to do that and no one in class was going to listen and then everyone would clap and everyone would kind of get an A because, like, nobody shot the lights out. Like, nobody, like, came up there and gave some. And so we just. We. Abdul And I both are actually really passionate about this stuff. And we just brought that passion on the stage and it was, I think it just was unsettled, the normal vibe of that event because we weren't trying to piss anybody off. But we have people from these legacy providers saying that they're leveraging AI and using technology and doing all this stuff. And we know that, we know that [14:12] JD: these [14:14] Hunter Hopcroft: platforms are not engaging the participants. You go to the shop floor and they don't know who their record keeper is. They don't know where to log in, they don't know if their, their company offers a match. And effectively, what Abdul said is this industry has had 40, 50 years to build a product people really wanted to use and they just haven't. They just have not built a product that's up to the standards of modern technology. An app that people want to log in and check, a platform that plan sponsors want to go in and not be a burden. And so we were just saying, hey, it's time to be of service to participants. It's time to be of service to plan sponsors. The cost of developing technology has dropped to basically zero. So there really is no excuse not to build a better, a better product for this industry. [15:05] JD: I totally get your perspective on that and his as. I think there's a lot of truth to what you said. I think there's a lot of bullshit to what you just said, but I think there's 90% truth there. I think if you look at the 70s, 80s, 90s, 2000s, like obviously 401k and the record keepers that built this whole sector, I think have worked really hard and, and done the very best they could to like, kind of do the right things. And we have had a lot of success in terms of use and amount of money saved and, and changing people's lives and all that kind of stuff. But that there's probably just as much when I say that because I'm, I'm advocating for the industry, but I think currently you're totally right when it comes to tech and innovation. Like, if you, I've said this before on this show, like, I can hop on my phone and book myself a flight to Hawaii and change my seat and choose what I want for lunch on that flight, and then I can change that all over again in the next 30 minutes and flip it, you know, and change my flight to somewhere else, all like, very seamlessly in a really nice user experience. And for sure, I think the, the ue I'll drink of our plan participants over the last say 10 years. And all the software that we use in the technology, for sure, is behind a lot of other industries. And we're financial services. Like, we're where all the money is. You would think. Is that a fair assessment, Powder? [16:43] Mark: I don't like that name. J.D. i'd say. I'd say, yes, it's a fair assessment. I also think there needs to be a little grace given in that. This thought of participant engagement. While we know it's important and we know it is the future, it was not the past. Participants didn't want to be engaged in the past. So 30, 40 years, 50 years of building this technology. That's not what the technology was, Hunter. [17:07] JD: I don't think they want to right now. [17:08] Mark: They don't. That was my point, though. JD is. I think that. I think that will change in the future depending on how we engage them. Because right now we engage them in a way that makes no sense for them. [17:17] JD: I think answer to that a little bit. I don't want to get deeper into basic capital, But I mean, eight out of 10 of these participants don't really want a great experience. All this you're talking about. They just want to have their money put in, have the employer put in the match, have it be in some type of investment that they're comfortable with. They're not into this whole Robin Hood scene, bro, that you're in New York City and this whole thing, you're in finance, you're part of a startup now. I think you have kind of blinders on to what, like, the average person actually wants. [17:50] Hunter Hopcroft: Yeah, I actually don't disagree with that at all. I. I agree. And that's a common feedback we get, is participants are overwhelmed by too much choice. They're overwhelmed by having more investment options or having these more sophisticated products. And I think that's true for a lot of participants. But at the same time, nobody wants to be told they're unsophisticated. No one wants to be told that they don't have the wherewithal to manage what is effectively their money. And when you make the guardrails so narrow, you know, our platform, like anyone, there's the easy button, there's the target date fund. You can always do that. But to limit all the other options because the average or the mean participant is not interested in it, seems like it might be a bit. [18:37] JD: We. I need to give context to the audience and to the guys here. I think when he's talking that he's thinking about guideline and human interest and not necessarily all the products that we've been accustomed to over the last 20 years. [18:51] Mark: Well, not just that, but I think that for years we've put guardrails on the investment chassis of fear of fiduciary risk and exposure. And why do these, why does the median employee need access to these things? And I think what you're saying is you're right that the average person doesn't, but there are still a lot of people that aren't the average investor. [19:09] JD: But the legacy eggs. So the legacy record keepers have, many of them have true open architecture. Many of them will allow any advisor to guide any plan sponsor to have any specialty sector in that core menu that, you know, there's programs like, like pretty loose. What's that? [19:31] Mark: I said that's not really the case of a, of a plan of a certain size. You can get into brokerage windows and you can get into certain sector funds. But JD in the micro small space, they're, it's changed in the last five years. Even the products now are super narrowed again because they need proprietary in there. So the investment options are once again getting squeezed back to the way it was. [19:53] JD: Okay, fair enough. [19:55] Hunter Hopcroft: Just, just to scope, just to scope it really quickly because I was running some numbers before we went down to pni. You guys will probably have more fluency with these numbers than I do, but there's 70,000,401K participants in the country. Does that sound about right? [20:10] JD: I think that sounds about right. [20:11] Hunter Hopcroft: 40% of them are under age 40. If we assume that they have a median balance of somewhere between 25 and $30,000, we're talking about 700 billion of assets for the under 40 crowd. And 401ks, 700 billion. Robin Hood has 353 billion of platform assets. Something doesn't seem right in comparing this. [20:38] JD: You're talking about as a coverage gap. And you know this like not all employers offer an employer sponsored retirement plan. Right, of course. [20:48] Mark: But I think what he's also saying is the request for more access is prevalent when people are taking their own money in that range. [20:59] JD: Robinhood should be the canary in the coal mine's the wrong thing because that's like a negative, it should be the positive canary in the coal mine of like, look, people do want this, they want. [21:09] Hunter Hopcroft: And Robinhood definitely, I would say did not position their app around simplicity. That's what like Wealthfront and Betterment did with the Robo Advisor. You know, Robinhood positioned their app around honestly, like a pretty high degree of sophistication and complexity and attracted Those customers. [21:27] JD: But still it's definitely a proof case for. [21:29] Mark: Is it, is it worth acknowledging for those that don't know Basic Capital, we JD started off with the, you know, mortgaging your, your plan. But also a big push for you guys that we're talking about here is access to alternatives, access to crypto, access to private markets, which is, that's kind of what you're getting. [21:49] JD: Can I stop before we get too far off track? Because I want to get to crypto later. Let's get straight to the product because a lot of people are here to kind of understand. So Hunter, if you could Basic Capital, what I would call a new disruptor, you know, not these legacy providers. We're talking about Fidelity, Voya, principal and power, etc. So kind of following in the footsteps of human interest guideline best. Well, currently I think your first round of funding, 25 million, so kind of smaller. But it's your first step out. And I do want to dig into the retirement mortgage because I think that's kind of the sexiest part. But I also will say on behalf of your company, hey, still an open architecture tech forward record keeper. You do not have to choose this retirement mortgage thing that we're talking about. Hunter's agreeing. So this is just one aspect of it, but can we please talk about it because it's the crazy part. So in plain English, I put in a dollar. You. Lend's not the right word. You give me four to increase my the amount of money I have in the market. I've heard your, your founder and, and chief executive officer on YouTube. Everyone should go check it out. Do a nice two minute video on this comparing it to a mortgage. Hey, when you buy a million dollar house, you don't have a million dollars. You put 200 down and then you borrow 800,000. And so he's saying let's make a mortgage for 401k. The reason why people cannot get to these higher account balances that they need to retire is because they're not putting enough money into the stock market. So let us at Basic Capital help you by putting four in for year one so you can have more money in there to get investment gains. You're not giving me the $4. You're letting me use it to grow my account. Take it away from there. What did I get wrong? What did I miss? [23:52] Hunter Hopcroft: No, that's great. That was great. One thing I want to get into the how I want to get into the mechanics. And especially when I talk to like advisors, we, we dive Right into the how. But I do want to pull it back just for a second about the why. Why even bother building this, like this sort of complex, sophisticated thing? And Abdul has a different answer to this than I do. But mine is I've worked again in RIAs and looked at a lot of glide paths and retirement plans. And there's just a basic timing issue, which is that most people's careers, they start out making a little bit of money. They can't save that much. As their career goes on, they're able to make more and therefore save more. And I think in America, most people probably hit their peak earnings years around early 40s into their 50s. So at that point, they have the most money. They have the most money and they're able to contribute the most money, but it has the least time left to compound. And then if they're in a traditional target date, if they're in a traditional target date fund, those big contributions are going into a mostly bond fund. [25:04] JD: Right. I'm maxing out my 401k now. I was not when I was 30. Right, right, right. [25:09] Hunter Hopcroft: I think I saw the stats on that recently and it was like, well, for a 24 year old to put 24,5 into a 401k, that's not happening. So it's just this basic timing problem. And when we say using leverage, people think, oh, you're trying to juice returns or goose up returns or something like that. No, we're just trying to solve a very basic timing challenge that for now, the only way we can see to solve it is by using financing so that you have more money exposed to financial assets for longer. You know, if you live in New York and you're 24 and you make $100,000 a year, you might be able to save 1% of your income. It's going to take you 100 years to replace one year of income. If you make half a million dollars, you might be able to save half your income and replace your income with savings every two years. That initial capital endowment is just a really important part of how compounding works over time. [26:08] JD: So, and let's not forget, and I'm using your, your founders kind of storytelling here, but you know, again, you mortgage your house, you, you take a loan out on your car, right? You take, you take a loan out for college and you pay that back. Like it's not uncommon for us to get lent money for money that we don't have now and we do it responsibly. So to me, those two things tie together like, oh, of course, you know, [26:37] Hunter Hopcroft: yeah, we, we think the three best inventions, the three best financial innovations of the past century were probably the. And this goes beyond the past century, but the limited liability company which allowed people to go out and start businesses without risking, you know, all of their personal assets, the 30 year mortgage, a 30 year amortizing loan to buy a much larger asset than you would otherwise be able to afford. And the index fund, which took investing, which was incredibly complex for most people. And so you take those three things and we put them together into one thing that we call the retirement mortgage. And before I moved to New York, I owned a home. I've owned a couple homes before I moved up here. Obviously couldn't buy a home in New York. It's not something that I have an interest in doing again. It's something that I think a lot of people that are on the younger side don't feel the utility that they once did in owning a home. [27:34] JD: By the way, there's a great analogy for the fees that we'll talk about right now. You know, when you. No one really talks about this, but when you buy a million dollar home, and I'm guilty of doing this, and you have that mortgage over 30 years, but how much money do I end up paying? [27:49] Mark: 900,000 in interest. [27:51] JD: Way more than that. [27:53] Chad: Right. [27:54] JD: You know, I think what it ends up, I heard someone say this really intelligently, what a, what a mortgage is and home ownership really is, is just kind of forced savings. Like. [28:05] Hunter Hopcroft: Right. [28:06] JD: Yeah, yeah. So it's. Anyways, sorry, Yeah, I had a mortgage [28:08] Hunter Hopcroft: when I was, you know, in my 20s, which was a godsend for exactly that reason because it was the forced savings. But what I think people don't realize is that for a generation prior, basically using 4 to 1 leverage on a larger asset than they could afford at the time is how they've built, at least for the middle class, approximately two thirds of their wealth. So if there's a generation that's not interested in doing that or less able to do that, we think this is a solution for them to buy assets that they actually do set some. [28:40] JD: Can we be clearer so people start to understand this? Yeah, you're not lending. When I put in my $1 and basic capital puts in four here, you're not lending me that $4. I'm not on the hook for that $4. I'm only on the hook for my $1. So my $1 is at risk now. And again, you got a lot of smart financial advisors here that will watch this now live and later where the crux comes is the fees. And the fees are going to be applicable to my $1 as well as those $4 because. And I want to get into the $4 in terms of who provides it. But is that accurate to say is it's not as though you're putting me some position where I'm over leveraged now and I have to pay you back the $4 that you gave me over time. That's not true. Right? [29:33] Hunter Hopcroft: That's right. I'll walk because this is like a 401k crowd. I'll, I'll walk through. I'll try to keep the jargon to a minimum, but we'll go through exactly how the structure is set up and works. Okay, so first off, the retirement mortgage is a product that's available in the brokerage window, not in the plan. So a participant has to affirmatively step into the go get it. You got to go and go get it when they do that. [29:58] JD: Although you'll be defaulting it in three years. I'm kidding. [30:01] Mark: The plan sponsor made it available. So there's still a fiduciary liability 100%. [30:07] Hunter Hopcroft: And hey, annuities somehow Lifetime Income somehow charted the intellectual journey from, you know, [30:14] JD: oh, we stuff all the time. [30:16] Hunter Hopcroft: Yeah. [30:18] JD: So. But yeah, I like what you're saying. Someone has to go find it and get it right. [30:22] Hunter Hopcroft: Someone has to go find again. When that happens, we set up an, a limited liability company, let's say, let's say jd that you had decided to put some of your contribution into the retirement mortgage. We would set up basic capital for jd, llc, all of your contributions and if you had an employer match would be the common equity in that llc. Every dollar that you put in, we put in four as preferred equity. So first we get it back first we get it back at it depends on what your you choose as your underlying asset mix. But let's say if the account goes [31:02] JD: negative, and again, I'm sorry to bring that scenario up in some way, you're going to get your money back first before I get my money back. [31:11] Hunter Hopcroft: Right. So if you think, if you're imagining that stack there of preferred and common, if the value drops through the common. It actually does. We start losing money too. You know, we lose money into the preferred and then as the account comes back, comes back into the common as well. Because it's preferred equity, it's not mark to market and it's not callable. And the way the agreements and the structure is set up, it's not callable if basic capital went out of business. Right. [31:40] JD: You can never come to the participant and say, hey, I would need this money back or whatever. [31:45] Hunter Hopcroft: Yeah, yeah, exactly, exactly. [31:47] JD: Well, I should clarify that. It's in that llc. Talk about whatever money that's there, that's yours, you can go claw that back, but you can't come after my money. Money. [31:57] Hunter Hopcroft: Right. And I also can't come after your money based on anything per the LLC agreement. Anything that has to do with market valuations or pricing, I can't say you've. You've. [32:08] Speaker A: Guys, guys. It's a limited liability corporation. You gotta stop saying it. [32:12] Hunter Hopcroft: Okay? [32:13] JD: You're gonna owe us some drinks after this. [32:15] Hunter Hopcroft: I've got a bunch around, so we're good. I can catch up when. When you all start talking again. [32:19] JD: So keep going. [32:20] Speaker A: I didn't, Chad, but I will. I don't know for what. There you go. [32:27] Hunter Hopcroft: And so. Okay. Natural question is, well, what can you invest in? Well, the product has been through some iterations, but now we've decided that giant sip. [32:36] JD: Come on. [32:37] Speaker A: Sorry, sorry, sorry. [32:40] JD: Hunter, keep going. [32:42] Hunter Hopcroft: That. Over the past couple months, we've sort of improved the product to the point where it is. If you wanted to go 5 to 1s and P500, you could. If you wanted to go 5 to 1, 60, 40, you could if you wanted. We have about 10, what we call eligible assets. So if you. You can build a portfolio from among those 10 eligible assets. And we will extend financing no longer. [33:10] JD: Like that 9010 split of the kind of the private credit thing. And then the 10s and P5. It's not that anymore. [33:19] Hunter Hopcroft: No, it's more unconstrained now. We still have those private credit options in there. And just because of headlines, none of our funds are gated. None of them have cut distributions. There's. None of them are thankfully in any Financial Times headlines. [33:35] JD: Did you guys change that? Because private equity and private credit are under such scrutiny these. In this last year. Was that a pivot for those purposes? [33:46] Hunter Hopcroft: No, it was really as. And I can't get into like a lot of. A lot of detail about the. The backside of it, but we. When we originally developed the product, we thought that this credit underlying would improve the sort of back leverage of the capital markets for it. [34:02] JD: Right. [34:03] Hunter Hopcroft: But there's just a lot. As we've. As we've talked to more and done more of the financial engineering, the way the structure is, there's really no reason we can't do it on spy. [34:12] JD: Okay, fair enough. Okay. We only have so much Time. So let me go ahead, Ted, real quickly. [34:18] Mark: I just want to know the tax implications. Right, because the $4 that you're loaning in are not tax deferred dollars. So who's taking a liability on those earnings? [34:29] Hunter Hopcroft: You're asking about ubti, effectively. Well, the gain. [34:32] Mark: Yeah. [34:33] Hunter Hopcroft: Okay, so because we're investing as preferred equity, so we have a preferred equity rate, say S plus 200, and we take 5% of gains at liquidation. And there is. And so because we're participating in both the upside and the downside of the investment, the IRS does not consider it a debt financed investment. [34:56] JD: It's an investment. It's like any type of investment that would go up or down. [35:00] Hunter Hopcroft: And the 5%. The 5% is not because, oh, we absolutely rely on this carry for our business model. It was as a way of structuring the preferred so that we were capturing both upside and downside. [35:14] JD: Who is. So let's imagine this for a moment. You guys have success, you sell, you have a thousand plans which I would call mediocre success. I should ask you where you guys are at these days. But let's just use this fun example. You got a thousand plans. Those plans flow 100k of deposits each year. So you're putting in 400k. And so if you've got a thousand of them, I mean, what is that, $400 million or something that you're putting in? Where is that money coming from? Whose money is that? [35:50] Hunter Hopcroft: Yeah, well, I could give you sort of the vision and there's like lots of ways to go with this. And this is not, I'm not saying all of this is exactly the vision [35:59] JD: as in, because it's not happening at this moment. It's a concept really. [36:02] Hunter Hopcroft: Right. [36:03] JD: So, okay, so who do you have, who's on your Rolodex that is going to flow this, this $400 million into this? Robbie's in there. You're probably. [36:15] Hunter Hopcroft: Without getting into specifics, you could imagine how a product like this would be very attractive to long duration asset liability matchers for 1K, if you think about it, relative to other types of financial products, has a very consistent sticky depositor base. So all of these people are effectively dollar cost averaging into this structure all [36:43] JD: the time already would have invested that money in some market or some investment. So if that's happening at the same time, they're used to that risk as well. [36:55] Hunter Hopcroft: Right. And so you can imagine again, like a life company or an insurance company that would be very attracted to earning S plus 200 for 1520, 30 years as part of their asset liability matching. [37:12] JD: So the answer to my question is you guys will pool together. You'll create your own markets, you'll pool together the investors. And you just said these people will love to be in something like this compared to their other alternatives for a reasonable kind of prudent return. [37:29] Mark: There's got to be fear, stability, insolvency in that though. Like, if I'm one of those companies, you're telling me long term, I'm like, what 401k company lasts long term right now outside of the big cruise ships that have been doing it for 50 years? [37:41] Hunter Hopcroft: Well, again, even if, even if we folded up shop next year, the LLCs would not be collapsed. What would happen in practice is some financial buyer would buy the preferred equity at. [37:57] Mark: They want their money back. You got venture capitalists putting money into not only your business, but also this silo. [38:03] JD: Hey, Chad, let's remember though too, we're doing doomsday scenario here, which I think is, is fair, but I still, I. The $4 was never mine. The $1 of mine. So if everything goes kaputs, the thing where I got is I had a very high fee structure, like very high, comparatively speaking, on my, my $1, which by the way, we're not talking about $1. If I put in 20K, you. Hunter, you have to understand why we're so. I mean, this isn't your first rodeo with people like us, I'm sure, like why we're so perplexed. We live in this world of obviously in foreign Kia, worrying about markets, you know, ups and downs and, and so to, to compound that with higher fees and, and you've heard this a million times from all the nerdy, like Erisa type people. I'll drink. We have to act in the best interest of these participants, right? So every plan sponsor and every fiduciary that's supporting them has to make sure that they're making good decisions or we're putting good decisions in front of them. And so the fee structure seems like it's, it's fine only when it works. But if it doesn't work, it could get hairy. And tell me where I'm wrong with that. [39:25] Hunter Hopcroft: Well, let's. You keep evoking the fees. So let's talk about what the fees are. There is the, the cost of financing, which is, let's say S, plus 206% or so. [39:40] JD: 6%. It's the annualized fee I heard here. [39:44] Hunter Hopcroft: No, that's, that's, that's, that's the that's our preferred equity. That's our, that's our preferred equity rate. That's our cost of financing. That's the cost that we charge for the $4 to the, to the LLC owner. So they have to call they, so they have to tracking. [40:01] Mark: They have to have enough money in there to cover that nut to. For the cost of financing. [40:06] Hunter Hopcroft: Right, right. So but we can also it can be paid out of the investments. So just imagine basic capital doesn't exist. None of this exists. Is there any point in time where you would have taken 6% 4 to one mortgage and bought the S&P 500 and that been a bad idea? [40:26] JD: No, of course not. [40:28] Hunter Hopcroft: Okay, so that, so that's, that's the financing cost is the 6% and if you have a long duration view or you know like most retirement savers have, 10, 15, 20, 30 more or more. So that's what we're trying to provide is a long term reasonable rate of financing to buy the asset. The fees, there is a 50 basis point servicing fee on the whole structure. [40:53] JD: Everyone here, everyone here is going to understand that Hunter, because the way I understand that that's your wrap fee for being a record keeper. So. [41:00] Hunter Hopcroft: No, no, no, no. [41:02] Mark: That's separate J.D. this is that product. [41:04] Hunter Hopcroft: Specifically this is that product. This is for this product. [41:07] JD: Okay. [41:08] Hunter Hopcroft: And that is again incredibly similar to your mortgage servicing fee. Typically you'll pay a mortgage servicing fee as part of your mortgage. That's 25 to 50 basis points of the unpaid balance of your mortgage. If you applied that full fee that you paid as part of your mortgage fee to your amount of equity, you would say that's an insane fee to pay. But it really works the exact same way as this that the preferred is getting charged, you know, 3/4 of the the 50 bips and the commons getting charged 3/4 of the 50 bps. [41:45] JD: Yeah, I was fearful that this was. [41:48] Speaker A: I have a really high level, super intricate question. I don't know if this is too much for the show. [41:56] Hunter Hopcroft: That's a bit of an oxymoron. A high level, intricate. [41:59] Speaker A: Yes. [42:01] JD: Why did you name it Basic Capital? [42:12] Hunter Hopcroft: Very good. So you might be familiar with the concept that seems to rear its head every now and then of universal basic income, which is. [42:22] Speaker A: Okay, I'm just gonna stop you there because I don't see anything about this being basic. [42:31] JD: Definitely that is going to be a hurdle is the complication. I, I want to jump on Hunter's side one more time to the chagrin of many people in the chat bar. But let's not forget someone's throwing in, you know, I'm gonna up the ante here. I put in 10,000 and they're putting in 40,000. So when someone puts in $40,000 into your account for you to generate gains from the stock market returns, there has to be a fee. And that fee has to be probably something you're very uncomfortable with historically, because you've never looked at something like this before. Now, I'm not saying there's still not a ton of, like, you know, things we need to think about here and be concerned about, but we. At least let's put. Put that in context. [43:19] Hunter Hopcroft: I want to say one more. One more thing about the fees. Do you know what the fee for Jack Bogle's first index fund was? [43:28] Mark: Not a clue. [43:29] Hunter Hopcroft: It was 2%. [43:30] JD: Oh, wow. [43:31] Hunter Hopcroft: It was 2%. And then as the product got hard [43:35] Mark: to track an embassy then. [43:38] Hunter Hopcroft: And as the product got to scale, the fees came down. [43:42] Mark: As technology improved, the fees came down. You could put those two things side by side. [43:47] JD: Yeah, fair enough. Scale two, though. And I totally understand that, Hunter, you guys are building something from the ground up. I. I hate to be your defender again, but. By the way, everyone, sorry. [43:58] Hunter Hopcroft: It's torturing you so much. [43:59] JD: No, some. Some smart people. [44:02] Mark: Oh, geez. [44:03] JD: Guy put money behind this. Who's the big wig dude out in New York City or whatever that your founder was talking about? Everyone knows about? [44:13] Hunter Hopcroft: Yeah, I mean, we had seed capital from Henry Kravis and Bill Ackman. [44:16] JD: Ackman. Ackman. So, like, you know, people have looked at this and, and said, hey, let's move forward with this. This is an interesting idea. I. Once again, I'm going to challenge you to go listen to the founder speak about it. And so. But sorry, Hunter, we still do have to grill you here on this kind of stuff. For all those reasons I mentioned earlier. I'm going to move on a little bit and we can kind of circle back to this because I want to have some fun here. But so my summary of this is. Never seen anything like this before. And I think that that is a good thing to like, push the envelope and do new. I think the concept of trying to put more money in someone's account so they can take better advantage of the stock market, which we all hope over the next 10, 20, 30 years will. Will go up in. In some fashion. I mean, that's what our whole industry is kind of built on. So let's not. Let's not question that. And we are in the long game. And I think, Hunter, you already know the headwinds are going to be our responsibility to defend these participants in terms of the fee structure. And I would like to see a lot more Monte Carlo simulations of like, okay, if the stock market does what it's done or what we can anticipate, what does that look like for people? And. And I think what that ends up doing is it waters down a little bit of the $4. Like, it ends up being like, maybe just a great kind of return over time versus, like some massive kind of kind of thing. But then also we're concerned about, you know, the downside, which I thought earlier was just a credit risk. And now you're telling me it's also kind of stock market thing. Like they can invest in stock markets. I actually think that's kind of interesting. Good news. So, anyways, my summary is let's not all poo poo this yet, but let's definitely check it out and dig deeper into the feed. [46:17] Mark: And that's what I wrote. I wrote that to Christina in the chat bar is like, there's so many new things coming out, especially with the emergence of artificial intelligence and being able to leverage a think tank that we've never been able to before. I don't immediately want to think, just because it hasn't happened in the past doesn't mean that it's not the right thing for our future. So when someone like Hunter and Abdul come up with this incredibly creative, different idea, I. I've just gotta sit back and like, soak it in and look for the holes and see the. See the success in it. And I don't know if it's gonna work or not, but I've got. We've got to be open to changes. We can't keep doing the same. [46:59] Hunter Hopcroft: If I could just tell kind of like a personal anecdote of how I ended up here. Because I'm, like, seeing the chat and it's reminding me, like, there's like, people are like, completely hating on us in the chat, which is fine. But the. The product launched last May. I was working at a large asset manager. The product launched last May. The Twitter looked just like the chat. This is a scam. These people are fleecing Americans, the fees, all this stuff. And it got my attention. And so I went and read Abdul's Harvard Business School white paper where he doesn't talk so much about this product. He talks about the problem and why he sought to solve it. And so then I have a substack and I wrote more of an abstract on that white paper, just put it out there, said, hey, I read his white paper. Here's what it says. Abdul tracked me down and said, let's get a beer. And we met and I saw J.D. what you saw is like, wow, this guy's really thoughtful. There's something here. The product will continue to evolve, but the problem we're solving is a real one. We are trying to bring a whole, expand the surface area of innovation in this structure way more than anyone has. Of course people are not going to like it, but I want to say I didn't come here to fleece Americans. I came here because I'm very passionate about the problem we're trying to solve and that we're actually trying to flex and bend this thing as much as we can to solve it. [48:25] JD: It's definitely innovative. It's definitely different. I mean, my, I hate to go back to the negatives again. My fear, though, is the, the $4 to the $1 is such an attractive, shiny lure that I'm fearful that participants left to their own devices are going to see that and just kind of be like, yeah, like I, I'm gonna jump and do this. And for a lot of reasons that can be misleading. And we all know this. Like these participants and you said earlier, why does my industry make them all feel stupid or say that they're stupid? But Hunter, they honestly kind of are. A lot of them when it comes to financial services and they're not going to know enough doesn't mean they're stupid people. It means they're not intelligent when it comes to financial financials and markets. They're just not. That's a fact. Oh, I like money. And so they're going to, they're going to make a choice to do this without really knowing everything that they're getting into. And I think that's like a huge headwind to me. That's very concerning, I think. [49:35] Hunter Hopcroft: And this comes back to the stat I said earlier. The reality that the industry has to face is that they're going out and doing it on their own in much more irresponsible ways. Already leveraging, they're already doing, they're already doing a much dumber stuff than this outside of the 401k wrapper. And I know you all can say, well, that's not my problem, but that's not how we're looking at the problem in America. There's this barbell. You can be, you know, straight laced, indexer, target date fund, or you can [50:08] JD: like, go for it, go for it. [50:10] Hunter Hopcroft: And all we're trying to say is maybe the 401k would be attractive if people could move a half step this direction. [50:19] JD: Yeah, okay. All right. [50:21] Speaker A: I just, again, I, I just to even wrap my thoughts around it because Hunter, the, the role I play on the show is thinking about the little guy, the, the participants, the normal people. And my big thing, it's been through everything we've dealt with in our industry and product changes and other regulation changes. Is anything like this that brings to light different ways and creative ways to start looking at the people who need the help now? Yeah, I know maybe that's not your angle here, but I'm just saying it's going to breed, hopefully people who want to take your idea and morph it and look at different ways to solve a problem that you're looking to solve. So I don't want to sit here and bash this. And I know the chat bar is going off again. We all have a pessimistic mindset, what have you. But like again, I just want to say thank you for coming on and answering the questions, but I do think that there's a lot here that there's, there's something there. I think we could all agree there but of course we're all like nerds and questioning things, trying to understand because fear of change and all these different things. So I, again, I. Not much there to add other than like thank you for, for giving us more explanation. [51:27] Mark: Still some question marks though. [51:29] Speaker A: But yeah, I think it's good. [51:30] Hunter Hopcroft: Yeah, I'm thrilled to do it. And I look to your point. If Fidelity said tomorrow that they were launching a retirement mortgage, I would be thrilled. [51:41] JD: That's a great, that's an interesting concept. If it was someone we knew that had a real brand, how would we be thinking about this? [51:51] Hunter Hopcroft: Well, they did it with a new again, they did it with lifetime income. They did it with target date funds. As long as it. As long as the website is that nice color green or dark red, no one seems to ask any questions. [52:03] JD: Well, and they, I don't know if you know, they were one of the, the first in our industry to really let Crypto into the 401k plans and allow for that. So Fidelity has done some more edge case kind of stuff. So that's interesting to think about. We'll come back to this. I, I have, I'll tell you this on a positive side. Your guys marketing is phenomenal from an aesthetic look and your Black Panther is exciting. So cool. Like, yeah, there's definitely some things we could learn from this. Let's. Let's play a quick game. So much serious talk. [52:38] Hunter Hopcroft: I. [52:39] JD: Let's do, let's do. Let's do back to back. [52:42] Speaker A: Wait, hold on, Katie. I'm sorry, I'll be real brief. Hunter, again, I appreciate you doing this, but I will say your lack of drinking on every time you got acrosin has really pissed me off. [52:52] JD: Though if there was any beer that would qualify for acro sin, it probably would be Sierra Nevada. Pale, Alex. But aprosin means you drink from the bad boys. Okay, [53:09] Hunter Hopcroft: so I've just. I have some friends, they just moved back to Serbia. This is called rakia. It's some sort of like. [53:16] JD: Why aren't you drinking that? [53:17] Hunter Hopcroft: There we go. Perfect. Perfect. [53:21] JD: Let's start with a new segment we've been doing, Hunter. This is a segment where I like to update our little community, our little retire hu community, on my adventures of a lifelong California surfer buying a second home in. In Texas. It's a 30 acre ranch and I'm now pretending to be a cowboy for half of the year. Okay, so here we go. It's called Tales from Texas. [53:47] Mark: Howdy, y'. [53:48] JD: All. [53:48] Hunter Hopcroft: Welcome to Tales from Texas. [53:50] Mark: Let's hear all about my adventures. [53:53] JD: Okay, Brandon's using this artificial intelligence. [53:56] Mark: I love it be so much. [53:58] JD: I was waiting for the. The last guy with the pitchfork and [54:02] Speaker A: I would rather him actually illustrate the entire thing. And have you not talk though, because listening to the cartoon, way better. [54:08] JD: Good job. In Texas, you can buy a gun and you can shoot it on your property. This has been Tales from Texas by jd. Okay, let's move on to the next game. We're gonna do fin talk. Yes, it is. All right, Bran, play the first one. We're gonna play a little fin talk and talk about it. [54:38] Hunter Hopcroft: Hi. [54:40] JD: Hi. And how are you? [54:42] Hunter Hopcroft: I'm good. [54:43] JD: And how are you, Hunter? [54:49] Speaker A: I don't know about you. [54:50] JD: Have you felt this? You joined a Zoom A teams. There's this awkward like three minutes of people you know, you don't know just kind of. [54:59] Speaker A: Well, especially when you're there and you're meeting with people you've never met with before and the person who set up the meeting isn't even on yet. Sometimes you can do that in Zoom, but not in teams as much. But yeah, it's like what's. I mean, what's going on? It's just. [55:10] Hunter Hopcroft: It's just like when out of town's relatives visit, you start with where are you from? And you immediately compare the weather there verse here. [55:18] Mark: Yeah. [55:23] JD: The weather is so funny. Like, oh, hey, I'm out here, you're out there. How was the weather? Oh, it's, it's pretty hot. Oh, it's cold here. Oh, wow. Okay, let's get started with the. [55:34] Chad: We all talk on it, but we all do it at the same time. [55:37] Mark: Yeah, we do. [55:38] Speaker A: Yeah. [55:38] JD: Here's what I'd like to stop do. You know, I start every zoom, so yeah, I log into the zoom. There's the person I'm supposed to talk to one on 1. I mean 99 of the time the words that come out of my mouth are, can you hear me? Can you hear me? All right, let's do the next one. Let's do the next one, Brandon. Chad, I know you're way too dedicated to do something like that, so let's, let's take. [56:12] Mark: Hey, I'm getting better, jd. As I've gotten older, I'm getting better. [56:15] JD: Is that how you shut your laptop down on a Friday, Justin? [56:19] Chad: Absolutely. [56:20] JD: After 3:00. If it's that bad, I'm like, how about you, Hunter? Are you a. Hunter's getting a text message from his. [56:27] Hunter Hopcroft: No, I, I see. This is why. It's because we're, we're a startup, so obviously we're like a slack office and I think at this point I have slack nightmares. I have like, I, I see the little did to hear that stupid little noise. [56:40] JD: Well, that's what I was gonna ask you. Are you a shut it down on Friday it whatever's going on, I'll deal with it on Monday. Or are you a seven day a week kind of startup? [56:52] Hunter Hopcroft: We're a seven day a week shop for sure. [56:54] JD: All right, one more, one more, Brandon. [57:01] Mark: Yes. [57:02] JD: Hell yeah. [57:03] Mark: Hey, come on, baby. Come on. Yes. [57:06] Chad: Come on. [57:09] JD: Yes. [57:10] Mark: Yes. [57:12] JD: They don't have to worry about that if they have a basic capital. [57:18] Hunter Hopcroft: I don't know if there's a lot [57:19] JD: to talk about that. No. Let's go to you, Roby. You're that you represent the regular people as well as the slackers. Like, I mean imagine if instead of maxing out, you took that money home. What fun could you have? What fun could you have? [57:34] Speaker A: Don't. [57:34] JD: We shouldn't sitting for the now. [57:36] Hunter Hopcroft: Well, you know what some people, you know what some people do with that extra money is they go out and they get a 4 to 1 mortgage on an Airbnb. [57:45] Speaker A: It's got to be an acronym. [57:47] Mark: Bring them up. It is. [57:50] JD: You could do some fun stuff. [57:53] Speaker A: Are we also many more activities? No, I, Yeah, I trust Me, man. Yeah. Coming from when I used to, like, just look at the bare minimum again. In my last job, not this one, but, you know, to get whatever match there was or whatever. And you're just like, do I want to? [58:11] Mark: And you're. [58:12] Speaker A: Yeah, you're just. Every dollar, you're like, I need that for the fun stuff. I don't. I don't care about saving. I don't care about. I get hurt. I just want to be able to go do stuff. [58:21] JD: Yeah. [58:22] Hunter Hopcroft: What if savings is a cold starter problem too? I remember this when I first started working. It's like, like, you put in, you put in, you save your first, and you have. At the end of the year, you have $7,000. And the next year you do it again, you have $14,000. And maybe the market moves in your direction. In year three, you have $28,000 and you're like, I could have gone to Greece with my friends. You know, like, this isn't. [58:48] Mark: The deeper you get the more you wish. [58:50] Hunter Hopcroft: Yeah. It's like, is it getting anywhere? [58:53] JD: I knew. Go ahead. Sorry. Keep going. [58:55] Hunter Hopcroft: No, no, it's fine. It's just like, I think there's a psychological element to just like literally being more invested. [59:04] JD: Fair enough. I. When you told that story, I wasn't thinking the ending was going to be I could have gone to Greece. [59:10] Hunter Hopcroft: I mean, that's what I was. That's what I was thinking. [59:12] JD: I thought you were saying, like, sometimes I used to tell this story which was like, you know, people who have never saved and they get in a foreign can, they kind of get forced into it, automatic enrollment. And like, they were never able to look at their bank account and like, see money. And sometimes they get their credit card to get denied or they're, you know, they get overdraft fees and all of a sudden three years goes by and they look at. To your point, not that they would save that much, necessarily. This, this use case I'm talking about. And then they have 28,000. Like, oh, my God. I. I saved money, man. Like, good for me. Like, I never could do that. I've always felt like that's the positive of 400k. Let's wrap this with. Ah, man, I. We spent so much time on that base. [1:00:01] Mark: Yeah, I was gonna say we have some good topics to hit, too. [1:00:05] JD: Rapid fire. [1:00:06] Hunter Hopcroft: I'm sorry, guys. Let's. Yeah. Rip them through. [1:00:08] JD: Let's go ahead. Let's go ahead and go with a financial fomo. I will drink. I think this came out from. I don't have actually no idea what publication this came from. But nearly half of Americans say that the financial situations of close friends or family have very much affected their views on personal finances, either positively or negatively. So this is a keeping up with the Joneses kind of thing. Like people are measuring themselves based on their peers. With that said, when seeking financial advice, Americans trust financial advisors. They were the number one person they trust to talk to about their finances. And they said 43% was the number more than any other resource hunters bailed. [1:00:58] Mark: I'm saying no way to that stat. [1:01:00] Hunter Hopcroft: Really? [1:01:00] Mark: Well, it's not certified public accountant for sure. [1:01:04] JD: It's not that big of a stat because then it said friends and family are right behind them at 32%, their bank at 29, which I think is even more hilarious. Like your bank people, FYI, the financial people at your bank are the lowest rung of intelligence of financial people. Typically. Typically they don't understand. [1:01:25] Speaker A: And then we have a, like a disclaimer at the bottom that says JD's views are not the same to all of us. [1:01:31] JD: Is that not true? Do you think the person at Chase bank is. Is as good as your, like, investment advisor? [1:01:39] Speaker A: I'm not saying you're right or wrong. I'm just not saying that I want to tell that person who's working hard for a living that I don't agree with what they're doing. [1:01:48] JD: Buddy, I didn't say I didn't agree with what they're doing. I just said they're not very good at it, that's all. [1:01:52] Speaker A: Well, I'm not willing to say that they're great at what they do. [1:01:56] JD: Followed by social media. Fewer. [1:02:00] Mark: Clearly they didn't use accountants and, and they didn't even put that in this study. It wasn't a button to click or something. [1:02:06] JD: Chad, I don't know if most people have accountants their fancy pants. [1:02:10] Mark: Like, I think, I think most people are using some sort of tax software that they would ask those types of questions to. [1:02:18] JD: You think you'd go to your accountant to know more about stock markets, investing and saving? [1:02:26] Mark: I think what I understand about 100. [1:02:29] Hunter Hopcroft: I don't understand any of these polls is what questions is a big. [1:02:33] JD: Yeah, who they. Who they. [1:02:35] Hunter Hopcroft: What questions? [1:02:36] JD: Who they seek? What types of questions? Yeah, well, I mean, I just tried to make up a few right there on the spot. Like, you know, should I be saving? Where should I be investing it? Should I be in crypto? Should I not. Should I. Should I do this basic capital thing? [1:02:50] Mark: People who are asking those questions have an accountant if they've got the discretionary income to be like if should I invest in crypto, where should I be putting my money? They've got enough money money to have an account. [1:03:00] JD: Well, let's go to the more negative thing then. Not surprisingly, 81 of Americans intentionally avoid discussing money topics with family and friends. Hunter Money seems like such an important part of living life as a human being in the United States right now. I mean it's, it's our, you know, it's our money, it's our currency. It's what we use to like get the things, eat the food we eat, do the things we need to do. Do you think that the subject is as taboo as the article points like why do we not discuss this more? It's such a big part of our life. [1:03:36] Hunter Hopcroft: Yeah, I think and this comparison culture and I saw comments social media, this is to me this is like really lazy causation. I'm 38, so I was 10 when the tech bubble burst. I was 12 and 9, 11, I was whatever. I'm trying to think I was like 18 or 19 when GFC happened, I was 30 when Covid hit. I think for a large population of America there's a degree of fatalism after living through 400 year floods that is going to take a really long time to shake the idea of thinking about something. I mean we even try to actually not use the word retirement much because it's such a ephemeral, nebulous concept to so many people. We say long term investing and I think that a lot of this is downstream of having stuff that's not that if you look at the statistics on markets is, you know, a Six Sigma event shouldn't happen every 10 years, it should happen like every 50. And so to go through three or four of those. I think people are just like living every day like it's their last because they kind of in sub subconscious part believe it might be. [1:04:54] JD: And you think that lines up with the Robin Hood stuff you're talking about earlier? Like they're all kind of just sending it in a weird way. [1:05:02] Hunter Hopcroft: Like it's a complete jackpot mentality has really taken off, taken hold. [1:05:08] JD: Wow, that's crazy. I feel like that is crazy. I feel like I get off my lawn old man right now or I wanted to like rip on you for that, like oh boohoo you guys, I'm so sorry for your generation. You went through all this hard, hard stuff. But I, now that I look back, I get it. Yeah, you guys are kind of like informative. [1:05:26] Speaker A: Years. [1:05:26] JD: Why would I do anything? So that's interesting. My advice to you, Hunter, as an old man. I'm 55 in a month. Would be, buck up, you little. Rub some dirt on it and start being responsible. Okay, we're not doing drunk stock tips. I got a brand new drunk stock tips I'm trying to put together that I want to unveil. Even really original know this. Think. [1:05:54] Speaker A: Hey, what is probably going to be is JD is going to start doing it now. Just like he's going to take it over. [1:06:01] JD: I wish I would have had that idea. [1:06:03] Mark: Surfer stock tips. [1:06:04] JD: Think. Think. Bringing someone in to compete against Rogue Guy. [1:06:10] Mark: Oh, love it. [1:06:13] JD: Before we head out, Hunter. What? [1:06:14] Speaker A: We better not be Tristan. [1:06:17] JD: What we always do at the very beginning. Thanks to. [1:06:21] Hunter Hopcroft: It's. [1:06:22] Speaker A: What? It's Moody's sister, mw. [1:06:25] JD: Who's mw? Mike Webb. A. Webby. Webby. What do we tell Brandon to do? Spin the wheel of ice. [1:06:36] Chad: Oh, we're still doing it. [1:06:38] Mark: Oh, Webby knew. I've got to go to coach baseball, so please don't. [1:06:44] Chad: Shut up. [1:06:45] JD: Chad always does. [1:06:49] Mark: Getting absurd. [1:06:50] Hunter Hopcroft: Thank. [1:06:51] JD: Thank you to Hunter for being here. And I'm sure if you're. If your chief executive officer ever has the time to watch this, he's going to cringe. And I. If he does, I want to say to him right now, hey, buddy, keep doing what you're doing, man. You seem to be on a good path, but we just got questions in this whole 401k world, dude, so we'll keep asking them. And, Hunter, we appreciate you coming here and taking a lot of flack in the chat bar and talking to us. We'll keep our eyes on basic capital, and we'll reach out to you if you have more questions in the future. I'm sure we'll be discussing it on this show in the future. Thank you to the chat bar for being so kind to our guests when they show up here. And thank you to Silent J, nerdy Chad, and everybody's favorite retireholic rope guy. We are the retireholics. We're changing the retirement plan industry one beer at a time. And our next guest will be, I believe, Stephen Daigle from Bid Moni. So tune in for that. They're doing big things. And where can they find you, Hunter, at $1 for 4 on X. Or, you know, I am, I am, [1:08:00] Hunter Hopcroft: I am R. Hunter H on X, where I actually spend most of my time. So if you want to bring some of this hate to my DMs, you're welcome to or replies I'm here for it. [1:08:13] JD: And website isbasic capital.com, right? [1:08:17] Hunter Hopcroft: That's right. [1:08:17] JD: Cool. Cool. Okay. All right, man. Good luck to you, and we'll see you all next time. Thank you, Hunter. [1:08:25] Mark: Absolutely, Hunter. Pleasure, man. Really appreciate you. [1:08:30] JD: By the way, guys, we're moving our plan to basic.