Thanksgiving Edition

Happy Friday and hope you all had a wonderful Thanksgiving Day!

Click the player above to listen to this edition of S3T! You can also listen on Spotify.

In this Edition of S3T:

• 💰 Reflect & celebrate, and get ready for what's next: Pantera Capital’s 1000x returns since 2013 highlight Bitcoin’s massive growth and untapped potential in global financial systems. How will the evolution of the world's financial architecture be impacted by crypto? 📈
• 🏦 Near term: keep an eye on: The optimism in private capital for 2025, which could benefit institutional and high-net-worth investors while emphasizing the need for broader financial inclusion. 📊
• 📚 Let’s learn how to empower others: Teach budgeting, saving, and investing skills to build financial stability and help individuals manage capital alongside wages for long-term security. 🤓
• 🌍 Change leaders should champion this idea: Inclusive capitalism thrives when everyone participates—connect underserved communities with resources and foster skill development to unlock wealth creation opportunities. 🌟
• 🔧 Start driving change today with these tools: S3T resources like the Budget Planner, Layoff Recovery Toolkit, and Change Leadership learning segments are designed to support personal and professional growth for you, your team and others you meet!
• 🚀 Premium Resources for Full Access Members: 8 Playbooks on AI & Data, Org Effectiveness and Influence & Aligning.
• 🕐 Manage your Focus with this strategy: This Change Leadership Learning Segement introduces the "Layers" approach—a proven method to manage your work and focus more effectively.

Opinions expressed are those of the individuals and do not reflect the official positions of companies or organizations those individuals may be affiliated with. Not financial, investment or legal advice, and no offers for securities or investment opportunities are intended. Mentions should not be construed as endorsements. Authors or guests may hold assets discussed or may have interests in companies mentioned.

Like Buying Gold in 1000 BC

The evolution of the world's financial architecture is one of the key strategic themes for Change Leaders. Understanding the technical and economic implications is important, but it's also important to learn and work toward a more inclusive economy. Here are some of the latest developments and insights from this week.

Dan Morehead and the Pantera Capital team are celebrating a milestone this Thanksgiving: hitting 1000x returns on their Bitcoin investment journey that started in 2013. Morehead thinks we are still early in the adoption cycle. Key notes and quotes from his post:

• In May 2013 you could buy 156,000 Bitcoin with $20 million. In 2013-2015 Pantera bought 2% of the world's Bitcoin
• In 2020 Bitcoin's market cap was the same as L'Oreal. Today it is 10x L'Oreal and bigger than Meta:

• 88% compound growth rate since Pantera launched the Bitcoin fund eleven years ago.

There is "north of 50% chance that the world adopts a global currency/payment system in which free cryptography replaces the very expensive ‘trust’ charged by banks/VISA-MasterCard/Western Union/PayPal/etc."

• 95% of the world's financial wealth has not addressed blockchain. When they do Bitcoin "might be at something like $740,000 / BTC...that’s a market cap of $15 trillion.  Not an inconceivable number, relative to $500 trillion^[2] in financial assets."
• Buying Bitcoin now is "like buying Gold in 1000 BC."

Private Capital Optimistic for a better 2025

Private capital (which includes private equity but other forms of capital) now expects 2025 will be better than 2024, with more activity. This will benefit primarily institutional investors and high-net worth individuals rather than retail investors.

Traditionally private capital/equity have been reserved for people who could afford to put $5-25million into an investment fund for 7-10 years. These individuals are taking significant risks, but can see investment returns far higher than what is available to retail investors in stocks and bonds. For more details, see Allvue's helpful explainer on private capital here.

Change Leadership Perspective: Capitalism works best when everyone participates.

We need to teach people how to build and manage capital rather than just rely on a salary alone. Key points to know and share:

• As Picketty and others have shown, wage growth typically does not keep up with capital growth over time. Meaning: a person who relies on wages alone will not reach the same level of wealth as a person who relies on wages plus investing.
• Your best financial security comes when you have a mix of both - have a salary and build your skills so you increase that salary over time, but also build capital and manage its growth over time.
• Learn how to live on a budget so you can balance your spending with consistent saving and investing. Look for opportunities to start a company or participate in other forms of capital development.

Phil Kotler's 14 Shortcomings of Capitalism are directionally correct in my view, and when considered together all seem to highlight this key point: these shortcomings can be solved if we focus on getting full participation in capitalism.

How to drive full participation in capitalism

• Help everyone gain basic financial literacy: learn how to budget, save and invest.
• This includes helping those who may in an unsustainable financial situations, lacking basic needs and income necessary to progress at all. Connect them with support programs that can help them establish the basics: personal stability and safety, shelter, jobs with future income growth potential, skill building, and finding their why.
• Teach everyone how to tap into their driving purpose: explore and develop their own identity, skills, talents and interests.
• Support them in turning their skills and interests into companies and products that can provide them with a return on investment of their time, talent and money. Or in finding other means of investment that help them grow their wealth over time.

More reading & learning:

• HBR Summary of Piketty's landmark work "Capital in the 21st Century". Used copy on Abebooks.com
• A counter argument: Testing Piketty's Hypothesis on the Drivers of Inequality (PDF). Textbook example of the lengths free market hawks will go to to attempt to refute Piketty's core observation - that capital growth outstrips wage growth, and those who can leverage capital growth enjoy exponentially greater wealth accumulation than those who rely solely on a wages.
• Chicago Booth Review: Piketty is wrong and right. Even those who debate Piketty's thesis on financial inequality agree that upskilling workers is urgent. This piece is valuable for its links to other papers and references.
• McKinsey Global Institute: How Productively Are We Using Our Wealth? - Argues that global net worth has tripled since 2000, but the gains are mostly from real estate rather than productive capital.

Actions to take: Use or Share these free S3T Resources:

🧮 Personal Finance learning page

Offers with 3 valuable resources. 1. A Budget Planner to create a suggested monthly budget based on your income. 2. A Budget Basics section to learn how to use your budget to build your financial security over time. 3. A Recommended Reading section for further learning. Perfect for helping a young adult or anyone learning how to managed their finances.

🧰 Layoff Recovery Toolkit

This unique toolkit is designed to help you navigate a layoff with confidence, giving you practical tools to help you set a strong positive mindset, conduct a highly effective job search, and be 110% ready for what’s next. Learn how to share your past success stories in a way that excites people about working with you to create future success stories.

We're continuing our Change Leadership Learning Series now in the 201 level where we are Learning and applying change leadership skills on personal, organizational and macro levels.

Last week we learned about Making time because leading change takes extra time. We learned to apply a proven way to maximize what you can do with your available time.

This week we're building on that by learning how to use a "Layers" approach to managing your work and your focus more effectively. Instead of seeing life as a futile quest for focus time, Layers gives you a proven way track and do what you need to do.

Click here to access this week's Change Leadership 201 segment: Layers of Work

Annual Review Roundup: Top S3T Resources for you and the team

📗S3T Playbooks for Premium Members

Playbooks offer proven strategies and tactics for complex problems faced by change leaders. Here is a list of playbooks related to AI & Data, Org Effectiveness and Influence & Aligning.

Playbooks on AI & Data

Organizational Effectiveness

Influencing and Aligning

Thank you for what you do! Learning and applying change leadership principles in your work makes a difference - perhaps to many who will never be able to come back and thank you. So I thank you for your work and leadership. It means a lot.

Ralph