The surprising benefit of delivering a financial boost to needy families
Ric Edelman: It's Friday, October 6th. Coming up on today's show, how to protect all of your documents safely and securely and incredibly easily, too, including sharing them with folks. And the question about correlation with crypto.
There are more than 3,100 counties in the United States. The fifth wealthiest county in America is Fairfax County in Virginia. Just across the river from Washington, DC, the average income in Fairfax is almost double the national average. But not everybody in Fairfax County is wealthy. 6% of the population is poor. That's 68,000 people. So now Fairfax County is distributing $750 a month for 15 months to 180 low income families. No strings attached. The recipients can spend the money on anything they want - drugs, booze, cigarettes, prostitutes. But more likely they'll really use the money for food, clothes, housing, health care and childcare. The local United Way is determining which families qualify for the money.
And by the way, I was chair of that United Way for two years and on the Board for six. United Way says that although 6% of the county is defined as poor, according to federal guidelines, a third of the people in the county qualify for this program, but only 180 of them are going to get included. Fairfax is the latest local government that is experimenting with cash payments as a way to combat poverty and inequality. 118 mayors across the country have signed pledges to develop these programs in their communities.
In other words, UBI, universal basic income, is getting guaranteed money without having to work for it, or do anything else for that matter, other than being a low-income household. Or to be specific, to qualify in the Fairfax program, you do have to be employed. You've got to be older than 18, you've got to have a child, at least one of them 16 or younger, living with you, and you can't be receiving any other form of government assistance like Social Security, disability or whatever. And your total household income has to be between 150 and 250% of the federal poverty level. In other words, we're talking a family of four who have an income of $45,000 to $75,000.
And Arlington County is right next door to Fairfax. They began a similar program this year, too. They're giving $500 a month for 24 months to 170 households. Most of the people in that program say they're using the money for food. But the real benefit, according to the program staff, is that the recipients mostly report a great reduction in stress because they know their children won't go to bed hungry. Some report they were able to quit second jobs and spend more time with their children. There's no question that these programs provide big help to people in financial need. The money doesn't merely provide basics like food and shelter. It provides an emotional boost knowing that others care and are helping. Well, that's a big deal.
Could this lead to fewer kids dropping out of school, resulting in lower crime and safer communities? But there's a cost to this. Fairfax program is costing $1.6 million a year, not counting the administrative costs, and that's just for 180 families. Imagine if it did that for every qualifying family. We're talking a cost of $150 million a year, and that's for one of the wealthiest counties in America, which has among the fewest low income households. Imagine the cost for counties in Tennessee, Alabama, Louisiana.
And then there's the political equation. Do members of both parties like this idea of giving out free money to large portions of the country? Well, clearly, progressives and liberals like that idea. You know, we're talking many members of the Democratic Party because it's rooted in eliminating income inequality and improving lives. But I'd like to think that even conservatives, meaning Republicans, should like this, too, because the result is lower crime. If we make our communities safer and we end up with a healthier, better educated population. Well, our costs for funding health care will go down. The cost of prisons will go down, GDP will go up. So even conservatives could view this as literally what it is an investment in our collective future UBI, universal basic income. It might be coming to your county.
Prisidio’s Glenn Shimkus on how to simplify your life - online and offline
Ric Edelman: You know, we're all grown-ups now. That means we've got to do some grown up stuff. Not always fun, but it's always important. We buy homes and cars. We buy insurance. We contribute to our retirement accounts at work. We've got bank accounts and brokerage accounts. We write wills and trusts. We get powers of attorney. And we've got a lot of documents, birth certificates, marriage certificates. We've got children and their birth certificates, medical records, employment records, passports, deeds, car titles, you name it. All those legal documents got to be stored away safely. But somewhere we're not going to forget where it is, somewhere we can easily access. And we all need to know it's safe and secure along the way. And in our new digital world, it means we don't have to fuss with paperwork anymore. We can convert everything to digital files, and we can store them in a secure digital vault. So I want to introduce you to my guest, Glenn Shimkus. He is the co-founder and CEO of Prisidio. And Glenn's been building technology products and companies for 30 years. He was the CEO of Cartavi, which he sold to DocuSign. And at DocuSign, he helped that company go public. So, Glenn, welcome to the program.
Glenn Shimkus: Thank you for having me, Ric. I’m excited to be here and excited to be a part of your podcast.
Ric Edelman: So let's begin at the start and explain to folks what Prisidio is. What is it you do?
Glenn Shimkus: You know, the simplest way to think about Prisidio is, or really the evolution of the safe deposit box for the digital age. But you know, fundamentally what we do is we provide families and individuals and specifically families. This was built for the consumer with a secure digital vault, and it's where you can bring together your most important documents and information and then more importantly, share them securely, whether it's today, tomorrow or down the road with family trusted advisors and those close to you.
Ric Edelman: How did you come up with the idea?
Glenn Shimkus: Well, this goes back as you mentioned, 30 years. I consider myself a document management nerd very proudly. I think there's a badge on my LinkedIn for that. But I've been doing document management my entire career, very focused and specialized on it. And literally up until about five years ago, that entire focus has been on helping global companies, multinational organizations and their employees spread across the globe, help them manage the documents and information because, let's face it, in the digital age, that information, that documentation is an important asset of that organization. Right? It contains the knowledge of the workers, right? Sure. And so, you know, you mentioned I sold my last company to DocuSign, stayed on, helped them become a public company. But what I found is I was using the product or real estate that I created that DocuSign acquired for my own personal use.
Every year when I was doing my taxes, I would create a room in that product. It's called DocuSign Rooms now. And I would invite my tax folks, my financial folks, myself, my wife, our estate attorney. And we'd get into that room and securely share and store documentation. When I was refinancing a property, I created a room. I had all my trust and estate documents there. Right? I mean, what good is a power of attorney if it's sitting in a file cabinet and you can't access it when you need it? Right. So I was using my own product not for what was created for real estate, but for my own use and for my family. And I realized, like the light bulb went off, right? As an entrepreneur, like there's got to be a solution here. And I did about two years of homework, tried find like, what would this look like? How would I build something like this? Is there a market for it and how do you keep it secure if you do and then realize like we have that same problem as families and individuals that I've been addressing for corporations, for, you know, the prior 25 years?
Ric Edelman: Well, so why now, though? Is it just that you've figured out a way to get to market or is there really something happening in the world that you see requires something like Prisidio?
Glenn Shimkus: Yeah, you know, it's unfortunate, right? I mean, it's a chaotic time out there. There's a lot happening. And quite frankly, I am a perfect representation on multiple fronts, you know. So I split my time between Chicago and Naples, Florida, and I've been down here about four years and twice in four years I've had to evacuate. Once was last September for Hurricane Ian. But about two and a half years prior to that, I evacuated for what, a wildfire like literally right across the street from my condominium building. And all the embers were coming at us and we literally picked up two plastic containers and threw everything. We had our passports, our important files in those containers, and we evacuated. Right. And that's that was kind of an impetus for this. And you see, I mean, it's very unfortunate.
What we're seeing in the Lahaina wildfire is just you don't have notice so many times. Right? We're dealing with these natural disasters more frequent and severe. We're coming out of a global pandemic. That a million people plus in the US lost their lives. We're an aging population. And as you know, you just did the age quake show. But we're also at the start of the largest wealth transfer in history. So, many of these things are converging right now. What has always been an important need is now being brought to the forefront.
Ric Edelman: This sounds a little bit when you talk about document storage online, a little bit like cloud storage companies like Dropbox. Are you similar or tell us how you're different.
Glenn Shimkus: Yeah, you know, I would say Ric that's probably the number one question we get is like, you know, they get what we're doing and then they say, okay, well, how are you different from a Dropbox or a Google Drive? There's really three primary ways we're different. First is when you look at all of those, they're built for documents, right? They're a document vessel, right? They help you manage everything that you have document wise. But your life involves more than documents, right? You have people you work with. You have family members. So there's a lot of people in your life. You have things, you own things. Now, some of them are of value. It could be a life insurance policy. It could be a boat, a property, a 401(k) plan, but it also could be, you know, a blanket literally, that I have that my grandmother knitted for me 40 years ago. May not be worth a lot in a garage sale, but it means the world to me and to my family. And you also have places where you have things. And so cloud storage really only helps you with documents. We help you with the rest of your life, of course, plus your documents.
Ric Edelman: Explain to me how your grandmother's blanket, which is a very physical item. I mean, it isn't something you can scan on a printer and upload. Tell me how your service at Prisidio solves my need. First of all, what are my needs regarding Grandma Blanket and how do you solve them?
Glenn Shimkus: Well, it's related to identifying. You know, we say identify what you have, where you have it, and who knows about it or may need to know about it down the road. And that's the people, places and things. So, you know, my blanket, literally green blanket, my grandmother knitted 40 years ago. I took a bunch of pictures and added it as a thing. It's something in my vault in the thing section. Now it's again, not financially viable value, but sentimentally it's huge. So I took a picture of it. I wrote a little story about it, but then I also captured a video within Prisidio that tells the story so my children will always know why. You know, where did I get that blanket from? I have a video from my mom now. She didn't make the blanket, but she knows how important it is. So, you know, part of what we help you do is you've got to be able to tell the story. But it starts by you got to identify the what do you have, where is it? And who knows about it.
Ric Edelman: And a key element to all of this is once you get that information onto the site, is securing it. That's more important than anything else is the safety security of the data. So talk about how you resolve that.
Glenn Shimkus: Well, it's paramount, right? I will tell you. Right. I did about two years of research before I even formed the company itself. And in that, one of the primary questions I asked is, can I keep this stuff private and secure? Because that is paramount. And so I worked with, you know, I've had good fortune. I've worked with a lot of really smart people across my career in many different areas. And so I went to people like Vanessa, who is the former chief information security officer at DocuSign. She built security privacy for that company from start up through public company. And I went to these people and I said, Hey, can we keep this private? Can we keep it secure? And so the answer I got was yes, but it takes time. It takes work. And you have to be committed to really a culture of security, not just like are we going to hire engineers and make sure we securely code, but do we hire people and do background checks? Do we use multifactor authentication internally?
And so it all starts, though, with the team. You know, we have Vanessa, she's on our board of directors, formerly with DocuSign. My chief technology officer worked at the NSA equivalent in the United Kingdom and his job was to protect country assets, and that literally included nuclear launch codes. You know, I've got one of the most senior executives in privacy at PayPal as an investor. We even have a US federal agency called CISA, Cybersecurity and Infrastructure Security Agency. Their job is to help national infrastructure protect against cybersecurity. We've worked with them. They've assessed us just like the other groups they've assessed. We scored above average in all the categories, and they even scan our environment for vulnerabilities every single month. So there's not one thing we do. It literally spans everything we do when it comes to security and privacy.
Ric Edelman: All right. So let's assume that we have uploaded the data. The information is in our account at Prisidio and I'm sleeping well. Data secure. I don't have to worry about that. I can access it, I assume, on my smartphone anytime I want. But now, like you use the example of the blanket, you've uploaded photos of the blanket and you've got text you've entered that explained the story of why a history of the blanket, why it's important to you. Your mom has created a video that you attached so that all that family lore is there. But how does your daughter know about this? How does anybody in the family get to know this or gain access to this? How do you share all of this information? And in a more important way, not that family heirlooms are not important, but if you're engaged in a financial transaction, your accountant, your attorney are involved, maybe your real estate agent or a title settlement company or an escrow agent, how do you get data to them? How do you share documents and information with somebody else?
Glenn Shimkus: Yeah, that's a great question. And I would say if you look at kind of what makes us unique, I think sharing and doing so securely today and down the road, if something happens to you, is an absolute key differentiator for us. And we do have a mobile app. It's iOS and Android, it's web as well. We make it really easy to if I want to add that blanket, I literally can take pictures, I can record a video through our app and it's all there. But so much of what we have today is not about being in isolation, right? This notion of a vault, it's great, right? But I need to get tax records to a mortgage person. If I'm doing a refi on a property, I need to get income information to my CPA to do my taxes.
So much of what we need on a regular basis is our sensitive private information. And the problem is today, most of us, we email it and we text it to someone else when they need it, which is the worst thing you can do. But let's face it, it's the easiest. So with Prisidio, we focus on making sure that when you have your vault, first and foremost, you can invite your attorney, your insurance agent, your spouse, your children, If they're of age, parents, whomever you desire, you can invite to your vault. It's free. They never have to add a credit card ever after it's fully secure. They have the same security requirements that you have with the vault. But then we make it really like we like to say...It's as easy as social media to share.
Now it's highly secure, but you can go to your will in the document section, for example, you can go to the storage unit. That's a place that you have and literally you can go to sharing and you see all the people you've invited to your vault and you literally see who they are, what their name is, their picture. So there's context. You're not just sharing with one, two, three, do good at gmail.com, which you're like, Who's that? So you can share and then you have full visibility. So you look at that Will and I shared it with you Ric as my advisor. Did you look at it? I know when you looked at it, right. But anybody does that. Where we start becoming different is first and foremost, right? This is your most important sensitive information. The moment you access my vault, it says Ric accessed your vault from, let's say, Washington, DC. So approximately where you're physically located.
Well, why is that important? If I share with you, I want to know when you're in my vault. And so we give you real time notifications and we even have a patent application filed. So in one click, let's say I'm doing this important podcast right now and I see a notification that says Jane Smith accessed your vault from London. And I'm like, well, Jane. Oh, she was my attorney. She's not anymore. I forgot to take her out. Or Jane from London. I'm like, Gosh, I don't think she's in London right now, but I don't know.
Literally in one click you can block that person's access until you have time to dig into it. Hey, Jane, are you in London or. Hey, I need to look. Do you have still the access I want you to have? But where we really get different and this is something that is paramount, like most people with a cloud storage, which I love, Dropbox, I think is a great solution. I still use it for so many different things, but not my most important sensitive documents. When you share, the problem is it's the needle in the haystack. So if I share with you Ric and any cloud storage solution, I have to remember what did I share with you? I have to think, did I share the will with you? Did I share the power of attorney? Did you look at it? Then we reversed that. Now you can go to the will and I can see, of all the people in my vault who has access, who's looked at it, but I can change the context and I say, no, no, no. This case I care about Ric, my advisor. What does Ric have access to across my entire vault and what has Ric done? So we want to make sure that it's not this needle in the haystack. We help you understand what you've shared with whom, what they've done. You can even permission and say Ric can add or edit or delete things. So we're really focused on the sharing component because again, this is not an isolation.
Ric Edelman: And the thing that I, in my experience as an advisor dealing with folks for decades, the most urgent and scary time of their lives is when they're in a hospital because of an injury or an accident. And there's a very serious situation going on. And they need to produce a power of attorney to help the doctors determine what the course of treatment is going to be for the ill or injured individual. Well, the last thing anybody is thinking of when they get the phone call is run into some filing cabinet and grabbing a power of attorney. But when you have your smartphone with you, which we all do 24 seven, it's literally at our fingertips to be able to provide to the hospital and the doctors right then and there without thinking about it. When you get an evacuation notice because there's a wildfire headed your way, do we really want you taking the time to throw paperwork into a box? For one thing, just get the hell out of the house, get to safety. And certainly what you ought to be thinking about is grabbing the kids and the dog, not the passport. And so the fact that you can have this data secure the peace of mind. I think it's providing I think in and of itself is priceless.
Glenn Shimkus: Well, we need to be prepared. And I think if there's one lesson we've learned through all these happenings in our world, like in the Lahaina wildfire, is just it's horrific when you see it, like you said, you're not worried about like, what can I grab? You're like, how do I get out of here? How do I get my children out? How do I get my dog out? Like when my in-laws evacuated for the last two hurricanes, they're worried about, like my father in law's CPAP machine, prescriptions, hurricane shutters closed. Right. You don't have warning on a lot of these things. If you knew you're going to be in a car accident like that would be pretty good because then you go, okay, well, I'm not going to take Path A, I'm going to take Path B, but we just don't know what's going to happen. We live in a chaotic world and we need to have these things ready and at our fingertips.
I do a weekly, two-minute tip on social media. And my last one was the power of attorney. It's great. Many people have them, but you don't know when you're going to need it. Oftentimes it could be in the case of an emergency. I have power of attorney on all three of our children. They're over the age of 18, which we need for health care. My wife and I have on each other. They're useless if they're trapped somewhere. And so what we want to do is make sure everything's with you wherever you are and that you can access, but also share and do all of this within the guise of a highly secure, highly private solution.
Ric Edelman: The journey that you described was that you were using DocuSign. You kind of bastardized it a bit and turned it into a tool that it was not created for. And then you realized there's got to be a better way. And that led you to your path of launching Prisidio. That, to me, says that you had consumer usage in mind. So I'm presuming that you built Prisidio for families and individuals predominantly. Is that exclusively who Prisidio is serving, or are you also serving businesses?
Glenn Shimkus: Well, as it turns out, there are a lot of businesses that are we're talking to and working with us and providing Prisidio to their clients because we can do a co-branded version of it. And part of the challenge is like, and I look in my life, right, I have an insurance company, actually a couple for life and personal property and all this, and each one of them has a consumer portal and I have to get the URL. I have to create an account, I have to log in. Right? I have to change my password every six months or every four months, you know. And the same thing holds true for financial advisors and all the people I work with. And part of it is from my perspective is for the consumer, is the more people I work with, even if it's three or 4 or 5, the more I work with, the more work I have to do.
And so what we want to do is change that equation and say, No, no, no, no, stop the madness. Let's take care of the consumer. Now, I don't like I don't want to have to go when I get an insurance policy. Did they mail it to me? Did I put it in my file cabinet? Did they email it to me? And it's somewhere in my file folder structure on my computer. Is it in their portal? And I had to grab it like, so we want to say is no, no, no, let's work with these companies. And we are today where they can automatically drop items into your vault. So when you sign something, for example, using DocuSign, like a bank application, it gets dropped into Prisidio. Now obviously there's a little bit of work that we need to do and we have a pretty special partnership that we're working on right now with DocuSign. But it's even as simple as you're my advisor, I can invite you in and say, Hey Ric, I just gave you the permission to add stuff, so don't email it to me. Go into my vault, drop it in there and then I'll see it.
Ric Edelman: That sounds great. But I would also think that a lot of the folks who are the natural target audience for, you know, the folks listening to this podcast, for example, would I'm sure a lot of them are nodding their heads saying, Yeah, this sounds like something I could really take advantage of. But a lot of folks procrastination sets in or they are passively involved in their personal lives because they rely on their advisors to be actively involved. So I rely on my doctor, my attorney, my accountant, my financial advisor, my insurance agent, my real estate agent, my mortgage lender, my banker. I rely on them to tell me what I need to do and to frankly do it for me. You described my insurance agent sending my insurance policy to me. It would seem that all of those professionals would benefit greatly if their clients were using Prisidio, as you pointed out, because as an advisor I don't have to harass my client to give me their latest brokerage statement. It's already in Prisidio, which my client has given me permission for so I can get the documents I need faster, quicker, cheaper without having to bother my client. It just makes me better able to do my job on behalf of my client. So it would seem to me that enterprise sales, meaning going to a financial advisor saying offer this to all of your clients and will allow you to give them a group discount because it'll help you in your practice management while at the same time you're now offering a terrific new service to your clients, which is of great value to them. Everybody wins. Is that something that you're working on?
Glenn Shimkus: Yeah, and I'll tell you, it's actually again, timing is so important when you're launching a company right? And what we've seen is like the biggest of big insurance companies, the biggest of biggest financial services companies we're having conversations with because let's face it, they've spent time and money and they've heard from the consumer. They've got to be able to securely deliver this stuff and help them. But guess what? Almost every single one of them I talk to and they say, Yep, we have a portal. Yes, we can deliver documents for it. And I say, okay, let me ask you a question. Give me a rough percentage of how many of your customers actually go to your portal and pull down their insurance policy or their financial statement? And the answer is generally less than 10%. And in most cases, it's close to zero.
So these companies realize there's a need there. There's a demand from the consumer, but they haven't figured it out. And I think part of what we're doing is we're being that advocate for the consumer saying, don't make me go to ten places or 20 places or 30 places because the average person today has 130 online accounts, the average person in the US; Significant, right? And so we want to change that for people so it can get put in. And part of it is like, you're busy. I'm busy. We're all busy and let's share that load so it's not all on my shoulders. If you're my insurance agent, when you drop it in my vault, I'm going to get notified. I'll know it's there. And then, by the way, when the mortgage broker needs that insurance policy for my property because I'm refinancing, all I do is either add them to the vault and share it with them, or I can do a secure email link out to the documents, so they have access to it.
Ric Edelman: Yeah, that's exactly what I'm thinking because I go through that myself as an individual. We all do. To your point that every time I have a relationship with somebody in the financial industry, credit cards, banks, brokerage firms, insurance companies, mortgage companies, real estate, I mean, the list goes on and on and on. We all have these relationships. They all brag that they've got secure portals, but they only secure their stuff. They aren't really facilitating a one-stop shop kind of environment where there's a single common denominator. I'm like... That's what we need. We need all of you folks to work in my one site. Don't make me work on your two dozen sites. And so it would seem to me that financial professionals would flock to Prisidio because you're providing a really valuable service. They don't have to build it. They can simply use it. They can provide it to their clients, do it on a common basis across industry and sector. It would seem to be a no brainer.
So if you're a financial advisor listening to this, I think some light bulbs are going off. And I suspect, Glenn, that you're going to get some calls from financial advisors who want to talk to you about how to make this available or introducing it, at least to their client base and as individuals contacting you as well, saying, yeah, let me learn more about Prisidio and how you can make my life a lot simpler and safer and more convenient.
Glenn Shimkus: I got to tell you; you have to very relevant of your daily podcasts that have talked about that. We all know we're an aging population, right? Nothing new there. But then you couple it with how do you choose the right financial professional? Well, you know this better than anybody, is we're the start of the largest wealth transfer in history. And it's going from the boomers, for example, to the millennials. Well, obviously these institutions want to keep the customer with them. But when it goes from someone who may not be familiar with technology or is comfortable with it, what do you think the children are going to want? They want to see that you're easy to work with, keep things secure, friendly, all these different things so that the insurance policy stays with them, the bank holdings stay with them, etcetera. So, we think we can be a real asset in that area.
Ric Edelman: And this is why taking it a step further, you need to make sure that your parents are using a system like this, because when your parents end up in the hospital or get Alzheimer's or die, how are you going to know where all their documents are and gaining access to them at the real moment you need to. And so, we all know that money is a family affair, and we need to have this open communication. And so you need to be doing this with your parents on the up line and you need to be doing it with your children on the down line and integrating with your financial and other advisors along the way on the sidelines. And so I think the time is here. We know that tech is working at its best when we aren't paying any attention to it. And for a long time that was not the case with the Internet. It has now become pretty seamless. But now we're beginning to realize that the byproduct of the Internet is digital data that is being thrown at us on a constant basis, and we now need services that help us organize, sort, save and store the data and now the latest way to share. And so I think that's where Prisidio has claim to fame. How can people learn more about this Glenn and sign up if they would like to?
Glenn Shimkus: So we are you know, obviously we're across the social media channels, whether it's, you know, Instagram, Facebook, LinkedIn, Twitter, we'll actually say X now, right? You know, we have a great YouTube page. If you Google Prisidio, we have a bunch of videos, How-To videos so you can see how simple it is. And of course, our website, you know, we have a bunch of information there. And you know, one thing I got to tell you that that you just said that's so important and I'm living through this. You know, my father's 77, about to be 78, had his first real health scare. And, I'm the executor for my parents. And that means I have a legal responsibility. And it doesn't mean someone has to have ten, 20, $30 million in assets. It means you may have a house with some equity, a car, you have to cash in a life insurance policy. You have to, you know, get the storage unit. There's a lot of work in that. And let's face it. You look at the data, the amount of unclaimed life insurance policies, increasing the amount of unclaimed property at the state and federal level increasing. I mean, listen, there's an entire show about storage wars on these storage units that, yeah, some people forgot to pay or forgot about them, but a lot of times its family didn't know that they had one. And so that's what's really important. And that's one of the things that we have built in now. We've been working on it for two years. You'll even be able to identify a key holder. That's the term we're using. We've got an international patent application filed on this. You'll be able to pick who you want in your vault to have access to if something happens to you, the vault owner. And then we have a review process with the death certificate, with the attorney review, with signed affidavits. And when we release the vault, we're releasing it to whom? The vault owner said, when I am no longer here, this is the person. And they'll have read access to the entire vault so nothing gets lost.
Ric Edelman: So there's a lot of peace of mind associated with that. So I'm really glad we had this conversation. I think folks are going to be really intrigued by this idea. I invite you to check out Prisidio. Prisidio.com. It's PRI, not PRE; Prisidio, Prisidio.com. The link is in the show notes. Glen Shimkus, the co-founder and CEO of Prisidio. Thanks for joining us on the show today.
Glenn Shimkus: Thank you so much for having me, Ric.
Ric Edelman: You're listening to the Truth about Your Future. I'm Ric Edelman. You understand stocks and bonds and real estate and you know how to evaluate them. You know how to choose among them. But do you know how to evaluate and choose among digital assets? Come learn how on my next webinar. It's Wednesday, October 11th at 1 p.m. Eastern. I'll be joined by Christopher Jensen, director of research at Franklin Templeton Digital Assets. And we'll show you tokenomics and how you can use this new research to make informed decisions about crypto coins and tokens. You'll get one key credit to stay informed about the latest in the investment management field. You can register for this webinar right now. It's Wednesday, October 11th at 1 p.m. Eastern. The link is in today's show notes.
The New World of IoT
Ric Edelman: We live in a connected world. Your doorbell talks to your phone. All this is made possible by the Internet of Things, IoT. And it's changing how we live and work. We already have 3 billion connected devices in the United States. There are 15 billion worldwide. Eventually, everything will be connected to the internet, even fruit, with a QR code stuck on it or a chip embedded in it. The market for that is growing 26% a year. By 2030, it'll be a $13 trillion industry, six times bigger than it is today.
It's skyrocketing because of three factors. First, sensor technology has gotten really good. Voice recognition systems that you use, you talk to Alexa without any work or any effort, no training, no limitations. Say whatever you want. The IoT understands you.
Second, these sensors are really small and they're really cheap. That makes it really easy for product manufacturers to add them to everything from cars to coffee pots. Think about it. There's really no reason for any manufacturer not to add them as a feature to their products, even if they're not needed. It's like that clock in your oven. Do we really need our oven to have a clock? Not really. But it's so cheap to include, what the heck you might as well.
And third, 5G. 5G network technology is fabulously faster than 4G. I wrote about all this in my book, The Truth About Your Future. That 5G was coming. Now it's here and it's 100 times faster than 4G. With 4G, you took eight minutes to download a movie to your phone. With 5G, you do it in eight seconds.
The commercial and industrial uses for this connectivity technology are huge. Consumer media, connected vehicles, construction automation, precision robots, heating and ventilation, lighting, autonomous vehicles, remote maintenance, office equipment IT infrastructure security and fire alarms. The list is almost endless.
We all love what it does for us. Ever been in a parking garage looking for a spot to park? Those new garages. Now they've got red and green lights. You've seen them. They tell you where there's an empty space. That's IoT. Or our refrigerator tells us we're running out of milk. That's IoT. AI and ChatGPT, they're all making IoT even better. And just think about the numbers. There are only 8 billion people on the planet, but we already have 15 billion connected devices. Each one has its own internet address. Eventually we're going to have trillions of IP addresses. Everything will be connected.
And that makes connectivity one heck of an investment opportunity. That's why you should know about the Global X Internet of Things ETF. The symbol is sensor SNSR. The fund invests in companies that leverage Wi-Fi, 5G, telecom, fiber optics to create, connect and maintain smart grids, smart homes, connected cars, the industrial Internet. The high growth potential of this thematic ETF is pretty attractive because the number of consumers using 5G mobile is growing massively. Global spending on IoT is expected to top $1 trillion this year. The Global X Internet of Things ETF, Symbol SNSR. Learn more at Global X ETFs.com or ask your financial advisor about it.
New Bitcoin Whitepaper and Crypto Correlation
Hey, the big news in crypto in the past month has been the fact that the SEC lost its lawsuit against grayscale. Everybody's been expecting the SEC to therefore let Bitcoin ETFs come onto the market very soon. You can learn all about what's happening in my new whitepaper. You can get the latest version of it at DACFP.com. The link is in the show notes. Among the people who are very excited about this are financial advisors like you.
Why are advisors so very excited? Because with an ETF it makes it incredibly easy and convenient to add bitcoin to a client's diversified portfolio. But why are our advisors so interested in owning bitcoin in the first place? Forget about the ETF angle. Why bitcoin at all? In surveys, half of advisors say they personally already own bitcoin. Most haven't yet started recommending it to clients because there isn't yet an ETF. But when the ETF becomes available, which is expected soon as a result of the grayscale lawsuit, advisors are going to flock to it. Why? The number one reason that advisors say they like bitcoin. Correlation. Well, what's that?
Correlation is how we compare one investment to another. In other words, if we have two investments and their prices move in sync like synchronized swimmers, then they are positively correlated. They both go up. They both go down in unison. Well, if that's true, if we have two investments that are identical in their performance, then what's the point of owning them both? The whole point of portfolio diversification is to own investments that are negatively correlated to each other.
You want one investment that goes up while the other investment goes down. You want one that zigs while the other zags. You want negative correlation because that reduces your risk. This way you're not losing money on everything all at the same time. Not everything's going down simultaneously. That is a key element of successful portfolio management. But finding assets that are negatively correlated is not really the ideal. What you really want is something non-correlated. I mean, it's good to have an investment that goes up while something else is going down. What you really want though, is an investment that has a price move without regard to what the other thing is doing.
And guess what? Bitcoin is the only asset that is non-correlated to all other assets. This makes it a perfect addition to adding it to a diversified portfolio. And that's why financial advisors like bitcoin as a financial advisor more than anything, you want to help your client avoid and minimize losses. And if you can add a non-correlated asset to their portfolio, then you can reduce their risk. That's what makes clients happy. That's you doing your job. And soon, by providing bitcoin via an ETF, you'll make it incredibly easy and convenient and low cost to give your clients bitcoin without them having to actually buy it and store it on their own. You can learn more about this not only by reading my new whitepaper at DACFP.com, but also read my number one Amazon bestseller, The Truth About Crypto. That's correlation.
Ric Edelman: That's it for today. A reminder that the latest episode of Jean’s podcast came out yesterday. It may just make a healthy difference in your life. You can listen to Jean’s Show wherever you get your podcasts.