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Do you know what your children are doing right now?

As a parent of two young gentleman, I like to ‘think’ I know where they are. My two should be at work and school.

And yet still find time to stick their heads into their mobile phones.

Today though, I’d like to bring to your attention a specific app your kids may have downloaded on these phones.

It looks and feels like a harmless game, in fact its designed to look exactly like that.

And it could so easily ruin their young financial lives, forever.

Today I will lay out to you a disturbing trend that gained mass adoption in the heights of the Covid lockdowns.

If you are a parent yourself, you must be across this.

And as the 18.6-year Real Estate Cycle nears its peak, an entire generation who were promised a truly democratized financial market will instead experience the mother of all ‘rug-pulls’!

With Mum and Dad expected to foot the bill.

Read on.

How our youth intend to out-earn their parents.

I have 2 young adults and can empathize with their viewpoint of the world.

One of those was reflected in a recent UK insurance company Urban Jungle survey of 35-year-old males. The survey respondents reported feeling at an “unfair disadvantage to the generations directly before them” when it comes to financial stability and savings.

That’s a shocking assessment.

Gary Stevenson, a 35-year-old former trader and financial education campaigner from east London, is one: “My dad never went to university. He worked at the post office for 35 years and could raise three kids and pay off [a mortgage] he has a comfortable retirement,” he says.

That is off the table for most young people now. It’s created a bit of a panic. If you can’t do what your dad or grandad did you must come up with a better plan,” he adds.

At some point, risky bets start to look like the rational choice: “One way, you see a zero per cent chance of success. But if you take on insane risk at least you have a chance.

What are these risky bets? Welcome to the world of speculative assets such as cryptocurrencies, NFTs and “meme stocks.”

A trend that exploded onto the mainstream radar during the government mandated Covid related lockdowns.

A wonderful study of how governments, in their infinite wisdom, try to do the right thing but end up making things worse.

Why? Because by flooding the economy with “stimulus cheques” they provided tens of thousands of bored youths with money they didn’t have and turn to their phones and start speculating in a whole range of digital ‘assets.’

Well, what else could governments do you say? Covid was an unknown risk, and people needed the financial lifeline.

My answer is; look harder!

Stagnant wages, rock bottom interest rates, soaring house prices — and now, corrosive inflation — have cut away at the idea that the under-40s can follow the well-trodden path to financial security that their parents took.

The blame for most of the above lays directly at the feet of governments.

These artificial distortions mean the methods used by the previous generation to build their wealth simply can’t occur for our children.

What’s happened instead is a large cohort of student debt laded young adults who approached the markets from a position of weakness, not financial strength.

You really need to stop and think about this.

Young adults making huge bets on things like cryptos and NFT’s are the symptom. More importantly is the cause. This is what I’ve laid out above.

I have heard that this isn’t the problem it appears on the surface.

The world has reopened, there has been a vicious and sustained bear market in the crypto markets that has scared most participants from gambling on them.

But is that really the case?

Diamond Hands.

Here’s some more interesting facts.

According to UK based advisory OpenMoney, under-25s are twice as likely to turn to social media for financial advice than any other age group, and more than three times as likely to do so than to seek help from a professional.

There is a strong link between trading apps like Robinhood (which promised commission free trades) and the rapid adoption of Twitter and particularly Reddit (WallStreetBets anyone) as a forum for investing advice.

It was Robinhood which promised to ‘democratize’ financial markets by removing commissions and allow small amounts of capital to be placed into expensive glamour stocks like Apple and Tesla.

Four years later, every US-based broker had eliminated commissions for equity trading. And created a suite of simple app-based trading platforms that requires a few touches to place trades.

It was a model that crypto exchanges like Coinbase quickly adopted. It drove a “meme-coin” craze where the amount of cryptos grew from seven in April 2013 to now tens of thousands.

And we can’t forget the “meme-stock” craze where WallStreetBets fueled speculation in GameStop and AMC sent the term “moon-shot” into the public sphere.

Here’s the insidious side of this.

Increasingly platforms are blurring the line between gaming, gambling and investing, especially platforms that enable the use of cryptocurrency,” says Jack Symons, chief executive of the UK app Gamban.

Some might say this is a blunt approach, but gambling doesn’t look like it used to. It’s not something that only happens [in a casino].

I have seen them myself; these trading platforms have undergone ‘gamification’ to such a degree that I can’t tell the difference at first viewing.

Is my child playing a game, gambling, or trading? It’s hard to know anymore.

But if you want to make a whole generation addicted to your platform…

No wonder the largest US gambling hotline said it was seeing a marked increase in the number of calls coming from people addicted to day trading, rather than traditional gambling or sports betting.

It promises to get worse. A huge and sustained fall in the value of all crypto coins has seen a wide-reaching campaign run by these same crypto companies for the faithful to hang in there regardless of paper losses.

Instead, holders should dismiss the falls as another cyclical “crypto winter” and those who wait will be rewarded.

All this within the echo-chamber of trading app forums who have produced an emoji called “Diamond hands” for those who continue to hold onto a leveraged position even as its value drops near zero.

Ok, so now you should know the lay of the land. Hopefully, you have some idea of the digital world our kids love to immerse themselves into.

My biggest concern is the behavior on show. A study by academics at the University of Sydney last year found that people aged between 18 and 24 were much more likely to make risky decisions when they thought their peers were watching.

A wall of misinformation and flawed moonshot strategies create an illusion of control which increases the level of risks and causes a feeling that the odds of winning are significantly greater than they are.

Recall I mentioned these trading apps don’t pay commission? How do they make money. Simple; by offering users margin as leverage.

Guess what? As a parent or guardian, you’ll have zero idea they have even applied and been granted this debt. It’s just a few touches away within the app.

It’s a perfect storm of epic proportions. 20 years in the markets have proven to me the stock market will eat these guys alive.

What’s needed here is a good strong grounding in what truly makes the economic world work.

The ability to appreciate investment risks and how to formulate a strategy to stay safe in the markets.

And most importantly develop good fiduciary basics to recognize most of the “advice” received isn’t for their benefit.

I believe this would make a great start; a membership to the Boom Bust Bulletin (BBB).

It will teach you the history of the 18.6-year Real Estate Cycle, why it continues to repeat even today and guide you to the true opportunities for enduring wealth that the cycle provides as it turns.

We can’t expect our kids to face this kind of furnace themselves and not walk away with lifelong scars and even worse a lifetime of trading debt to pay back.

It’s time to empower them to understand precisely what the risks and rewards are in the market and at least have something that can guide and educate them on their journey.

These various digital assets and the real estate cycle are aligned now; they will rise together, but also bust together.

Knowledge of the real estate cycle can provide that crucial timing.

That’s what the BBB provides, all for less than a takeaway coffee.

Sign up now.

Best wishes,

Darren J Wilson
and your Property Sharemarket Economics Team

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This content is not personal or general advice. If you are in doubt as to how to apply or even should be applying the content in this document to your own personal situation, we recommend you seek professional financial advice. Feel free to forward this email to any other person whom you think should read it.